PEROT SYSTEMS:

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PEROT SYSTEMS

• Ross Perots autocratic management system verses
  Mort Meyersons return to a human organization

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Case Summary Perots empire

• Focuses on the evolution of Perot Systems since
  formed in 1988
• Transformation from EDS to Perot Systems
• Mort Meyerson versus command and control
  atmosphere
• Question? Can Perots leadership style turn
  Perot Systems into a major force in the
  information technology field

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Ross Perot Love to Win

• Chairman of the Board
• Founded Perot Systems in June 1988
• Served as director, president, and chief
  executive officer from Nov. 1997 to August 2000.
• Authoritarian Personality

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Ross Perot Jr.

• President and Chief Executive Officer
• Responsible for the direct management
• Oversees day-to-day operations of Perot Systems
• Quoted If he thinks he is right, thats all
  that matters. referral to Perot Sr.

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Mort Meyerson What is the new Definition of
Leadership?

• Everything I thought I knew about leadership is
  wrong.
• Joined Perot Systems in 1992 as CEO
• Former employee of EDS
• Question To get rich, do you have to be
  miserable? To be successful, do you have to
  punish your customers?
• Used 360 degree evaluations
• Human Organization

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Perot Systems Leadership Structure

• Ross Perot (Chairman of the Board)
• Ross Perot Jr. (President and Chief Executive
  Officer)
• Peter Altabef (Vice President, General Counsel,
  and Secretary)
• Darcy Anderson (Vice President, HR, Best
  Practices, and Corporate Support)
• Marc Barnett (Global Software Services)
• Greg Bedner (President CEO of Perot Systems
  Government Services)
• Lou Buglioli (Vice President, Financial Services)
  
• James Champy (Chairman of Consulting)
• David Cohen (European Team Leader)
• Russell Freeman (Vice President, Chief Financial
  Officer)
• John King (Vice President, Founder)
• Scott Lang (Vice President, Strategic Markets
  Group)
• Chuck Lyles (Vice President, Healthcare Industry
  Group)
• Brian Maloney (Chief Operating Officer)
• Bob Mattana (Vice President, Industrial Services
  Group)

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Perot Systems Information Integration and
Customer Management

• Custom Application Development
• Custom Relationship Management
• Data Mining
• Electronic Bill Payment and Presentation
• Integrated Procurement
• Supply Chain Management
• Intranet Design
• Knowledge Management
• Systems Integration
• Enterprise Resource Planning

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Perot Systems Ideal Company Profile

• Worldwide provider of IT solutions
• Services broad range of clients
• Delivers services and solutions focused on each
  clients needs
• Develops integrated information systems,
  operating and improving technology and business
  processes
• Helps clients transform their business.
• Help streamline operations and provide new levels
  of customer value.
• More than 7,500 employees with more than one
  billion dollars in revenue.
• Perot systems has relationships with clients in
  several industries

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Autocratic Management Style

• Premise is the belief that in most cases the
  worker cannot make a contribution to their own
  work, even if they could, they wouldnt
• Workers have no interest in work in general,
  including quality of their work
• Workers are soft and lazy
• Job managers deal with this by using carrots and
  sticks. The carrot is the monetary incentive
  such as piece-rate pay schemes. The stick is
  docked pay for poor quality or missed production
  targets.
• Only money and threats can motivate lazy,
  disinterested workers.
• Autocratic managers attempt to control work to
  the maximum extent possible
• Attempt to simplify word to gain maximum control
• Implement a strict top-down, chain of command
  approach.

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Ross Perots Skeletons-Citizen Perot by Gerald
Posner
Ross Perot personality Three distinct
qualities An absolute conviction that he is
morally right An intense will that refuses to
consider the possibility that he could be wrong,
or lose a fair fight A need to control every
situation to fit these parameters Perot got rich
off government money from Medicare and Medicaid.
He has a long history of abusing his employees.
He demand great loyalty and extreme hard work
from them.He works people extremely hard for
little money and subjects them to intrusive
scrutiny, such as private investigators,
wiretaps, drug tests and lie detector test. Perot
feels he has the right to control their lives
from every angle. While at EDS, Perot made
discussing peoples salaries an immediate firing
offense and enacted strict dress code. License
plate numbers in the company parking lot were
traced to see who came in early and who late.
Perot won a lost contract from their largest
competitor, Bradford, through political pressure,
lawsuits, and an attack team that followed
Bradford executives and videotaped some officials
with prostitutes. EDS and Perot Systems have been
under investigation several times for bribery and
paying off officials to achieve their goals.
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Management at EDS Mort Meyerson

• Felt people paid high price for company success
• 80 hour work weeks norm
• Shift people from project to project- death
  marches
• Work first priority
• Family and community came second
• Compensation system used to motivate people.
• Pay tied to profit-and-loss performance
• People were angry, frustrated,irritated, and
  deeply unhappy

• Financial performance before all else personal
  sacrifice and doing things not in best interest
  of the customer
• Produce positive financial results in short term,
  but weren't in the companys long term interest
• At Perot Systems, feared profit-and-loss system
  created culture of destructive contention
• Best people in the industry wouldnt want to work

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Questions in Perot Systems

• Mort Meyerson vs. Ross Perot
• Are we here to only create a successful IPO?
• Are we here to build a great company?
• Reinvent the company- Participation Management
  Style

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Problems faced by Mort Meyerson

• Acknowledged relations with customers were
  unnecessarily strained and difficult
• Won virtually every negotiation and decided what
  would be delivered
• Treated customers paternalistic and was
  condescending
• Made customers feel incompetent or stupid

• Severely diminished relations within organization
  and with customers
• Arrogant, rigid, and high-handed
• Attitude encouraged from management
• Employees must prove to be money-makers
• Win negotiations at all costs

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Changes in Management

• Transformation of Perot Systems
• Constructive contention seminars conducted- 2/3
  of entire company took communication program
• Abusive treatment addressed
• Redrafting company values
• Became company who focused on day-to-day business
  and economic performance

• Focus on well-being of people on their teams and
  concerns of customers.
• Issues of life as important as demands of
  profit-and-loss performance
• Became a Human Organization
• Any needs inside or out of organization realized

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Changes in Management cont

• Leave employees with alternatives
• Dont make customer feel taken advantage of
• Customer should become like partner

• Used 360-degree evaluations for their people
• Asked all levels of management to participate
• Input from customers valued

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Mort Meyerson

• We should never lose sight of the fact that
  were in business to create a first class
  organization and to survive.
• So what is my job as a leader?
• Were going to figure out the companys future
  together or were not going to to do it at all.

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First Job of the Leader

• The essence of leadership today is to make sure
  that the organization knows itself
• Have durable principles that underlie the
  organization
• Leader should embody those principles
• Commitment to the community

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Second Job of the Leader

• Pick the right people to be part of the
  organization and to create an environment where
  those people can succeed.
• Encouraging others and develop a strategy and
  grow the philosophy of the company. I am a coach,
  not an executive
• Employees should look to themselves, not to him
  for answers

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Third Job of the Leader

• The leader is to be accessible
• Be accessible for two-way communication thats
  honest, open, and direct
• Electronic mail
• Be accessible to all levels of employees

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Can Perots leadership style turn Perot Systems
into a major force in the information technology
field?

• Pros

• Cons

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Can Perots leadership style turn Perot Systems
into a major force in the information technology
field?
Yes
But at what cost to it's employees, customers,
and society at large?