Jim Sinegal is the boss at the US Costco chain. Costco’s stock price has doubled while he has been in charge.

Apparently:

• Sinegal’s name tag just says ‘Jim’.
• He answers his own phone.
• His headquarters office doesn’t have walls.
• He earns an annual salary of US$350,00. He reckons he should be paid more than 12 normal company workers.
• He has a one page contract which says he can be sacked if doesn’t do his work.
• His employee turnover rate is the lowest in the retail industry, over five times less than rival Wal-Mart.

I’m impressed. That’s leadership.

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I recently came across this story from last August at the ARN site; Ethics: Harder in a Recession?

Author Mary K Pratt suggests some corporations are finding it harder to stick to their lofty ethical goals at a time when most organisations  focus on cost-cutting.

It’s a good piece, but it’s missing the most important dimension. Pratt worries about green initiatives and corporate responsibility programmes. I’m more concerned about day-to-day ethics.

When the recession hit New Zealand – a year or so before the story appeared – I noticed managers in various companies were quick to drop more down-to-earth ethical standards.

In particular I observed:

• Lying – suddenly many companies thought it was OK to tell porkies. I sat through a management meeting where a colleague was be-rated for not lying his face off. This was despite the lie he was told to tell being so obviously untrue that it would undermine his and the company’s credibility for a long time into the future. Any gain from the lie – and I suspect there would have been none anyway – would have been short-lived.
• Cheating – I saw close up many examples of companies cheating others – acts of minor dishonesty such as charging for services not delivered.
• Bullying – within days of the recession hitting, I heard managers threaten employees with lost jobs if they didn’t do x, y or z. The threats and bullying made for a seriously disrupted and demoralised workplace.

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It’s a cliché, but technology changes at a frightening rate. If you pay, or take responsibility for paying the bills, depressing might make a better word.

For example, the typical shelf life of a new personal computer is now just nine months. That is, its makers only expect to earn revenue from the machine for three quarters before a replacement comes along.

More worrying, some PC companies estimate that you’ll use one of their desktop machines for just 18 months before needing, not merely desiring, a replacement.

File servers and other larger computers tend to last a little longer. Manufacturers expect you to get two to three years front line use from such a machine before relegating it to a subsidiary role.

While software and operating systems change less often, the changes often need extra spending elsewhere as other software, hardware and support will probably all need updating.

Network technology may not change at quite the same rate, but your organisation’s communications needs certainly will.

Of course, you don’t have to allow the people who sell technology to dictate your replacement schedule.

However if you aren’t continually re-evaluating, upgrading and improving systems you could quickly fall behind competitors. It isn’t going to matter too much if you wait an extra year before following the herd to a new technical nirvana, but you will need to move on at some point.

In information technology, standing still is not an option—try buying a mainstream application for Windows XT to see what I mean. That operating system was superseded only a couple of years ago, yet Microsoft treats it like ancient history. So do certain other PC application suppliers.

While you don’t want to be a hostage to fortune, clearly your organisation’s IT plan must include an orderly renewal schedule. A good plan takes expected technical advances into account as well as the hardware, software and support costs of frequent upgrades and replacements.

This need not be as expensive or as difficult as you might initially fear. There cheaper ways of squeezing more performance from an existing technology investment than throwing everything out and starting again.

This is true if you can devise a forward-looking IT strategy putting systems and policies in place to take your organisation through the next few years without expensive discontinuities. This kind of planning is the core idea behind future proofing.

Or, more accurately, it is the core idea behind the usual meaning of future proofing.

Like many IT terms, the word can be hijacked and misused. Some advertisers use the word to imply a product or technology won’t be outdated for a long time. That’s a part of future proofing, but it’s not the whole story. Nor is it the most important aspect.

At the core of future proofing is the idea today’s decisions affect future decisions.

Most importantly, you shouldn’t commit to technical dead-ends. So, simply buying the best tools for today’s needs is not enough. You need to look over the horizon as well. There are two types of changes to consider, those inside your organisation and those outside.

A good organisational IT plan should closely align with the business plan. It needs to look forward to tomorrow’s needs. A growing organisation should put IT systems in place that can expand to meet future capacity and application requirements. An organisation expecting to get smaller might need to add IT capacity to compensate for workers or it might just need less IT.

Externally, you need to read the IT industry. Will company X continue to market, develop and support software Y?

Is the feature being heavily promoted by company A likely to become an ‘industry standard’ as promised or will it go the way of the Betamax video and EISA bus?

This can mean using an inferior technology because it is a standard. Standards tend to hang around longer than non- standards and new standards tend build on old ones. Of course there is the question of `which standard?’ but, on the whole, standards make a good starting point.

Similarly, there is safety in numbers. Products that sell well are more likely to survive than those that don’t. They are more likely to be developed, improved and updated. The companies making the products are more likely to be around to provide support. So picking industry winners can help.

On the down side, if you play safe and opt for obvious standards and industry winners, you’ll have systems that look a lot like everyone else’s. This might be comforting, but it’s no way to gain a strategic advantage over your rivals. Your system might be future proof, but your organisation might not be.

In some respects building a future proof system is like the way exporters buy currency options. Both processes reduce risk. You take a small hit now to cut the chance of a big hit later. In some cases those yet to happen big hits can be fatal.

You’ll need to do plenty of homework. Reading the technology press, keeping track of marketing material, paying for expensive analysts’ reports and attending seminars is part of this process.

As an IT journalist with some 30 years experience, I want to warn you companies don’t always tell the truth and other times they simply get it wrong.

Sorting good information from bad is hard enough for those who do it for a living. For people with other responsibilities it is almost impossible. Listen to what people say by all means, but don’t bet the business on a supplier’s promise.

At this point, you could be forgiven for thinking that future proofing sounds good, but belongs in the too hard basket.

Thankfully, there is a way around the problem. To find it, consider how company’s reduce currency risk. Few organisation’s actually handle their own currency risk management. Most contract specialists who agree to deliver a predetermined set of results.

There is no direct equivalent to currency hedging in the IT world. But organisations can move to IT arrangements where they buy predetermined deliverables and not specific tools and technologies.

For example, you might hire or lease equipment, not buy it outright. More specifically, an organisation could future proof payroll processing by hiring a service provider who delivers an agreed number of correctly processed pay transactions within a fixed time at an agreed cost. This approach explains the success of software-as-a-service vendors.

In an arrangement of this nature, the customer doesn’t need to know or care about the technology used or how the payroll is processed, merely that the job is done.

Contract clauses can account for any efficiencies gained by technical advances during of the contract, or they could be put aside until contract renewal. Competitive tendering means service providers can bid on a combination of service quality and cost.

Finally, future proofing is about managing risk, not necessarily eliminating it. It’s important to develop a realistic awareness of your organisation’s IT risks and the impact these risks have on your organisation’s main business. Learn where you can take a punt and where you can’t. If you start to think about your IT in terms of risk, you’re part way to building a future proof organisation.

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If you’re writing an ‘about’ page on your web site, compiling a brochure or putting the finishing touches to a business proposal don’t fall into the trap of adding a lengthy company history.

It’s best to avoid histories altogether. If you must have one, keep it short and either stick it at the bottom of the printed page or link to the information on another web page. Certainly don’t start the page with a history lecture.

Hardly anyone cares when your company started or the location of your first premises.

Too many ‘About’ pages start with something like: “In 1997, three clever guys had the idea of forming a widget business and set up shop at 101 Boring Street, Dullsville, Arizona”. Yawn.

Not only does a company history bore readers, it sends a message that you are self-obsessed, maybe vain, possibly even narcissistic.

What’s worse, Google and other search engines will pick up on this information – particularly if it is near the top of your company ‘about’ page – and the history will take precedence over the more valuable information your customers will be searching for.

This rule doesn’t apply if you are selling history. For example, if you run a cafe in a historic building.

Writing for Australia’s Nett magazine Donna Page offers some timely advice as we approach Christmas. The magazine is aimed at small business owners, but her Holidays are good for your health applies just as much to knowledge workers.

She writes:

There is no doubt holidays are good for us; studies have linked overwork with anxiety, depression and workplace accidents. But the fact remains that very few small business owners take a breather from work.

Does this sound familiar? As she says, “no leave, no life”. So make a deal with yourself now to take a good break over Christmas. If you’re in the antipodes, that means to set aside two weeks of summer for rest and recreation. If you are in the Northern Hemisphere, take a shorter Christmas break, but ensure you set aside time when the weather is more suitable.
Work vs. life: why you need holidays.

Businessweek has a great short piece by Marshall Goldsmith describing the five steps you need to take to become an effective leader.

Often this kind of material is more about the writer’s prejudices than evidence-based advice. Goldsmith drew on a study of 86,000 people working in major corporations before devising his list – so I suppose this might be better titled “increase your corporate leadership effectiveness”.

Goldsmith says the jury is out on whether great leaders are born that way (in fact he asks his readers for their opinions on this). However, he argues the essential skills are not hard to learn.

One tip I particularly like is:

Periodically ask co-workers for suggestions on how you can do an even better job in your selected behaviors for change.

I may not always like what I hear when I get feedback, but good or bad it is always welcome.

How to Increase Your Leadership Effectiveness – BusinessWeek.

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You’ll find good backgrounders and explainers on knowledge management all over the web. But most assume the reader works in a large, or at least medium-sized company with plenty of resources.

On the other hand, Michela Ledwidge’s excellent Knowledge management 101 published by the Australian Nett magazine provides an overview for smaller businesses and entrepreneurs.

As Lewidge says;

Knowledge management is one of those terms you have probably heard but dismissed as something only big companies do.

She then goes on to explain why you should at least think about knowledge management and how you can get started.

I only read it 30 minutes ago and I’m already exploring Zoho CRM and looking up other tools.

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Nothing illustrates the role of information in modern business better than the emergence of the CIO or Chief Information Officer.

It’s a senior management role that first appeared in the late 1980s. In theory at least, the role combines information technology know-how with all-round business skills.

It may a simple and clichéd view, but the cartoon CIO should be able to read a circuit diagram, debug programming code, find out where the bodies are buried in a set of corporate accounts and understand the general thrust of a opaquely-written marketing plan.

Being able to leap tall buildings in a single bound and stop a locomotive in its tracks don’t appear in any job description I’ve seen so far but they’d probably help.

CIO Magazine offers this mission statement prepared by the Gartner Group:

To provide technology vision and leadership for developing and implementing IT initiatives that create and maintain leadership for the enterprise in a constantly changing and intensely competitive marketplace.

It’s not a bad stab at defining the role, but the words could apply to the bespectacled kid hacking away at Linux in the back room of an ice cream parlour.

In fact, Gartner’s mission statement could apply to just about anyone working in information technology with a mere smidgeon of ambition. And it is London to a brick most enterprises in this quadrant of the galaxy regard their marketplace as constantly changing or intensely competitive.

Leadership and vision

On the other hand, I’m impressed Gartner managed to squeeze in the concepts of leadership and vision. To me these are certainly the important features that distinguish a good CIO from the dross. Of course, leadership and vision is not about being the first company to sign up to a new initiative being pushed by one of the big technology vendors. It means standing up to the snake oil merchants.

Likewise, CIO leadership and vision isn’t about blowing the budget on expensive new toys. Though some technology vendors use the words to imply exactly that. In their view visionaries spend money on their products regardless of whether they are proven or not.

And leadership most definitely is not about ploughing into heroic IT. The era of huge, unworkable mega-projects came to an end about the time the first CIOs appeared.

These days most companies recognise that information technology is a tool that will carry out the business plan. It’s part of the CIOs job to make sure IT and related knowledge resources are harnessed towards the key business goals and not an end in themselves.

Pinnacle of knowledge work

In many respects a CIO position in a large corporation is one of the pinnacles of knowledge-workerdom. It’s not necessarily the top knowledge worker job even for those knowledge workers with an IT background, indeed some CIOs have progressed to the CEO position, but the specialist nature of CIO work means such a transition is unusual even in those companies where the strategic application of technology and information tools lies at the very core of the business.

While some CIOs climbed to their position from technical careers in programming, systems analysis or even support, you don’t need to have an intensely technical background to reach this exalted position. That’s because in many case a CIO is more involved in applying technology to help an organisation reach is business goals than managing the technology on a day-to-day basis. That is why some people stepping into the CIO position and similar senior IT-related roles come from a user or application background.

Management education

If you do have a mainly technical background and you hope to step into a CIO role at some point, you’d be better off looking at expanding your management education and not your technical skills. Obviously an MBA will help more than Microsoft certification or any further IT qualifications. You’ll need a strong business orientation and some in-depth experience working on commercial applications in a key industry sector.

It’s possible you arrived in IT management with a first degree in a non-technical or non-vocational subject. Some recruiters might recommend you to top up your technical education before shooting for an MBA as a stepping-stone to the CIO role. In my opinion, it makes more sense to gather technical expertise on the job and concentrate your formal education resources on that MBA. Having some major project success on your CV is more likely to impress potential employers than any formal IT qualification. Remember, CIO is more about strategy than hands on computing.

Not all top-ranked corporate IT professionals are CIOs. There is generally a clear distinction between the role of Director of IT and CIO. The former is mainly involved with implementing strategies on behalf of senior management. It’s perfectly normal for a Director of IT to give advice at the senior management level, but the job is primarily technical. On the other hand, the CIO role is more strategic. In some organisations the Director of IT reports to the CIO.

The rewards for successful CIOs can be enormous. Of course it does depend on the size of an organisation and the size of the job. There are CIOs working in Australia with salaries well in excess of A$500,000. More often CIO positions involve more modest salary packages along with generous performance bonuses – possibly in the form of stock options.

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