By annie shum | March 4, 2011
Howard Anderson’s new post titled “Michael Bloomberg And The CIO Hall of Fame”
@ InformationWeek.com. Building on the success of NYC mayor, Michael Bloomberg who’s a former Salomon trader and its computer chief, Anderson used it as a testament to why IT leaders should be rotated into other business roles. http://goo.gl/ViPDj
New York City Mayor Mike Bloomberg was in town the other day, and I had a short conversation with him (Howard, you shameless namedropper). Bloomberg grew up near Boston and was a less-than-stellar high school scholar before he shipped off to Johns Hopkins University in Baltimore. Years later, when he was so successful, Bloomberg was named the university’s chairman of the board and has been “more than generous” with his riches (read: a $100 million-plus donation). The joke at Hopkins: There are three statues on the campus: Johns Hopkins, Michael Bloomberg — and the admissions officer who let him in.
Bloomberg’s business and political accomplishments got me to thinking: Is he the most successful ex-CIO in American industry? Jim Barksdale went from FedEx CIO to become CEO of McCaw Cellular and then Netscape. Bob Crandall was CIO at American Airlines before rising to CEO. But, no, Bloomberg and his $20 billion fortune still stand above them all.
I use Bloomberg’s story in my MIT classes. Bloomberg went to work at Salomon Brothers right after getting his MBA from Harvard and worked as a trader. Then he got caught in a power squeeze and was “relegated” to running the computer department. Then he got fired — and left with $10 million when Salomon got sold.
Instead of starting another boutique investment banking firm, he started what became Bloomberg LP. His insight was that he knew more about computers than the traders and more about trading than the IT folks. Bloomberg’s first real client for his Market Master terminals was Merrill Lynch, where his proposal was pooh-poohed by the internal IT staffers, who said they could build the application that he was proposing cheaper than Bloomberg’s upstart firm.
That is the same argument we often hear. The internal IT guys don’t want to lose face or power and insist on keeping application development in-house. The CIO at Merrill at the time was DuWayne Peterson, who cut a terrific deal which I’ll get to later. Mike Bloomberg asked when Merrill Lynch’s development team could start this project and was told it would be a year.
So he made them an offer: He would finish the project before the internal guys could start it, and if he and his team didn’t deliver, Merrill Lynch wouldn’t have to pay him. How could Peterson say no? And Peterson got a kicker: 20% of the equity of Bloomberg’s company, which eventually was worth $4 billion. So maybe Peterson belongs in my CIO Hall of Fame as well.
One of the problems most companies have is stovepipe management, and IT is no exception. So why not cycle the hot new MBA hires through IT, and why not cycle the computer science grads through the rest of the company? The quick answer is that the MBAs know nothing (OK, true) and will just get in the way (OK, for awhile) and that the computer science grads may get enamored of the rest of the company and not want to go back (so what?).
In any case, the corporation would benefit. Let’s face it, what we call technology management is more often than not just common sense. Furthermore, IT is too critical to be left to just the IT folks. Look at Goldman Sachs, where the IT managing partner sits on the firm’s management committee and makes more money than the GDP of some Third World countries.
When all is said and done, IT delivers a service. It buys hardware, software, and communications and integrates them into a service-level commitment, very much like a telephone company. It must meet certain levels of performance and it scans for new methods and new technology — just like the rest of the company.
There’s another case for such cross-fertilization: career advancement. With IT growing at a slower rate than it once did, people don’t see the career opportunities they once did. Often, their only upwardly mobile option is to go elsewhere. But if the best and the brightest could see that the whole company is open to them, they would thrive.
By Howard Anderson , InformationWeek
March 1, 2011 08:00 AM
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