the 10 things tech company ceos should know right now

8/3/2019 The 10 Things Tech Company CEOs Should Know Right Now

1/4

The 10 Things Tech Company CEOs Should

Know Right Now

CEOs get the weight of the whole company on their shoulders. Although everyone speaks of team

effort, it is the CEOs face that is the companys face, and, more important, it is the CEOs brain

that leads company strategy.

For this, they are paid way too much, in many cases reminding global citizens of Roman-era excess,

and religious cults of the End of Days. Given these enormous rewards, it is surprising that, while

these CEOs are usually first-rate at their jobs (and sometimes stunningly so), the majority are, in my

opinion, just OK, going on good.

It is not at all unusual to see these leaders making mistakes. Often these are so large, and so

avoidable, that it gives pause: how did that happen? Why did Ciscos John Chambers think a telecom equipment company should get into cute

pink consumer video cameras?

Why did Apples Steve Jobs think he could beat IBM in the early corporate and enterprise

PC markets?

Why did Microsofts Bill Gates think he was bigger than the United States Justice

Department?

Why did Carly Fiorina think engineering-driven Hewlett-Packard was all about her personal

public-relations effort?

Why did Ray Noorda and Scott McNealy start runningNovelland Sun Microsystems as

though their primary destiny was defending against Microsoft? Why did Intels Paul Otellini think marketing hype was more important than flagship chip

speed?

Why did Steve Ballmerthink Microsoft should be in the consumer market?

Why did Jeff Immelt just give China the blueprints to General Electrics famed jet engines?

And why did IBMs Sam Palmisano do the same with the companys most advanced chip

fabrication secrets?

Hubris is usually the answer; that, or a lack of good advisers. Sometimes theres a technical

issue, like chip heating; and sometimes there are national (or shareholder) pressures. In any case, it

is obvious that CEOs, while perhaps dropping a ball here or there, need to avoid making Serious

Major Screwups (SMSs) that could devastate the company, destroy their legacy, and end indisaster.

For these reasons, I thought it might be helpful to provide 10 basic recommendations to CEOs that

might help them get from the golf course to the boardroom without being hit by pies, eggs,

shareholder suits, or Stories Continued on Page 10.

1. Human-caused climate change is real. If you dont get this one, dont bother with the rest.

After all, if the planet is trashed, why worry about your stock price? And enough of the Its

the other guys problem attitude: do you think the citizens of Sendai were just waiting for

complete and utter destruction? It happens, whether you care or not. This is going to drive

insurance rates through the roof, upset global food and commodities pricing, create mass

migration waves of the dispossessed, and wreak havoc across the globe. How will yourbusiness be affected? Youd better figure it out, and then get your company involved in

trying to avoid this disaster.
http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=csco&tab=searchtabquotesdarkhttp://www.forbes.com/profile/john-chambershttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=aapl&tab=searchtabquotesdarkhttp://www.forbes.com/profile/steve-jobshttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=msft&tab=searchtabquotesdarkhttp://www.forbes.com/profile/bill-gateshttp://www.forbes.com/profile/carly-fiorinahttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=hpq&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=novl&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=novl&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=intc&tab=searchtabquotesdarkhttp://www.forbes.com/profile/steve-ballmerhttp://www.forbes.com/profile/jeffrey-immelthttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=ge&tab=searchtabquotesdarkhttp://www.forbes.com/profile/john-chambershttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=aapl&tab=searchtabquotesdarkhttp://www.forbes.com/profile/steve-jobshttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=msft&tab=searchtabquotesdarkhttp://www.forbes.com/profile/bill-gateshttp://www.forbes.com/profile/carly-fiorinahttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=hpq&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=novl&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=intc&tab=searchtabquotesdarkhttp://www.forbes.com/profile/steve-ballmerhttp://www.forbes.com/profile/jeffrey-immelthttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=ge&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=csco&tab=searchtabquotesdark


2/4

2. The Global Consumer Explosion is on. This is the second most important, large-scale

economic trend in the world. Between Asia and South America, Russia and Africa, we will

see about 3 billion new consumers entering the global economic marketplace (often via the

Internet) in the next century. How you place your companys brand, interests and products or

services before this group may well be the prime separator between the good and the great.

The main problem for global CEOs attempting this reach: these populations, while sharing

certain predictable traits, are not just alike, nor do they come from similar countries. IfMuhammad Yunus can get the Nobel Prize and then be thrown out of Grameen Bank,

anyone can get this wrong. This leads specifically to:

3. Your firm will likely lose money if you go to China. I really should flip this and put it

more strongly: according to the Trade Minister of Australia, it is likely that 80% or more of

non-Chinese firms operating in-country will lose money in China. Now thats interesting,

isnt it? As far as I can tell, the Chinese have every reason to want your investment money

and your intellectual property, and no intention whatsoever of allowing you to make money.

All of those firms that disclosed the former in order to obtain the latter now look like losers.

Yes, there are one or two exceptions, always the same and over-the-top publicized General

Motors, for instance. But there are millions of losers. Between Chinas Indigenous

Innovation program, forcing government and state-related companies to buy only Chinesegoods, made with Chinese IP, using Chinese equipment (no, Im not kidding) to a

mercantilist policy of crushing foreign competitors, blocking imports, and subsidizing

export champions well, unless youre Chinese, your name (and your firms name) are not

on the Buy list. You lose. Better re-assess your global profit plans, by territory.

4. You should not not try to serve both the Consumer and Enterprise technology markets.

There are many seductive reasons that will be whispered into your ear regarding why you -

just your company, just this once will be an exception to this rule. Ignore this advice. You

will be so very glad that you did. Consumer Market DNA and Enterprise DNA do not mix,

and they tend not to inhabit the same employee bodies. All of those people you carefully

hired to do Mission A in Enterprise will be as useful as umbrellas in a hurricane when

Mission B in Consumer hits the first planning meeting agenda. Just dont bother. Greater

leaders than you have tried, and all have ended on the shoals.

5. Innovation is a real creative process, not just a word. Practice it. You almost certainly

will do better if the creative, inventive process is alive and well in your company. It needs

care and feeding, which means your spiritual and public verbal support, as well as a real

budget. I think there should be a new federal law passed that any CEO who gives a speech

using the word Innovation, without then actually creating new things, should be stripped,

labeled Emperor With No Clothing, and put on morning TV for a week. Make sure that your

actions, and your budget and promotion schemes, match your thoughts and speech on this

issue. Doing this right almost guarantees you a seat in the CEO Hall of Fame. Just repeat

after me: David Packard, Bill Hewlett, Steve Jobs, Bob Noyce, Andy Grove, Gary Kildall,Craig McCaw, Bill Boeing yes, its a great club, and you should be in it.

6. Protect your companys IP. Unless you runCoca-Cola, I guarantee you that you are not

valuing your companys intellectual property highly enough, nor protecting it from theft

carefully enough. Most CEOs have almost no idea about this on either count. Lets start with

value. You have a flagship product; lets call it the Ford Mustang. You have made lots of

other products, and tend to value their blueprints all about the same, with the same password

protections on your network. Hint: The value of the Ford Edsel blueprints are not equal to

those of the Ford Mustang. The first almost sunk the company, and the second saved it.

More important, the latter represented years and years of customer feedback, generations of

engineering and design lessons, and Most Important, decades of failures, all of which

informed the Mustangs winning design. The value of your company resides in the value ofits Intellectual Property, more than anything else. If I am your shareholder, you have a

fiduciary duty to me to protect the Crown Jewels of my investment. And I can tell you right
http://www.forbes.com/profile/craig-mccawhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=cce&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=cce&tab=searchtabquotesdarkhttp://www.forbes.com/profile/craig-mccawhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=cce&tab=searchtabquotesdark


3/4

now, whether you are running Ford, just robbed of your drive-train IP by a 10-year employee

and Chinese spy, or DuPont, just robbed of your most valuable paint recipe (titanium white)

by a Chinese hacker targeting the companys Taiwan operation you are not doing enough.

No company is. So, wake up, smell the napalm (in this case, the smell of Advanced

Persistent Threats from China, bent on having your IP if you are in an important industry),

and do something about it.

7. Countries matter, and the world is not flat. Just as you were reading about the gloriousnew life of the Global CEO, it would be better to forget what youve read and start planning

your own book after you figure things out the right way. Columnist and author Tom

Friedman now appears to be the economist-wannabe fool of all time, missing out on perhaps

the largest economic story of the century: the difference between mercantilists and their core

plan of export-driven, asymmetric trade, and the more naive free-trader countries that have

been their victims for the last few decades. The role of the global corporations in all of this:

not one of ruling the flat world, but of fitting into the plans of each of these countries.

Boeing thought it knew what it was doing when it violated its own longstanding internal rule

about not taking the crown jewels offshore. Now it faces the simultaneous loss of its largest

customer, China, and the conversion of China into becoming its largest competitor. Chinas

919 appears to be a photocopy of the Boeing 737, the companys bread- and-butter product.Bad move. I think we will see Boeing now reconsidering the whole offset manufacturing

program, not because the Dreamliner nose didnt fit the body (although thats true), but

because of IP theft. Boeing had an excuse: China made them do it, using Airbus as a

competitive threat. Sorry, but it wasnt worth it. More important: it never is. Pay attention to

country differences, and trade where you should, how you should. Add quality to your

quantity sales measurements. Think beyond the quarter. Which leads to:

8. Be prepared for your Chinese competitor. When Google went to China, it was already the

market leader in every single country it had entered. There was good reason to think that this

might happen in China, too. Instead, despite its willingness to be censored, the company

quickly found itself with two or three native Chinese competitors, from Baidu to Alibaba.

(Yahoo had already tried China and found itself stuffed into a worthless minority ownership

position in the company it started Alibaba.) Today, Google has been harassed out of the

country completely, and Baidu is setting plans to come after it in the global marketplace.

AskSergey Brin what he thinks of China, and then ask new CEOLarry Page what he plans

to do to fight Baidus next Android-like operating system for mobiles. What does Boeing

CEO James McInerney plan to do to fend off the Chinese 919 in global markets? What do

Cisco and HP and Motorola plan to do to fend of Huawei in global markets, having already

seen their IP stolen by this Chinese firm? U.S. Internet companies, in particular, were

unready for the idea that NO non-Chinese Net firm would prosper in China. Nor were they

ready for the next export step. Is your firm ready for its Chinese twin in the global

marketplace?9. You must manage for currency manipulation. This problem started with Japan

intervening in the global markets to keep the yen weak for its export champions. Quietly,

South Korea joined in. Next came China, with nightly intervention for the same purpose,

ensuring its exporters could sell into U.S. and European markets. Today, everyone is doing

it. How can you manage a global company, with serious fractional revenues coming from

overseas, if you dont account for currency manipulations and their resulting shifts in your

home-country value? While your sales may go up or down 10%, look at the Brazilian real

vs. the Chinese yuan last year: about a 34% decline. Be prepared to buffer your losses, either

through arbitrage (difficult) or repatriation options (not doing it until convenient), in order to

take the risk out of this Wild West shootout.

10.Declining global economic stability is a reality. The days of a relatively stable world aregone, both politically and economically. We should probably say that the days of the post-

WWII expansion are officially over, and in retrospect have been since perhaps 1997. This
http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=goog&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=yhoo&tab=searchtabquotesdarkhttp://www.forbes.com/profile/sergey-brinhttp://www.forbes.com/profile/sergey-brinhttp://www.forbes.com/profile/larry-pagehttp://www.forbes.com/profile/larry-pagehttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=mot&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=goog&tab=searchtabquotesdarkhttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=yhoo&tab=searchtabquotesdarkhttp://www.forbes.com/profile/sergey-brinhttp://www.forbes.com/profile/larry-pagehttp://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=mot&tab=searchtabquotesdark


4/4

doesnt mean that you and your firm cannot make money, even lots of it; many companies

do their best in times of change. But most do not. So, manage your company as though

China is playing a zero-sum win/lose economic game, as though many Islamic nations and

peoples are driven more by religion than by business sense, as though the number of ethnic

wars and battles was increasing rather than decreasing, as though the leaders of the U.S.

government had lost the ability to have a rational conversation on life-and-death

issues.Things are going to get much more interesting, and you get to figure it all out.Finally, I think there is an 11th suggestion that almost goes without saying:

In a world made of cynicism, why not be a real hero?

We need it.

Mark Anderson is the editor ofthe Strategic News Service, a newsletter about the technologybusiness, which previously published this column. He also runs the the annual Future In Review

conference.

Copyright 2011, Strategic News Service LLC.
http://www.forbes.com/sites/ciocentral/2011/04/17/the-10-things-tech-company-ceos-should-know-right-now/www.stratnews.comhttp://www.futureinreview.com/index.phphttp://www.futureinreview.com/index.phphttp://www.forbes.com/sites/ciocentral/2011/04/17/the-10-things-tech-company-ceos-should-know-right-now/www.stratnews.comhttp://www.futureinreview.com/index.phphttp://www.futureinreview.com/index.php

the 10 things tech company ceos should know right now

Documents