FRAMINGHAM (07/24/2000) - Talk about a birthday present. Just days before turning the big 3-0, Mike Nelson reached a career height to which professional peers twice his age often aspire.
He hit the executive ranks responsible for a multimillion-dollar budget, as vice president of IS at Point.com, an online retailer of wireless phones, service plans and accessories.
"So what," you say. "Point.com is just a little Internet start-up." But the company's IT accomplishments are nothing to sneeze at. Last year, it won the Inc./Cisco Systems Inc. Growing with Technology Award for use of network technology. In 1998, BusinessWeek named it one of the seven best Web sites of the year. In an endorsement of its new business-to-business strategy, in May Motorola invested $15 million in the privately held, 5-year-old company.
Plus, Nelson has faced management and technical challenges that would test the most seasoned network professional. He's had to rejuvenate a tired technology team, hire dozens of workers, plan a $10 million budget and implement a systems and network architecture that would let Point.com enter new markets painlessly, all while selling potential customers on the company's technology vision. And he's only been at Point.com for one year.
Despite the stress, Nelson loves every minute in the dot-com world. He's highly motivated, ambitious and too impatient to work within the confines of a traditional IT department. Nelson left Microsoft Corp. after a three-year stint developing internal business intelligence systems because he viewed it as a footdragger. "Microsoft is an old-school technology company and tends to be a bit slow," he says.
Clearly, not all IT professionals are as enamored with the Internet as is Nelson. Some of you wouldn't risk the safety of an enterprise job for all the stock options in the world. But, whatever your druthers, the Internet economy is affecting your company, and therefore, your career. The question you've got to ask yourself now is: "Will I be helped or hurt?"
To answer, you need to understand what IT opportunities are unfurling, where you fit in best and what steps you need to take now.
Can't sidestep the Internet
The first thing to understand is that even if the Internet doesn't rule in your industry today, it will soon. Incumbent companies that don't do anything in the Internet are going to be disrupted, says Jeffrey Elton, managing principal at Integral, an international consulting firm in Cambridge, Mass. Disruptive technologies are akin to Moore's Law. They change the paradigm so that the old way is no longer valid. Internet entrants are doing everything they can to be disruptive quickly, and they have the advantage. Their new business models are fast and flexible, easily adaptable to take advantage of new opportunities.
If you've got tenure and a sense of ownership at your old-world company, your best bet is to lead your employer into the Internet economy. Chances are, your senior management is grappling with how best to take advantage of the Internet.
It's your professional and ethical responsibility to participate in, if not lead, those talks, Elton says.
As an IT executive, he advises you must facilitate, even stimulate, discussions on:
- What lines of business to Internet enable and how.
- What interfaces to customers and suppliers to Webify.
- Whether the company can disrupt itself by taking advantage of a substantially different business model provided by the Internet.
- Whether the Internet opens new business opportunities.
If you're successful in repositioning your old-line company as an Internet player, you'll find yourself exerting considerable authority. That's been the case for Ralph Szygenda, chief information officer and group vice president at General Motors Corp. He oversaw the re-engineering of GM from a traditional automotive company into an Internet powerhouse. E-commerce accounted in part for GM's strong financial showing in 1999. The company reported a record $176.6 billion in revenue for the year, up 13.6% over 1998 revenue.
Szygenda lords over a $3.2 billion budget; he's spent $1.6 billion on e-commerce applications and Web hosting in the last three years. Even so, he's reduced IT spending from 1996 to 1999 by $800 million. With those savings, he's created a venture fund. "I put in the information technology, and now I can drive and manage a major investment fund."
Talk about a career booster. By managing a major investment fund, he has the power to finance the development of emerging technologies or pay for their acquisition. For example, GM invested $15 million in General Magic for hands-free voice, a technology that offers obvious market advantage to a car manufacturer. Other CIOs - from old-line or dot-com companies - would find it hard to match the authority Szygenda has.
Another well-known tale of success is Dawn Lepore, who as CIO led investment firm Charles Schwab & Co. on to the Internet. Last July, she was awarded the title of vice chairman - a big acknowledgment of the role she played in turning the company into the premiere online trading firm. NetworkWorld has repeatedly chosen Lepore as one of the most powerful people in networking in our annual Power Issue, and Fortune considers her one the most powerful women in business.
Clearly, success in transforming your company into a New Economy player will cement your career at the top. Seasoned IS executives who have proven their Internet mettle are in big demand.
At Federal Express, an Internet trailblazer that deals with 70% of its customers online, Dennis Jones is executive vice president as well as CIO. He plans to parlay that senior management experience into a CEO spot when he retires at year's end.
"I'll be retired for a nanosecond," quips Jones, who has held the CIO spot for 10 years. "But I don't see myself taking on a CIO role. I see myself taking a broader leadership role."
Jones says he's received his share of job pitches, and that he felt it necessary to announce his retirement nine months in advance to stave off recruiters who were gunning for his replacement, Robert Carter, senior vice president and chief technology officer at Federal Express Corp. "I had a worthy successor who was receiving substantial offers from other firms. I needed to announce our succession plan," he says.
When to hit the surf
If your executive team hasn't been willing to listen to your ideas on e-business, is outright ignoring the Internet or is moving too slowly to capture the opportunity, then your responsibility is to yourself. Clear out of there before your career fizzles, Elton advises. Staying at a company that gets left behind because it has overlooked the Internet can result in you being served up as a scapegoat.
If that's the case or, if like Jones, you have already guided your company into the dot-com world, chances are you're dreaming of an Internet start-up as your next challenge.
No doubt, dot-com offers can be compelling: instant senior management status - perhaps even the CEO slot - meaty stock options, a plentiful IT budget. But such job offers are often a Trojan horse. You'll be working long, hard hours for an immature company using an unproven business model chasing uncertain customers. You might be CIO or CEO one day and out of a job the next. Even with good funding, far more start-ups fail than succeed. That means career crash.
That was always what concerned Michael Ford when he listened to dot-com job pitches. As CIO at Best Western International, he heard a lot from folks forging online hospitality ventures. These entrepreneurs talked about using leading-edge technologies, yet didn't have scalable systems. They promised to deliver functionality to customers that was in no way feasible. And they lacked creative business approaches, Ford says.
But Ford finally got an offer he couldn't refuse: chief technical officer (CTO) of PurchasePro.com Inc., a Las Vegas e-marketplace provider. "The founders knew they did not have the infrastructure to support hundreds of thousands of users, and they needed me to redevelop and re-engineer the system," he says. "My three concerns were literally the challenge that led me to a dot-com."
One of the unbeatable positives about becoming top technology dog at a dot-com is that most everyone understands the importance of your role. They know without good technology, the company's toast. "In traditional companies - even the most progressive - technology is still used just in support of the business. "In the Internet, it is the business," Ford says.
That's good for your ego, but it also redraws the battle lines. Instead of spending your time explaining and justifying technology expenditures to your CEO and board, you're an integral part of your company's overall business strategy.
Ford and Point.com's Nelson, for example, each say they joined their respective dot-coms in part because technology and the corporate vision were intertwined - meaning they're in the thick of the business. "With a dot-com, especially one engaged in business-to-business [e-commerce], you get to be a company spokesman. That gets me jumping out of bed in the morning," Nelson says.
Groomed for CEO
Ford and Nelson see their futures much differently now that they've moved into the dot-com world. They find themselves immersed in making business plans and corporate strategies, and the intimacy with those operations has prepared them well for a move into the corner office, they say.
Nelson has given himself six years. Maybe he'll become a CTO first, taking on more business responsibilities than he has as a vice president, he says. Maybe he'll launch a firm of his own and take on the CEO role.
Ford dreams of entrepreneurship, too. "My next step, if I decide to pursue it, would be developing a technology company and running it myself," he says.
Of course, dot-coms aren't the only companies begging for good IT talent. The more risk-averse might opt for top technology slots in traditional companies with solid histories and unquestionable futures. Such a company would understand how to play in the New Economy, or at least recognize its importance and need you to get it there.
A top executive slot is not the only measure of a successful IT career these days. "It's a mistake to suggest that someone who doesn't have a career path to CEO has had a disappointing IT career or a career that's over. People have had their own passions, and they have to follow those," says Peter McAteer, vice president and managing director of Giga Information Group Inc.'s Organization and Workforce Planning ePractices service in Cambridge, Mass.
For some, establishing operational procedures in the data center is more rewarding than plotting corporate strategy in the boardroom. That type of job is still important. "But, it's woefully insufficient for the type of technology leadership companies need for new business models," says Integral's Elton, who co-authored a Harvard Business Review essay with McAteer on the topic "Are CIOs obsolete?"
Eventually, Elton and McAteer say, if you favor operational procedures over business strategies, you'll find yourself weeded out of user organizations playing by New Economy rules. Not to worry, though. You'll have great career opportunities within a wildly growing infrastructure industry spawned to support all those new dot-com and Internet-related business models - job opportunities are ripe at application service providers (ASP), content delivery network providers and Web-hosting firms, they say.
But forget that grand career plan you developed years ago. If you can expand your lens, then where you go can be different - maybe into other parts of an organization or to an ASP, for example. Remember, Elton stresses, "Nothing here is about death, but change."