Profitable Growth - The Musical!

Criminey, this CGI magic thing is getting out of control. Got a call this week-end from Peter, who's apparently a big producer on and off Broadway. Said the current shows are tired, everyone saw Les Miserables 20 times, the Disney musicals don't attract the affluent boomer crowd and producers are looking for the next big thing.

Pete said a friend of his who toils in IT forwarded the video of CGI members dancing the polka in Mumbai and Pete was floored. This is the hot ticket for 2010, he said.

I said, Pete what the fuck are you talking about? A couple of IT workers do a few steps on a stage, that's not new to me. An acoustic guitar, a few chords, that's not rocket science.

Pete said, no no no Mike, you don't understand. After the mortgage meltdown, AIG doing down the tube and Maddoff behind bars, this is what people crave for, honesty from regular naive workers and profitable growth as the new mantra. Don't you see Mike, the CGI magic has to be put on Broadway. This will appeal to regular folks and to investment bankers as well. Dude, financial analysts will line up like fucking lemmings to see this musical. The 2 train will be jam packed after the closing bell.

I said to Pete, speaking of profitable growth, how does this idea translate into black ink on my bottom line? I don't mind this Hee Haw thing on Broadway, I can even provide some people that are on the bench right now awaiting layoff, but - let's speak frankly here - what's in it for me?

Pete said, of course we'll split the benefits Mike, but picture this. The CGI logo, 200 feet tall, on Broadway. I can even find you a part in the musical if you're up to it. I was thinking about Peter Woodward or Patrick Stewart, they're bald and much more expressive than you, but if you want to dance the CGI magic on stage Mike I'll let you do it. How does that sound, he said, I need a decision now.

I said, let me think about it Pete, I need to work on the numbers first. We agreed to talk later this week.

Now dear readers, I am unsure about this musical thing, I need your advice. Should CGI sponsor a musical on Broadway to promote profitable growth?

Breaking news! CGI to ban dividends forever!

Don't we all have this passionate relationship with money? People who claim they have little interest in money are either liars or .... well they are just liars. Cash is related to life, love and the meaning of the universe.

We had this big meeting this week in Montreal, where we announced that shareholders won't get a dime in dividends. Sure, folks were angry and threw me all sort of veggies when I was on stage, a pineapple even landed 2 feet from me. I'm trying to decipher the message.

If I make my employees more happy, this won't bring me any additional revenues, right? If I make my shareholders happy, they'll buy more wine but this won't create new strategic opportunities. No, I keep money in the bank. Period. Money quote: It's very hard to do something when you don't believe it's the right thing to do.

Then I went with the usual spiel about CGI looking aggressively to expand in the U.S. and Europe. Boilerplate stuff, really, this is the same freaking lines I've been reading for 6 years I guess. 60% of our revenues still come from Canada, I have a hard time convincing analysts that we're a global company. I show them our Ritual Dancers from India, they like the catchy song but this does not translate into additional revenues.

Another good quote: If you want to make sure that you can power through economic times that are uncertain, you want to go where the fish are and it's in financial services and it's in government.

As we all know, there are fat fishes swimming in financial services and especially in government. The mortgage meltdown proved that financial services is inhabited by crooks and all sort of retards who will do absolutely anything for money, so outsourcing their IT allows them to focus on new strategies to package debts into fancy products. As for government, well, money is unlimited and wisdom is scarce, so it's still a pretty good clients.

FYI, we changed the company bylaws to that CGI will never ever pay a single dividend. If me or any future CEO decides one day to pay dividends, the CEO is relieved from duty due to insanity. If the board decides to pay a dividend, they'll be fed to the lions or crocodiles (both species are uncommon in Montreal, we need to address that).

So keep your expectations low, dear members. And get back to work, I need more revenues.

From India to PEI

Here's an interesting post about CGI members who went from India to Prince Edward Island. I can't imagine the cultural gap those brave people have to adapt to. You deserve a virtual medal, I'll create one on the intranet. Now, did those members participate in the ritual dance? Anyway, the article prompted the usual whiners to post some ridiculous comments such as this one:

Having worked at CGI for more than 10 years, I can tell you morale in CGI in Montreal is at an all time low. When people are on the bench and not chargable to a project, they are being forced to take mandatory vacations to avoid being layed off, who wouldn't choose that.. Meanwhile, they are continuously shipping IT jobs to India where cheap labor reigns supreme. The average salary in India is under $15,000.00 CAD where by similar in Montreal would be in the range of $55,000.00 to $70,000. CGI is making a killing off the back of Indian resources who are getting very good training from school.

Point taken, but CGI is not a welfare organization. Our mission is not to employ to most expensive IT person. Dude, if you're making $70K, I need to talk to my HR people about profitable growth. But this crybaby had more to say:

All in all, I moved on to greener grass and I'm glad I left CGI when I did because now the company has forced their employees to work an additional 2.5 hours per week (37.5 hours to 40.0) for the exact same salary....

Bye bye, double bag.

Big announcement at CGI this week

I can't tell you more, I'm just teasing you. But something is coming up, you will be impacted. Operation Profitable Growth. More later.

The reverse butterfly effect

During my talks at the '09 annual tour, I had the opportunity of interrogating many CGI members about their relationship with our company. Nothing beats some face to face talk to spot some devious psychological profiles.

From those fascinating conversations I was able to extrapolate a new management concept that I called the "reverse butterfly effect". The standard butterfly effect is of course a metaphor where a very small difference (let's say, you) can produce a large effect on something (let's say, a 26,000 company). Of course this is a total delusion, such things only happen on the silver screen.

The reverse butterfly effect works like this: A very large event or variation does not have any effect on the smallest unit of a system. Sounds intriguing? Follow me.

CGI just announced a $395 million contract with the U.S. government. That's a news of galactic proportions, even the most simple-minded Wall Street retard can understand this. Serge and I were high fiving each other yesterday, I was almost dancing on my desk (but I didn't).

What's the effect of this news on a CGI member down the line? Zero. Bar none. How's that possible? Because the powerful significant event is distributed through some many gears and processes that in the end, it does not affect the typical employee. If a star explodes in a supernova on the other side of the galaxy, you and I will maybe get a few gamma rays but that's it, it won't change anything right?

It is therefore why the following conversation is very typical between a CGI member and a relative:

Relative: Son, I just read in the newspaper that CGI signed a huge contract with the government, I don't recall the number, many millions. You must be proud to work there.

You: Kinda.

Relative: Will you be working on that contract?

You: No. It's not my business unit that got the contract, it has nothing to do with me. Anyway, CGI tagged me on this blackhole project for 5 years, there's no possible parole.

Relative: You're a bright young man, I'm sure CGI will pick the best resources to work on this contract, I'm sure you'll get a call even if it's not your BU that got the contract.

You: Dad, CGI doesn't work like this.

Relative: You must be proud to work for Michael Roach.

You: Mike who?

This is so wrong

An anonymous reader sent me the following link over the week-end, this is a spoof of the official CGI India video that I talked about last week.

This is so wrong. How could laugh at people who are fundamentally happy at work, so happy that they perform a ritual dance for their beloved CEO? How often to you see that?

If only all CGI members could devote their residual energy to find new sources of revenues and increase profitable growth...

That Jonestown feeling

The '09 CGI annual tour was an opportunity for us to do a partnership with an anonymous pharmaceutical drug company. I can't tell you their name, but we're talking big guys. Anyway, we're now outsourcing all their IT systems on a 10-year contract.

In exchange for this service, they asked CGI to test an experimental drug on some of our members, nothing harmful they assured. So we did a secret test with our India business unit, we added some undisclosed substance in a bowl of Kool-Aid during one event, you can see the guys at 1:19 tasting the recipe.

What we didn't know is that the experimental substance does a weird thing to your brain when combined with Indian food. See for yourself.

Calling Michael Dell

Following my post yesterday, I called the Big Dell to inquire about cheap laptops. The call was somewhat askward, I think Michael expected me to say that CGI was for sale. You Texas bastard, you'll never gonna get me. So anyway. After the usual chit chat about the state of the industry and how we hope that our freaking customers will double their IT expenses for 2010, I went straight to the point.

I go, Michael, CGI doesn't mind continuing to purchase its laptops from you guys, but man you gotta work on the price. It's still awfully expensive for what you really get. I asked him to design the cheapest laptop model ever, I don't care about the specs, just bring the cost down. Dell goes, we're already making shitty products on the low-end, even the Chinese are impressed, I mean Roach dude, how low can I go?

I go, Michael, remember when you were living in your dorm building PC clones for your college buddies? He goes, sure I remember. I go, when you were a fucking student you could live with $50 a week, you'd buy Kraft Dinner at Wal-Mart and a can of Folger and you could sustain for a week. That's what I call lean. Today your grocery bill is runs what, probably in the 4-figure zone for a single week now? Not counting the booze. So you're a pretty fat bastard.

Michael, I said, you totally lost perspective of what cheap is, I guess you don't even know how to write the word anymore. Dell goes, but I have a team of cost specialists working full-time to find the cheapest components out there, I mean you can get a fucking Inspiron desktop for less than $400, what's the issue here?

I go, Michael, I'm talking to you as a friend, not a competitor. CGI is buying a freaking huge number of laptops from your company, and I need to bring this cost down by all mean. If I have to take a screwdriver myself and pop all the duplicate "Shift" keys from the keyboard to save $0.07 from each laptop purchase, I will do it. After all, who needs 2 Shift keys, do you know? And that NumLock key? Gone. Wi-Fi? Get rid of it, take $25 off. So this is what I'm talking about. Let me give you another idea. Have you ever thought of bringing EGA screens back? Call it a "classic" laptop, or whatever shitty name you like, but if you can shave $300 off the current preferred price you'll the man.

Dell goes, jee I've never thought of that, are you sure you want to go that low, I mean don't your employees will scream when they see this piece of crap on their desk? I go, sure they'll whine for a few days, they might even post their rants on the Web, but you know what? I don't give a damn. Profitable growth is about squeezing the lemon until subatomic particles of juice come out.

Dell was silent for a while, and then he said, sure we can do this. We might have to dig a local landfill for find some components, but if this is what CGI wants sure we'll do it for you. We should have lunch you and I some day you know? I see a good fit between CGI and Perot, maybe we should talk strategies over lunch ya know?

I then said to Dell that I was entering a tunnel and that my cell phone connection was bad, then I hung up. That always does the job.

On managing business units

A long long time ago, our fearless founder Serge had this noble vision that CGI business units should be managed in a very liberal way. Give them targets, and let them manage the "how". Business units work locally, so they know their battle ground very well. Plus, giving local managers more power to grow their business was a very strong trend in management book at the time. So Serge envisioned this very lean CGI headquarter, where the CEO would basically act as a coach to all business unit leaders.

I mean, dude, welcome to the real world. Even Serge gave up this romantic idea of self-managed business units and he hired me to bring order to chaos. Command doesn't work like a brotherhood of well-intentioned men, it takes a strong leader to say things and others just follow orders.

CGI Montreal has gained more power over its business units during the past few years, and my goal of 2010 is to increase that control even more. I have this chart in my office where I pin pictures of all the business unit VPs worldwide along with revenues and cost of operating, and frankly what I'm looking at is the largest collection of bozos ever assembled. They are all middle managers who worked long and hard to achieve VP status, but they are no leaders. What they are good at is following rules and orders, and those are the instruments of profitable growth.

Even Fidel who's a total communist prick understands this concept, probably more than today's business leaders. We are all created equal of course, but like the pig said some are more equals than others. Someone has to take charge, and most people are much more comfortable following a strict set of rules. Give them room to choose, and you're likely to end up with errors and this will show on your next quarterly results. You can't trust your trusted lieutenants, I'm telling you.

Let me give you an example. CGI employees may use a laptop depending on their project and the business unit to which their payroll comes from. Some BUs don't have this program, some BUs have some kind of program. Some BUs do not charge employees for using a laptop, and some of them do (this is brilliant by the way, you must use a fucking laptop for your job and we make you pay for it!). Some BUs offer 2 or 3 different laptop models, some of them just offer one.

This is where the CEO comes in and say: this had got to stop. Variety breeds costs. My plan is for all BUs to charge employees for using a laptop, because we all know employees use their laptop at home to surf the net and mostly download movies. So it's morally okay to ask employee for money, and this improves the bottom line.

As for the laptop model, I'm planning to call Michael Dell personally today. I'll let you know about it.

Your CEO is costing you $65.38

For those of you who didn't read the financial news right before Christmas, my salary was raised from $885 000 to $925 000. Yes, I have to disclose this information so that the SEC trolls be happy.

Your first reaction might be, holy cow, our CEO got himself a whopping $40 000 raise, this is what profitable growth is about, it's about the bald dude at the top cashing in and driving a Mercedes, isn't it? This reaction is normal, trust me.

But then, if you take out your pocket calculator, you come to the conclusion that it is only a 4.52% raise. Better than what you got probably, but nothing to scream about. In addition, I got a $850 000 bonus compared to $600 000 last year. What did you get?

So let's ask ourselves an honest question: is it okay to pay the CGI chief executive officer $1.7M? Since CGI has 26,000 employees, your CEO is costing you $65.38 individually. I mean, that's fucking cheap! For the cost of a pair of Levis' jeans, you're getting a job and a world-class CEO, I bet the kebab vendor on the street corner would be willing to pay that amount of money to get a CEO who could drive his street food industry to billions of dollar in sales.

The truth about HR people

I have this love/hate relationship with HR people. On one end, they are the perfect team to implement processes, maintain a tight grip on salaries and ensure that everything is done according to the rules. On the other end, they have a life of their own and they tend to impose their own biased perspective to CEOs. Let me give you an example.

Hewitt Associates, another collection of HR minded people, recently polled a couple of companies in Canada to determine the "best employers" in the country. Amazingly enough, the greatest company of all time is not in the list. First, read about their work here and check out the so-called list here.

So according to these "experts", MickeyD is a better employer than CGI. Sure, it takes less time to go at McD from a burger flipper to night manager than from a distinguished CGI consultant to a distinguished CGI director. Go work under the golden arch, please.

Hewitt has some good points through. Money quote: One of the determinants of engagement is a willingness to remain with one's current employer, so when there are fewer options, many employees are glad to stay put and hang on to the job they have.

In other words, your job sucks but since there are less and less options, you simply accept the fact that your professional life is a black hole and your subconscious takes care of the rest. You lower your expectations about your current job to sub-ground levels, and disappointment vanishes.

Yet another good nugget:

Organizations with high engagement stated that their employees exhibited the following behaviours during the recent downturn:

• Support for improving productivity. Employers reported, for instance, that employees endorsed the introduction of new technologies and processes. They were ready to make changes to help improve the business.
• Willingness to make trade-offs. In several cases, for example, employees opted for reduced salaries and/or hours of work for all staff rather than see some co-workers laid-off.
• High trust and confidence in leaders. Employees really believed that their leaders were the right people to confront and overcome the challenges faced in tough times.

The balance of power between employees and leaders is a delicate one. If employees gain too much power you end up with unions and your organization enters a vegetative state. If leaders have too much power you... well you achieve control and this is the path to profitable growth.

2010: The year we milked the cash cow

Well I hope all CGI members took some well deserved (some less than others) rest, as 2010 will be a key year for our company. Analysts expects that something will happen with CGI, anything but something. Those whores didn't learn a single lesson from 2008, some fruitcakes told them the recession was over and now every drone on Wall Street slipped back into their former devious behaviour. Analysts want something grand, something out of proportion, 5% is not cool anymore. Man, oh man, where are you, Luis Rukeyser?

So since CGI is not on the block (I mean, not officially), my plan for 2010 is to milk the cash cow using all our brainpower. Some business units received a major butt last year, I hope they'll learn a lesson or two and start printing money. We also plan to choke all local expenses, like pencils, paper, paper clips. Cents do add up. Salary raises for 2010 have been topped to 1.8%, so if you get 2% this year this mean that another dork got 1.6%.

This is all for now, Serge is waiting for me to sign my new salary terms for '10, I'll talk about this later this week.