Bait & Switch Techniques

I feel obligated to address here one important topic that has been the subject of much debate in the IT consulting world, that is how we help youngsters to find a place in this world.

Let's say that there's a client that has a lot of money and they want to start a significant IT project loaded with unknowns. Their internal staff might already be overloaded with existing shit and they don’t have time to work on the latest project. Or the guys are not exactly the sharpest knives in the drawer. Whatever. The client hires you - the consulting firm - to help them achieve whatever fantasy they have in mind.

Most large IT projects are like a bomb ready to explode: snake oil salesmen did a masterful job, the technology is not mature and not understood, there's a huge political feud going on internally, and the project objectives are vague - at best. But the CEO or the commissioner is sold on the idea because it will save his/her sorry ass if it works, and no one - NO ONE - wants to be the bearer of bad news and say that the project is doomed to fail.

The client expects you – the consulting firm - to parachute an army of supermen and superwomen, senior consultants who have seen so many IT battles that they can guide you through the thick jungle of risks and even assist you when shit will hit the fan - because it will. Those super-consultants speak your language, they are politically savvy and they know everything and everyone.

Here's the problem: every client is asking for them, and it’s impossible to be staffed with just kings-of-all-trades.

What do you do as a consulting firm? Here’s the recipe: you bid on the project using the resumes of your superheroes knowing too well that they are booked solid until 2024 – late 2024 that is. The client is drooling over their shiny resumes and even though you charge top rate, the client gives you the contract in a leap of faith. Asses must be saved, and faith manages.

Knock, knock. Who’s there? It’s reality.

The next act if where your ability to negotiate is of prime importance. You can't deliver the people who promised, you knew this from the very beginning. BUT you can deliver some other individuals who - although they are less stellar - are probably suited for the job. And I say “probably” in the largest possible definition of the word.

The client’s initial reaction is of course negative, you promised a new Ferrari F40 but all you can deliver is a beat-up Ford Tempo. But hey, the Tempo is also red with 4 wheels so things are not that bad. You must use positive arguments to shove the juniors down the project, and this is where creativity comes in.

For instance, you can say to the client that the rookies will be closely supervised by far more experienced resources. You don’t have to say those experienced resources are the same people who don’t have time to work on the project, therefore they don’t have time either to supervise newbies. You can also say that the people you are sending have experience with “similar technologies”, meaning you are sending a Cobol specialist as a .NET programmer. It’s all the same shit to me, after a week it won’t matter to anyone.

What's important is to jump on a gravy train and turn your inexperienced rookies into people with more experience at the expense of the client, therefore allowing you to charge more for your men/women on the next project.

The Relentless Pursuit of Unhappiness

Here's another nugget of management wisdom for all managers-wannabe out there, and it's free so consider yourself very lucky. This advice goes pretty much against what management textbooks are saying, but it is the absolute truth. Never doubt The Roach. Ready?

Here it is: Employees do not have to be happy for your business to be efficient and profitable, in fact the state of happiness has to be avoided. Are you stunned now? If you're still with me at this point and you're not looking frantically for a Prozac in your drawer or purse, read on.

Generally speaking, employees' state of mind can be categorized on the following scale: happy, disillusioned, disgruntled.

Of course you don't want your staff to be totally disgruntled, because at that point they are updating their resumes and actively calling competitors to see if there are openings. Simply put, your revenues might tank during the next quarter because of their resignation. That is bad. Sure, you'll always be able to find other deadbeats to fill the spot, cheaper ones probably, but I gotta admit it's a lot of work to hire someone, and this activity cannot be billed to any client. The attention of any decent manager should be on delivering outstanding financial results, not interviewing Gen Y slackers who are just shopping around for perks.

The ideal balance is between disillusioned and disgruntled, simply because employees are not pissed off enough to go shop elsewhere, they still plan to remain employed by you, but at the same time they are not happy due to (insert your favourite reason here). It's a limbo state with just the right dose of unhappiness.

This stage to me is the perfect balance, as employees do not cost too much and yet they are billable to customers and provide a nice fat revenue stream. Your HR team should be able to provide you with the standard salary let's say for an analyst with 10 years of experience, for instance $60K. You then must pay between $50K and $55K, no more than that, so the analyst will be slightly pissed off but $5K is not enough for him to jump ships. You see what I mean? Of course you need to publicly say that you are offering salaries that are "in line with market conditions", which is the BS line that gets you covered. Nobody wants to be in line with market conditions, there's always this spread.

If you continue to go on the scale, you enter a state where employees are basically happy. Salaries are above market conditions, work is fun, they have nothing to complain about. This is really really bad from a management standpoint, because this means your staff is costing you too much. Sure, your turnover rate might dip below 5%, but trust me this is not the way to build profitable growth. You cannot short happiness. It's just a bleeding hole that requires attention. You need to trim the benefits and raises the next quarter and enforce new policies to reduce expenditure.

Once you understand this very basic concept, you'll understand why all the retards on Glassdoor systematically complain about their salaries / conditions / environment. They're blowing off steam, they vent their frustrations but they are not sending their resumes. The subtext is that their manager is actually doing a fine job - hence they work for a great company. Go buy their stock now.

The Three Little Pigs, Revisited

I've decided to address the younger crowd today by coming up with a nice story about profitable growth. It's never too early to teach good values.

This is the story of three little pigs whose mother decided they were old enough to earn a living by themselves. She was tired of cooking and cleaning and dreamed of a better future under the sun. So she sent out the three little pigs to seek their fortune.

The first pig created a gaming company whose multi-platform product was supposed to take the world by storm. It was a cash intensive business, the pig had to hire many specialists to produce something that could compete with the major players. The pig used angel money at first, but he then had to go through a costly 2nd round of financing before the product was ready to be marketed. His board of directors were old-school pigs, they did not understand the gaming business at all, and much less the mobile market.

The pig applied for R&D government grants, but the process was long and tedious. He had to explain 20 times what his innovative ideas were about down the smallest details, and the government workers were completely clueless about the gaming industry. He was able to secure $60 000 in grants, but the whole process consumed more money in time than the grant provided.

The first pig soon ran out of money and his gaming company filed for Chapter 11 and its assets were bought at an auction by a large game company owned by a rich wolf. Massive funds were then injected to promote the game and it grossed $500M in sales the next year. The wolf - an accomplished peddler - was then able to secure government grants in no time to develop another version, now that risks were bar none.

The second pig thought he was wiser than his younger brother and went to start a hardware company. According to the business plan, the gizmo would rival everything ever created by Apple, RIM or Sony, it would make a dent in the gadget universe. The pig even had a foam mock-up for which he paid with his own money. The pig sent his business plan to a VC firm managed by a wolf with a well-known reputation . The wolf said, "Little pig, little pig, let me come in." and the VC firm closed a round of financing where the pig was now a minority shareholder. The wolf provided funds on a monthly basis to pay for salaries and basic expenses, and the pig was under enormous pressure to turn a profit even though he could not market his product due to lack of funds. All marketing expenses were questioned by wolf, who expected the gadget to sell "just by itself" because it was good. After a while, the second pig sold everything to a Chinese company for a song.

The third pig had a different perspective on seeking fortune. He first sold himself as a consultant to a local government agency. He didn't know shit, but he quickly learned the lingo. After a while, he was able to detect more needs and wanted to grow his business. He hired his 2 younger brothers and billed top rate for their services. The client was quite happy by the pigs' services, there was a large budget for IT consulting services and the third pig was able to hire more piggy consultants from local competitors. Rapidly enough, the 3rd pig was spending all his time growing his business instead of working in a cubicle. His business was certified ISO 9001, allowing him to bid on more important projects.

The 3rd pig retained 100% of his business despite the fact that he was now employing 250 piggies. He received offers from competitors but turned them down. He had a vision where he would become the number one IT consulting provider in his country. The 3rd pig bought smaller less ambitious competitors and went through an IPO (ticker was HAM) to raise more cash.

At some point the 3rd pig acquired the wolf's business, money was just to sweet the wolf was tired of harassing young entrepreneurs.

The 3rd pig then structured his business for the long run. He was past 5,000 employees when he deployed SAP, opened new business units in different geographical locations, and created a centralized management team. Company values were teached to newcomers, there was a strong HR team in place and hundreds of forms and procedures. Despite all the goodness that the 3rd piggy had put in place, the turnover was above 15%. Even his 2 younger brothers had left the company, seems there were pissed off by some company policy.

Nevermind, the 3rd pig said, there will be others.

Hitting That Sweet Spot

IT consulting takes countless forms thanks to the mindboggling complexity of technology and the people who build a lifetime career on it. You can be a middleware consultant and earn your living by maintaining crappy products whose functionality still eludes me. You can be a security consultant and write governance documents that have a close resemblance to a Danielle Steel novel. You can be a project manager and your job is to defuse political feuds going on between two groups. All this non-sense pays very well but - let's speak frankly here - it's not the Klondike.

There's a specialty in the IT industry that very few people in the consulting business can achieve because you have to be fairly crazy and probably delusional, but finding one is like hitting a home run from a financial standpoint.

When you're considered a "luminary", it means that your Kool-Aid has found its prime target. No matter how crazy you are, no matter how disconnected you can be, many people will listen to you and ask for more. Simply said, it's a match made in heaven. Of course some people who maintain a ground connection with reality will quickly realize you’re just a phoney, but those people are not my concern because they are not the ones willing to pay for a luminary.

I heard many cases where consultants came up with ideas that were simply nuts, I mean totally bogus, anyone with an ounce of common sense would have said that this was a road to fiscal perdition. But the customer found the idea so appealing that multi-million dollar projects where founded. The crazier the idea, the bigger the budget. Strangely enough, this situation occurs only with public customers, crazy ideas don't stick in the commercial sector – well at least not very long – ask those who worked at Lehman Brothers for examples.

Although it's very bad news for the taxpayer when such crazy projects are jumpstarted, it's tremendously positive good news for consulting firms because it means millions in revenues over the course of several years.

When the customer is hooked up on a delusion, the last thing you do is to wake it up and talk about reality, because at that moment you're killing the goose that gives you golden eggs. What do you do then? You jump into the game, talk the same lingo and offer new ideas to augment the flawed idea, because the customer will love you even more.

Have you ever had a close contact with a luminary? How did you feel afterward? Let me know your experience at fake mike at gmail dot com. May profitable growth enlighten your day.

A Matter of Style

Maybe it's because I'm a guy in his late 50's and there's this natural gap between my generation and the one starting their career, but I'm dumbfounded by the dress code and consumption patterns of some of our youngest members at the company.

Don't get me wrong, I know it's a natural thing for youngsters to dress differently from their parents. When I started my career in the early 70's, it was okay to wear a tie as large as a small pizza and grow sideburns thick enough for a squirrel to be able to hide inside. Nevertheless, we were dressing for business and regardless of what hues were considered trendy, tasteful choices could help your career greatly. When we were meeting with a client to force a mainframe maintenance contract down his throat, we were not dressed like we were about to climb the Kilimanjaro. Ross Perot had a similar dilemma at EDS back in the days, he could barely tolerate men who dressed with shirts other than white and growing a beard raised suspicions about your political viewpoint.

Which brings me to my point, guys and gals in their early 20's have no dress code boundaries. They tend to dress at work pretty much the way they dress at home. Shirts from The North Face, Merrell sandals, the only thing missing from their outfit is climbing gear. Horrible haircuts are now back for young men where you can barely see their eyes, therefore impeding their visual perception of nonverbal signals during important meetings. What are they thinking? What happened to decency? And don't get me started about piercing, whenever I see a perforated gal or guy in the office, I try to imagine the top career level that this person will ever achieve and the level is usually quite low.

If you want to have a chance in life, keep your skin intact and distance yourself from your grungie friends. Start shaving, and by shaving I mean shaving, not a 3-day look. Go shop at Harry Rosen, if you're not sure about how to wear a tie just google it. And for god sake make an effort to speak in complete sentences, life is not a MSN chat room. I don't care if your job is to maintain a SAN, you should dress like a CEO. Do yourself a favour and ditch that Hyundai shit box and get yourself an old Mercedes for the same price, you can get today a clean 190 for an astonishing price. Larry Ellison from Oracle did exactly that when we was a young stud, and now check what his net worth is.

All this of course won't give you more money from me, but you'll score higher in my mind and that's what's important.

Uptrend Spotted in Shares of CGI Group

Chip says it all, and he's a wise man. Look at the picture above and decide what needs to be done. If your cultural background indicates that the sacrifice of a young lamb might excite the gods of profitable growth, just do it - but don't expense the lamb, I won't pay for it.

Members Column Day: Turning Members Into Numbers

Today let's open the mailbox to find another fascinating message from one of our members:

Dear FakeMike, many of us are questioning the company's way of managing employees for the past couple of years. It seems everything is colder every day, rules are fixed, nobody is having any kind of fun anymore. Directors show signs of mild to severe depressions. What is the place of the human nature at CGI? Celine from Mtl.

Human nature is overrated, Celine, sorry to bring you the news in such a way. If you want to have fun, get yourself a Wii or a dog, although the latter requires recurrent investments for food and vet. If you want to earn your living, medication is part of the package and pleasure is definitely not within the scope of work. C'mon, where is it written that work has to be fun? Employees who are having a good time is a suspicious activity, it means something is not right and that the manager should definitely check into it. When you laugh, you are not thinking about strategies and tactics to reach a higher level of profitable growth.

As for the company that provides your pay check and therefore feed your family, we might not be perfect yet and we definitely consider humans to be important. Important in a soylent green fashion, meaning humans have to be useful and contribute to the company long term goal. It's no secret that human capital is gradually converted into financial capital, and I think this is normal evolution.

Companies like Google which displays a very abnormal company behaviour toward employees are bound to return to a normal state. Don't even think for one second that on-site gym and free massage are sustainable company expenses. WIthin a few years, Google will transform itself into a standard company, and they will start by using a monochrome logo. They'll drop the freaking expensive free cafeteria, encouraging employees to get their food at Togo's or Taco Bell on El Camino like everyone else. Google will of course drop the 1-day-per-week personal project idea, which is completely useless and goes against every practical management rulebook ever written. Google will hire managers from IBM or Ernst & Young to bring order and decency. Even Eric Schmidt will stop acting like a total lunatic or he will replaced by a more sensible manager who will be able to understand the untapped power of IT consulting services. I'd like to see Lou Gerstner or someone similar leading GOOG.

Gosh I'm getting goose bumps just writing this.

Once people are exposed to the genius behind our service industry and the core ideas of profitable growth, they quickly ditch their ideas about revolutionary products and hardware (yuck). They understand that products are meaningless and risk-ridden, that R&D is a almost a communist idea and humans are just financial resources ready to be put into action.

Celine, I hope you share my grand vision and please report back to your manager immediately if you have any doubt. We may send you back to one of our CGI 101 session to let you adjust your personality to our management philosophy.

I Feel Good

When you're feeling down and out, sometimes you stumble on a situation when your concerns suddenly appear insignificant in the grand scheme of things. Today's such a day for yours truly.

Ever since we announced the lost of the Desjardins account, I've been feeling - let me find the right word - depressed like a Lehman Brothers analyst managing a pool of subprime loans the day they went bust. Not a pretty sight. I could barely eat this past week-end, I was thinking about resigning from CGI and going back to my native Pembroke to raise livestock, something for which I have no experience but somewhat found appealing. Cleaning cows must be fun.

When I opened the newspaper this morning I saw the devastated face of Curly, and my troubles just went away like a snow ball in July. This guy is being torpedoed on a daily basis by problems and scandals of unprecedented magnitude. Muddy liberal party financing tactics, judge nominations dictated by influential party donors, not a day passes without some kind of huge scandal making headlines. The state runs into a deep deficit, and Happy Raymond's budget is still the subject of important resentment from everyone. Water is coming in from all decks, the ship is going down, and there's 2-3 years before the next election, so Curly here is aging fast. He's still in denial mode, at least when talking to reporters, but privately this guy must be gulping Rolaids like crazy. If you were a doctor and the wreck above would check into your office, how much time would you give the man?

So when I think about Curly, I feel good, I feel so light and free of worries. His livid face is a reminder that I'm full of energy, I can double the size of this company if I put my mind to it. I feel like dancing tonight, but don't tell this to CGI members from India.

I need to go now, I'll call a few Wall Street analysts tomorrow and tell them to put CGI on their "Strong buy" list, because we're going to crush the competition just using our will power. Profitable growth will ensue.

Members Column Day: More Crybabies

Dear members, there are days where I wish I'd chosen a career path in the agriculture industry. When you drive your John Deere across the field, you don't hear wheat complaining. When you're in the barn, you don't hear cow talking about getting unions in. Even pigs are happy, and we all know they'd be the first to overthrow the farmer and start wearing Hugo Boss suits.

A knife went threw my heart when I read this CGI bashing on Glassdoor.com:

Cons: Published values not respected from upper management and down the chain. No IT leadership as this company follows the train and is mostly for "body" placement. Very little empowerment of employees as decisions power is kept at the top with little delegation thru the ranks (middle management and employees). Management structure changes frequently. Very weak HR function with few described roles and responsibilities. No ombudsman to enforce sound management practices. Training is hard to come by. On the whole, a large company managed like a small one.

This anonymous coward from Montreal is being tracked right now by our internal intelligence service, he or she will be sent to a dungeon to administer a Lotus Notes server remotely. Nevertheless, it hurts me. Why? It's not because this dweeb is saying false things per se, because as a whole I agree with the guy.

Yes, we're a body shop, we parachute consultants (viruses) in clients site (hosting body) and we bill top rate for whatever skill they have (infectious disease), be it SharePoint, BizTalk, WebSphere, the works. Multiply that action by thousands, and you start talking profitable growth.

Yes, we have no ombudsman because this kind of function is for the weak - get an ombudsman in and next thing you know you hear talk about socialism and unions. The basic idea behind ombudsmen is that they are supposed to act as a neutral position between employees and management. Problem is, my view of the CEO position at CGI is pretty close to this one. Therefore, an ombudsman is of no use and it saves me $100K a year.

Yes, there is no empowerment, this is done on purpose pal because our empire is being driven by a handful of people. Can you imagine the Death Star being run by several committees reporting to Vader? One middle manager trooper might decide to blast a small moon because he had a bad day, and then Sir Darth himself would have to issue a press release saying he's sorry his organization ran amok.

It hurts me so much to hear members take positive aspects of the company (no empowerment, no ombudsman, company managed like a small one) and turn them viciously into sleazy comments. People have no respect for profitable growth, I'm telling you.

Now get back to work you sissy, enlarge your BU revenues for a change.

Back in therapy. Sigh.

With the sour announcement this week that Desjardins is kicking CGI's ass in April 2011, I am feeling awfully depressed - I tried watching a game of curling but it didn't cheer me up. I played bridge on my computer but that didn't do. I even tried listening to favourite tunes from Slim Whitman but even that didn't cheer me up. So I called Paul my therapist and asked if he had some time for me this week-end. Sure, he said, as long as you can pay me you are always welcomed.

So I go back to his office on Saturday, drops of rain were hitting my Mercedes like to punish me even further.

So how are you feeling Mike, my therapist asks. It's been a long time since I billed you.

I go, terrible, just terrible. I mean, you read the news, right? Desjardins is throwing us out the window, like an unfaithful husband after 10 years of marriage. CGI doesn't deserve this, I don't deserve this, GIB lost 3% on the TSX, Serge is calling me every hour to lecture me on how I fucked a profitable relation that he carefully put in place when he was the CEO.

Paul pulls out his iPhone and checks the stock chart for CGI. I see, this is really bad, Mike this is really bad, I gotta dump some at market price Monday morning. But let's get back to you feelings Mike, what do think happened?

I sink even further in the leather couch. You know, Desjardins is going through a major reorg and they want to move away from the mainframe platform. They say they burn too much money in IT, they want to cut 900 positions and save over $175M. Sure, there's a lot of bacon fat in IT but that's not a legitimate reason to put CGI in the garbage can, you know?

Paul grabs a copy of The Globe & Mail and scans one article about the CGI / Desjardins news. He goes, would it be possible that Desjardins' conscious desire to restructure their company is causing them to reconsider all prior decisions, even good ones? I see that in couple therapy, guy dumps the wife and then buys a new car even though the old one, the car I mean, was perfectly fine. It's called projection. You transpose your frustration into other entities.

Well, I go, I think we might have pushed our client toward bad decisions just to keep the gravy train rolling you know, the money was just too sweet and we never recommend a client to reconsider things like a mainframe or other goodies that keep the juicy contracts going. A mainframe is like a 24-hour rainbow with a pot of gold constantly replenishing itself, from the IT outsourcing standpoint that is. We don't want to kill the rainbow. We have loads of IT people specialized in mainframe technology.

Paul goes, so what are you going to do with those mainframe people when the contract will be over in April 2011?

I will fire them of course, what else could I do? But that's not the real issue. People are expendable. What matters is profitable growth, FY2011 will take a direct hit unless we find a mother load of outsourcing contracts in Poland or God knows where. Our company is structured for the investor to be happy as a clam, clients and employees are second-ranking beings. If I proceed with my accelerated path to profitable growth, I'll have to suffer the wrath of money managers everywhere.

Time's up, said Paul. Same time next week?

Sigh. Of course. Send me the bill.

We screwed up

Your humble servant is writing you today with tears in my eyes and red ink in my spreadsheet. We lost a major outsourcing contract with a long-time client, one for which we sucked about $1.2B in revenues during the past 10 years. Yeah, these things happen.

I gotta tell you, a 10-year outsourcing contract is like a marriage. The first year you cater every possible need of your wife, you buy her expensive gifts and you go the extra mile every day. After 10 years you spend most of your nights in strip clubs pretending you have important business meetings. It's the same with a client. After a few years you start to ignore complaints because clients whine all the time. You then become so integrated with the client business that you think you ARE the client, and the real client is just an obnoxious bug flying around you. The client complains that he's been stuck with Explorer 6 for the past 10 years, and you list all your other clients that are still using IE6 and are quite happy ignoring that there are newer versions out there.

The most insulting thing about the Desjardins story is that it happened in our own backyard in Montreal. Worse, these nitwits publicly said that they are only considering IBM and HP to replace their beloved CGI. Like that's gonna solve a problem.

Roach out, talk to you soon.