An industry whose capital is human

As you know, CGI is not manufacturing trinkets like some of our competitors do. The human element – to reuse the Dow Chemical campaign – is at the core of what we do. And humans are unfortunately the most difficult species to manage.

When Serge hired me more than 10 years ago, I did a very thorough due diligence of CGI, Kojak-style. At one point, we were having a drink at the Queen Elizabeth hotel in Montreal, I took out my Mont Blanc pen and sketched a triangle on my napkin. Its three points were meant to represent the three types of stakeholders: shareholders, clients and employees. I used to believe that, in the long term, we could not succeed if we couldn’t find a balance among the three partners.

How naïve I was. Here I was, a young guy in his mid-forties who only had one job at Bell Canada for 25 years, trying to come up with something smart to impress the company founders who were looking for a CEO.

Where did I get the idea about the triangle? Let me share something with you. If you read about how the current Toyota logo came to existence, you learn that the two perpendicular center ovals represent a relationship of mutual trust between the customer and Toyota. Where are the employees? Nowhere. What matters is the bond between the corporation and customers, employees are just necessary gears required to move cash flow from one party to the other.

I figured I was smarter than those Japanese dudes. Moving employees in this grand vision thing did sound impressive and it helped get my job at CGI, but everyone knew I was full of shiitake. They didn’t care though, because it sounded great.

While humans are the building blocks of any IT company, they must be corralled to bring order and unity which lead to profitable growth. If you shed too much light on your employees, their egos sprout and next thing you know you have union representatives knocking on your door. You don’t want that, do you? DO YOU?

So, on the surface you need to give employees the impression that they are important. Profit sharing, lots of HR processes and even human contact once in a while. But underneath all the nice things, you need to rule your staff with German-style discipline. They are – like the philosopher Waters once said – just bricks in the wall. Middle management is the concrete that hold the bricks together, and you need lots of it. And bricks serve a very specific function, you don’t want bricks on the loose that decide what color the walls should be. You catch my drift?

Clients also need to be corralled, especially the ones in the government sector, but they bring money, lots of money. If one decides to build a crazy program that costs hundreds of millions with a vague scope of work and it is willing to pay for it, I say let it bloom into a thousand flowers.

Employees are an expense from an accounting perspective, so the relationship is entirely different. You need to give in a little, but not too much. Bricks need air to survive, so it’s up to you as a manager to run your experiments and decide how much.

You’d be surprise how low you can go.

The annual tour is almost over

The past few weeks have been particularly exhausting, as I toured many of our offices in the U.S. and Canada. Picture above taken in L.A., I'm the fellow with the baseball cap on the left. I feel like an army general touring military locations, each time reminding my brainless soldiers of what’s important, how to behave, and what’s the big picture they should grasp. It ain’t easy, I’m telling you. I cannot count the number of time I had to answer questions concerning a possible merger of CGI with another big fat company. My answer was always the same : we’re analyzing different options, the market is good and we’re sticking to our plan.

It’s not a sexy answer, but CGI is not about fun or thrills, so anything exciting would be out of character. It’s like watching Kojak, you don’t expect Terry Savalas to dance the polka in the middle of an investigation. Or - for the younger crowd - you do not expect Patrick Stewart to snort a line of cocaine in the Enterprise ready-room.

We’ve done a couple of press releases recently, Yellow Pages for $100M, Daimler Financial Services, GSA for $32M. This is highly frustrating for me, because these are pretty fucking big announcements and Wall Street analysts could not care less. Our stock should be at $30, don’t you think?

Anyway. We’re releasing our 4^th quarter results and FY09 results on Nov. 9^th, and we’re coming on strong. Yes, dear members, you’ll get your $2000 profit-sharing bonus this Christmas unless our business unit screwed up – some of you did big time. Consider yourself lucky to have a job, and get back to work.