No iPhone for CGI members

We learned yesterday that Bell will launch its new high-speed packet access (HSPA) network next month, and to celebrate this event Bell customers might be able to offer the iPhone to its angry customers. It’s not official yet, but everyone can imagine Bell is eager to whack Rogers and its iPhone monopoly. Telus might join the fight soon as well.

Of course I expect my mailbox to be full by the end of the day with requests from CGI members asking to get an iPhone from Bell as soon as it comes out. CGI members get their company phone from Bell since they are a client of us. You scratch our back, we scratch yours, it's like business is done.

What’s wrong, don’t you like your Canadian-made Blackberry? I like my Blackberry, since it allows me to send e-mail to my staff during the night and I expect them to read it of course.

Don’t get me wrong, I think the iPhone is a nifty piece of technology but it doesn’t fully serve the CGI mission. For one thing, there’s no enterprise server. And the enterprise server is yet another excuse to sell consultants to a customer. Remove the server, and you remove possible revenues. I hate that.

So before you send me e-mail stating your love of Apple technology, consider the impact of the iPhone on CGI. Meditate on this for a while. Could a less expensive technology better serve our dream and mission? What about our partnership with Microsoft? Could Steve Ballmer be offended by our attitude toward Apple? At a time when CGI might sold for a large sum of money. Hum?

Think about that before you bug me with your childish requests. Please.

You got Njoyned

It’s a shame employees nowadays are disgusted with the idea of serving 25 years at a single company, they think jumping ships is the quickest way to increase their salary and get promotion. And don’t get me started on those Gen Y youths, they deserve to get their butt kicked hard and… wait… Mike, control yourself, you need to refrain your negative energy. Ok, deep breath, exhale, feeling better now.

Today I’d like to talk to you about how to block unsatisfied employees of leaving your company. Let’s say that there's this kid, let’s name him John, and he’s 25 and doing a good job but he thinks he can get a 10% raise by moving to Desjardins, Bank of Montreal, Bell or anywhere which happens to be one of our outsourcing client.

John’s obviously stupid because he’s already working at CGI, a company whose excellence and values cannot be topped, so he’s already at the best place but John doesn’t see this. Blame his inexperience.

John sends his resume to this company X, but wait, who’s managing this company’s infrastructure? That’s right. John’s resume is tapped by our CGI supersensors located deep into the client’s network and the resume is routed to the Njoyn database where CGI has private access. Our clients are told to report any defecting CGI member. If they don’t, well it’s the game where you tell the client that they have a beautiful infrastructure with tons of server containing sensitive data, and of course it would be bad if something happened. Like, really bad.

So John goes from disgruntled to depressed because he never get any interview or job offer, thanks to our super Njoyn system. Wink, Wink. We introduce self-doubt in the employee so he’s ready for the next phase.

Every week our senior HR guys take a look at this database in their secret room (pictured above) and discuss what treatment should be given to those who dare considering leaving CGI. We don’t beat them WWE-style, of course. We typically reassign the employee to a project where he has to work all alone with very little human contact – from CGI or the client – for a very long period of time. This solitary confinement is an opportunity for the CGI employee to meditate and to begin an inward journey where he/she discovers how much our company has to offer – on our terms of course.

Simply said, the grass cannot be greener elsewhere, because CGI is the grass company.

If you’re not already a CGI client, you’d better firewall your own resources with military-grade control because they will evaporate like free beer on a hot summer day. Instead of trying to do it yourself, why don’t you give a call – I have Njoyn brochure ready for you.

Innovation is so overrated

If mankind's history can be used to examine how innovations are integrated into society, one could say that human beings have always been pretty much satisfied with what they have at any time period and that the need for new products has been massively overrated ever since the wheel has been invented.

I’ve been giving a lot of thinking about Xerox buying Affiliated Computer and the previous acquisitions, as there’s a significant shift going on from product to service. We live in interesting times.

The reason is quite simple. Nowadays products are so freaking complex that you need an army of technicians, analysts and project managers just to make software work. Even more so, just the task of explaining what a product actually does is now a science in itself, and if you doubt me go check how Microsoft explain what Windows 7 is about.

And the reason for product complexity is not technology evolution per se but rather the inability for any organization to simplify and streamline. Check into any government organization and examine how they operate. They are totally inefficient, each department is a silo, people are not given clear objectives and the whole boat runs amok. It was like this 25 years ago, it is like this now, and it’ll be identical 25 years from now. So if this organization wants to implement a CRM or any kind of middleware, the product must be fundamentally complex to match all the non-sense processes going on in the organization.

How do you implement this? Well well well you call IT consulting companies like CGI. We’ll send you a cargo full of specialists charging hundreds of dollars per day so that you can implement this poorly designed software that you bought from the snake oil salesman. Then after 3 years you’ll realize you bought a fucking lemon and you’ll go back to the fruit market hoping to buy a better lemon.

Does this sound familiar? If you’re older or educated enough to recall how the world worked in the 60’s, it’s pretty much the way information technology was during the golden days of the Mad Men era. Companies bought costly mainframes from IBM, and Big Blue delivered a thousand pounds of transistors on your door along with buses and buses full of pricey consultants. Boxes are cheaper today but we shifted margins on service.

My point is that customers don’t need innovation, they may want it but they certainly don’t need it. Innovation is confusing and involves thinking and changes. Innovation is essential because the economy would stop dead in its track without it. Customers just want the freaking box to work so they can go home at 5, drink wine, watch TV and have sex. Peace of mind is priceless.

The box was bigger and heavier in the 60’s, now it’s smaller. If less is more then how you keeping score, sang Eddie Vedder. Well you keep score by selling people to your customers, the more you can sell the better your financial quarter will be. Innovation is completely irrelevant. Your customer wants expertise on beige boxes, you provide a beige box specialist. If the trend shits to black boxes, you provide someone whose expertise involves darker colors. As a CEO, all you need to know is what colors are in demand. That’s it.

For an industry to be profitable, the product has to amazingly complex but insignificant in the global realm of things.

I’m still awaiting your resumes. Together we can service the world.

Yet another therapy session

I was back for a session with my therapist this Sunday. Again, we focused on my supposedly negative attitude toward middle managers, as Paul seems to think there’s something lurking in my subconscious and it’s not a cigar.

Paul, I said, despite what you may be thinking I have very positive attitude toward my middle managers. We care about them because we have forms and processes in place where they play a crucial role, isn’t what love is about? Let me emphasize my point by giving you a very down-to-earth example.

We have this “CGI 101” thing, it’s a 3-day brainwashing mandatory session for all our directors. Imagine that, they don’t bill their clients for 3 CONSECUTIVE DAYS and they get no punishment for that, to me that’s unheard of. So we pack them in a hotel room and paint an exquisite image of CGI, our values, our dream, what role they serve in the grand scheme of things. They watch about 750 PowerPoint slides in 3 days and we use 10 points fonts to make sure we cram everything important. Profitable growth is mentioned every 3 slides to make sure our directors get the message.

We plan seatings an advance, so that the guy/gal next to you is from another city and or country and you can exchange on business topics. So you start talking about your boring project that’s going nowhere and is over budget and your client is completely nuts, and you’re startled when the other person says a similar story. My my, I though I was the only one poor schlep stuck in a hell hole. So you share some more, talk strategies, and by the end of the session you feel damn good even though you’re still stuck in the same hopeless position. If you’re lucky you can get laid but I’ve been told that’s rarely the case

In case we regroup around the same table a bunch of negative minds who could end up convincing themselves to leave the company after a few drinks, we hire “stunts” and we assign one to each table. They are professional actors who are paid to act like CGI employees and they tell rosy stories about their job, they will criticize lightly the company management – just enough to sound believable – but they will always conclude that CGI is the greatest company on this side of the galaxy. Therefore, people with negative attitudes will be compelled to take another look at themselves, and maybe the CGI 101 training will prevent them from giving their resignation.

Some people might say we’re using questionable tactics to manipulate our middle managers, but we’re investing 3 freaking days in those sessions. That’s a shitload of money if you take into account the actors, room rental, sandwiches, coffee, slide projector, paper pads and CGI pencils. So having stunts is just a way to boost the morale of our troops, and make sure they spread the gospel when they get back home.

Paul said we still have a long way to go in this therapy and made another appointment next Sunday. Damn.

What if CGI acquires another company?

As you all readers probably know, CGI is on a journey to do an acquisition that will strengthen our core business and provide customers with more value-centric strategic business solutions. In simpler terms, it will increase our earnings.

Serge and I were going last night over some potential targets this morning, and locations were always a key issue. Let’s say that there’s this good IT firm in Chicago, Boston or New York with $50M in revenues that does basically the same shit that we do, they’re up for sale because the founders are fed up with managing morons, they want to cash in and retire to the Bahamas so that they can drink margaritas for the next 20 years.

If we buy this firm and CGI already has a location in this town, the burden to integrate their employees with ours is a major challenge. You start by managing egos and who will report to whom, of course 75% of the new staff will be pissed off because 50% won’t get a promotion, another 25% will report to a new person who doesn’t care about their past corporate culture and the remaining 25% is pretty much brain dead.

Then it’s this make-believe part when we pretend that their corporate culture would be a nice addition to the CGI way, when in reality we couldn’t care less and can’t wait to integrate their employees into our billing system. Time is of the essence, so we usually deploy a PeopleSoft SWAT team within 4 hours following the press release about the acquisition so we can merge their billing and HR processes into ours.

This forced marriage is obviously doomed to fail and our goal is to retain 10-15% of the original staff after 3 years and 95% of their customers. If CGI is already the dominant player in the city, then those numbers are usually lower. So it’s a lot of effort on our end to drive this profitable growth, our employees do not realize how much work we’re putting into this when we know in advance the train is heading toward a cliff. But so is the price of buying a competitor.

An option of course if to acquire a company that has offices in places where CGI is not already present. We’re considering places like Turkistan, Uzbekistan and other remote places whose idea of information technology revolves around distributing AK-47 maintenance manuals on Torrent. The downside is, local government regularly tortures people for a bunch of reasons, and if you have employees detained for political motives they become not billable to your customers (unless the customer is the same government body that tortures them, then it’s something we would include in the contract to recoup any potential loss).

Note to self: check the classifieds this week-end under Business for sale.

We're here! We're here!

Those guys at Seeking Alpha deserve a round of applause for boosting CGI's visibility. Read here. Money quote: Dell valued Perot at $30 a share, which represents trailing multiples of 30x price earnings, 1.56x revenue and 13x EBITDA. Using the same multiples for CGI would mean a takeout price between $20-$30 (Canadian - the shares were trading for $12.84 Monday afternoon).

Holy Jumping Catfish! 30 bucks !

Steve Ballmer never called me back, maybe I should e-mail him this link don't you think? That would set a opening price for negotiations. I need to talk to those Cisco guys, which reminds me something. A guy called my office the other day, I thought he was trying to sell me switches and I told him to get lost. His name was Chambers, and now this name rings a bell...

16% of our staff is completely dumb

CGI Group's basic belief is that, when you own something, you simply take better care of it. Proof is, when you get a rental car for a week you allow yourself to drive recklessly, do off-road in the desert and eat quarterpounders while driving. You might even drop a dead body in the trunk and disregard any permanent coloration and odours it could leave. You don’t care, because it’s not yours.

So we’ve put in place a plan where employees can purchase company shares traded on the public market (up to 2% of their salary for regular employees) and CGI chips in for the same amount. Bottom line, you buy one share and you get one free. It’s a great program, there’s no vesting period so you can sell the stock at any time and pocket the profit. We’re actually fucking generous if you ask me.

So as an employee, you own a share of the company, and the idea is that you’ll take care of it (the company, not the shares stupid). Ownership creates a deeper, more personal involvement and brings incremental value to all stakeholders.

So as an outsider, you’d figure Jee, ALL CGI employees must be shareholders, their company is giving them FREE SHARES they can sell at ANY TIME.

Wrong. Only 84% out of 26,000 employees actually benefit from this voluntary program, meaning 16% of our staff is simply saying NO to free money. I’ve been giving a lot of thinking about these numbers, trying to figure out why someone would decline our stock purchase program. Do they think the stock market is a creature of Satan and money is evil therefore the less they get the better they feel? That might be it.

The other hypothesis is that a sizeable portion of our employees is simply dumb beyond all explanations, yet they manage to be billable. If we had 5 douchebags like this worldwide, my mind would be at ease. But 16%? That's 4160 douchebags. It’s a not a constant number throughout the company, some business units have a much lower rate (closer to 1-2%), but some BUs are just off the chart. Could it be the water? Could there be a deep cultural thing where owning shares of the company you work for goes against Buddha’s philosophy?

50,000,000 Elvis fans can’t be wrong, but apparently 4160 of our employees are wrong. If you know the motives more than I do, please give me a cue.