IBM Canada's former CIO stakes out startup turf

Whether through their own volition or because of circumstances beyond their control, CIOs sometimes find themselves moving from large companies to smaller ones. And whether they flourish or flounder depends a lot on their attitude and approach to the very different environment they find themselves in.

George Postalian is a case in point, and his experience can provide valuable insights for other CIOs who find themselves in this situation. Well known in IT management circles, Postalian spent close to thirty years with IBM Canada, eventually taking on the role of CIO of their Global Services business, which he held for nearly five years. But nice as it was to helm the Canadian IT department at one of the world’s leading technology firms, Postalian hankered for the kind of challenges that could not be found in an organizationally mature company like IBM.

“My forte is in business transformation through the use of technology,” he said. “It’s in helping businesses move from point A to point B. Once it gets into somewhat of an operationalised mode, a somewhat steady state, then probably I’m not the right person for the job. I’ll let somebody else pick it up and run with it.”

In short, Postalian wanted to get in on the ground floor of a company in which he could give rein to his visionary and transformational skills. Leaving IBM at the end of 2005, he soon found the kind of environment he was interested in. In May 2006 he joined five-year-old Wirecard Payment Solutions Ltd, which became a wholly owned subsidiary of Wirecard AG the following year, a provider of electronic payment and risk management services.

GROWING PAINS

There was no question that the challenges facing Postalian at his new company would be vastly different than those he faced at IBM. “The company fundamentally needed to mature. There were no constructs of formal processes and tools. There was no HR,” said Postalian. “The analogy I use is that of a two-year-old child who has freedom, can walk and talk, but really has no construct of what it can and can’t do during the day. It doesn’t know that running out onto the street isn’t good for its health. Most start-ups do whatever they have to do to survive.”

A significant turning point for the firm came in 2005 when it moved from the red into the black. At the same time it began to recognise the need to go from phase one to phase two in its business cycle. That meant putting in place things like a formal software development process and architecture, application development, quality assurance and operations teams with defined roles and responsibilities. It also meant hiring a veteran IT executive like Postalian to bring about such changes.

“It’s been an interesting two and a half years – very, very different,” he said. “Where IBM was rightly very focussed on cost, on consolidation, and on optimising its infrastructure, those principles don’t apply here. Our focus is around how fast can we grow and how fast can we develop and mature the people, processes and technology to keep up with the pace the company wants to grow.”

CREATING THE RIGHT ENVIRONMENT

In order to create a technology-driven company that could sustain the kind of growth that was envisioned, it was necessary to get the right IT team in place. When Postalian joined the company, the staffing situation was somewhat volatile – people were coming and going frequently, sometimes staying only a brief period of time. Within the first three months of his arrival, the focus was on hiring a local HR individual who would put an emphasis on recruiting and retention.

“We really had to stem the tide in terms of staff turnover, which we’ve been able to do over the past two and a half years,” said Postalian. “We’re at a point now where they’re staying two to three years, which for us is good.” The company found, however, that doing its own recruiting and finding the right people simply wasn’t a workable model in all cases. There was also a need to work closely with IT recruiting experts.

“Many recruiting companies are simply body shops for contracting and you’re just a number in the pile,” said Postalian. “We needed to work very hard and very closely with our recruiters, and there are some recruiting companies we’ve developed a very close relationship with – I would classify them as close partners – and they’re sincerely interested in us as a company.”

Another key aspect of retention was creation of the appropriate HR policies, procedures and incentives. These things needed to be put in place because there was no catalyst or mechanism of any kind to entice people to stay.

“We implemented things like a pay for performance bonus-based system and a benefits program, which we think is one of the better ones, and performance reviews, which we do quarterly,” said Postalian. “We’re also investing time and energy into the personal development of our staff – and we’re investing in the technology they’re working on. These are really important things for a start-up. In addition, you’ve got to have good quality people who have excellent people management skills, and who are interested in investing in their people, both from a time and technology perspective.”

But to sustain it long term, the right HR programs also need to be in place, he added, because at the end of the day, high turnover means that your productivity is negligible.