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.

TENETS FOR HIRING

Retention also has a lot to do with making the right staffing choices in the first place. Postalian relies on a few key tenets as an aid to selecting the right people.

First and foremost, staff have to come from a large multinational or national organization, such as a bank, insurance or computer company. He wants people who have “been through the war” – people with a sense of what it’s going to take to go from point A to point B – from a two-year-old to a twelve- or a twenty-two year-old, to use his earlier analogy.

“People from other small start-ups may not bring with them a belief in the maturation of process, tools and people” said Postalian. “And so it was critical that the people we were hiring – especially the people that report directly to me and, to some degree, the more senior people – had this belief. They understood that process is important. They understood bureaucracy but they didn’t want to have the same kinds of bureaucracy and overhead that exist in a large institution. They wanted to have the flexibility and freedom of a young company to do what we needed them to do.”

Secondly, Postalian looks for people who want to make a difference – people whose satisfaction level comes as a result of the day-to-day things they do to make the world better for the company, their people and themselves. Emphasizing the importance of this, he said that the company now does special screening to find those kinds of people. One tool it uses is the Thomas International program for personality profile analysis (PPA).

“Using these PPA assessments gives us a really good sense of who these people are. Are they introverted or extroverted? Do they have a dominant style? Are they more steady and compliant – ‘I’ll do as you say because you asked me to do it,’” said Postalian. “We’re trying to find people who are more interested in shaking the trees a little and moving forward. We’ll worry about finding the people who are going to be more steady and compliant in the future when the organization, technology, process and tools are in place and more mature.”

Another key hiring tenet: people needed to understand that this wasn’t a long-term career opportunity. They weren’t entering a company with 14 steps to becoming the president. There were really only three layers – first line, second line and CEO – so they had to be happy with the role they were going to play.

“They had to understand that this wasn’t a progressive step – that they would have a learning experience for three to five years, and that’s all we would ask. After that they should be happy to move on,” said Postalian. “That’s very different than a company that’s looking at investing a lot of time and effort in somebody and having them stay for ten or twenty years.”

CHANGE MANAGEMENT

Change management is one of the biggest challenges CIOs have to deal with, and it’s an especially critical issue for a young company on a rapid growth path. “The biggest difference going from an IBM to a young company like ours is the relative rate of change,” said Postalian. “At a large mature company like IBM you’ve got defined processes, defined structure, and when you go through a transformational change it is aggregated at a very high level – either at a country level or a North American level. Typically, at the micro level or at a business-unit level in Canada, you have to get a certain level of buy-in.

“Here, everything is changing all the time. You‘ve got to keep up with technological change as well as the changing needs of people and the business. The question is: which do you put first? You can’t say it’s one or the other. In some cases you have to put the cart before the horse and in others you have to put the horse before the cart. And it’s sometimes difficult to get people to understand that and make sure that you’re still going forward – they need to constantly understand what the big picture is and accept what the world around them is.”

One of Postalian’s methods for keeping things on track is to constantly remind people of the company’s objectives – what it is trying to achieve and where it is trying to go – without getting into the specifics of how everything is going to happen.

“Personally, my strength lies in being able to paint that vision and strategic goal, and work towards everyone’s general acceptance of it,” he said. “You want to keep your people happy, you want to keep them around, and you want to keep them trained and engaged.”

ADVICE FOR CIOs

Postalian had some specific advice for IT executives transitioning from large organizations to small ones.

For starters, he said it’s important to realize that there will be a significant difference in the quality of people that you will have at your disposal, and in the operational maturity of the organization. For him, that was the biggest challenge.

“I was used to having very high quality people work with me. For example, in a mature company there is an inherent belief of ownership and accountability and making things happen all the time. When I joined this company there was nothing like that. No one knew who was accountable for what, and what their roles and responsibilities were. All of that stuff that you expected to be in place just didn’t exist. That was a big culture shock.”

He noted that if you have the same spectrum of responsibilities that he has, which is the whole lifecycle from architecture through to day-to-day operations in a smaller company, you’re not going to have all the knowledge, skills, and experience that you’ll need. Therefore you will have to learn how to supplement your company’s skill base with third-party skills and knowledge – without alienating your own people. Your people have to recognise that if they don’t have the required skills they must come and ask for them.

Secondly, IT executives should be prepared to deal with a much less robust technology environment. Postalian said that when he first arrived, the thing that caused him to lose more sleep than anything else was his concern over systems availability. Why? Because the systems weren’t built using proven off the shelf components; they were all very unique and custom-built, which is not uncommon for a young firm.

Finally, he recommended trying something that he has successfully put into practice. Every year he sits down and self-assesses his goals, and then he writes a letter to the CEO about the current status of the company and where it is going. The letter is typically about two pages long and highlights the handful of items that the company needs to address and what Postalian is personally going to do.

“In this world there isn’t the objective-setting at the senior management level that you would see in a multinational. You have to be self motivated, independent, driven, and know what needs to get done,” said Postalian. “Nobody else in my company is an IT expert. I am that person and they expect me to know what needs to get done and provide the roadmap. So you must be able to assess yourself both fairly and critically. You have to be able to say ‘that’s not good enough; here’s where we need to go.’”

Postalian even takes this a step further, sharing his self-assessment with his staff.

“It tells them: here’s what I’m thinking about; here’s what I’m working on; here’s where I think we need to go. So when we do our reviews I can refresh their memory about what the roadmap is, what the vision is, because as typical IT people, they can get buried in the trees. They forget.”

“At the end of the day you’ve got to be tough minded yet fair, you’ve got to be driven, and you’ve got to be independent,” he said. “You’ve got to be able to run your own shop and know confidently what you need to do.”

Even then, you may need some help with your task, and getting it may mean the difference between success and failure.

“To their credit, my company recognised that I needed help, given we are European-based with a Canadian presence. As I’m the only senior manager here I needed a management coach to work with me,” he said. “That person acts as a sounding board and helps me make sure that what I’m doing with my team is as effective as possible. If there wasn’t a management coach, I’d say it would be difficult for anybody doing this job – very difficult.”



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