Leadership

Video: Dumb business decisions that can take down a company

Big egos and a lack of foresight kill lots of companies. IT leaders can learn from their misguided decisions. This episode of Sanity Savers for IT executives discusses some of the most common bad decisions that can hurt good companies and their IT departments.

Big egos and a lack of foresight kill lots of companies — both small and large. However, IT leaders can learn from their misguided decisions and glean a some important lessons to keep their IT departments -- and ultimately their companies -- from suffering the same fate. This episode of Sanity Savers for IT executives discusses some of the most common bad decisions that can hurt good companies.

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

60 comments
ssampier
ssampier

Excellent video Jason. I loved it. Your post was timely, as I just finished listening to the the audiobook of "How the Mighty Fall" by Jim Collins. I would add another one to your list that Jim Collins mentions in his book: growing too big too fast. The customer service angle sort of ties into this one. In that case, lack of customer service is more of a symptom than a disease.

iragalicia
iragalicia

May I get a text format of this video?

pmwork1
pmwork1

Great succint presentation. Peters has said some of it before. Out-takes were good but soem peopl might not like the word Sh*t

sean.smith
sean.smith

I think you used strong language to describe a topic that needs to be dealt with in a strong way. I have no further insights, just a comment.

bs1805
bs1805

You have no further insight but have a comment and I would be interested what your comment would be.

gi7omy
gi7omy

Most companies these days are run by accountants who have no background in the type of service provided (this applies across the board and not just IT) These guys consider that the only 'indispensable' job in the company is THEIRS, so everyone else gets dumped and they award themselves a nice fat bonus for 'saving' the company money. The fact that they may have run the company into the ground is irrelevant - they have a contract guaranteeing them a nice fat golden handshake when it does fold. Call me cynical if you wish - but I've seen it all happen too many times

bs1805
bs1805

How about implementing a new ERP System without any backups at all in a hostile enviroment where almost every employee hates the management of the Company not only that but putting in ??200.00 workstations and calling them servers. Compound it with head office server again no backups but having windows 2003 standard instead of windows 2003 enterprise which would have addressed memory up to 32gb instead of 4gb. Yet the IT director was willing to spend ??500,000 for exactly the same system from suppliers who he stated had right colour of hair. I got exactly the same system for ??200,000 but from suppliers who had wrong colour of hair. Was it a dumb decision or a racist decision please comment.

zhenchyld
zhenchyld

Note to self - yellow shirt in front of under lit green screen equals glowing shoulders.

mark.silvia
mark.silvia

Shortly after I finished college and being laid off from what most would of classified as a cool company to work for, I made a poor choice for for employment and did a poor job negotiating appropriate compensation. I came into this company as an database application developer and was paid well below market level. I was able to re-negotiate a 33% raise which brought me just below market rate. I then took on extra responsibilities including systems administration and being on call practically 24x7 and was treated like crap in general. I have also saved the company hundreds of thousands of dollars but worked 3 years without a single raise. I finally got fed up and found a company close to home and paid twice as much and half the hours with normal hours of 8-5. As a result, the company had to scramble and hire 3 people to replace me. I came by the visit 4 years later and I felt like I walked back in time. Same programs and setups I did 4 years ago are still there and leaned that, even in my absence, my applications beat out a competing application. Bottom line, if you have a smart and hard working employee, compensate them at fair market value or better and treat them with dignity and respect.

FrankXchange
FrankXchange

I think you make an excellent point about recruiting and keeping talent. I've developed a very jaundiced view of Human Resource departments and their employees. Too often dealing with HR in large organisations has meant endless inane exercises designed to cover their butts. I'm convinced that many use HR as a dumping ground for deadwood, or unduly manipulate them for politically expedient ends. Hiring a strong, dynamic and dedicated thinker to lead HR is critical for the health of an enterprise. You have only to look at the lacking leadership in the auto industry, for instance, to see where stagnant hiring practices lead. I'm amazed more companies don't get this.

brent.russell
brent.russell

We call this the Human Remains Dept for those kind of reasons.

w.kimura
w.kimura

Good stuff, but same-o, same-o! I've heard this same arguments for decades. Why are so few leaders paying attention?

mcmahon
mcmahon

Another common mistake: "My company's network infrastructure is running so well, why do I need all this IT staff?" Little known is how much work it is taking to keep that system running so smoothly.

vucliriel
vucliriel

... Maybe it's because sseemingly so many of you actually have the TIME to watch these videos instead of reading it in text form ;) No personal offense intended, Man.. Whew, the energy put into these text responses to drive in the importance of a simple text version of the subject... ;)

g01d4
g01d4

I think... "Diversity" does not necessarily correlate with gender or skin color. Building competetent teams is more important than retaining top talent. "Promotions" to management should be a thing of the past. Management skills often aren't 'above' technical skills in this day and age. More of the Dilbert rather than Peter Principle.

g01d4
g01d4

I think... "Diversity" goes beyond gender and skin color. Retaining top talent is less important than building competent teams. 'Promotions' to management should be a thing of the past. Management is obviously important but the skills required, especially in IT, are often not 'above' the skills required for other team members http://en.wikipedia.org/wiki/The_Dilbert_Principle

dbecker
dbecker

The top four killers of companies are: 1) Lie to your employees; 2) Assume you know everything you need to know and don't listen -- and especially don't listen to criticism which could lead to profitable resolutions; 3) Value image over substance -- if it looks good, it must be good; 4) Steal; milk your environment for all it's worth -- after all, after your promotion [or next 'opportunity'], you won't have to worry about failures after you are gone, caused by starving the resources for maintainance of a viable environment. Beyond that, note the "Big egos and a lack of foresight kill lots of companies": Narcissism is the worst way to run a business -- or the best way to ruin a business [putting the "I" in run].

dbecker
dbecker

Have no idea what you guys are talking about: There's no video? Is this an IE6 thing? Or didn't get through our firewall? Yes, a transcript would be nice to know what's going on here. From experience, here's a point you can use: Don't hire psycophaths into IT. You will regret it [based on many different personal experiences which wrecked not just IT, but the entire business / corporation / agency]. Beyond that, provide what needs to be provided and avoid manic overreaching. --- or --- Go ahead and hire psychopaths with visions of grandeur who are so convincing that everyone is satisfied with the image of things to come until the day you get the bill and they take a powder to go on to yet more dizzying heights of mystic madness in another, more promising, venue.

rhkramer
rhkramer

Where's the transcript?

vucliriel
vucliriel

Please add my voice to this request... It's high time TechRepublic considered a content based version of their articles versus the present high bandwidth fluff which is nothing less than 'marketing vehicle' for mainiatining entertainment to a level that can sustain continuing advertisement viewing. Give us a lower bandwidth CONTENT CENTRIC version. I have my fill of commercial viewing on pay TV (which is especially offensive since viewers are forced to pay pay for viewing channels that are already financed by 40% commercial content, but that's another story). I long for the time that the internet was a tool for freedom and emancipation. Look at this site, there's almost as much glitz as in a Vegas casino. Now don't take us wrong, we like the content, but do loose the empty fluff and give us a TEXT based version!!! Oh and if you don't believe me, ask yourself where the most insightful information lies in these articles: in the user comments!!!

jasonhiner
jasonhiner

Transcripts are coming very soon (likely in November). However, I also put a link in each post to the text version of the article that the episode is based on.

rbackus
rbackus

1. I need a transcript because sound is disabled on my work computer (broadband access, IT controlled); and I don't have broadband at home; nor do I read lips. 2. I searched the whole page and "watched" the whole video and couldn't find a visible link - not even in the credits. 3. Graphics are nice, but words are much more specific and informative.

Terabyte Computer
Terabyte Computer

I'm sure it's just me, but I don't see the link in the post. Would love to see the article, just don't have time for the video.

vucliriel
vucliriel

If it's there, it's very well hidden... Kind of looking for vital information in legalese fine print... Probably designed that way... Or maybe the text link is spelled out in the video ;)

jlambert
jlambert

I dont bother with the videos myself because if it is worth reading I may want to save it for future use.

atoms
atoms

I seem to recall this whole thing happening the last time I was interested in the content of one of these videos. As I've mentioned before, I can't watch these things at work. After seeing a couple at home I'm not very motivated to watch them anyway. Text please! Thanks

mhbowman
mhbowman

I don't see a link either.

ToadWiz
ToadWiz

I keep my browser very secure. I COULD relax my security for sites I trust, but what happens when you get hacked? No, I do not watch any flash videos. If you need to get a point across to me, it needs to be in writing.

don
don

No time for the videos. Need transcript.

b.lantz
b.lantz

I'm with the other guys; I'd prefer a transcript.

agilebrainz
agilebrainz

I want the info, but a video takes too long. Please put this into an article!

Industrial Controller
Industrial Controller

I agree there should be a text version, but you have numerous people saying how busy they are. Too busy for video, and then they waste time posting feedback in this forum. I guess important work is a matter of opinion.

CommonSenseNBusiness
CommonSenseNBusiness

As a consultant for ISO, ITSM, ITIL, BlahBlah.... I do my best to make management understand that Common Sense prevails every single time, to whit the first post that truly makes sense of this article. People that do not have time to watch a video but do have time to read posts and write them stating that they do not have time, surely are more part of the problem than they can imagine.

mhbowman
mhbowman

Everyone's caught up on Web technology and production. However, I'm never going watch a 5 minute video when I can scan the key points of an article in 30 seconds. Ever. While were on the subject, when you do have an article, just link it. Half the time I have to go through a couple of links, and then download a paper. Pass. If I like it that much, I'll bookmark it.

frankharty
frankharty

Come on stick on a set of headphones and listen while you go through your inbox or handle a couple of other issues that take little time and not much thought. This argument about how little time you have and how your 30 second scans are so much better than a couple of minutes of listening to a video are just plan lame!

raym444
raym444

some of us actually have lives and can't afford to sit and listen to a bunch of BS just to pick up a few good points.

Lovs2look
Lovs2look

Must do HEAPS of meaningful work throughout the day. Tell me, when you find an interesting tidbit of info that may be relevant to your work, how do you archive it for future reference? Do you store the whole video, in case you want to reference the info again, and then have to find the place in the video where it is referenced. You may have to sit thru 4 mins to get to the good stuff. If you have several videos, this 4 mins may turn into a lot longer. Or do you slice up the videos into relevant topics and save them individually? Sounds like it would take AGES, and heaps of space, but that's right, you have nothing but time! I prefer to store a document or pdf (much smaller) that can be searched for content. Takes 5 sec to find it on my PC. Soooo much easier and quicker. Saves heaps of time...you should try it.

Lovs2look
Lovs2look

My company restricts video on our network, so I'll never be able to "stick on a set of headphones and listen while you go through your inbox" I have a phone that rings constantly, a boss who mumbles, an A/C that is noisy and NO TIME TO WATCH VIDEOS. That's great that you can switch off for however long you like, but some of us have work to do. How about a transcript?

TX-Netware
TX-Netware

One thing you're not considering.... some of us have hearing impairments .... haven't seen one of these videos or webcasts yet that I could hear.

Tig2
Tig2

For many, it is an issue of bandwidth. For others, all video is blocked. For those peers, the only way to get to the content is to view it from their home systems. That is not the first thing most people want to do when they get home from work. Maybe they only use TR on their lunch hour or when doing research. I agree that transcripts of video articles should be made available. That way the text information is available for easy reference later.

vucliriel
vucliriel

... And got to agree strongly with the original poster, not everyone has the leasure to 'enjoy' these videos.

Chuck.little
Chuck.little

I believe that you hit the nail on the head so to speak. The last company that I worked for is extremely guilty of those practices and they claim to be a Six Sigma company. I do not understand why people with MBA's, "moxy", and vast business experience can never seem to grasp things such as this that are simple and true. It has been said and proven time and time again: Take care of your customers and they will take care of you. Take care of your employees and they will take care of you. Problem solved.

reisen55
reisen55

Hey, all those IT guys do on the 37th floor is read magazines and browse. Those 15 servers they manage are up all of the time and we have not had a worm or virus in ages. Obviously they are doing nothing and Microsoft is great. So, we can replace them with 1/4 pay help desk staffers in Bangalore and reduce salary expenses and eliminate health care costs. My former employer did that in 2005. Result: IT support got far worse. 200 servers infected by a worm in 2006 Helpdesk knows nothing. But management sees those salary expense savings ONLY and not the hidden productivity loss metrics.

jim.lonero
jim.lonero

I cannot believe that corporate management is SO dumb. It sounds like, in order to keep your job, IT staffers will need to create noticable problems in the equipment. Also, the larger the problem, the more the (perceived) need for the staff. Some high level people really need a kick in the rear.

kudincendol
kudincendol

Some management just simply look at the cost, . If the cost is cheaper, they don't care even if it is unnecessary and make things much more complicated. But if the cost is expensive they don't care even if it really a critical equipment. So what to do ? Just let the disaster happen then the critical equipment will be justify. Hahahahaha.....Am I correct or not ?

Tig2
Tig2

Even when expressed in hard numbers, it is very difficult to get business to see the negative impact on the organization when a productivity stopping event happens. It is even harder when they choose cheap candidates with no knowledge of the existing systems to write new code to update them. Failing to make good choices tends to result in employees doing everything they can to keep from being "seen" by management. Fudged numbers and incorrect metrics result. And business is left with a poor understanding of what is really happening. When projects fail to meet their projections, business blames the project team. So much for staying under the radar! The unfortunate truth though is that business doesn't want to see reality. They seem to want the sunshine of never having a real understanding. Scrapping a project is easier than doing it correctly in the first place. Makes me shake my head...

jim.lonero
jim.lonero

The 2nd and 3rd paragraphs have been replayed over and over again for the last 30 years. I have seen software project that were extremely underestimated for lack of knowledge of what has to be done. The minute details are forgotten or not known ahead of time. For example, attempting to make a light-weight mainframe on par with existing IBM mainframes in 6 months (1980s) or creating a COM package, similar to Microsoft's using 3 people in 6 months (2000). The examples go on and on. The project designers do not understand the intricacies and scope of their project at the start and keep adding more to it until they run out of time or money. Sometimes, even need to add staff. This is all to make their project worth funding. It is a matter of looking good rather then truthfullness.

Matt Miller
Matt Miller

I agree that outsourcing in most cases does not provide the same high level of service as in house expertise. However, salary and wages are big, big line items on every company's budget. And let's face it, even entry level IT jobs pay well compared to other administrative positions; so, yes IT becomes an obvious target. One final note to that: we (IT) are constantly making other areas more efficient, reducing man hours and man power to produce more work, this needs to be the same philosophy within the IT department as well. With that said, outsourcing ultimately occurs when one of two events happen. 1) The in house expertise is either lacking or not critical. Running network wire or servicing printers are obvious examples that I believe most will agree with. 2) Somewhere, leadership has failed to be able to demonstrate the true value of in house expertise. Describing the number of help desk calls or hours put in to recover a server do not show value to upper management; those are simply tasks that are part of the job. Yet we all know these tasks are what we bring, and are a major component in providing a problem free network. Yet over and over, this is the type of information that is constantly being presented to management. What needs to be presented is how all of our daily efforts contribute to the business: How are your efforts making other areas more productive? How did system X reduce the bottom line? How does having a small dedicated in house team to manage servers keep the operating versus outsourcing a larger team across the globe? This reality should not be surprising. Most IT professionals are not ones who walk around bragging about their accomplishments. We simply do not require constant feedback and praise. We are self reliant, and self motivated. When a job is done well, we give ourselves a quick pat on the back and move on to the next project, no party, no fanfare, no acknowledgement required. However, if no one is doing it, then upper management will assume that outsourcing or reduce of manpower is easily justifiable. This is what your CIO/CSO/IT Director should be doing, but it doesn?t have to stop at that level. My advice for any level of IT workers 1) Understand business thinking. Go back to school, buy some management books, etc. You would be surprised in how quickly your opinions will change of their decision making. You will most likely still disagree, but you will at least understand. And with that understanding you will be better able to argue with management in business terms. In addition, you will begin finding that your approach to solutions will be more business oriented, thus expanding the value you already bring to the organization. If you are fortunate enough to have an IT Executive that is business oriented, versus technical or accounting based, leverage him or her. Learn how the business units view your value, and how you can improve it. You might be surprised to find that the high level of service you provide in one area may not really be required to the business (and therefore an area that can be eliminated or outsourced properly). If this is the case, reduce your efforts on the task(s), find a way to delegate it, automate it, or advise management to outsource that task ? in any event this will allow you to focus on areas that the business finds valuable. 2) Be proactive and personable with your customers Yes, the senior execs are your customers. They do not understand, nor do they care, the efforts into making the systems hum quietly day after day (and in most cases you don't want them to know either). So it is up to you to go the extra step. When there is a problem that you resolved for them, follow up in person - to ensure the problem truly is resolved. When a new system or change is put in place to increase efficiency, follow up, and then ask simple questions such as, is there any thing else that we can do for you? These simple steps remind them why you are there, and reinforce the value you bring to the organization, all without any bragging or saleman-ish approach of self promotion.

kudincendol
kudincendol

Good comment indeed. Thanks for the tips on how to communicate with the management. However, not all managers are open minded to new ideas. Some already look at you based on your education level, reputation and source of your idea. Unless you have an Internationally recognize certificate or a Master/PHd, don't even think of giving some opposite feedback (read: argument) to your boss idea, let alone to give new idea.

reisen55
reisen55

I am pro-active with my customers and listen to their concerns. In fact, I have just sent off an email to Dell (I have a great small business rep there, Devershi Patel and I commend her to one and all on this board) to consider a workstation upgrade for a client, which is a statistical exercise in many ways. Their systems are not broken, and are working but at 3-4 years old it is always worth keeping numbers in mind. As for Bangalore, I would like to see how they would have handled the day when I returned to my job to be confronted by over 700 Optiplex systems and 200 laptops to be re-distributed and imaged in a 2 week time frame. You see, we had this little old server crash from the South Tower of the World Trade Center and, darn, some things just cannot be done by remote control.

mhbowman
mhbowman

I think these types of problems spring from management that hasn't been promoted up through IT. Instead they're brought in under the false impression that a good manager can manage anything. WRONG!! How can you make solid IT decisions when you don't understand technology? Would it make sense for a Chief Financial Officer at a bank to not have a background in banking? No, but it's probably what Wachovia did. How about a hospital administrator that used to manage a hotel? Same thing right? Rooms, beds, and people in them. No problem. Combine that with someone that thinks the only thing that matters is the bottom line and the result is inexperinced people working on ten year old equipment, running software that isn't even supported any more. Then, they wonder why they killed by a virus, but of course it can't be them. And yet they're still pulling down huge money to make these choices. Go figure.

raym444
raym444

sfessey, your statement that a good manager can manage anything is a load of bull****. After 22 years in the industry, I've worked with managers that came from IT and those who haven't and the non tech. managers were INVARIABLY incapable of managing their departments successfully. The only reason they were kept on board was because of their professional image or their connections up the ladder. A good manager HAS to be someone his subordinates can turn to when they have a problem they can't figure out and that just can't happen when the pretty boy manager can't even tell the difference between a router and a modem, let alone troubleshoot a network connection problem. Like I said, after 22 years in the industry working for big corporations like Perrier and Time/Warner, I still haven't seen a non technical IT manager that was worth his exaggerated paycheck.

mhbowman
mhbowman

fortunately, for me, I've had mostly great bosses that came up through the ranks. Most of the big mistakes came further up the ladder, and again fortunately for me, from the fairly distant past. The frustrations come from: 1. Mgrs only considering the bottom line 2. Wasting employee time when you need the most basic concepts explained. Again. 3. Waisting man hours because you can't see the obvious value in tools that allow you to do things more efficiently. 4. Risking the enterprise because you don't understand how important it is to stay WITH current technology. 5. Having all the evidence in front of about why a specific path is the OBVIOUS choice to everyone involved and STILL taking a different direction. 6. Wasting money by signing off with a vendor to pay for support you either don't need or already have in place. That's my personal favorite. We were contracted for network support. Zero outages in the first 3 years of a five year contract. The genius CIO signed a 25 YEAR contract to another company to do the SAME thing. They took over, we got the crap work, and they had 3 outages in the first 3 months. Simple question: You have a choice between a leader WITH experience in an industry or one without it. Why would you ever go with the latter?

gil_gosseyn
gil_gosseyn

I've been a tech for over 30 years, worked for countless companies in 10 states, and can count the number of good managers I've worked for on one hand. Most companies, especially larger ones, stay in business despite the incompetence of their management. Good managers are the very rare exception, not the rule.

sfessey
sfessey

I understand the frustration about managers making solid IT decisions when they do not come from an IT beckground however the fact is that a good manager can manage anything. Let me qualify. The real gift of a good manager is to get the best from their team. An accountant can manage an IT department well if they have the technical expertise in their team to give them advice and for them to then act responsibly on that advice. Not all can do it but good managers can. I agree with the point made about keeping your value in the minds of the senior executives. Email is a critical corporatetool and everyone takes it for granted, I know that but we in the IT department do not take it for granted at all as it is also a prime conduit for infection. We do not get many spam emails come through but now and again we do and the reaction from senior management was almost accusatory. I decided the next month to change the report I gave them and instead of showing email flow it showed the level of infections and spam emails intercepted. No more accusations, merely an appreciation of what a great job we are doing. Let management have the information that is important to them in a format they require.