Thought Leadership of Former EDS CEO
Mort Meyerson built EDS into one of the top technology and business solutions company in the world who boasts from the day he started in 1979 up to the time he left in 1986, that there was not a single quarter of loss neither flat profits.
In an article published over at fastcompany, he discussed two astounding leadership thoughts he live by during his tenure.
To get rich, do you have to be miserable?
Monetary rewards play a very big factor in employee loyalty and performance especially when profit performance translates to their pockets. For some it is the primary motivation for excellence and success.
Mort tells how he has run the company with ferocity and unpopular beliefs all for the sake of money which in turn made a lot of people rich based on their performance. But what Mort realized is that happiness cannot be found only in monetary benefits that drove his people like crazy and resulted to unhappiness.
In an excerpt:
What I realized after I left was that I had also made a lot of people very unhappy. Our people paid a high price for their economic success. Eighty-hour weeks were the norm. We shifted people from project to project and simply expected them to make the move, no questions asked. We called our assignments “death marches” — without a trace of irony. You were expected to do whatever it took to get the job done. In terms of priorities, work was in first place; family, community, other obligations all came after.
None of that happened by accident. I had helped design EDS to operate this way, using the compensation system to motivate people: I tied their pay to profit-and-loss performance. If you ran your project very profitably, you were richly rewarded. If you didn’t, you weren’t. I routinely spent an extraordinary amount of my time on compensation and rewards — roughly 15%. I did it because I knew that compensation mattered most.
The system worked; that is, we got exactly what we wanted. We asked people to put financial performance before everything else, and they did. They drove themselves to do whatever was necessary to create those results — even if it meant too much personal sacrifice or doing things that weren’t really in the best interests of customers. Sometimes they did things that produced positive financial results in the short term but weren’t in the company’s long term interest. That’s a charge you’d usually apply to a CEO — but I’ve never heard it said about individuals down to the lowest ranks of a company. Yet my pay-for-performance approach effectively encouraged that behavior from all of our people.
This could no longer be applied in this present day because companies are exerting great effort in people happiness as a significant factor in raising productivity, efficiency and quality of results which in turn hit the bottomline of the company.
To be successful, do you have to punish your customers?
Mort discussed here that as consultants they outgunned and out-debated and out-argued their customers to a point that deliverables were always based on EDS decision rather than what the customer wants.
In an excerpt:Of course we delivered what we promised. But there were two problems: we made sure we won virtually every negotiation that decided what would be delivered; and our tone was often paternalistic, almost condescending. Customers felt like they were outgunned at every turn. Too often we made them feel incompetent or just plain stupid — after all, they had called us to bail them out of trouble, hadn’t they? I left EDS thinking not that our aims had been wrong or dishonorable, but that the way we had pursued them — in truth, the spirit with which I had led the company — had ultimately diminished both our own organization and our relations with customers.
It wasn’t until I had been out of EDS for a year, consulting to several other companies, that I began to get a clear line of sight on this question. As a consultant, I watched other vendors sell their products, many of which were the same ones I had sold. This time, I listened to their presentations with the ears of the purchaser. And what had sounded good when I was on the pitching side didn’t sound so authentic from the receiving side. It sounded arrogant, rigid, and high-handed.
I would agree with this leadership style because often customers ask a lot of things that could already be detrimental to their growth. They seem to see a very large picture of things and tend to want everything while in fact they would only need a small portion of a solution to be increasingly productive. Simply put, Less is More. The “Customer is always right” philosophy does not create long and lasting value to them and it is the job of consultants to show them the way. Probably Mort felt the style they did it was wrong; I feel that the approach could be tweaked to make it less brutal, but still, it’s all about making decisions for the customer rather than customers dictating what they want. What they want is not always what’s best for them.
Anyways, this is a great read and hopefully you learn more from Mort on leadership.
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