How to Gauge the Success of a New CTO: Looking at BMC

Rob Enderle
Slide Show

The Evolution of the CIO

BMC just hired Phil Harris out of Cisco to be its new CTO. I work with a number of CTOs in a variety of firms and have come to develop a sense for the ones that will work out and those that won’t. I also had a chance to interview Harris last week. Now, I’ll walk you through how I assess a CTO’s skills and conclude with my assessment of Harris (or if that is all you care about, I’ll save you some time and say he passed).

Assessing a CTO

Most first-time CTOs either don’t understand the job or don’t have the authority to drive change. The latter can’t be effectively assessed from the outside. Something you should understand is that the CTO generally doesn’t have the direct authority to make the changes because it is a staff, not a line, position. That means CTOs need political power because they lack direct authority and that political power must come directly through their influence on the CEO, because it is that office that makes the CTO job work.

My worst experience with a CTO was when I once met a new Sun CTO. He invited me in for my first, and what turned out to be my last, briefing. In this briefing, he outlined Sun’s strategy for the future and at the heart of it was a change in the computing eco-system, which Sun was aggressively driving. In this instance, that change was to drive the market to commodity open source software, which would cripple Microsoft. There was no doubt that the strategy would do (and did do) what was intended, but he also outlined that this would also drive the market to commodity hardware. I raised my hand and asked the question that got me uninvited to future events: “Wouldn’t a drive to commodity hardware and software do more damage to Sun than it would Microsoft by effectively eliminating the company?” The CTO mostly responded with a deer in the headlights look. Of course, as my question predicted, that is exactly what happened to Sun.

Sun was so focused on hurting Microsoft that it didn’t realize it was even more aggressively putting itself out of business. At the time, a better strategy would have been to more tightly partner with Apple and Oracle to strengthen the premium space, but Sun was so blinded by Microsoft envy that it couldn’t see the better path.

The Four Legs of a CTO’s Table

The CTO’s job is to set the strategy for the company and to do that, the CTO has to be very knowledgeable about four things. Most, like the Sun CTO I referenced above, look at only two in depth: internal information and customer information. Internal info is important because it shows what the line managers want and can do, but the second can be misleading because customers tend to operate tactically, not strategically, and aren’t a very good source for what they will want more than a year out. This is because they don’t really know what new offerings might be coming. For instance, before the iPad was launched, customers had very little interest in tablets but the year after, pretty much everyone was dealing with an iPad wave.

Not to mention, looking only internally can lead to the very problem Sun experienced where the company follows the myopic plans of one leader who is filled with jealousy rather than proceed with a plan that will benefit the entire company. Sun CTO Scott McNealy wanted desperately to take down Microsoft, and this overrode his good sense and eventually lead to the death of what had been a very successful firm.

The other two missing table legs are competitive intelligence and environmental intelligence. The first has to include current and future competitors. For instance, IBM was blindsided by Amazon Web Services because it didn’t view AWS as an emerging competitor and had to respond tactically by buying SoftLayer in a near panic rather than having the luxury of taking a more measured approach. The second leg, environmental intelligence, anticipates regulatory problems or changes, such as the increasing conflict with China. Being able to anticipate such changes in a strategy can make the difference between a firm benefiting from them or becoming badly damaged by them.

In effect, the successful CEO has to channel the ancient military strategist Sun Tzu: “If you know the enemy and know yourself, you need not fear the results of a hundred battles.” If you are ignorant both of your enemy and yourself, you are certain to be in peril. Hence the related saying: “If you know the enemy and you know yourself, your victory will not stand in doubt; if you know Heaven and you know Earth, you may make your victory complete.”

Wrapping Up: Phil Harris

I talked to Phil Harris at length on these concepts, and it was clear he’d studied Sun Tzu and had learned these lessons somewhat painfully while at Cisco. So he enters the job at BMC battle hardened and experienced. That is often the biggest problem with new CTOs — they really have no concept of what their job is and often neither does the CEO, which makes both of their successes unlikely and their learning process potentially catastrophic. Harris was hand selected by BMC’s CEO Bob Beauchamp, who continues to impress me by picking top players to fill out his executive team.

As you look at other firms, does the CTO really set the strategy based on solid knowledge of his or her company, customers, competitors and environment, or do they just mostly manage labs or parrot the CEO’s vision, in essence rubber stamping someone else’s strategy? If it is the former, you can bet on the firm; with the latter, you are likely looking at a disaster in the making. Harris’ selection at BMC suggests that firm is focusing on a successful path.

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+

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