When a company’s home market is no longer its largest, “global” becomes more than an ambitious buzzword—it becomes a matter of survival. Manpower, the employment services company that began in 1948 in Milwaukee, now gets 80 percent of its revenue from outside the United States and has 4,400 offices in 72 countries.
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For more on what C-suite executives expect from IT, go to The View from the Top Series.
IT plays a critical role in linking those offices together, helping drive efficiencies and best practices across them. But it’s a challenge to bring those offices together without crushing their independence and responsiveness in the local markets.
Jeff Joerres knows all about this challenge. When he became chairman and CEO of Manpower in 1999, the company had just bailed on a $92 million front-office computer system for its worldwide offices that had been plagued with huge cost overruns and delays—causing the company to take a $57 million after-tax write-off in 1998. “We had kind of broken the golden rule that if you couldn’t get it done in a certain time frame you shouldn’t do it,” recalls Joerres. “The project had become too all-encompassing.”
Since then, Joerres’ strategy has been to make global IT investments cautiously, trying to maintain a delicate balance between global efficiencies and local flexibility. It’s been difficult. For example, offices in some countries still use paper forms in triplicate for some aspects of the candidate application process—one copy for the client, one for the local branch and one for corporate.
The paper trail is one of the things that Manpower’s CIO, Rick Davidson, is trying to eliminate in the new incarnation of Manpower’s global IT system to make the candidate application process entirely electronic worldwide. This time, the focus is on speeding routine processes while supporting, rather than dictating, processes like sales and marketing, where the locals have a chance to shine, says Joerres.
To manage that delicate balance of global and local, Joerres involves Davidson, who reports directly to Joerres, in the strategic decisions of Manpower in a unique way: He has Davidson develop the agenda and facilitate the monthly executive staff meeting. “It was my way of forcing him to be right in the middle of the action, to ferret out what’s important,” says Joerres.
CIO spoke to Joerres about his expectations for IT in a diverse global company.
CIO: You do business in 72 countries. From a business perspective, what characteristics should a global IT infrastructure have?
Jeff Joerres: In an organization as large as ours, if you do everything globally, you average to the lowest common denominator. And you never have an application that’s very good. That’s why we said, it’s not about all global or all local. It’s the combination.
Globally, we want to use IT for three things. The first is, How can global IT pursue revenue and profit? In our business, we interview 10 million people a year and put 4 million people to work. What if we could interview people faster and better?
The second global initiative we have is driving efficiency. We use paper time slips in many countries. What if I did that all electronically? I increase my speed, I decrease my error and I drive efficiency.
And then the third thing is that I want global IT to be the centerpiece for behavioral changes within the company overall. By that I mean, as an organization we have to modify our behavior to know what is global and what is local—to accept global [processes] because [they have] breadth and speed and efficiency. So, we’re putting IT out in front of business change because we believe that IT is less emotional than many other areas, such as marketing.
What do you mean when you say emotional?
Why should we have 72 data centers? Doesn’t make any sense. Now, does that have some emotion in it? Yes. The emotion is, “If I don’t have my data center then I don’t have control over IT.” Now we have three data centers: Singapore, outside of London and in the Midwest of the United States. While [eliminating the other data centers was] emotional, it has so much logic behind it, it’s pretty hard to fight. And that’s where you get the changing of behavior [to promote global sharing].
You have to do it right and not try to consolidate at the snap of a finger, because you run the risk of actually having the behavioral changes backfire on you. [The new centers go down] and then the local offices say, See, that’s why we don’t do global. My data center’s been down for a week. If it was mine I’d have it fixed. So, what we’ve done is to make our time lines and budgets as realistic as possible to build up credibility for the IT group.
So we have made, if you will, the proverbial turn in global IT. From having nothing [shared globally] four years ago, to now having the business field organization saying, Why can’t we do more? And that’s part of this behavioral change we’ve been looking for. Once the local offices understand that we at corporate are not trying to take power from them, but [are trying] to make their jobs more market-responsive, then they really start to get the global aspect of IT and support starts to build for [more global IT and processes].
What do you think you’ve achieved from globalization in IT?
Well, the easiest thing, and the most seductive thing, is that it drives a tremendous amount of efficiency. [But] if I only incent IT on efficiency, then everything is going to be driven toward centralization, and, in my opinion, marginalized. You will drive out the ability for IT to look at things from a growth perspective. They would only be looking at it from a cost perspective. And I think that’s dangerous.
Another thing that we have really worked on is, How do you not get IT trapped so that they own all of the cost-benefit analysis? The way we used to do it was, IT would request and own the projects. Then IT would go off and start projects and the business would say, “Oh, yeah well, I don’t know if I really wanted that.” And IT would be left holding the bag. Now, the business has to sign up for them in the budget-planning sessions.
[We also build business accountability by having] service-level agreements and chargebacks. We’re saying to the business, “It’s your IT budget. It’s allocated back to you.” It is not a perfect science. Because as soon as you try to make it a perfect science, a [local office] will find a hole in it and then say they’re being overcharged. So, we’re saying, “You’re missing the big picture. The allocation is there so that you don’t think that the [IT budget] is a honey pot.”
The other issue is this: Small countries could never do anything with IT if you do everything on an allocation basis. For example, if we put in a system and send three people to install it in the U.K., that kind of effort is not justified in the Philippines because the office is so much smaller. So we may [subsidize the small-office effort]. The big country says, Well, you charged me for them. We say, Sorry guys, that’s the way a company works! We can’t just let the smaller offices do nothing or do whatever they want because we could live to regret it later on if they grow.
How did your experience selling IBM mainframes shape your view of IT?
It showed me the complexity of building an application. Seeing that from the other side of the table has given me insight into what we don’t want to do with IT in our company.
What you want to do is easy; you read that in a book. What you don’t want to do involves the harder things that are behavioral driven, [like refusing to share resources and information]. I’m cynical at times with an IT budget. And the cynicism doesn’t come from inflated application costs. The cynicism comes from how much garbage is laying on the floor when the people in an organization aren’t being honest with one another.
For example, the organization decides to do a global application. And then you get into the local budget and you see some weird IT stuff in there and you find out that they’re not banking on the global IT guy coming through. So they’re writing a new version of their own software.
That drives me nuts. Now, if you told me [you don’t think IT can deliver], you might actually get the local rewrite approved. If the application is critical to your business and global IT has not delivered, maybe that’s a good business decision. But you better say exactly what’s going on. Otherwise it’s going to get cut. Because that’s just bad behavior.
How do you root out that behavior?
You’ve got to have the dialogue. If you’re hiding something in a budget, you don’t get fired because of that. You get coached: Why are you doing that? What behavior are we exhibiting that says you should be doing that? Don’t do that again, bring it forward. Or, what is global IT doing wrong? Maybe global IT needs a kick in the butt. Now if it happens a second or a third time, it’s a different kind of discussion.
Your company’s labor market research has said that there’s a shortage of talent in IT. And yet, readers write letters saying, I’m out there looking for work and I can’t find anything. What kind of a shortage are we talking about?
When I do media interviews, invariably I get e-mails and letters saying, What are you talking about? I have great experience and I can’t find a job.
[But] unfortunately, companies are looking at talent in a very different way. They are not geographically bound as much. There may be a great C+ programmer in Boston but somebody needs him in Madison, Wis., today.
The product lifecycle of an electronic device used to be three years. So, everything keyed off of that [and labor market cycles were longer]. The product lifecycle is now three months and labor has to key off of that [meaning there is going to be faster turnover in jobs]. And that creates a very discomforting situation. And I don’t know how you reverse that.