The Road to the Presidency

USAA ITCO President Steve Yates doesn’t hold a Harvard MBA. He does have a master’s degree in industrial engineering from the University of Alabama, where he learned a thing or two about cost accounting. And he took useful business law classes. But most of Yates’s business training has been on the IT job.

His first CIO gig in 1978, at Pool Co. in Houston, had him reporting to the CFO?a blessing in disguise. His boss “was very sharp and taught me a lot about basic business and money management,” says Yates. “He was the first boss to make me set management objectives and report on them monthly.” The CFO also directed Yates to set up his first IT chargeback system in 1980.

At his next job, Yates learned when to cut bait on a business. While Yates was CIO at engineering company Ebasco Services, the company bought an IT services outfit from Boeing that made systems for power company grids. Yates absorbed this group and its commitments to customers including Duke Energy and ConEd. “We assembled all the hardware and wrote the software to deliver the whole solution,” says Yates. “But in the end, I completed all the contracts and shut down the business. We simply weren’t competitive. That’s why Boeing sold it to us.”

The learning experiences continued at Ebasco, where Yates also managed an engineering group of 80 PhDs working on the Superconducting Supercollider, the world’s largest nuclear particle accelerator. When the Soviet Union collapsed, the Ebasco project was cancelled. But not before Yates attached himself to another business mentor, the engineering group’s salesman. “Just going with him to call on clients was like getting a master’s degree in sales,” Yates says. “He had a gift for working with people to understand what they really wanted and how to keep them happy.”

The finance and sales knowledge, combined with Yates’s IT background, poised him for his next three positions, running for-profit IT departments at Brown & Root, Rockwell Automation, and finally, USAA.

His business-side colleagues are effusive about Yates’s talents. “He’s the best business-focused IT guy I’ve ever seen,” says Mark Wright, president and CEO of USAA Federal Savings Bank. USAA COO Tim Handren adds, “A lot of CIOs might understand all the technology gobbledygook and not think about the business of banking or insurance or whatever. But Steve truly puts the needs of the USAA business right out front. He’s seen why IT fails in other companies. So he was able to put into practice here things that work.” -S.O.