Leadership in a Chaotic Marketplace

In the October 21 Wall Street Journal, there were a number of articles centered around the dynamic environment in the information technology industry. In an industry where innovations and change can occur at break neck speed, many companies are struggling to stay ahead of the power curve and trying to figure out products, financial models and pricing structures that will prove successful in the future.

Yahoo Inc's Chief Executive, Carol Bartz has struggled with reduced ad revenue and has focused on cutting costs across the board in an effort to stabilize the company. The WSJ article spoke of Bartz leading Yahoo through change such as implementing a home page on one technology platform. (for the record, I had Yahoo as my home page for years, but I can't stand the look, feel and intrusiveness of Yahoo's new page, so I moved to MSN recently).

In the same WSJ edition, there is an article about a desire among some internet service providers to move to a pricing structure that charges customers based on usage as opposed to the current flat rate model.

Yet another article speaks of Sun Microsystems problems and planned layoff of up to 3,000 workers. The article talks of a potential takeover by Larry Ellison and Oracle Corporation. On the technology innovation side, an article speaks of Barnes & Noble's release of a new electronic book reader. In another recent WSJ article, the financial troubles of the print newspaper industry was detailed - driven largely by the real-time availability of news and information a point and click away on the internet. And of course e-business has exploded.

All these articles underscore the volatile and dynamic environment of the information technology industry and the rapid pace of change. The challenge for CEOs and other senior leaders is how they can get their companies out in front of the power curve to lead the innovation and change rather than be steam-rolled by it. To stay in front, leaders need to form a vision of the future and be willing to take calculated risks. Only the agile will survive.

In "Who Says Elephants Can't Dance," Lou Gerstner showed that an IT executive does not have to necessarily be a super technologist to be a successful leader. Foremost, Gerstner was a superior businessman, decisive and customer-centered. Secondly, he surrounded himself with a select number of very bright, capable people who could help him lead the necessary change. He was willing to make difficult decisions that would be hard for some stakeholders to accept but that were ultimately what was best for IBM. One very "slick" risk that Gerstner took was the decision to sell IBM's component technology, even to competitors. He reasoning, in part, was that by having other companies incorporate IBM components into their products, IBM could ultimately influence future industry standards (to IBM's benefit). This was a very smart way to shape the future and get ahead of the curve.

Today's leaders in the information technology industry must be especially good at recognizing the evolution of technology, the possibilities it presents, and assessing consumers' and business's openness to accepting the cascading of new products and capabilities. This is a challenge because many do not want to be in a constant state of "upgrade mode."

Today's environment, in my opinion, provides many opportunities for creative partnerships and leaders must be open to such arrangements. Probably most importantly, IT leaders must create organizational cultures that embrace and value the rapid pace of change. Additionally, continuous learning and support of risk-taking are critical. This is not an industry where the recipe for Campbell's Tomato Soup can endure for decades upon decades unchanged!