Reflections on the 5th Fisher-Hopper Prize Event

A week-and-a-half ago, on Thursday, Sept. 29th, the 5th annual Fisher-Hopper Prize event was held at UC-Berkeley to a sold-out audience of one-hundred or so CIOs and IT executives from throughout the US, Canada, and Western Europe. It was a long day with the doors opening at 7:30am and the evening banquet concluding shortly after 9pm.

The 2nd presentation of the morning segment was by a father/son team, DuWayne Peterson, the former EVP/CIO of Merrill-Lynch, and his son, Brad Peterson, the current EVP/CTO&CIO of NASDAQ. It was a stunning performance; relevant, thought-provoking, and – at several points – very, very funny … as the laughter from the engaged audience showed.

Two of their slides caused me to mentally “wander.” The first of these was a slide that had nine hexagons, each containing one of nine “Technology Trends Shaping Financial Services: Innovations Advancing The FinTech Landscape”

  1. Cloud Services
  2. Smartphone Ecosystem
  3. Blockchain
  4. Machine Intelligence
  5. Cryptography
  6. Quantum Computing
  7. Big Data
  8. Microservices
  9. Augmented Reality/Virtual Reality

While this was being projected on the central screen and on four large monitors on the east wall of The University Club, Brad made a passing remark about the fact that it wasn’t particularly important that the slide showed “nine trends,” and my mind began to wander. “Nine” was important, possibly not in this exact context but certainly within the broader context of the “bits and bytes” that are the fundamental building blocks of our Digital Age.

A “byte” is comprised of eight “bits” plus (and here my memory was wrong) a parity bit (either “odd” or “even”) meaning that Brad’s nine trends were coincidentally the same in number as the true number of bits in a byte … but I was wrong. A day or so later, I checked and discovered that a “byte” contains seven data-bits and one parity bit for a total of eight bits, not nine.

However, while Brad was speaking my mind kept wandering into the murky waters of parity bits, odd or even parity, vertical and horizontal parity, and – finally – error detecting codes, error correcting codes, and (more to the point) Hamming Codes. As I sat there in that beautiful room high atop Memorial Stadium, I recalled a 1967 talk by Richard Hamming (then of Bell Labs) to a class of EECS graduate students taking a research course being taught that year at Cal by Bertram Raphael, a Visiting Scholar from Stanford.

As Brad and his father were outlining the future as seen through the lens of Financial Technology, I remembered a comment made Hamming …

Hamming’s talk was given in a smallish lecture hall in the old Engineering Building on the campus of the University of California at Berkeley. His topic was the past, present, and future of computer technology. One thing he said stuck in my memory, “Whenever there is a technological change that causes a functional improvement of one or more orders of magnitude, the impact on human civilization is unpredictable.”


How right he was and how little did we understand what was about to happen – back then in 1967! One measure of the underlying cause of much we see happening today might be found in the fact that in the fifty year period, 1958-2008, the [invested capital] cost per executed computer instruction per second has declined by seven orders of magnitude from approximately $10,000 (in 1958) to less than 0.1¢ (in 2008).

While I was recalling Hamming’s “order of magnitude” comment, Brad had moved on several slides to one with three recent quotes by the inventor and futurist, Ray Kurzwell:

  • Law of Accelerating Returns is the reason why information technologies grow exponentially, and they’ll not only impact businesses but what makes us human.
  • Information technology progresses exponentially [whereas progressing] 30 steps linearly gets you to 30. 1,2,3 … you’re at 30. With exponential growth, it’s 1,2,4,8 … [and by] step 30, you’re at a billion!
  • Current exponential growth of computing will continue and human-level intelligence will be eclipsed as early as 2029.

With Kurzwell’s quotes on the screen, I pondered Hamming’s “order of magnitude” comment from six decades ago. As I type this a week later, I think Kurzwell made an important but unstated distinction; that we live in a world where most change is linear but, simultaneously, where digital technology change is exponential.

… and then, I mused …

It is the built-in conflict of linear change in governmental structures, in religious viewpoints, in human-to-human relationships, versus the exponential change in information technology that is fueling much of today’s strife – where autocratic regimes of almost feudal structure and religious leaders pressing for structures and relationships of a millennium ago are using 21st Century information technologies to further their retrogressive aims … desires by “the few” for power and control over “the many” that is at cataclysmic (definitely the right word) variance with a new generation that sees (and expects to possess) a growing range of technology-fueled freedoms within a world not of limits but one of plenty.

… and then the Engineer in me wandered back to those seven data-bits in an eight-bit byte. Many years ago I was part of a crazy computer project that actually designed, built, and foisted off on an unsuspecting public a 6-bit computer in an 8-bit world … and we did this very, very successfully. Why? Because “main memory” computer storage in the mid 1960’s was comprised of tens of thousands of 1/8th inch diameter magnetic donuts called “cores” (one core = one bit) that were not cheap … so our computer, the Friden System Ten, actually out sold IBM’s 1401 in, I think, 1965 (6?) … but not for long.

Seven data bits enable you to store 128 different “things” in one byte (any one of the 10 numeric digits, or of the 26 lower case alphabetic characters, or of the 26 upper case alphabetic characters, or of the 32 “special” characters, with room for 35 more). On the other hand, a six-bit byte has just 5 data-bits with that restricting you to just 32 different things – meaning it took our computer two 6-bit bytes to store an alphabetic character (12 of those magnetic donuts) compared to computers where “main memory” was comprised of 8-bit bytes. As memory costs plummeted our cost advantage vanished – but we did quite well for awhile …

Central to all of these musings while DuWayne and Brad were talking was my thinking about some of the terminology we use. We refer to “the Digital Dragon” or “Digital Disruption” whereas none of our computers are actually “digital” but, far more accurately, they are “binary” … very fast processors of a lot of “zeros” and “ones.”

It is the unlimited scalability of those “zeros” and “ones” along with their related and also unlimited precision that is foundational. Kurzwell tells us that IT progresses exponentially. Perhaps that is because the foundation of that technology is, itself, exponential (more specifically, a technical architecture based on 2x) in nature.

The SLOW Executive

I wandered in to the UC Press bookstore on Bancroft Avenue in Berkeley yesterday and came across a new book entitled “The SLOW Professor” by Berg & Seeber. After riffling through it, I didn’t buy it … the book that is.  However, I did (and do) find much to agree with in the concept.

In the “IT” world we are hearing a lot these days about the wonders of DevOps as a way to get things done really, really fast; as a way to get something done in 3 days instead of 3 weeks … or in 3 weeks instead of 3 months.  I’ve listened to DevOps gurus and come away with a sort of Yogi Berra “Deja Vu all over again” feeling.

Of course we should have a highly collaborative working relationship between the IT Development organization and the IT Operations organization – but what’s new about that? Silo-fication was diagnosed as a terminal disease  fifty years ago – with today’s DevOps being a new name for an old cure, namely “desilofication” – the process by which you get people to work effectively together across functional boundaries.

The word “process” in the previous sentence bothers me a bit since I think some IT executives have overdosed on it.  Too much “process” is every bit as bad (and maybe even worse) than not enough process. Jack Welch was right with his emphasis on keeping things SIMPLE.

Maybe the challenge many of us are facing is one of keeping our processes and our organizational structures appropriate to our needs which, of course, are constantly changing. This gets me back to the point found within “The SLOW Professor” which is that  sometimes – and particularly within the hallowed halls of Acadamia – speed is not a good idea; that slowing down and thinking something through with some care might just be much better. I tend to agree.

At the same time as our IT gurus are advocating DevOps as a way to get things done really, really fast, they are decrying what they see as the increasing pace of change.

One might make a good case for suggesting that these gurus on wrong on both points.

First, DevOps is really not all that new. I encountered the concepts and structures now described as “DevOps” fifty or so years ago. Our challenge today is one of removing the burdensome incrustation of levels of process and levels of structure that have accumulated while we weren’t watching.

Second,  I make bold to suggest that all this stuff about “pace” is a bunch of hooey; that the pace of invention today is about what it was 150 years ago.

Consider a person born in 1877. That person saw in his or her first 26 years, the invention of:

  • 1877 – the phonograph
  • 1880 -the commercial incandescent light bulb
  • 1882 – the power plant for generating electricity
  • 1886 – the automobile
  • 1889 – Movies
  • 1903 – the airplane

By the time that person was 45 years old in 1922, all of these things had become common – but in a vastly changed world. Technology in the form of Computers has been an increasing part of our lives since the first computer-based payroll system (at, appropriately, GE’s incandescent light bulb facility) in 1954, sixty-two years ago.

Thus, we might ask ourselves, “Is today’s pace really all that difference in size and speed from that encountered by that person born in 1877?

The answer comes in three flavors:

  • Pace of invention
  • Pace of adoption has significantly accelerated
  • Pace of impact

I will end this by suggesting that “impact” is the central issue and I will close with a quote from 1966 by Willis Ware:

The computer will touch men everywhere and in every way, almost on a minute-to-minute basis … Every man will communicate through a computer, whatever he does. It will change and reshape his life, modify his career, and force him to accept a life of continuous change.

and – I emphasize – that was said in 1966!


The Future of Work & Income Disparity

The following is an extract from Chapter #5, “Leadership for Extraordinary Success”of my forthcoming book, “The CIO: Role, Talent, Pace.” Preceding the following paragraphs is an extended discussion on the impact of computers (especially automation, robotics, and AI) on “The Future of Work” and the related and accelerating shrinking of manufacturing and management jobs.

The time is not far distant where income disparity will cause large numbers of people to disengage from our democratic institutions and seek hope for a better life from crowd pleasing demagogues. Such preachers, with their promises of a glowing future, will only lead to disappointment – but after much damage to Western Civilization’s long cherished values.

Thus, the increasing disparity of income will have disastrous consequences unless addressed soon and meaningfully. If not addressed, our civilization’s values of freedom, of equality of opportunity, of justice for all, of the worth of the individual, of governments that seek to serve and not to dominate – all of these and more will be at risk of being lost.

A major factor determining who gets the relatively few (as a percent of all jobs) high paying jobs will be a job candidate’s education (extent, quality, and content). While STEM (Science, Technology, Engineering, Math) graduates are, and will continue to be, much in demand, recent statistics suggest that the STEM-graduate supply is adequate. The core differentiator seems to be education in all its various forms.

Besides disengagement from our democratic institutions, the interviewees suggested some less earth-shaking consequences, including a decline in the average work week, trending towards a “new normal” somewhere in the 20-30 hours/week area.

In its February 2015 issue of the Communications of the ACM, Moshe Y. Vardi, that journal’s Editor-in-Chief, commented directly on the economic disparity issue. He summarized the remarks of MIT labor economist, David Autor, at the 2014 Kansas City Federal Reserve Bank’s annual symposium in Jackson Hole, WY. Autor’s paper, “Polanyi’s Paradox and the Shape of Employment Growth” points out:

  • Automation is destroying more and more routine office and manufacturing jobs.
  • Concurrently, IT is creating new high-skill jobs which require cognitive skills that computers cannot match.
  • The dual outcomes of this are a shrinking middle class and a growing income and wealth disparity.

Thus, in the view of the majority of the interviewees [I interviewed 20+ folks on this topic], of Yuval Harari, Daniel Kahneman, and David Autor, we are facing a major socio-economic disruption. Jobs might not go away but the chasm in pay for those jobs will rankle the masses. We must do something about this. The power of those masses to revolt has not been entirely lost.

The pace with which this is happening is quite fast. When pressed to suggest a numeric time frame, no one exceeded ten years and several suggested something like “five years or so” – virtually tomorrow when you consider the topic.

A Word From Our Sponsor

Most of my previous posts have been fairly carefully worded statements of my thoughts on some topic hopefully of interest to those in IT leadership.

This time I will depart from that past practice and tell you a bit about the IT Management consulting firm that Tim Tyler and I co-founded in 1987 and that I still lead.

It’s original name was “The Systems Consulting Consortium, Inc.” which evolved over the years to today’s form “SCC Sequoia” which is normally paired with the related phrase “Solutions that Endure.”

Here is an up-to-date description of the firm:

SCC Sequoia is a consortium of ten individuals, each having both deep experience and critical expertise in some aspect of designing, building, managing, and governing information technology environments (hardware, platforms, ops, apps, security, and networking/telecom). For thirty years, SCC Sequoia has:

  • listened carefully to the needs of over 200 firms,
  • assigned the SCC members who have the right experience and expertise, and
  • crafted effective, enduring solutions for the challenges we discovered.

Each of us is actively engaged in the segment of the industry in which we have expertise, and each of us is regularly asked to participate in roundtable discussions, industry conferences, and academic analyses. This ensures that, collectively, we are a source of both long history in the development of IT capacity and current awareness of the latest opportunities and risks. Our clients recognize that the effectiveness and efficiency of their infrastructures – while critical to their success – are not their core competency. They come to us because they value our combination of experience and currency.

I am truly honored to have had the privilege of leading SCC for now well over a quarter-century. I remain a bit amazed at the quality of our team and their extraordinary track record of over six-hundred successful projects … strong evidence that using an “A-team” is generally a pretty good idea.

Bi-Modal: Low Value Hype or High Value Insight

As some of you know, my wife and I own a cattle ranch; Red Angus beef cattle. One of our registered bulls is Golden Boy. As you might expect from this,  I have become rather familiar with  real “BS” as contrasted to the far less real “stuff” many of us encounter close to daily in our business careers. Please keep that in mind as you read the following.

On November 19th, I was the “featured speaker” at the monthly meeting of the Fisher San Francisco CIO Forum – which I co-chair with Tony Leng of the DiversifiedSearch executive search firm. I hadn’t talked to the group (typically about 15-20 CIO actual attendees of the 50 or so invitees) in maybe 2 or 3 years.

My talk’s title was “New Skills for a New Age: Leadership Skills for Successful Innovation in the Digital Age” and within that context, I went on to discuss in some detail [1]-Leadership, [2]-Innovation, and [3]-Governance.  Along the way, I stated that a “Digital CIO” is “Bi-Modal” and uses digital technology to enhance company revenue. I mentioned, somewhat in passing, that there are two modes to “Bi-Modal” –

  1. Legacy systems
  2. Digital systems to enhance company revenue

… and the reaction from some of the CIOs present was not at all what I expected. One stated (at some length) that there was no such thing as a Legacy System and another (seated immediately to my right at the head of the U-shaped configur-ation of tables) said with some vigor that “Bi-Modal” was just Gartner “hype” and then went on to talk about all the new and amazing things he was doing as his company’s CIO.

As I listened, it seemed to me that he was doing a great job of presenting a close-to-exact example of the second form of “Bi-Modal”.

It seems to me that the term “Bi-Modal” is simply a new name for an old thing. Maybe the fact that Gartner is the one that seems to have coined it, is causing some CIOs to get upset, needlessly so, in my view.

Of course there are “Legacy Systems.”  Some folks might choose to call them something else but that doesn’t make their existence any less real.

Think of your Accounts Payable system, your Accounts Receivable system, your Payroll system, your General Ledger system (or systems at some unfortunate companies). Almost all enterprises have most of these in some form but they tend to be in the background or somehow so foundational that no one ever thinks about them. Yet, they are there; day in and day out; doing their jobs quietly with almost no maintenance. Since some are Systems of Record, we carefully back up their files – but none of these enhance our revenue or give us new forms of enduring competitive advantage. The latter is what Bi-Modal #2 systems do. The former are all examples of Bi-Modal #1.

The distinction is not unimportant. Increasingly, enduring competitive advantage will be found in highly innovative, technology-based, digital systems – all of which fall in the Bi-Modal #2 category.

For much of the last decade we have seen declining IT budgets. Only in the last year have I begun to hear of Boards pushing for IT budget increases – and not just in response to Cyber Security concerns. “Better” Boards of Directors and “Better” CEOs are doing two hugely important future-focused things:

  1. moving beyond “Quarteritis”
  2. pushing with real vigor for new forms of enduring competitive advantage; such as forms found with increasing frequency in highly innovative, technology-based digital systems.

Gartner can be an expensive and sometimes annoying company to work with, but it is rarely wrong. “Bi-Modal” is an important distinction and CIOs who ignore its imperatives are putting themselves and their companies at risk.

OFFER – If you’d like a copy of my November 19th presentation that caused all the uproar, please just ask. I’ll send you the version with the “notes” I used when giving my talk. Swiftest email is


Last week I attended Gartner’s “SYMPOSIUM ITxpo 2015” at Disney World in Orlando, Florida; 12,000 of us including 4,000 or so CIOs from Sunday the 4th through Thursday the 8th; 400 or so individual presentations with up to 12 going on at the same time with maybe 20 or so on Cybersecurity; comes close to being the best such event in terms of quality and quantity that I’ve attended in fifty years of attending such things; yes – really!

Here are my top five take-aways:

1 – DIGITAL AGE – The best “words of one syllable” definition” of what’s new for CIOs as they move into the “Digital Age” is that they are now going to be expected to use IT to create NEW REVENUE for their companies.  That’s it; all of it. It really is that simple AND it really isn’t all that new! Every single one of the Renaissance CIOs earned their stripes by using IT to create NEW REVENUE – starting way back in the 1970s with Max Hopper and the SABRE System at American Airlines. It might not be “new” but it is – today – hugely more important. Great companies either grow and blossom or they shrivel and die – and now that choice is up to those of you who are CIOs … and the time for that choice is NOW! Never were CIOs more central to corporate success!

2- CYBERSECURITY – Cybersecurity is a very, very hot topic; so much so that almost a 5th of all CEOs surveyed by Gartner rank it as more important than business growth. Too many companies aren’t doing the basics: enforce changing passwords every 90 days; make them long and complex: upper & lower case + digits + symbols and maybe even ten characters long (as is the case at the NSA); educate your employees and renew that every 18-24 months; warn everyone about phishing and check to see if they’re listening by “in house” phishing; identify your most critical files and give them extra protection. Finally, update your Enterprise Architecture to incorporate Cybersecurity in an integrated manner. Whatever you do, don’t “do” cybersecurity in a fragmented manner. Slow down, stop if you must, but think it through and develop a balanced and integrated approach. Don’t do what one company did: 200 tools from 45 vendors!

3 – TALENT – 50% of CEOs and 67% of CIOs believe there is an IT talent crisis. To counter this crisis, CIOs must become obsessed with attracting, retaining, and motivating TALENT. They must learn how to unleash the skills of their existing talent and much better manage that talent. They should get closer to Universities to recruit new talent and new ideas. Finally, they should rotate talented individuals from non-IT areas of their companies … to constantly be bringing in new, creative, innovative ideas. Central to all of this is the unleashing of skills – but that means you must know what skills there are to be unleashed and skill surveys most often do a rotten job of this. IT Leaders (notice the capital “L”) must get to know their people in some depth – and the only way that I’ve ever found that really works is one-on-one in-person hour-long (or sometimes even longer) interviews. You “create” through your people. You must come to know their talents – and not just the obvious ones. Do it! It’s central to your success in “The Digital Age.”

4 – GOVERNANCE – This is probably no one’s favorite topic, certainly not mine. However, in “The Digital Age” the traditional forms of governance can be life-threatening. They too often lack a strategic focus. They too often are change-adverse and – by virtue of that – innovation-adverse at exactly the time when innovation is a prerequisite to corporate survival. Governance imposes innovation-killing “boundaries” that can no longer be tolerated. These “boundaries” and the governance processes and structures that have enshrined them must be thrown away and replaced by “flipping” from an emphasis on compliance to an emphasis on constructive, IT-based, impact … impact in the form of increased revenue (i.e., the definition of “The Digital Age” as outlined in my topic #1 above). The traditional forms of governance are a poor excuse for “Top Tier” IT Leadership … leadership with a clear vision; leadership that is able to execute on its vision; leadership that seeks and achieves positive, enduring, and major impact. The time is Now! Throw away those governance rule books and start leading!

5 – TRUST – The underlying and connecting thread in all of the “How do we manage? How do we lead? sessions with the CEOs of IBM, Pixar, and Zappos, and with Gartner’s top “Leadership” speakers, was one word: Trust! The days of Frederick Taylor’s “The Science of Management” (c. 1913) are over. Start today to build a new company culture based on mutual trust, mutual responsibility, mutual accountability, cross-functional connectedness, and one in which all the members of a team (1) see their role as peer-to-peer, (2) have a vested interest in each other’s success, and (3) give and listen to each other’s ideas openly, freely, easily.

In the above five all-too-short paragraphs, I have just discussed five gargantuan topics: the Digital Age, Cybersecurity, Talent, Governance, and Trust. I look forward to your comments.

People aren’t Robots

Frederick Taylor in 1913 got it wrong.  Management is not a science. It is an art. Franklin Terry (of GE) in 1916 got it right. Employees aren’t just numbers (as in “We need twelve Netsuite gurus, and six SalesForce gurus.”). They have health issues; personal finance issues, children’s education issues, etc. – and, as Terry stated just one year short of a hundred years ago, wise employers will help their employees with all those issues.

The days of considering employees as pseudo robots whose every action must be measured and ranked are over, gone, done with. As more and more jobs-for-humans are replaced by honest-to-goodness robots, those who manage those who fill the still numerous (and growing, not shrinking) jobs-for-humans, must look beyond Taylor’s “if it moves, measure it” mindset and consider their employees in a far more comprehensive and humanistic manner.

The vast majority of people are trustworthy. They want to do a good job. They want to be thanked. Treating them as though none of this is true because of the shortcomings of a very, very few is beyond dumb. It is very, very expensive!

Well treated employees are better motivated, work harder, are more creative, more innovative. In short, they are your most valuable assets.

Read the book “Born to be Good” by Dacher Keltner for a ton of solid research that supports all of what I have just said.

A few years ago, a new CIO took over a large IT shop whose Employee Satisfaction rank was way at the bottom … 1/3rd that of the average of the rest of the company.  He got rid of a bunch of needless contractors and consultants and gave all the interesting and challenging projects to his employees – all of whom rose to the occasion! Morale skyrocketed and within six months people were asking to join the “IT Team.” That team developed and implemented two mission critical and, as it proved, competitive advantage projects far faster and for far less money than expected. The CEO, the CFO, and the EVP for Sales & Marketing were a bunch of Happy Campers … and the CIO gave all the credit to “his extraordinary team” – a team his predecessor had publicly reviled as incompetent.

Where one CIO saw incompetence, his successor saw a diamond in the rough, just lacking a small bit of polishing to shine – as it soon did. He treated his team as warm, flesh and blood, human beings. He challenged them to do their best – and they did exactly that. He was notoriously vague about schedules and budgets but became a good friend of the CFO. He poured time and money where it counted – and followed a “Do it once and do it right” policy that annoyed some peers who wanted frills … but was much appreciated by the Board of Directors.

He didn’t measure robots; he managed human beings.