Friday, 7 November 2014

CSC Q2 FY15 earnings call - the same old song………….

CSC announced their results for Q2 FY15 (quarter to 3 October 2014) on November 6.   And to the surprise of very few CSC watchers it was the same old song:

  • EPS up by 17% compared with Q2 FY14 due to cost take-out. Beating Analysts' consensus by $0.17
  • Guidance range for FY15 EPS increased by $0.10c
  • Revenue down 4% year-on-year in constant currency
  • Operating margins stagnant at 11.3%
  • New business wins for the quarter were $3.0 billion, down almost 30% from Q2 FY14 and once again below the revenue replenishment level.
  • Operating cash flow for the quarter of $217million and free cash flow of $31million, down 20% and 64% respectively from the previous year.
  • Share repurchases were $278million or 128% of total Operating cash flow; in comparison cash flow used for investments was $184million.

Despite the positive spin put on the results by CEO Mike Lawrie  “ CSC delivers continued earnings growth”  the real story lies elsewhere in the numbers . Declining new business wins, dropping revenue levels, an exodus of experienced managers, and stagnant operating margins despite all the cost take-out suggest a business in trouble. That the company “invests” more in share buybacks; a questionable 'value-add' activity, than in developing business suggests the management team has run out of ideas and is reduced to using financial management strategies to maintain the share price. 

How long can it last?

Unusually, the share price dropped 5% after this earnings announcement, suggesting that analysts and investors are beginning to feel less comfortable with CSC’s outlook and are (finally?) developing some healthy skepticism with Mike Lawrie’s promises of a bright future.
The next few months will be interesting at CSC . 
Will Mike Lawrie manage to cut even more costs to maintain EPS before revenue levels collapse?  
Will potential buyers of CSC be deterred by the Federal prosecution related to the alleged Medicaid  fraud in NYC?  

We continue to believe CSC is becoming a shell whose value
is being lost by being continually hollowed out in the quest for short term profits. 

Investors following the advice of   “financial spreadsheet analysts”; who we believe do not look deeply into the company but just run superficial financial spreadsheets on reported headline results, forecast the CSC share price as heading towards a range of $72 to $75. They could take a real beating.



83 comments:

Anonymous said...

Busy Bee you need to get busy with something else... if you believe... then why do you persist in spending time writing about this organisation... rock on....move on and spend some time with the family as opposed to blogging about this so called atrocity... lol

Anonymous said...

Because I suspect Busy Bee and others like me believe CSC could be so much more if managed right. Sadly it may be too late but hope lives eternal.

Anonymous said...

Busy Bee sounds like a disgruntled employee - most probably an ex-employee with an axe to grind or who is vested in the collapse of CSC's share price ... yeah rock on

Anonymous said...

Thousands of people read this blog to hear what's really going on, not the lies and crap we all get told via your channels.

Besides anon 21:52, why are you here? Haven't you got some new C3 headlines to write.... can we have another one with a picture of a clown please... another one where he poses for a photo with Ronald McDonald would be nice.

Anonymous said...

Just like Marussia Racing who CSC used to sponsor. .. CSC is a car crash waiting to happen.

Anonymous said...

Busy Bee i find the articles insightful and a good place for factual information on CSC.

Keep up the work!

Anonymous said...

This is a serious blog and trolls should be censored. Trolls already have C3 to praise ML. I suggest you to create a post on C3 about how ugly the truth in this blog is. You may get a promotion if there's still a company by then or perhaps you will be censored. Shall we bet? By the way, C3 has become as hollow as CSC...nobody dares to post anything interesting nor it is used to encourage collaboration among teams to share tools and information. It has become to be some ugly sort of "CSC Pravda newspaper" where only propaganda news are posted. The Ronald McDonald charity post is really pathetic... how much did they give? Looks like if they donated a few hundred dollars to remodel a playroom. This kind of propaganda tells a lot about the subject. One guy who dares to present himself as mother Teresa with a couple hundred bucks and that on the shadows cashs out all his stock options to make millions over the tear down of the company he runs and leaving employees on the dry dock.

Anonymous said...

You sound like a current desperate employee who us scared of the truth or even worse trying to cover it up. Lol on that. Lol

Anonymous said...

http://m.bizjournals.com/washington/blog/fedbiz_daily/2014/10/cscs-new-controller-named-to-get-paid-450-000-a.html

225000 dollars for joining CSC! You could not make this up.

Caesers group..is that not casinos hotels and gambling? Just about sums up CSC current strategy. She will do well.

Anonymous said...

For those that live in the UK. This sounds like Rover cars which was asset stripped by the management and then evaporated.

Anonymous said...

The big thing that I can't see the stock market having spotted, yet is completely obvious from the perspective of a CSC'er is that these analyst calls have little consistent message.

The only consistent bit is that revenue is continually falling and EPS is only being propped up through burning the company assets to fund share buybacks.

Other than that, each quarter we hear a different story - we hear this time that one bit of the business is doing well (and the others don't get mentioned because their numbers are falling) and previously it was another.

If Mikey had a true turn around strategy that worked we'd see him talking consistently about the success his chosen direction was achieving quarter after quarter after quarter.

But no, that is not the case.

The trouble with wall street at the moment is that most value is pegged to companies using only a handful of metrics. These "investors" know nothing about the detail of what these organisations do, they just are not interested. They aren't investing money to see a business succeed in its mission to provide a service, they are just collecting the cash.

I think this will change sooner or later, simply because the bubble created on wall street by financial engineering is about to explode. I would suspect that the 2008 crash is going to seem small fry compared to the panic this will cause.

While I am typing, some people on here have talked about "disgruntled former employees" and whilst I don't doubt these exist, its nothing compared to the number and problem with "disgruntled current employees".

You can get away with your former employees being pissed with you, its much more of a problem when your entire current workforce hates you with a passion.

Anonymous said...

Its funny actually, when I saw that absolutely terrible Mike and Ronald photo the other day, all I could think of was this:

http://www.mcspotlight.org/case/case_pix/factsheet_cover.jpg

(that might not mean much to some people not from the UK, but that was an anti McDonalds leaflet campaign in the 1980's.... but it means so much more to me in this CSC context!)

Perhaps one for your blog photo Cassandra lol

Anonymous said...

I don't consider 21:52's comment to be trolling. Just as Bob Cringely can't let go of IBM's woes, Cassandra has CSC in his/her blood. The hard part is knowing when, after all your warnings go unheeded, to finally turn away from something you care(d) about. At some point Cassandra will do that... if CSC is still in existence, then its employees will have one fewer outlet to share a version of events that is closer to reality than C3 offers. And Cassandra can have more family time.

But if this follows the myth, then Cassandra will be abducted by the purchasers and become their PR head, only to be brutally fired by the McKinsey consultants who are brought in after a board coup. Cassandra's brother was Paris, who defied warnings to abduct Helen and cause the Trojan War... does Mike L. have a sister?

Anonymous said...

+1....

Busy Bee said...

http://m.bizjournals.com/washington/blog/fedbiz_daily/2014/10/cscs-new-controller-named-to-get-paid-450-000-a.html

225000 dollars for joining CSC! You could not make this up.

Caesers group..is that not casinos hotels and gambling? Just about sums up CSC current strategy. She will do well.

Kathy Mecum said...

I like this forum because it give me a true evaluation of the financials at CSC

Anonymous said...

@BusyBee food for thought. Write your next blog entry about your motivations for this blog and general connectedness to CSC. Otherwise this blog is a good channel to get global insights about CSC.

Anonymous said...

+2

Anonymous said...

+3

Anonymous said...

Good analogy. Only difference even though rubbish cars Rover did make something.

Anonymous said...

Busy Bee - I know CSC management hate this thread and The Register which is quiet on CSC for some unknown reason....... I once worked at CSC and know this for FACT.

Now heading up a global department for competitor who actually allows me to travel!!! Whoop whoop! Actually pays out on bonus !! Whoop whoop!! Training for my people!! Whoop whoop!

So writing about motivations and giving insights on yourself I do not see as what this blog is for.

Title sums it up perfectly "don't ask what it means. It makes a point).

Anonymous said...

+4

Anonymous said...

Is you are inside the csc fire wall you cannot access this blog strangly enough....

Anonymous said...

CSC advice on lowering phone bills:-

When abroad avoid unnecessary incoming calls by switching off your mobile phone unless it is absolutely essential that you are contactable on it. Divert your mobile phone to your CSC voice mail and leave details of a local land line where you can be contacted.

Yes switch off your phone

Anonymous said...

When travelling, refrain from eating if not too hungry. You might get slimmer. :)

Anonymous said...

Sorry if this is off topic . . . but in the picture, which one was the clown?

Anonymous said...

Busy Bee you provide a valuable service to CSC customers, employee’s present and past, suppliers and stockholders. Please keep investing in this blog. (I’d love to see viewing figures for here – I bet readership has gone up in line with ML’s length of service).

I fall into two of the categories above; a past employee and a stockholder. When I left I sold nearly all my stock plus I cashed in my investments with Fidelity UK. Fidelity own nearly 13% of CSC so remember that if you expect CSC’s share price to go down at some point in the future – don’t keep all your eggs in one basket! I kept some stock so I retain an interest in CSC and could vote against the board when appropriate (nearly all the time) and get the enjoyment of being part of a stockholder revolt if it occurred. That is unlikely I know but I’d be grinning like the Cheshire Cat if it happened.

I like the detailed analysis that is provided on this blog. Let me add a little of my own.

From CSC’s Q2 Press Release here:
http://www.csc.com/investor_relations/press_releases/116069-csc_delivers_continued_earnings_growth_in_second_quarter_2015

I quote the press release about Global Infrastructure Services.

“GIS revenue was $1.04 billion in the quarter, a decrease of 8% in constant currency from the prior year. Growth in next-generation offerings of cloud and cyber helped to partially offset the impact of price-downs, restructurings and contract conclusions. Operating margin was 6.6%, which reflects continued investments in new offerings and strategic partnerships, and compares with 9.6% in the prior year and 6.3% in the prior quarter. GIS reported new business awards of $600 million in the quarter.”

Revenue 8% down but partially offset by cloud and cyber. Terrible news whichever way you look at it. Either traditional revenue got hammered and cloud and cyber came to the rescue or traditional revenue was down but not terrible and cloud and cyber are doing nothing. Margin 6.6% against 9.6% a year before. Same again. Either massive fixed and semi-fixed costs hit the margin and there was investment or the alternative of less fixed/semi-fixed costs and little investment. In Q2 Conference Call Paul Saleh did mention that CSC had invested $35m in the privately held Cyber company but I wouldn’t call that a significant investment.

More worrying still is the future. Q2 FY14 bookings were $0.8B. Q2 FY15 bookings were $0.6B – that by my maths is a 25% shrinkage!

You choose what you think really happened as there is little information to inform anywhere else in the quarter’s reporting.

The supporting slides here:
http://assets1.csc.com/investor_relations/downloads/CSC_Q2_FY15_Earnings_Call.pdf

5 slides of 24 are title pages with Apps, Big Data, Cloud, Cyber and Mobilty wrote large on each page but no supporting data.

The Q2 Conference Call Transcript here:
http://www.thestreet.com/story/12945698/1/computer-sciences-csc-earnings-report-q2-2014-conference-call-transcript.html

Nothing concrete to add from here either.

My opinion is that CSC is still heading down fast and the momentum or direction hasn’t changed. Time to change the man at the top and the board.

Anonymous said...

My suspicion is that GIS revenue was down substantially and that cyber and cloud added only a little. Otherwise Lawrie would have broken out the numbers for these growth areas. Regardless, how much margin and revenue can be gained by reselling the same third party products and services CSC's competitors are selling?

Lawrie is not an idiot as he chooses his words carefully to ensure he makes no commitments. Do you notice how Lawrie always says "we are beginning to see . . . ." The following quarter when the numbers are worse he never follows up on his previous statement about signs of growth.

When Lawrie arrived at CSC he claimed the " get fit" stage was 18-24 months. We are now well past 42 months with no growth. He revealed his strategy during the earnings call when he said he hoped to move a greater percentage of resources off shore. Lawrie never made any commitments about growth or revealed the numbers of the growth areas. In fact, the so called growth areas continue to change without notice. Whatever happened to the focus on healthcare? It seems it has now been replaced by Mobility. Ever wonder why CSC is the only major IT/technology company that does not disclose its annual expenditure on R & D?

It is clear Lawrie is following the game plan he used with Misys. The question is can he find a buyer before the implosion? Like Misys. there is likely a large train wreck ahead.. Given that Lawrie was given a potential $2.5M stay bonus tied only to his being employed by CSC next May, it appears the Board is concerned that Lawrie may abandoned ship with his new found wealth.

Anonymous said...

I've been a recovering CSC employee for the past 14 months. I've shared this blog with my former clients and they appreciate the insight especially as re-competes come up. Truly appreciate the forum.

Anonymous said...

Can only come from some bean counter who has never left the US in a Falls Church back office.

Anonymous said...

The sad part is that the people that believe in CSC from within would love to invest in their business units by strategic M&A, staff or other activities as they are aware of the opportunities. Unfortunately senior management prefers financial engineering with a 1.5 bn USD share buy-back or filling their pockets with high salaries and not allowing raises for the people below them.

Anonymous said...

Some interesting stuff in the Q2 earnings call transcript...

Edward Caso (Analyst - Wells Fargo Securities, LLC):

Good evening. I was curious about, you bought in a dramatic new group of people, dramatic in number and obviously they appear to be doing well. But I've heard almost maybe most of the top 100 executives are now new to the Company. I'm curious, are they all with you or have some of those turned over? And maybe some commentary morale, at this point.

Mike Lawrie (CEO):

I think morale is beginning to improve, particularly outside the United States. If you just think about this, we're really beginning to see some really nice improvements in our businesses outside of the United States. We have got more work to do in the United States. I just put a new leadership team in the United States, announced that 3 or 4 weeks ago. Because I think we can do better in the United States. And to be candid, I haven't been totally pleased with some of our execution in the United States.

You are right, we have replaced, I think And they are beginning to come together as a team. It is hard when you make that kind of change. It's like inviting 100 people over for dinner and not knowing anyone until they show up at the front door. So it takes a while to come together and knit together as a team. I think that is beginning to happen. We run a pretty tight performance management culture in the Company, and you can expect that there will be continued turnover in the executive ranks, as we move forward. We're having great success recruiting people from outside the Company and from the industry. So we're always looking for ways to upgrade the team.

So I think we just run some surveys -- I think I mentioned before, we did a big electronic jam, 6 or 7 months ago, and ***********by and large, most of the employees are with us. That's not to say everyone is with us*******. And when you go through this kind of cultural change, you are certainly going to have some casualty. But by and large, most of the people would like us to even move faster than we are currently moving.

****REALLY? No shizzle Sherlock!****

I'd like to give Mikey the 2014 award for most understated comment on an investors call!


Anonymous said...

Last week's NPS 'Open Mic Session' was interesting on several fronts. Apparently, Lawrie remains unrepentent and will enforce the forced appraisal rankings (Rank and Yank). Not so sure he needs to rely on this scheme, since my site has lost several very talented staff members with more to come. Understand that other sites have similar experiences. Loss of good people places stress on existing contractual performance and you'd think that with loss of employees investors and analysts would be mindful of the potential for failure. Another disconcerting part of the presentation was the apparent disconnect between the presenters and the participating listeners. Thought that some questions were glibly passed over. Little was said to allay employees concerns over the future of the company. Investors should be cautious about the direction of this company under the current upper echelon.

Anonymous said...

I found my way out, but like I would with an older relative on life support, I'm still getting regular updates from people on the ground. I've heard from 3 different sources that a massive RIF is incoming. Now that people have bleed down their vacation, CSC is getting ready to fire people before they have to match the 401k (IMO).

Anonymous said...

Like you (20:19) and had a good severance package. I have been approached by good techs (and poor ones) who ask if I have any jobs available.

The comment "morale all time low" - that is said year on year.

This company has become a dog with the fat cats taking the cream.

Anonymous said...

I also heard that. This Friday will supposedly be a bloodbath.

Anonymous said...

Moral hit rock bottom, then it started digging...

Anonymous said...

Interesting:

A similar "why don't you let go and spend time with your family...." post appeared on the Yahoo Finance message board. Has CSC hired a social media expert to contrast negativity on public forums?

http://finance.yahoo.com/mb/forumview/?&v=m&bn=e0f120ee-fd76-3e86-8f36-ffa8d1a1505a

(Yahoo Finance > CSC stock > Messageboard > user optimistprime941 (1 post, account created today)

Anonymous said...

There certainly seems to be a disconnect here as Mr. Lawrie stated on the earnings call last week that morale was great. : )

Anonymous said...

If they have.. he or she lets face it are rubbish. .

Anonymous said...

Its a grad who's been ready way too many self improvement books...

Anonymous said...

PULSE CHECK RESULTScreated by Barbara Lloyd on Nov 10, 2014 3:49 PM, last modified by Barbara Lloyd on Nov 10, 2014 3:49 PM
Version 2 If you attended the recent roadshows or listened to the recording on C3, you will have heard me talk about our Customer First strategy. It’s founded on four pillars: Mindshare, Marketshare, People & Organisation and Business Performance – and sets out how we are driving CSC forward to achieve real and sustainable growth in the region.


To gauge the impact of some of the initiatives being delivered by the programme on our region’s employees, we plan to run a ‘pulse check’ survey at regular intervals moving forward. The first of these to kick this off and establish a baseline was run in October. It took the form of a short survey which was sent to all employees in the region.




Pulse Check Survey Results

Martin and I committed to share the results with you within two weeks of the survey closing, so please read on for a summary of the results and how we plan to use them.




First of all, thank you to everyone who responded; we had 1359 replies (21% of the population). The leadership team takes these results seriously and we are committed to repeating the survey quarterly and to using the results to inform how we implement the initiatives that comprise our Customer First strategy.




Let’s start with the highlights. On the positive front, 64% of those who responded agreed they understood what the Customer First strategy means for them. This is important and encouraging, but there is more to do, to get you all engaged in this programme.




On a less positive front, 60% of those who responded do not feel positive about the direction that CSC is moving in, and only 15% believe that CSC will be a better place in which to work in 12 months’ time.




We also asked how many positive stories about CSC you have been able to share with friends and family over the last six months. I am encouraged that 34% reported that this had been possible.




Finally, we asked you to share 5 words that you believe describe CSC at the moment. Again, it is no surprise that of the 5000+ words submitted, words such as ‘uncertain’, ‘confusing’ and ‘changing’ stood out as a clear trend.




What Next?

Part of our goal for this survey was to establish a baseline from which we can measure the success of Customer First in engaging our employees in the region. We have achieved that and I commit to running the survey quarterly and sharing the results with you each time. The results were not surprising to me and it’s clear that we have a lot of work to do.




Over the remainder of FY15 and into FY16 I hope to see more positive results from these surveys, to show that our Customer First strategy is having a positive impact on you and on your perception of our organisation.




We are listening and we are committed to taking the actions required to achieve the change we need in our region. Specific plans to address the points raised are already in progress as Martin outlined at the recent Town Hall meetings and web cast. We will continue to share progress reports on these and I ask for your participation and ideas wherever possible.




Regards,

Sanjiv


Anonymous said...

Pretty damming from the staff themselves:-

On a less positive front, 60% of those who responded do not feel positive about the direction that CSC is moving in, and only 15% believe that CSC will be a better place in which to work in 12 months’ time.

Anonymous said...

Serfs,

As with the previous ‘Get Fit’ programme there is an error in the announcement of the ‘Customer First’ initiative. ‘Get Fit’ was the codename for the ‘Screw You’ programme and we couldn’t be bothered to change the name after the initial announcement so ‘Get Fit’ stuck.

We cannot allow this situation to be repeated and to avoid unnecessary cost and the reduction in Executive Remuneration/Money for Share Repurchases that would result we ask that you correct the message above yourself. Using Find and Replace please replace all instances of ‘Customer First’ and replace with ‘reward Mike’. Before you ask this activity, along with your annual Ethics training should be charged to your normal code. No overhead codes are available. In case of any questions please see you manager (who will be held responsible for any breach of ethics).

I will be continuing this series of regular communications in the near future. Next time I will cover the instruction for you to take the last Tuesday in November as vacation/holiday. The leadership team(sic) ask that you do this for your own benefit. As few attractions or places of interest will be open you will have no opportunity to spend the pay rise you haven’t had and so suffer no loss. A win/win situation as it allows us to continue to ‘manage’ the financial reporting of company results.

Regards,

Anonymous said...

Note the repeated use of "beginning" which prefaces many of his statements in each earnings call especially those relating to sales and other areas where CSC is failing. Why is it that Mr. Lawrie never talks definitively about these areas such as . . . sales have improved . . . clients are happier . . . morale is great?

Anonymous said...

i didnt get that email, WTF!!! im UK staff

Anonymous said...

That's because it wasn't an email. It's buried in the C3 site, and you were supposed to uncover it all by your lonesome. Yes, they're listening by continuing the underhand and ethically challenged approach of hiding information...

Anonymous said...

On the bright side posting it here means it read by many more people at CSC

Maybe Sanjiv himself did it to get a bigger audience.

Anonymous said...

You expected them to publish a survey result THAT bad via email? That would have been with The Register in minutes and we all know how fearful they are of The Register.

No, I'm just surprised they had the balls to publish it anywhere - I was expecting it to get buried and never mentioned again.

PS results were entirely predictable from where I see - it is worrying that they seem to be surprised at the results....

Anonymous said...

8:25 - great response - reading your comment I realised its completely true !!

Anonymous said...

I have just heard that the RIF has started in the US and today is the last day for at least two quite senior people I knew and a possibility of a 3rd in an unconfirmed report. Not sure whether to be sad for them or not.

Anonymous said...

Falls Church, VA —Underscoring the benefits of working for a laid-back company like CSC, CEO Mike Lawrie told reporters Tuesday he had instituted an office-wide policy permitting employees to work from home anytime after 6 p.m. “If it helps them be efficient and get more done, I have no problem with people working remotely once they’ve left the office for the day,” said Lawrie, who noted that as long as they’re doing their jobs, the location where his employees choose to work between 6 p.m. and 9 a.m.is “completely up to them.” “That’s the kind of relaxed culture we strive to create here—one where you can even be working from your living room couch at two in the morning if you’d like.” Lawrie added that since they don’t have to be in the office for any meetings, employees are free to work from home on weekends and holidays as well.

Anonymous said...

The "Reward Mike" program referenced by 17.40 November 13 has got off to a great start.

According to WKRB News, Mike Lawrie unloaded 7479 shares that day at an average price just over $60, raking in some $480,000.

Anonymous said...

What is the register?

Anonymous said...

To the requester who asked; the register is an IT news web site http://www.channelregister.co.uk/2014/11/07/revenue_drops_at_it_giant_csc/

Anonymous said...

The number of shares sold was 7949.

Anonymous said...

So Mikeys confidence in the company really shows !
Cashed in $2.4m worth of shares in 2014 alone !

http://www.insider-monitor.com/trader/cik1180454.html

Anonymous said...

If there is no such thing as a "gruntled" employee - then it's going to be even harder to find a dis-gruntled employee?

I'd say Busy Bee is doing all CSC Employees a service - providing information that is vital, but which CSC management doesn't want the peasants to see or hear - so..... "yeah, rock on" - whatever that's meant to mean?

Anonymous said...

http://www.channelregister.co.uk/2014/11/10/csc_reorg/

Soooo... told to reapply for own jobs... but up north... remote system management. .from up north... csc uk has north south divide... only getting worse. Will be redundancies but they will push paying bonuses for people to leave to avoid formal consultancy. . Trick they have been using for years.

Anonymous said...

2 Questions to 20:08, Q1 : Are you saying they will offer incentives to encourage people to leave? Q2: What happens if you dont reapply?

Anonymous said...

A comment about that article from a poster named Anomymous Coward -

"Back in my BT outsourcing days we much preferred Accenture to CSC; as one of my team said "CSC will totally stab you in the back, at least Accenture only stab you in the front"

Anonymous said...

There have been several RIFs over the past 2 weeks in US predominately in the Finance and HR areas including some managers and one L3 or L4. Can you provide any additional details on what you heard?

Anonymous said...

I've seen some people I used to talk to in GIS USA just vanish in the last week and there is more slash and burn going on with budgets for the rest of this financial year.

Seems the only way this crashing aircraft can make it over the mountain range of Q3 figures being worse than flat is to chuck out all of the passengers, cargo and seats. Maybe the pilot should do the honourable thing with his service revolver in the ladies toilet.

Anonymous said...

And on November 12 he sold 12051 shares for $725.000.

Anonymous said...

More insider transactions/sales by the CSC CEO. http://biz.yahoo.com/t/31/4114.html - CEO's that believe in their company would buy stocks not sell, right?

Anonymous said...

New song for the serfs at CSC.

Anonymous said...

Let's try that again. http://www.youtube.com/watch?v=yJ-jvEd0pDw

Anonymous said...

"Ten Stupid Rules that Drive Great Employees Away " relevant to CSC as it currently stands.

Bell Curve Performance Reviews: Performance reviews in general are a bureaucratic waste of time, but the ones that force managers to fit their teammates into pre-set slots on a Bell Curve are disgusting and unworthy of the brilliant people on your staff.
If you truly don't trust your managers to hire wonderful employees, why did you make them managers? Bell curve performance reviews only encourage the hiring and retention of so-so employees, or worse.

Stupid Attendance Policies: Salaried people don't need attendance policies. That's why they're on salary. If you're still dinging people for getting to work ten minutes late when they commonly stay an hour late every day, you don't deserve them on your team.

Stupid Frequent-Flyer Policies: Business travel is a grind. It takes years off your life. It's not easy being on the road and leaving your life behind. Your employees earn every frequent-flyer mile their business travel entitles them to. Those miles are theirs, not their employer's. Any company stingy enough to steal its employees' frequent-flyer miles is not an employer that can grow your flame or take you to the next step on your path.

Stupid Approvals for Everything: We'd expect any employer to require approval from higher-ups before you're allowed to spend a lot of money or hire someone new. We'd expect some required approval before you launch a project but do we really need a manager's written approval for everything eg an employee to replace his ID badge or incur minimal expenditure to travel between sites?? We have taken nearly all the latitude away from the talented adults we hire. That's stupid and a waste of shareholder's money. More bureaucracy only slows us down.
Can we not trust the people we chose to join our team to do simple things like order a new stapler without requiring a manager's written permission?

Stupid Disciplinary Rules: The idea of discipline comes from the military. We don't think that it would ever be appropriate to put our kids' piano teacher or our plumber on probation, so why would we do the equivalent to the employees on our teams? We are all adults. If someone goofs up, we can have a conversation about it. We can figure out where things broke down. If we don't trust a person to represent our brand, what good will . Anyone who sighs "We're forced to follow these old rules" is either lying to himself, to you, or both.

Stupid Feedback Mechanisms: Employee Engagement is a crock and a slap in the face to your teammates, most of whom would be happy to tell you to your face what your company is doing right and wrong. All you have to do is walk up to them and ask them, face to face, and LISTEN to what they have to say.
Lose the engagement survey and make it easy for people to tell you what's working and what isn't, in the moment.

In short, capable people don't want to put up with being treated like children or criminals, and they won’t, so they leave to go work somewhere else.

So why do companies install so many stupid rules and policies?
Fear is the reason. Fearful managers don't trust themselves to hire people they could trust to do the right thing. There is a tremendous amount of fear in many corporations. Operating in a culture of fear is wasteful of the real energy within any company, and tapping into that unused potential is the way forward.

Trust. Believe. Enable a culture of learning by sharing knowledge and mistakes (airlines do this) and operate together. Leadership is having a team who believe in you, your judgment, and will follow you anywhere and go the extra mile-not a team of people who follow only because they are terrified of challenging or trying anything new for fear of blame or termination.
There is no place for fear in successful leadership –that is tyranny, and ultimately it never succeeds as a brief look back in history will show.

Anonymous said...

It might just be me, but if you look at the link on the insider monitor site, Mike Lawrie sold over $ 1M in shares between Nov 11-13. Really says something about the confidence he has in his company...and just how much the rest of the employees are getting screwed...

Anonymous said...

ML has no confidence in the company he is a breed apart.

He purchases and cashes in his stock options as soon as he can. See the details here http://www.getfilings.com/sec-filings/120208/COMPUTER-SCIENCES-CORP_8-K_FORM2/a12-4479_1ex10d1.htm

He doesn’t get a mandate when he can and cannot take his vacation time like other company serfs. He takes vacation when he wants. See section 4 above.

He makes no investment in CSC. Look at the clothes he wears. The man looks like a tramp. Senior executives should look the part when meeting customers, investors and colleagues. Lawrie looks like a tramp…. dirty trousers, unironed shirts and shoes that should be replaced not polished. He thinks he looks cool. I think differently. Take a look at C3 or the photos on csc.com to see what I mean if you haven’t had the experience of seeing him in person.

Anonymous said...

Mike 'invites 100 guests to dinner' did he. Judging by what I hear he invited 100 mercenaries to help carve up the business and make it sellable. These new execs talk about short term targets only, and how much they will make in shares bonus. To quote from some text books on mercenaries:
adj.
1. Motivated solely by a desire for monetary or material gain.
2. Hired for service in a foreign army.
n. pl. mer·ce·nar·ies
1. One who serves or works merely for monetary gain; a hireling.

mercenary
noun
hireling, freelance (History), soldier of fortune, condottiere (History), free companion (History) In the film he plays a brutish, trigger-happy mercenary.
adjective
1. greedy, grasping, acquisitive, venal, avaricious, covetous, money-grubbing (informal), bribable Despite his mercenary motives, he is not a cynic.
greedy liberal, generous, benevolent, idealistic, altruistic, philanthropic, unselfish, munificent
2. hired, paid, bought, venal The mercenary soldier is not a valued creature.

Can anyone see the difference between the tex book and what has happened at CSC?

Anonymous said...

I am surprised that people are surprised that Lawrie is in it purely for the money. Did you expect him to retire with milions in CSC stock and live off dividends?

Anonymous said...

No we expect him to also buy stock like other CEO's do that believe in their work and their companies. And we expect him and the L2 team to be more creative that starting OI gap calls by end of the year as usual. And requesting L2 approval for non client/sales specific travel like it would be the major cost driver for the company...leading to all sort of odd behaviors of the L3-6s below them.

Anonymous said...

I don't disagree with any of your considerations regarding the poor management of the company, nor I am defending Lawrie. I'm saying that I don't know of any CEO of major public company who actually buys the stock. They get plenty of stock options anyway - which they cannot wait to cash in.

Anonymous said...

Many public companies require executives to buy and hold a certain dollar amount of company stock, e.g. 1x their salary.

Anonymous said...

Cassandra…where have you been? I'm going through withdrawals…..

Anonymous said...

Looks like Mikey had some bills to pay or needed some funds for Black Friday .......

"Computer Sciences (NYSE:CSC) CEO John M. Lawrie sold 3,200 shares of the company’s stock in a transaction that occurred on Friday, November 21st. The stock was sold at an average price of $62.59, for a total transaction of $200,288.00. Following the completion of the transaction, the chief executive officer now directly owns 189,750 shares of the company’s stock, valued at approximately $11,876,453."

Source: http://www.intercooleronline.com/stocks/insider-selling-computer-sciences-ceo-unloads-3200-shares-of-stock-csc/143122/

Anonymous said...

Depends what country you're in.
I can.

Anonymous said...

If Mikey seriously thinks morale is higher outside the US, either its really desperately bad inside the US and merely chronically bad outside, or his regional "leaders" (managers!) are telling him porkies.

Anonymous said...

Credits to whoever put this together:

http://captiongenerator.com/19655/Mike-dictates-the-company-direction

Anonymous said...

The word is out... more people in UK taking "voluntary redundancy"....... compulsory just around the corner.....

People now being blocked with high pension awards.. how very unsporting!

Anonymous said...

"Fast acting to respond to global market changes, nimble and ready to act" or "does not know how to manage a global business and runs around in constant state of change, e.g. headless chicken." Take your pick.

http://www.theregister.co.uk/2014/11/10/csc_reorg/
Quote - Re-arranging the UK deck chairs on good ship CSC is the strategy the integrator has chosen after shelving plans to make further redundancies, according to numerous sources.

Anonymous said...

After the horrific UK "Pulse Check" results were bravely published (in which the rock bottom morale and almost employee hatred of the company was revealed) the head of CSC UK and Ireland is planning a tour to talk to the troops. Apparently employees will be able to say whatever they think under the "Chatham House Rule".

I'd imagine that to be about as safe as reporting corruption to the CSC Ethics Hotline....

Its an interesting approach, but I can't see it getting anywhere even if we accept it as a genuine offer to fix things - the power to fix things does not sit within any country, it comes from the fascist junta in Falls Church.

I wonder how long it is before Sanjiv discovers just how short his chain is.