Tuesday, 23 June 2015

Progress Report

Back in February 2012 The Cassandra Team put together an open letter to Mike Lawrie giving him our best wishes with a few pointers that he might like to consider for rebuilding CSC.

Was the advice any good?

Was any of the advice taken on board?

How do our readers think he is doing? 

The letter begins ..............

Dear Mike,

Congratulations on being elected President and CEO of CSC and our best wishes for every success.

As you get in-depth briefings and advice from Messrs Laphen, Mancuso and Chase, bear in mind that they carry more responsibility for CSC’s difficulties today than anybody else.  And if you follow their advice you will probably achieve the same result as they did, meaning abject failure. So we’d like to give you our advice based solely on our desire to see CSC succeed once more.

· Position your arrival as a major change in direction, culture and approach for CSC,  not as an evolution or some form of continuity with the past.  Harness the employees’ frustrations with the management style of the past 5 years to get their commitment and buy in to your vision of CSC. 

·  Set a clear strategic direction, communicate it then get the organization behind it.  If CSC has had a direction over the past 5 years it is a well kept secret. Boosting this quarter’s earnings or plugging the hole in this quarter’s profit is not a strategic direction.

·  Decide in which areas CSC will be world leader  and make the investments to support those decisions. CSC was recognized as a world leader in selected domains 10 years ago.  Today it is viewed as a “me too” player.  It has missed many market changes and opportunities in the past years due to its obsession with maximizing this quarter’s earnings at the expense of everything else, including investments in the future. 

·  Put the clienthis business needs and the CSC solution to these needs back at the center  of the management agenda. CSC has lost this. Internal debates, administration, cost cutting, inspection of 'numbers', organization models etc dominate the management agenda today which means the customer comes last and the employees nowhere.

· Decide your organizational and operating model and give senior executives the option of implementing it fully or leaving the company.   CSC has been going round and round this topic, especially in Europe, for years.  In theory there is one global organization per the Corporate model, but in reality there are local fiefdoms run by powerful barons. CSC must behave as one global organization, not as a franchise operation. 

·  Put small company values back into CSC, which  used to be a large company with the positive values of a small company. It was nimble, it could take decisions quickly. It could quickly deploy a top-class team of experts from all over the world to address a client opportunity. It could swiftly bring together executives of all levels, from technical expert to CEO, to address urgent client matters and take decisions while the competition was standing still. Today, CSC stands still, a small company with a heavy bureaucratic decision making process, (or often an “absence of decision” making  process) while nimbler competitors thrive. 

·  Change the “Tone at the Top” .   This phrase was used to describe the change needed in management attitudes in Nordic. But the most important and most needed change in the “tone at the top” is at the very top levels of CSC, to bring reality into line with the values the company claims to espouse. 

Why did no “whistle blower “ feel comfortable enough to warn CSC Corporate that they suspected something unusual was happening in Nordic when the irregularities started  long before they reached the $100million?  Did Messrs Laphen  or Mancuso ever ask themselves that question? Did they try to find out how other employees’ concerns, or allegations of inappropriate management behavior or actions had been handled in the past?  Did they ever try to see if there was a correlation between employees making complaints and leaving the company soon afterwards?

CSC should have one common set of behavioral standards, and the example must come from the top.  Credibility in management is destroyed when the executive decision makers grant exceptions from their own rules for themselves. 

Stop “killing the messengers” who try to raise issues or bad news.   This approach never solves the problem, it just encourages people to hide things from the management. If you can persuade employees to discuss their problems openly with you and your executive team you will have made a big step forward. Today many, many employees feel that “keeping their heads down” is their safest and best option.  

Get back to treating all employees with respect, including (or especially) those you must terminate.  

·  Introduce a CSC website that reflects your vision and ambitions for CSC.      After all, the website is the company’s window onto the world. The current website has no sparkle, no excitement and does not make the reader want to look inside it. It is the website you would expect from an administrative organization. In that respect it reflects well what CSC is today. Make it represent the CSC you want in 2017.  

We would like to repeat our best wishes for success. The value of our holding in CSC over the past 18 months reminds us that we have got literally thousands of reasons to want to see a successful and thriving CSC. 

Good luck !

The Cassandra Team


Anonymous said...

To the Cassandra Team:

Your recommendations formed a roadmap for moving CSC into a global leadership position. Unfortunately, based upon the events that have since transpired, I have concluded that your advice fell on deaf ears.

Furthermore, reviewing the compensation afforded CSC's executive team, I can reasonably conclude that the only objective they marched toward was enhancing their personal wealth.

CSC's operating model of reducing expenses at any cost has, in fact, impaired its ability to support current contractual obligations as well as diminish the resource talent pool critical for future work.

The best thing that could happen at this point is for the 'leadership team' to cash out now and allow the remaining folks to pick up the pieces and rebuild the company.

There is still a lot of hard working, intelligent, committed individuals whose goal is to satisfy their customers needs. Let them do it.

Anonymous said...

Sound advice Cassandra team. I believe, Laurie implemented every single advice. But the real issue is the failure to grow top-line and hence prolonged indiscriminate cost cutting that has shattered employee morale.

Anonymous said...

I think they did try much of what is listed above - when I say "try" I mean they did the bit where they ripped up everything that had been in the past, then singularly failed to have one clear, coherent strategy executed to put it back.

Instead of an impressive rebuild it was abandoned half way through and then when this suddenly appeared to derail the figures, swap to asset stripping and cashing out.

To be fair however, if you look at CSC's competitors, they also are struggling. It looks very much like managed IT services is something of the past and that technically abstract cloud services are the future.

These services won't be delivered by CSC, IBM, Accenture or anyone else - they will be delivered by the software manufacturers themselves whose products you will no longer buy and install, but will pay for using them on the internet.

Maybe in the face of all of this, the duty to the shareholders is actually to fold and return the money?

Anonymous said...

The damage is done. I left CSC a couple of years ago and have witnessed a couple of times how they are viewed in Financial Services. Just as nobody used to get sacked for buying IBM the risks of using CSC are seen as considerable. They had a small contract a while back but lacked staff with the skills. They brought in contractors, none of whom lasted very long, and they struggled to deliver. It was a disaster despite thinking it was bridgehead into a new FS account. It ended in adject retreat. I'm not aware they have won any work since and don't think they will. People remember.

That is the legacy of cuts, cuts and more cuts. A downward spiral from which it is very difficult to escape.

Anonymous said...

I believe that the only resounding strategy that Mikey has really achieved is ensuring that the customer does come last and the employees, or should I more accurately say inconvenient balance sheet costs, nowhere

Anonymous said...

Next time don't waste your time. The ceo is doing his job almost perfectly: double the stock price and prepare the company for its liquidation to cash more for all the people he only cares about. If this implies destroying the lives of thousand of employees, it is a collateral that doesn't hurt his values and moral. Who cares when you can cash a few millions per month while those losers can't find a better job elsewhere? Continue eliminating "Undifferentiated generalist " is a rewarding strategy for csc. Each penny he can scratch from your vr is worth the effort for his stock options price. This guy surely has clear values about how to make millions.

Anonymous said...

The only time the liquidate and sell strategy needs to be played out is when there is no long term future for the business.

Whether the lack of a long term future is (as many employees see it) simply down to the poor quality leadership at the top or whether the leadership are visionaries and see the IT services bubble as permanently popped is another question.

I think the evidence is out there writ large that the bubble has popped and the huge money made by IT services is in massive decline.

Sure, there will continue to be a need for it as a service, but not like it used to be.

All I will say is that during Mikey's reign of terror there definitely were opportunities to spend money to change direction and pursue more longer term objectives with a brighter future.

I don't believe he made a good job of that piece at all, however, I do believe that having made a hash of that, he is now executing the only logical step - hollow out by asset stripping, payout investors and sell to some sucker who will be happy with a 1% profit margin (presumably someone not beholden to the Wall Street overlords).

Mind you, the skill to spot and execute the exit strategy I suspect did not come from Mikey - I think it was spelled out to him in a bruising meeting with Jana Partners. I hate to say it, but I think they are correct.

Anonymous said...

I was made redundant by CSC in the UK 2 years ago.

It has destroyed my life, my self esteem, my worth.

Financially I am a lot worse off and my marriage a wreck.

Make no mistake, CSC has ruined me.

Ex UK employee.

Anonymous said...

More going as well.. http://www.channelregister.co.uk/2015/06/23/csc_job_cuts_update_yay_nay_maybe/

still sounds like we are better off without you

Anonymous said...

I gave up waiting for Redundancy plus I was concerned about being out of wok as its easier to get a job if your already in a job. Many job agencies tell me that's true. However, most of my colleagues who got VR in the UK got jobs usually back with the Client. I think 95% are in work in IT or started their own business.

It is defo better to jump than be pushed as you feel in control and don't loss any seff worth. Good luck to those who are left

Anonymous said...


Anonymous said...

26 June 2015 at 17:28 - well said.

I do hope people dumped by CSC do well.

Anonymous said...

So not sure how this survey relates to all the objectives but is interesting nonetheless and are a significant (if difficult to quantify) factor in how the company is doing and the lack of growth.


Anonymous said...

CSC listed as worse of the worst employers, WOW -
add to that:
- allegedly involved in flights of rendition,
- criticised Scandinavian and Italian governments for its work practises,
- booted out of the UK's most lucrative government IT contract (NHS IT) for non-performance,
- allegedly involved in New York State in fraud on health scheme,
- fined $190mln by the USA SEC for misleading shareholders and the markets,

now its own cycle team is involved in a doping and drugs scandal
"A Danish report into doping in cycling concludes that former CSC manager Bjarne Riis knew about the doping culture in the team and even encouraged it"
Read more at http://www.cyclingweekly.co.uk/news/latest-news/bjarne-riis-knew-his-csc-team-were-doping-report-suggests-178386#Fjd1EyCEvx4vpDy8.99

That's more or less the whole globe with issues with CSC. Where next Pluto?

Anonymous said...

I'm no fan of CSC, and entirely agree with 21:00's observations - apart from the cycling team, you can't hold CSC the computer company responsible for the actions of CSC cycle team. Presumably, the US Postal Service is riddled throughout with drugs? (Lance Armstrong rode for the Postal team!)

Anonymous said...

Fair point - But there is an old saying "You can tell the character of somebody by the company they keep". As the list of misdemeanours covers such a wide spectrum and there many other issues with CSC it CSC that has a habit of choosing its friends badly.

Anonymous said...

Andcthe cycling team was dropped quick when became apparent rife with drugs..bit like CSC dropping Mike Laphen...

Anonymous said...

I didnt know Mike was a cyclist!

Anonymous said...

Actually Laphen axed the cycling sponsorship when he took over from Honeycut....

They axed the sponsorship quite a while after the drug scandal, so it was probably more to do with whoever the person in CSC Denmark was who's pet project the cycling thing was getting the axe as Laphen cleaned house after taking the reins.

Its easy to forget, but Laphen had his own bloodbath, including moving HQ from the golden palace in California to Falls Church.

Anonymous said...

UK next week expecting inviduals to be told "at risk". The cutting is starting....

Enjoy the summer weather while you can.

Anonymous said...

US based employees are being told ZERO raises across the board this year. Again....

Anonymous said...

Not so sure on the zero raises. Several people I know have received increases, albeit modest raises at that, but raises nonetheless. I think we are seeing evidence of damage control measures to retain people. Question is whether this is too little, too late?
Another question is what happens when the company gets cleavage into its respective entities? Lot of unknowns and lot of people admittedly not waiting around to see what happens.

Anonymous said...

I got a 6% payrise in US.

It did suck telling my team zero rises across the whole company when I got one but I do put more effort in.

Anonymous said...

It seems to be a double standard as always with this company. The workers that are billable don't get a raise whereas the Managers that are hardly on-site get a raise. Nearly all the people I know on my project do make that effort, I just think the above comment of 'I do put more effort in' is typical of our managers!

Anonymous said...

if you bill a client you might get fired to make room for the two in a box management cr*p. I guess those boxy minded guys should also have 2 other bosses as well, so from the bottom L8 start to multiply by two every level up to satisfy L7, L6, L5, L4 and so on. Some people have a lot of friends and relatives to be put there!

I am not speaking without knowing; I had this two in a box nightmare for many years (can't understand why they call it new) and it is a living hell where you have to please two managers and a client (or clients) at once. By year end if the evaluator (admin manager) wants you to be labeled as a useless employee because he doesn't like you (for any reason), he just can do it. It doesn’t matter if your Functional and the Client think that you are a valuable resource that loyally takes care of the RUINS of an account that L7 L6 L5 and L4 managers destroyed before your eyes. Yeeeeep! it doesn’t matter because while you were worrying about your project and your client needs they were exclusively working on climbing the ladder for themselves while they just kept ignoring the client. Honestly, they are the smart ones because clients won’t give you a raise neither a promotion! Of course, after seeing all those fantastic managers destroy your account year after year and get rewarded a new step up every year, you just become an uncomfortable witness of their practices. It's up to you to decide either to please your administrative manager by pretending to be his friend (unless you are his family/girlfriend/boyfriend), or get blacklisted for working hard for the client and the functional manager. Be warned: Choosing the client and the functional manager will place you forever on L8 until they lay you off because the company needs to reduce its headcount of "undifferentiated generalists”. But don’t worry about this at all… upper management seems to be committed to destroy all remaining accounts and this company will be sold as scrap soon.

Anonymous said...

21:03 - Get out now on your terms ... not theirs. CSC does not deserve the good work ethic you bring to the table.

Anonymous said...

Well, it's mid-July and I haven't heard anything about my annual bonus ....not a word ....nada ....should I assume UK senior management want me to have a very pleasant surprise in my pay packet .....or that they haven't got the cojones to make an official announcement that there will be no bonus payments this year (again)?! #growapair

Anonymous said...

With 800 people in the firing line.. a high majority of those in bonus scheme... means no bonus in UK this year but expect bonus in 2016.

So if you 20:33 survive the nth blood bath.. you can take your kids away to a nice beach holiday July/August next year....

Anonymous said...

20:33.... Annual Bonus? You regularly get an annual bonus?

I am a US employee and in my almost 20 years, I've seen 3 bonuses - the last over 10 years ago.

We are lucky if we get a raise that keeps up with inflation and covers the increases in medical coverage. And as of today, no one on our team have heard ANYTHING about annual increase so we are expecting the standard 0% - or maybe 1% if one is lucky.

Maybe you were being "tongue in cheek" - since you mentioned "no bonus payments this year (again)... but the fact that you got bonuses regularly - in the past - should make you feel lucky.


Anonymous said...

While we are "discussing" whether or not we will be getting an almost zero salary increase and/or bonus, the Proxy Statement for this year's Stockholders Annual Meeting reveals some interesting numbers. Here are the total FY2015 compensation numbers for the 6 members of the CSC Executive Committee...

J. Michael Lawrie $15,353,880
Paul N. Saleh $4,492,392
Romil Bahl $5,304,472
Ashish Mahadwar $4,283,596
James R. Smith $3,047,853
Gary M. Budzinski $3,369,514

That's $36 Million split between 6 individuals. That is truly obscene when the workers are slaving away for a measly $500 - 1,000 annual salary increase or a $1,000 or $2,000 bonus.

My measly few hundred shares of CSC stock voted NO to reelecting ALL of the existing Board of Directors and an EMPHATIC NO to the 2016 proposed compensation which will get them even MORE.

Anonymous said...

About 5 years ago all UK people on bonus scheme got the max.

Was year when Kevin Brown retired and gave UK people bonus leaving present.

I got circa 15000 sterling. Now that was a pay cheque to remember.

Never been as good since and got zero on a few years ;-)

Anonymous said...

Now that could have been 500 sterling to 30 people. May I ask how many people you knew who were never 'entitled' to bonus?

Anonymous said...

Most people in the role "leader" are on the bonus scheme. Most senior leaders are.

I would estimate 20-30% of people in CSC UK are on the bonus scheme. Do take into account most people kicked out have been at lower levels.

The bonus is normally in the range 10-20% and is in contract. Sales have a more sales related bonus.

Various bonus schemes which no one really understands.

Is a more you get it - or you do not.

I know associate principles eg. department manager or sidekicks in UK do average over £120k basic so they would if got max bonus get a minimum £20,000. I expect some have had £40k+

Also market rates for people living in London/Aldershot are not factored into pay, so you do you have people earning very good wages where wage rates are a lot less than industry average e.g Scotland/North of the country.

Also quite a few of the people TUPE in from new business and role may not be like for like, so in some cases they keep the big pay/bonuses for a lot less responsibility once in CSC.

Then CSC UK pushes home working, so £100k+ a year, bonus now and again, 2 minute commute to your office (spare bedroom) in your house.... general mess in UK means can get paid for doing little.

I do see this is why the 800 job cuts are looking at the higher paid people.

Finally, a lot of the people who work for these dullards do not know how much they are on!

Regardless if they do go... they will get huge redundancy terms and if age right - pension top ups.

Laughing all the way to the bank..