The Challenge: Slumping trade volumes, cost-containment initiatives and threats of more layoffs have combined to lower morale across the brokerage business. IT departments aren't immune to this toxic mix, which can have employees worrying as much about their future as the task at hand. It makes motivating staff and shoring up morale a real challenge.
Tim Buckley is a bit of a contrarian. While firms like JPMorgan Chase & Co. enter into multi-billion-dollar IT-outsourcing agreements to shed staff and cut costs, and others look to outsource application development offshore, Buckley, chief information officer of the Vanguard Group, is taking a different tact. He's keeping work in-house, because it is "essential that the crew is pulling in the same direction."
"When we have had outsourcing arrangements in the past, such as running the data center or the LAN, we found that we can do it here far more efficiently than any outsourcing arrangement."
"We've outsourced things and brought them back in and saved millions," he says, adding that he finds the "quality rates go up." It's that commitment to the team or crew, as Buckley likes to call the 2,800 person IT staff, that can show employees that Vanguard is investing in its staff, he says.
"We sell a career and a company, we don't just sell 'whiz-bang,'" adds Buckley from his Malvern, Penn. office, noting that the current economic climate is "a tough environment."
Rich Malone, chief information officer of Edward Jones in St. Louis, adds, "The climate for everybody has slowed down. Companies are all talking about the same thing right now, how to weather this type of business climate."
Malone notes that while he has managed to avoid laying off staff, he has slowed down some projects, released contractors and for the "second time we haven't had a bonus." However, he notes, the last time Edward Jones laid off staff was in the 1960s and there was "no tech organization back then."
That culture of no layoffs can buoy up staff spirits in these tough times. The key to ensuring no layoffs, says Malone, is managing the business like the firm manages its clients' portfolios: "conservatively at all times."
According to the U.S. Bureau of Labour Statistics, the brokerage business has shed more than 80,400 jobs, about 10 percent of the workforce since its peak of 786,000 in April 2001. It's the worst percentage loss since the 17 percent decline in the 1972-74 recession and the bureau predicts the bleeding will continue. "We expect the national-securities-industry job losses to increase to around 112,000," notes a recent employment report.
The jobs losses range from layoffs to retirements and while the bureau doesn't break out the numbers according to job descriptions, technology departments have felt the pinch, if not in job losses, then in monetary reward.
A few years ago, IT managers could appease staff by throwing more money their way. However, the "days of motivating people only with money are gone for the foreseeable future," says Katherine LaVelle, a partner in Accenture's financial-services group who manages the human-performance business in North America. "CIOs have a tough challenge ahead of them. They're forced to do more with less."
Buckley says that means the non-monetary techniques used to motivate people in a good environment have to be emphasized even more in a bad environment.
A lot centers on communication and making sure that staff are informed and understand where the company is headed and why. "You got a lot of people working hard contributing to the company, so it's important to show them what impact they're having." They need to understand how a project they are working on affects the overall business, he says.
Too often, Buckley says, IT departments "forget to show them the benefit of what's going on. It's important that they know what the project is all about," whether it's making an operation more efficient or laying the groundwork for launching new products. That way, employees know that what they are doing is important and an informed staff is a motivated staff.
Barry Zweibel, a former vice president of telecommunications at the Chicago Mercantile Exchange who is now a personal life coach at Gottagettacoach! in Northbrook, Ill., says to keep people focused and motivated, "The first thing is to be honest. A lot of managers make mistakes thinking, 'I can protect staff by not sharing key information.'" So if the company is thinking of layoffs, they say nothing.
However, he warns, that can backfire because of office gossip. "If bosses are saying things that are inconsistent with what the grapevine says, then they take a real hit to their credibility. Once that happens it's tough to maintain a good working relationship with staff. You have to be honest about what's going on."
Jonathan Beyman, chief information officer of Lehman Brothers, agrees that managers must have "honest conversations" about their organization. His firm has started looking at doing some offshore development in India. "I stood up in front of staff in New York and Tokyo and talked about its implications and why we have to do it. I got a lot of very difficult questions," he says, noting that some people were upset. "It's not always easy."
Malone says it's also important to keep staff informed about business priorities moving forward and not just the here and now. "It focuses on the big picture ... and reaffirms the strategic long-term vision." Doing that, he says, shows that "everybody is in this together and pulling together."
He adds that one of the simplest motivating communication tools, which is often overlooked, is praise. "We celebrate our success and let (staff) know we appreciate their efforts."
LaVelle says CIOs must also put "more of a focus on teamwork and building a collegial work environment." That could be as simple as brown-bag-lunch discussion, where staff from different projects share information about what they are up to and the hurdles they face. That builds a "community of interest" and people "realize they have another source of support."
Zweibel says it's important to remember that "most people spend more time in the workplace than they do with their family," so collegiality is key. Managers should take some time checking out their workplace and recognize the stress people are under. Take three to five minutes to talk about something that's unrelated to work, he says. Ask about family and "treat people as real individuals and not like some little box in an organizational chart. People like to be noticed, seen and respected."
But communication is only part of the equation. Staff need to know that they are moving forward in their career paths. That means training and planning must also be emphasized.
LaVelle says in bad times, CIOs need to get "creative" and focus their attention on staff and show employee's "they can do a lot for their career path." That means deploying "different types of learning and training" and providing a blend of long-term and intermediate assignments.
She says firms need to use this slow period to "build holistic sort of skills or skills beyond one area of IT." Otherwise, she says, they may find that they don't have the talent to undertake major priorities.
Malone says in tough times training must be flexible. In his firm's case, he's shifted training priorities. "We cut back on some of the discretionary training," focusing, instead, on training that relates to the projects in the hopper. However, when doing that, he says, it is important "that you continue to do long-term planning of people's career and objectives. You need to continue to put people through training."
Buckley says that Vanguard also "continues our investment in training. We have a more concerted effort around training. It's more formal." Staff currently have a two-year training plan that will soon be bumped up to four. "What you're able to do by being more formal is more targeted training." If someone is in an area of technology they don't like and want to go from being "host centric to net centric" the formal plan can prod that career transition.
He says another motivating factor is "making sure you keep people challenged on the job." That means rotating them on projects, which Buckley says is "tougher to orchestrate in this environment. We make a concerted effort to move people to different jobs." (see Interview section to learn how American Century's CTO is handling such issues.)
Buckley says one of the best things a manager can do to motivate people is to say "thank you" when a project is completed and congratulate staff on a job well done. Celebrate the wins, he says, adding it "doesn't have to be extravagant. It's all too easy for people to forget to say thank you."