What Does It Take to be a CEO in Technology?
Succeeding Against Stereotypes

February 20, 2004 — Picture a successful mid-sized information technology firm that specializes in the competitive field of information security, enterprise applications, knowledge management, networking, regulatory compliance and program management. With clients in telecommunications, defense, international civil aviation, life sciences and Fortune 500 firms, it has over 80 systems in use in 30 countries. The company of 135 employees has weathered swings in defense spending as well as the tech bubble. Its CEO has been recognized for entrepreneurial leadership in technology services.

Defying Stereotypes and Odds
You might think that the firm was launched in the 1990's, based in California or outside the Beltway, led by a hard-driving CEO in his 30's or 40's, and backed by some serious venture capital that has helped the company build momentum, connect with clients and realign strategies to meet changing market demands.

Think again. Data Systems Analysts, Inc. (DSA) is led by CEO Frances Pierce, who proudly points to her 40th wedding anniversary, coincidentally the same anniversary year recently passed by the company itself. Founded in 1963, DSA is headquartered in Pennsauken, N.J.

There aren't any deep pockets behind DSA, which in 1980 became one of the pioneers among employee-owned (ESOP) firms. The company has survived, and thrived, through its ability to adapt to changing market demands — to continue to recreate itself without losing sight of its core strengths, values and capabilities. The qualities that may have worked against DSA during the e-business bubble when people were looking for 'sizzle' made DSA more highly prized after the bubble burst, when suddenly having a solid track record of success, financial stability and actual clients looked very good.

Pierce herself has also proven capable of both adaptability and vision. She has served as a member of the Advisory Board of the Secretary of the Army's National Science Center, and is a past Associate Director of the Armed Forces Communications and Electronics Association.

In 1998, Pierce was a finalist for Ernst & Young's Greater Philadelphia Entrepreneur of the Year Award for Technology-Services. In 2002, she received the Women's Fund of New Jersey Award for Outstanding Achievement in the Field of Technology. And in 2003, the Philadelphia Business Journal and the National Association of Women Business Owners selected her as a Woman of Distinction, an award recognizing commitment to professional excellence and community involvement.

Crisis Leadership
"One night I was VP/GM of the Washington Operation; the next night I was CEO," Pierce told students in the Executive Master's in Technology Management (EMTM) program offered by Penn Engineering and co-sponsored by Wharton.

So much for succession planning. This was a classic example of when leadership opportunity is defined by a moment of crisis. Pierce joined DSA in 1971 as a system design analyst. She moved up to lead architect engineer and technical manager, then program manager, and ultimately EVP and general manager of DSA's Washington, DC operations. Then, in 1991, suffering from the recession and a sharp drop-off in defense spending and contracts at the time, DSA found itself in an internal dispute over the direction of the firm, and faced the question of whether or not to sell.

Several offers were on the table to buy DSA, but Pierce was among those who advocated keeping the company and trying to make it work on their own. When the board met, it decided in favor of retaining control of the company and called Pierce to ask her to take the reins as CEO. The next day, ready or not, that was her new title and role. "I couldn't say no," says Pierce. "If I felt like this was the right future for the company, I couldn't back away from the responsibility."

In the subsequent months and years, Pierce helped DSA significantly reconfigure itself and reposition its market niche. It reversed its bench strength, from 80% software development / 20% systems engineering, to 80% systems engineering / 20% software. It transformed from being a turnkey sub-contractor relying heavily on extended multi-year contracts with large firms, to being a prime contractor with smaller, faster projects and direct interface with the customer.

Among other challenges, this meant handling the marketing and sales functions previously shouldered by larger client firms such as Siemens, Philips and GTE. Suddenly, engineers needed to know how to talk to corporate customers, market their products and become consultants as well as technologists. Tough decisions had to be made about shedding existing work that now drained resources without commensurate return.

Making smart choices, DSA successfully rode out the crises of the early 1990's and navigated the tech bubble and bust. Most recently the company has seen two areas emerge as new growth markets for the firm: security (really, a re-emergent strength in the aftermath of 9-11) and life sciences (which makes sense based on both capabilities and geography, with its proximity to the high concentration of biomedical and pharmaceutical firms in New Jersey, Pennsylvania and New York).

Lessons Learned
Pierce frankly warns, "Nothing prepares you for being CEO. You can do things to gain skills and insights, and experience helps a lot, but you can't know what it feels like until you're there." In her talk and extended Q&A on critical success factors, though, Pierce offered some advice, citing examples from her own personal experiences with DSA.

Among the lessons learned in moving from technical management to CEO:

• Trust your instincts. Engineers and technologist tend to like analytical proofs and clear answers, but you need to learn to go with your gut instincts. This doesn't mean shooting from the hip, or not doing your homework. But recognize that your gut reaction is a product of your accumulated knowledge and experience over time, and that it is a form of wisdom that you should listen to. If something doesn't feel right, it probably isn't.
• Play to your strengths (and ditto for the organization). Capitalize on your strengths and manage your weaknesses. You don't need to have all the answers, or be able to do everything. What you need is to understand your business, your industry and your clients, and play your strengths to best advantage.
• Take the time to articulate your values. We too often assume that everyone has the same set of values and ethics. It is important, however, to articulate these corporate values clearly. Alignment on core values is essential to the health of the organization. Ultimately, it affects everything from productivity to business success.
• Eliminate the "third quadrant." This relates to clearly articulating your values and goals. As GE's Jack Welch advised, watch out for individuals who are high performers, but whose values, integrity or goals are not aligned with the corporate culture you are trying to build. Calling these the "Charles Mansons," Pierce warns that you need to make the tough calls to weed out such individuals, who can otherwise end up poisoning the organization from within.
• Work on the business (not in it). You can't maintain the strategic bird's-eye view needed to lead a company when you're involved with operations. Think of the company itself as a system, Pierce advises technology folks who may still be tempted to keep their hands in some favorite projects.
• Know your industry and that of your customer. Spend time outside the organization (with customers, peers and industry groups). Find people to challenge your thinking; never get complacent. Again, for leaders who are moving from technology management, getting the bigger picture of business fundamentals and drivers is key.
• Keep working on the "people puzzle." Finding the right people for the right work sounds a lot easier than it is, especially when you are trying to institute change. Pierce also "invests time in conversation" with her direct reports. Once a month, she meets with each direct report for a scheduled one-on-one meeting that is driven by their agendas.
• When you're the CEO, there are no more excuses.When you're leading a project or a unit, you can always say 'If only senior management would….' When you're CEO, the ultimate responsibility for decisions, success and failure rests with you.

Bridging Technology and Business
How important is a technology background when you're CEO of a high-tech firm? While Pierce maintains that a technology background isn't necessarily a requirement for success in leading a technology firm, she cites several ways in which it proves extremely helpful.

Having the relevant knowledge base gives you greater credibility and confidence in your dealings with employees and clients. You know how to ask the right questions and pose the right challenges — and how far to push your technical teams. When you know the industry from the inside, you can pick up more quickly on important trends and understand what the key drivers are for the future. And finally, you are likely to have a good "culture fit" with the organization.

On the other hand, Pierce says, she felt at a disadvantage when she first stepped into the role of CEO, because she knew so little about the business of business. Why do so few CIOs go on to become CEO? While CEOs often move up from within the finance or marketing sides of the business, CIOs tend to operate more within their channel, never gaining the broad exposure that's needed to lead the business as a whole.

"There's a huge need for the 'glue people'!" says Pierce — people who understand technology and business and sales, and who know how to talk the language of finance and marketing, as well as talk intelligently to the engineers and technologists who are key to a technology company's intellectual capital and innovation.

For EMTM students, Pierce's advice fell on receptive ears. Most are men and women from engineering, science or technology backgrounds who are in the executive master's program to build management expertise and apply that insight to lead innovation in emerging technologies.

What about the 'Female Factor'?
It wasn't until nearly the end of the Q&A session that the question was asked: "What are the advantages and disadvantages of being a woman CEO in a male-dominated field like IT?"

While Pierce says she hasn't experienced a lot of disadvantages, there have been 'challenges' — especially in breaking into the network for defense contracts or representing the firm oversees in cultures where women are not usually seen in business roles.

When it comes to advantages? Pierce replied with her typical candor. "There aren't many…but at least they remember you."