Mike Gregoire, CEO of CA Technologies, explores what it takes to foster creativity, agility and invention at a large, established business.
In the age of digital business, when barriers to entry for start-ups have never been lower, large companies face a stark choice: disrupt their own markets or get disrupted by smaller, nimbler rivals.
It is a subject close to Mike Gregoire’s heart. Before joining $4.3 billion IT management software giant CA Technologies as CEO in 2012, he steered software-as-a-service (SaaS) talent management pioneer Taleo on a steady growth path to IPO, through the tricky recessionary years and, ultimately, to a $1.9 billion acquisition by Oracle.
In his two-and-a-half years at CA, Gregoire has been on a mission to inject the 39-year-old, 11,500-strong company with the same kind of dynamism he nurtured at Taleo — but this time tailored to a world of big-name, brand-conscious global customers with mission-critical IT needs. Indeed, he sees no mismatch between ‘big’ and ‘innovation.’
“Accepting that innovation is lost in a large company — that it somehow lacks the capabilities to foster innovation — is a cop-out. It’s a cop-out by executive management and it’s a cop-out by management in general. You need to have a strategy that actively preserves the legacy yet allows the creativity and freedom to build the next set of innovation.”
But innovating at an enterprise level comes with a wider set responsibilities, he argues, that demands not just inventiveness but also trust. “When you’re a big company there’s a higher duty of care and higher expectations. When companies like CA put products into the market, customers expect them to work, and to work all day, every day. What I tell our staff is you’ve got to be better than a start-up,” he says.
That’s not to say, however, that a large organization can afford to move more slowly. That’s a cliché associated with established market leaders, for which Gregoire has little time. It comes down to pre-empting customers’ needs — figuring out not what they need today but what they’ll need tomorrow.
In many ways, large companies have distinct advantages here, according to Gregoire. Unlike start-ups, they have deeper relationships with their long-term customers, wider market reach and the available capital to explore how customer needs might best be served.
That is only achievable, though, if you can “keep friction out of the system,” he says. The sources of friction he refers to are the traditional layers of hierarchy and bureaucracy that prevent great new ideas from getting due consideration in front of senior decision-makers. When he took over at CA, there were 13 layers between him and the company’s most junior employee; today, there are just six.
As that emphasizes, corporate success stems from managing talent. “If you want to inspire your company with creativity and leadership, the number one focus should be the people. Look at what they’re doing, look at what they need. Are you providing the right environment for them to be creative? And can you remove any of the administrative issues that get in the way?”
Another aspect of surfacing innovation is setting unambiguous direction. “Executive management shouldn’t underestimate their responsibility on long-term strategy. The number one way to lose great people, especially engineers, is to get them to work on things that don’t matter,” he says. “If they’re working to build something they later find out didn’t matter, they’ll take their intellect and their tools and their passion somewhere else where they are appreciated.”
The power to partner
Large companies have another advantage. Unlike start-ups, they have the power and reach to build ecosystems of partners around them that deliver a more comprehensive set of innovations. That’s one reason, for example, why CA partners with big IT industry names such as Fujitsu, which draws on CA’s enterprise security, storage and systems management solutions, and application management services, as part of its broad product and service offerings.
“The technology marketplace is massive and to think that any one company is going to be successful in all domains is naive,” he says. “We try to be very specific about what we’re good at and what you expect a partner to be good at. And when you get a partner like Fujitsu which is culturally complementary to you business and your customer base, I think that’s when you hit a home run.”