Dodgy brothers: The IT management dilemma
Summary Description Garbage bags of marijuana, sex scandals and fly-by-night companies. Is the technology industry plagued by dubious management practices? Simon Vandore investigates.
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Roullas Top10 Simon Vandore

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Editorial InformationArticle Location
Article Topic Special Report
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Story Group 000709
Post Date 30/06/2000 02:29 PM Status Posted Entered by Simon Vandore on 29/06/2000 12:37 PM


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Content
Introduction
Sex, drugs and scandal -- the IT industry has it all.

Body
The resignation in May of Chris Tyler, expatriate American CEO of Australian accounting software company Solution 6, hit the front page of national newspapers. It came after BRW magazine revealed his 1985 conviction in South Dakota for possessing "a couple of garbage bags" of marijuana.
The mainstream media's fascination peaked when Tyler freely admitted the offence and tried to play it down. Revelations of his involvement with failed Canadian company Lessonware didn't help, but Tyler only quit when newspapers revealed an arrest on suspicion of selling cocaine in 1981.
The questions remain: was Solution 6 aware of its CEO's dark past? Do recruiters sometimes bypass the usual checks and balances to get around our IT skills shortage? Did Solution 6 even care? Opinions are always divided over whether this type of revelation should affect someone's current career, but Tyler was not the first to depart in this manner.
An industry trend?
On the morning of April 17, Spike Networks announced that its founder, Creed Chris O'Hanlon, had resigned due to ill health. The Sydney Morning Herald soon ran a long exposé alleging that O'Hanlon was forced out. He left behind a sexual harassment claim, a mistress who allegedly stole $US53,000 from Spike and a series of huge bills which had sapped the company's funds.
Perhaps best known for his flamboyant hype about the future of Spike, O'Hanlon boasted it would become "the Disney or the News Corp of tomorrow" and predicted Spike Radio would dominate the 'youth nation' of the global Internet. Since his departure, the company has conservatively repositioned itself as a corporate Internet consultancy -- extravagant parties and mansions on the US west coast are a thing of the past.
Meanwhile, online education company NextEd was forced to defend its new chief operating officer, Dr Alan Bowen-James, when Newswire revealed that he was struck off the medical register in 1991 for professional misconduct.
Bowen-James was charged by the Medical Tribunal of NSW after allegations by a former patient that a consensual sexual relationship had existed. He denied the charge, but the tribunal found for the patient and he was prevented from practising for three years.
A NextEd spokesperson said Bowen-James was hired for his "extensive senior management and consulting experience". His blemished past was not an issue and he remains with the company.
And then there are industry stalwarts like Ian Penman, managing director of Compaq Computer Australia, who addressed a 1996 press conference as follows: "At Compaq, we will probably have $4 billion in cash reserves by the end of the year. Basically there are five ways that you can spend that, not including women [interjection of booing from the audience] . . . I'm a chauvinist, I admit that."
Could Penman talk this way if he was the head of Westpac? Or if he ran Coles Myer? Such insensitivity might make national headlines and women's interest groups might even encourage a boycott. But the majority of Compaq's customers are men. The technology media reported the quote with raised eyebrows and Penman got on with selling PCs.
The recruiter
Felix Borenstein, principal of Melbourne recruitment firm Parkside Consulting, admits two of the companies mentioned above are his clients. But he argues that there is no more scandal in technology companies than elsewhere.
"I think the IT industry is more high-profile than other industries, so you tend to hear about these things more," Borenstein said. "The Chris Tyler thing, for example -- that was on the front page of every newspaper for how long? If it was the CEO of a brick manufacturer would it have been there?"
Parkside typically does four or five reference checks on candidates for senior positions. Referees are often nominated, but the company also does its own research, especially when the candidate is from overseas.
"I mean we actually reference-check the referees!" Borenstein said. "After we've done a reference check we then ring back and ascertain whether the referee is who he or she says they are."
He agreed the big dollars on offer at high levels in IT companies have the potential to attract some undesirable characters, but said candidates must also undergo a barrage of psychological profiling.
"A prior drug conviction from 10 or 15 years ago? I don't know. I'll pass on that one. I think that everyone's entitled to make mistakes . . . I mean it was a very big garbage bag full. But I would suggest that there are some mistakes that would preclude somebody from holding a senior management role forever. A couple of bags of marijuana? Who knows!"
More women
Borenstein denied there is a bias towards male employees: "If we dealt with a client who said 'I don't want to see people with X background or Y gender or B sexuality', we'd say 'sorry we can't help you'."
However, he stressed that the loss of female employees after maternity leave adds to the skills shortage, and said the government needs to do more to encourage women to return to the workforce, especially in terms of reducing childcare costs.
"Why am I saying this? Because in my small company I now have five women who have gone on maternity leave in six years. If I wanted to get three or four of the women that I've currently got on maternity leave back here and I paid some of their creche costs I'd be subject to fringe benefits tax. There's no encouragement whatsoever."
"My most experienced consultant has just decided that it's not financially viable for her to come back and work full-time because of the cost of day care," claimed Borenstein. "These are very experienced, very senior, very successful women, but even if they're earning $100,000 to $120,000 a year it becomes fairly marginal. So how on earth are women on $35,000 a year coping? They'd actually be going backwards!"
Fly by night
As well as the headline-grabbing scandals, there are also less publicised but equally worrying problems in the technology field. Last year the Australian Competition and Consumer Commission (ACCC) held a special summit after receiving over 300 complaints about unfair and illegal trading practices in the IT sector.
"The industry must recognise that it must take responsibility for the problems encountered by consumers and weed out any 'cowboys' ruining the good reputation of a solid industry," ACCC deputy chairperson Allan Asher said at the time. The hardware retailing sector in particular has an ugly record of dodgy traders going out of business and then restarting under another name.
"The IT sales industry attracts people that are very confident, very motivated, and I guess they live hard and to some degree they play hard. But that's not everybody, clearly," Borenstein said. "The sheer nature of startups, especially in the Internet space, means that senior management in startups mightn't quite have the skill set of senior management in some other types of organisations."


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Bulletin SummaryDodgy brothers: The IT management dilemma
Bags of marijuana, sex scandals and fly-by-night companies. How does the technology industry get such dubious management practices? Newswire investigates the dark side of the IT boom.

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