9 Lessons To Be Learned From CSC's Transformation

Navigating Change

Many companies in the channel are facing a transition period where they need to adapt to cloud, big data and more -- and do so quickly. But for large companies such as CSC, the transition is more challenging -- taking a long-held strategy and tens of thousands employees and executing on a new vision. While industry bellwether CSC's transformation isn't over yet, the company has overhauled many aspects of its business. Take a look at 10 lessons that can be learned from the CSC business transformation so far.

Margins Aren't Everything

While it's important to grow a company's margins, analysts CRN spoke with said it also is important to invest in the company. They said CSC CEO Mike Lawrie has done a great job cutting the company's costs but he also needs to keep an eye on the future. That is especially true, they said, as Lawrie spoke of "execution missteps" on CSC's recent third-quarter earnings call, which some analysts said signals the company's underinvestment as it starts to cut costs. As any company navigates a transition, the analysts said it is important to balance cost-cutting with investments for the long term.

Focus On Company Culture

According to reviews on anonymous review site Glassdoor, CSC has struggled to maintain a strong company culture during its transformation. Current and former employee reviewers gave CSC an overall approval rating of 2.7 out of 5, with 36 percent saying they would recommend the company to a friend and 38 percent approving of Lawrie. Lisa Jackson, principal of Corporate Culture Pros, a culture and business performance consultant group, said this is a common problem she sees with companies in transition. She recommended organizations going through a transition focus on clarity with employees, giving them input into strategy and engaging them at line-of-business levels.

Know Who You Want To Be

One criticism analysts have had of CSC's transformation is that the company appears to be in an "identity crisis." As it goes head to head against industry juggernauts such as IBM and Accenture, analysts said they see CSC struggling to differentiate itself and answer the question, "Why CSC?" They said that is one major challenge facing the company going forward.

Acquire Where Needed

To grow its capabilities, a company can either build them or buy them. While CSC has built some key capabilities, analysts said it has also made some key acquisitions that have helped push it toward its goal of becoming a next-generation global solution provider. Jacob Gordon, research analyst who covers CSC at Technology Business Research, particularly praised the company's recent acquisition of enterprise cloud management company ServiceMesh as a move that "put them on the map" with cloud technologies. "Those acquisitions over the past year have allowed the company to gain some traction," Gordon said.

Focus On What You Do Well

Despite the changing marketplace and the need to adapt to new technologies, it is important for a company to focus on what it does well. A company should invest in areas where it can see long-term growth and, while there will be an adjustment period in the short term, the benefits will be apparent in the long term. CSC is looking to benefit down the road by focusing on building its business in security, cloud and big data analytics. In the short term, CSC is still working on what it has done well.

Focus On Attracting The Right Talent

While many companies focus on cost-cutting during transitions, it is imperative to have a great staff that can take a company where it wants to go. Bringing in the right talent will go a long way, while failing to do so will prove costly. In CSC's case, the company struggled to recruit programmers familiar with the IBM programming language RPG. Because of this, CSC was unable to complete work it was already contracted for by its deadlines, resulting in an 8 percent drop in revenue to $2.95 billion for the third quarter. Lawrie said that he has put steps in place to fix the issue so that CSC will recruit the right talent going forward.

A Little Self-Promotion Never Hurts

Throughout the course of a transition period, a company will see struggles. That is almost a guarantee. But along the way, there will be victories. Whether they are large or small, it is important to accentuate what the company is doing well, so employees and clients don't only notice the struggles. Let them know the good outweighs the bad. In CSC's case, it has highlighted its growing margins as well as its partnerships based on its developing cloud business that it intends to be profitable in the long run.

Need Strong Leadership

One necessary part of a company transition is having a strong leader to execute the necessary changes, Corporate Culture Pros' Jackson said. The change has to start with the CEO, she said, and top levels of leadership as well as employees need to be aligned around the vision, especially when they involve some tough decisions such as layoffs.

"[The leader] has to have an iron will to take a company through that journey," Jackson said.

Analysts all agreed that CEO Lawrie is strong leader and praised his ability to make the choices necessary to cut costs and realign the business around next-generation technologies.

Stay Ahead Of The Curve

For any company in the channel, it is important to stay ahead of the curve when it comes to technology. For CSC, CEO Lawrie has crafted a technology vision around cloud, big data and analytics and security and is pushing the company to innovate and deliver in those areas.