A decade of learning

Ten years is a long time in the IT business, especially when those years have been spent heading the Philippine operation of a software giant.

"It was the first attempt of Oracle to hire a young chief executive officer. I was 36 years old then and had made a name in sales but I had no CEO experience," said Bernard Yu. To give him the necessary mentoring, the head of Oracle’s Australian operation flew in once or twice a month for the next 15 months.

Yu was officially made managing director (Oracle Phils.’s version of CEO) in June 1994.

"In the early years, the thrust was to grow the business. The industry then was growing at 40% to 50% a year. Those growth rates are no longer possible. The thrust now is to sustain growth at a healthy double-digit rate," he said.

The last decade has also seen internal changes within Oracle. The company has grown from 11 to 115, of which only half of the sales force report directly to Yu for the last five years. The Philippine-based support service group reports to a regional head.

Management style

"When there were only 11 of us, decision-making was entrepreneurial. I alone made the decisions. Now that I have 60 people reporting to me and the volume of the business is bigger, I consult an expanded senior management team, which operates like an executive committee. The ESMT is made up not only of directors (senior-level managers) but also of department heads. We have very good discussions," said Yu, who admits that he likes to drain ideas and get the views of others. "Being the boss is a lonely job. At the end of the day, you take responsibility for decisions made."

Internally, Yu has been described as benevolent, in part because he knows how to manage the expectations of his employees. Realizing, for example, that most of Oracle’s new hires are young and hold to the Filipino everyman’s dream of having a car and owning a home, Yu pushed for company subsidies that would make it easier to buy that car and that house.

These benefits, in turn, have resulted in better sales performances.

"Everything boils down to selling," said Yu. "It’s important to know what motivates somebody because motivation differs in various stages of life. Even bad news may not sound so bad if placed in the context of how competitors fared or against last year’s performance."

Challenges

In the past year, the prospects of the IT industry has improved from incredibly bad to bad. Next year, the prospects are expected to further improve from bad to getting better.

The consumer market is growing, in part because it is not yet saturated. The corporate market, which continues to account for the bulk of sales, remains down.

"We primarily deal with corporate clients. For example, Oracle powers the entire prepaid text message system of Smart Communication," said Yu. "In some cases, however, corporate clients overbought so they are only fully utilizing now what they bought earlier."

In the consumer and small-and medium-sized enterprise market, Oracle’s product offerings include the Standard Edition, a full-featured database that can do simple stuff.

Not only is business harder but the ways to recognize IT revenues is now more stringent after the financial problems of Enron and WorldCom. For example, the option to cancel a software order can wreak havoc on the accounting of IT companies. Technically, a software is a license to use. If it is not used, there is no sale.

"Oracle has never come up with inflated growth figures," said Yu. "We have lost some deals because our competitors don’t play by the same rules."

Like his leadership model, Oracle founder Larry Ellison, Yu believes that success lies in having a vision and the passion to pursue it. His model for the third element for success–courage–is proponent for IT development Roberto Romulo, who quit because he could not stop the hanging of Flor Contemplacion. Given a similar scenario where he would have failed in his duty to Oracle and its workers, there is no doubt that Yu would do the same thing.