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Finance, Human Resources, IT Innovation | February 15, 2019

Keep Your Focus on the Business Priorities That Matter Most

By: Mark Hurd | Chief Executive Officer

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At the start of each new year, CEOs are often asked about their top business priorities. While tactical details may change by the week in a dynamic global economy, I have found that our business success comes back to three main things: strategy, operations, and people.

Getting those three priorities right is anything but simple, of course, especially amid ever-changing market conditions, regulatory restrictions, and customer expectations. Add to those the generational shift happening in technology, as companies move their operations to the cloud, and there’s plenty to challenge any business leader.

1. Getting the strategy right. Let’s define strategy as a company’s vision and high-level plan for achieving profitable growth and a strong competitive position. Let’s also acknowledge that this strategy might not be popular when you first spell it out.

A vibrant business strategy gets your company to a market position others either didn’t see or follows a path that matches its unique strengths. A decade or so ago, Oracle made the strategic decision to move to the cloud, all-in, by rewriting the company’s applications, database, and other key products specifically for that platform. That strategy entailed expanding R&D spending from about $3.7 billion a year to close to $6 billion at its peak, which necessarily cut into earnings in the short term. In the long run, however, it has positioned the company to take market share, as we’ve moved ahead of competitors with cloud products that are more modern, easier to manage and update, and more cost-efficient.

People may complain that you’re boring if you don’t come out with a shiny new strategy every year or two. But strategy, by definition, provides a long-term view.

2. Getting the operating model right. Globalization, non-stop digital innovation, and a range of other factors have heightened the pressure on business leaders to regularly evaluate and update their company’s operating model—how it delivers value to customers.

Among the operational questions I’m asking: What are our company’s core strengths? Are our product development, sales, marketing, finance, HR, and other teams organized in such a way to maximize those strengths? Does our company culture enhance them? Are our IT systems keeping pace with the needs of our people and the demands of our processes? How does our company generate new ideas and innovations, and how does it retire old processes and products?

One operational change our team made recently involved Oracle’s sales structure. Instead of organizing our cloud application salespeople just by geographic territory, we created territories that are competitor-oriented. For example, one territory consists only of hospitals and other healthcare customers of a particular on-premises ERP software vendor. The rationale: We want our salesperson to intimately understand the shortcomings of that one competitor and the needs and challenges of its customers as they consider moving to the cloud.

3. Getting the best people. Of all the challenges business leaders face, I believe none is more critical than attracting, cultivating, and retaining talented people. Among the many obstacles: Declining birth rates are starting to shrink the global labor pool; not enough college students are majoring in the STEM subjects; and more than 20% of those who do major in STEM at US colleges and universities are from other countries, so most of them are forced to leave the US after they graduate because of outdated visa regulations.

It’s my job, working with HR leadership, to create the programs, incentives, and culture that make our company a destination employer.

At Oracle, we made the decision five or six years ago to stop relying on talent poached from other companies and, instead, we got back to what most companies used to do decades ago: Attract talented young people, many of them right from college campuses, and invest in their development. We’ve since spent hundreds of millions of dollars on the recruiters, training programs and tools, and hub facilities to make that happen. Today, some of those hires are moving into management positions at our company.

Our industry is going through a time of accelerating change, and I’m sure you’re feeling the same about your business. New cloud-based technology options such as artificial intelligence, blockchain, and the autonomous database are rewriting the rules for all businesses. Thinking of those and other choices through the lens of strategy, operations, and people will help make this period of unrelenting change more manageable.

Chief Executive Officer
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