When Andrew Skates started his new job last week it was obviously an important day for him. But it was not just another appointment. Skates is the latest in a growing list of young executives to jump from the relative security of a big corporate IT company, in his case IBM, to the brave, unknown, new world of new media.
Until last Friday, Skates was the European marketing manager at IBM Software. But now he heads the new media advertising agency Clarity Interactive. Significantly, he is not alone in making the leap into the unknown. There are many other senior executives, mainly coming from IT, who are moving into the field.
But why are executives jumping off the corporate IT ladder and leaving secure jobs with pensions and all the usual related benefits to work for small new media companies? Especially when they are entering a sector that is financially unproven, where a company’s value is likely to fall just as fast as it has risen.
The uncharitable might say the only reason someone moves from a big corporation to a small company is if they are on the way out. But many of these moves belie that.
Three years ago, when Skates became a manager at IBM, he was the youngest in the company’s European division. From there he progressed rapidly and when he announced his decision to leave he was offered inducements to stay.
But after seven years at Big Blue he thought it was time to move on.
“Spending 25 years at one firm is no longer an option. It’s now more common to hop from one company to another after a reasonable period of time. In fact, if you spend too long at one place potential employers see you as getting too comfortable. You are seen as being, say, an ‘IBM man’ and not your own person,” says Skates.
The age-old drive to be your “own person” still appears to be the strongest reason luring ambitious executives away from big companies to smaller outfits. But there is also a desire to have a more direct impact on the business.
Skates points out that the IBM Software division across Europe employs 2,500 people and returned a profit of 2.5bn last year. “In that sort of environment, and with those sort of figures involved, all you can do is affect the minor decimal places,” says Skates. At Clarity he will have 20 staff working under him.
Richard Percy, who was general manager at Acorn Computers for two years from 1992, before moving to Internet TV operation ViewCall Europe this year as marketing director, echoes this view. “I wanted to have a creative and strategic role. Here there is greater creative freedom and a broader operational role.”
People who have made the move from big to small companies say they enjoy working in an environment where decisions are taken quickly because less people need to be consulted. It also means that the finance department shares a closer working relationship with the technical staff and so both are less adversarial – in theory at least.
Owen Geddes, who was an IT strategist at accountant KPMG, has switched to become technical manager at Internet registry company NetBenefit. “There is an awful lot of red tape in corporations. People who control the money are so far removed from the creative and technical people that it takes a long time to get money approved for projects.”
As an example, Geddes points out that the KPMG Website, set up earlier this year, was first mooted in December 1994 – technically it would take just one week to set up that type of site.
Stephen Dyer, managing director of his own 12-strong Internet company NomiNation, previously worked as an IT manager for Re diffusion. He says that small companies can move with the speed that the emerging industry demands.
“I have hired people that I trust in my team and the key ones have become dictators. For instance, if my head technical man comes to me and says that he simply has to have a piece of equipment then we have to go with that. You shouldn’t buy a dog and then bark yourself.”
However, running a small multimedia company is still a precarious business. As many people in the industry themselves admit it is very difficult to make money. At the moment Web designers are in the minority making money but the advent of do-it-yourself CD-Rom Web page guides will hit the opportunities in this area.
Registering companies’ names on the Internet is profitable. But there are still severe doubts about how profitable online services like shopping and banking will be. The market seems to exhibit very little middle ground, you either make millions very quickly, or lose them almost as fast.
“There is a constant rate of change in this industry that’s very different even from the traditional IT industry,” says Martin Temple, channels group manager at Internet service provider UUNet Pipex. “In the PC sector, you knew the direction that the industry was moving in. But in this field people are devising original solutions all the time. This makes the market very turbulent and if I was a small player in the market without backers it would be something I would worry about.”
Another problem this new generation of small businessmen face is adapting to a situation where their company name no longer carries clout. Where once suppliers would have fallen over themselves to help the likes of IBM and KPMG, a name like Clarity Interactive does not wield any power.
However, Chris Robson, managing director of multimedia company Syzygy, who has taken a slightly different path to the others, coming from the position of new business director at advertising agency D’Arcy Masius Benton & Bowles, claims the experience can produce a more rounded businessman.
“In a single day I can be setting strategy in the morning, talking to the police about building security in the afternoon and then marking up presentation boards in the evening. I never used to do things like this but it does make you feel more in touch with the company.”
Virtually all who have made the leap from big to small companies admit that being passed over for promotion, or at least feeling frustrated by the speed of advancement, was a factor in their move.
But most now feel they have stepped into the fast track of IT development, which has links with graphics, print and TV in the way PC technology has never quite managed to do, even after 15 years.
Skates sums up the feeling: “It’s very exciting. If you compare it with 19th century America, IBM was like working in a bank in New York. Now I feel I am on the frontier.”
These people are moving for money, excitement and ambition – in no particular order. Their success will depend on whether they can convert these whiz-bang technologies into the simple commodities consumers use every day. Ironically that was the same challenge faced previously by the big companies that these individuals are now leaving behind.