EMC Chief Ruettgers Talks on High-Tech Business
By Matthew Palmer
In a time of growing doubts about the economy, EMC Corporation Executive Chairman Michael Ruettgers gave an upbeat speech about the future of high-tech business.
About a third of Wong Auditorium was filled to hear Ruettgers apply the lessons he has learned from managing information storage company EMC to other new economy businesses.
“Lots of people left business school to make their fortune ... like a gold rush,” he said. While some of these people have become rich, he added, the dot-com industry as a whole has been struggling lately.
Many of the technology companies that fail, Ruettgers said, follow the downward spiral of growth, surprise, panic, and then decline.
Even EMC, which had $8.8 billion in revenues last year, has been careful to manage its success, he said.
“Always examine your successes and your failures,” Ruettgers said. Many dot-com companies became profitable early on, but did not know how to maintain it and fell into what he called the “graveyard of the complacent.”
Ruettgers, who graduated from Harvard Business School, was recently named one of Business Weekly’s top 25 executives.
Storage needs increasing rapidly
The need for information storage is increasing rapidly as companies use more and more digital data, Ruettgers said. From this he predicts large growths for EMC’s products, which are hardware and software data storage devices.
As technologies have evolved, an increasing number of people have gained access to information, Ruettgers said. The move from mainframes to personal computers to networks has dramatically increased the amount of information available and the number of people who can see it. In the future, technologies could “allow virtually everybody on Earth to access information,” Ruettgers said.
In the future, people may not connect to the Internet in the same way. “We believe in the future, most of the way to access information will not be through personal computers, but wireless,” Ruettgers said.
This explosive growth leads to a greater demand for information storage. Ruettgers said some companies tell him that their storage needs have been doubling every year and are expecting to maintain that pace.
EMC focused, redirected efforts
In 1989, Ruettgers said he realized that EMC was spreading itself too thin. It was spending too little in research and development to develop a wide variety of products. That year, EMC had a $20 million loss.
The company decided to abandon some of its markets and focus on others, even though the changeover was difficult.
“Each time we made a transition, we lost some people,” Ruettgers said.
He said it is important for businesses to stay focused and yet be aware of the future. That is why EMC has a rolling planning process instead of just compiling one annual budget, Ruettgers said.
Finding skilled employees difficult
One of the main challenges Ruettgers named in running EMC is finding committed and competent employees.
He said that the difference between the best employees and average employees is 50 to one. The challenge, then, is to find those exceptional people.
Ruettgers said it is not enough for employees to be smart and to work hard. Instead, EMC has developed a 12 point list of qualifications that their employees must have, including a sense of urgency, initiative, and adaptability.
Ruettgers also advised future employees to choose their employers carefully. “The first one or two bosses you have will greatly affect your career,” he said.
The lecture is part of the Industry Leaders in Technology and Management series, which is co-sponsored by the MIT Office of Corporate Relations and The Center for Technology, Policy, and Industrial Development.