Business

Being CEO in Corporate America: Farhat Ali

Image courtesy: mile.org

Farhat Ali can walk through walls. It’s true. When you look at an organization or institution, most people see the various boundaries that define each function, department or stage. Farhat manages to permeate through each function and fit right in. And though he probably had incredible adaptability his whole life, Princeton just helped to perfect his art into a skill.

What is the difference between an engineer and a great engineer? Of course it’s the training. But it’s also the exposure into the world outside of engineering, a world that has art and music, politics and philosophy. Farhat’s father was convinced that Princeton would give Farhat a more complete education than a hard-core engineering school, and that’s how he landed in New Jersey.

Farhat arrived at Princeton on a full scholarship, $80 in his pocket and a suitcase full of colorful clothing. His foundation education from Bangladesh and Pakistan was so strong that it became the ultimate equalizer – it was no surprise that he fit right in. Unlike MIT, which had a one-dimensional approach to technology and produced many brilliant individuals, Princeton was a liberal arts school that encouraged diversity, broadening perspectives and inculcating a sense of service, honor, honesty and integrity. “It was really the whole package.”

“I actually wanted to go to London and to study at the Imperial College until a friend of mine, Kamran Faridi, insisted that I should apply to Princeton because he said Einstein had studied from there – which, of course wasn’t true.” I ended up applying to MIT and to Princeton because of his persistence. A few weeks later, he got the full scholarship to Princeton. The rest, as they say, is history.

From zero income all the way to becoming President and CEO of Fujitsu America, a multi-billion dollar conglomerate where he led profitable operations for more than forty successive quarters, leading more than 10,000 employees across three continents. The highs and lows in Farhat’s life were extreme but his life is the stuff dreams are made of.

Zero Point
Farhat was born in Hyderabad, Pakistan, moved to Bangladesh. When he was 14, his parents sent him to Karachi fearing the bias against non-Bengalis might work against him. He stayed with his uncle and attended the Karachi Grammar School before heading off to Princeton. As a family, they were willing to sacrifice anything except education, after all, it gives you the code needed to decrypt and create a future. He inherited a great deal of resilience and determination from his mother but is equally easygoing, as was his father.

When he got his scholarship and was contemplating enlisting in an accelerated program to complete in 3 years instead of 4, his professor encouraged him to stay the entire four years and explore what he could. He took on a very diverse set of courses and, as he puts it, most of them were a lot more exciting than were the engineering classes. But he was a dedicated, talented student and absorbed everything he could.

“If I had to do it again, I would still choose Princeton over other institutions because of its emphasis on Liberal Arts. In retrospect, I would trace a great deal of my success to the Liberal Arts education as opposed to the technical education. And if I had a choice today to go between schools, I would choose Princeton over others without a second thought.

Princeton opened an entire world around engineering and Farhat. Unlike MIT which gives you excellent training in technology, Princeton’s physically well-spaced ecosystem emulated its liberal approach to education. If you can, imagine Farhat and the kind of intellectual wealth his three roommates must have shared: a math major who became an ophthalmologist, another who studied politics and became a lawyer, the third person who obtained a PhD in History from Stanford and became a professor. “That is the beauty of Princeton.” Farhat excelled quickly and was probably one of the few non-graduates to be publishing papers in IEEE Transactions.

After graduating from Princeton, he went directly to Harvard where he obtained an MBA. He was offered a jobin Quetta, Pakistan at Exxon Mobil, which he turned down. “It was 1979, I had just met my wife and I didn’t want to move back to Pakistan, so Exxon offered me a job in New Jersey, which was perfect.” Until he got a call from Amdahl, a high tech company out of California. “I remember telling my wife that I will go give the interview and get a free trip to California.” Problem was, when he landed in California, he wanted to spend the rest of his life there.

There is something about Silicon Valley that pulls people to it. Sure, there’s a lot of money to be made and it has an incredibly enabling ecosystem, but Farhat isn’t the first one to visit and stay on. “I had promised my wife that we would move and try the West Coast for 2 years, and then move back to New Jersey.” 34 years later and she is still waiting for them to make the move.

With his diverse background, he joined Amdahl as a program manager in engineering. Over the course of the next 20 years there, he worked in management positions in Sales, Manufacturing, Customer Service, working his way up to CFO of the largest division. “Every 2-3 years, I would enter into a new area of the business. It was something very different.” Armed with even more experience, he became CFO of the Fujitsu PC Group. Farhat then was promoted to COO and his first task was to integrate Amdahl into Fujitsu, also making him the CEO of his old company.

After successfully integrating the PC and the server business and launching the storage business, Fujitsu asked him to integrate all of the Fujitsu IT companies in the Americas and appointed him President & CEO of Fujitsu America. Because of IT outsourcing, Farhat was also given responsibility over Fujitsu India and Fujitsu Philippines. “I had about 3000 people working for me in India and because of visa problems, I had a lot of trouble going there.”

Growing Enterprises
Without a doubt, it’s the people within any business that ultimately determine its successes and failures. And usually, it’s not the quality of the quantifiable skills at work that are as critical as are the intangibles such as loyalty and integrity.

The levels at which Farhat was working, he needed to be able to size people; partners, employees, management, very quickly. “If people are loyal enough to put the interests of the company ahead of their own, they will work harder to make the company successful. (Because) if the company succeeds, so do all of us.” In the 30 years of service to corporate America, he never asked for a raise or a promotion. “I was very assertive, almost pushy in getting things done. I’d focus on solving problems.” Also, what helped Farhat was his keenness to take on assignments and tasks that were beyond his job description.

This allowed for two things to happen. First, most of the senior management always fought to have him on their teams and second,” he says almost embarrassed, “each time they were laying people off, because I would always do more than my share, I would usually end up with a promotion and a raise. I became the guy who could always deliver more than I was asked to.”

But work isn’t always so picture perfect. Fujitsu was running a manufacturing unit in the US and Ireland that had a few thousand people. “Fujitsu had decided to shut the operations and get out of the mainframe business, which meant I would be letting a lot of people go. These were people I had spent a lot of time with and my job was to shrink these 3,000 jobs and consolidate to maybe 400. I was personally responsible for letting go. I don’t think I had ever done something so painful.”

Another story Farhat narrates is one relating to commitment and integrity. Fujitsu was trying to sell a storage solution worth about $2.5 million to the CIO of a ‘top level’ company. Owing to a software glitch, the machine crashed. The CIO contacted me and our technical guys located the issue and solved it. “I had given this CIO a commitment that if a fault occurs again, I would take the machine back. Surely enough, because our technical team hadn’t cleared the cache, the same error occurred again, and I had to not only keep my commitment, but also buy a competitors product and set it up for him.” The CIO appreciated the integrity with which Farhat represented Fujitsu’s interest and promised to look at our products during their next sales cycle, which they did.

That year, Fujitsu won the Best Vendor of the Year Award because of how this situation was handled. “What I’m trying to say is; businesses have to operate with integrity and honor, values which must always be represented by the people. As the head of the organization, it was my job to ensure we maintain an honorable relationship with the dissatisfied customer.” Besides, consequences have a way of coming back to bite you later.

A CEO’s position is unique and a very lonely job. “You get a lot of advisers and lots of people that report to you and have access to the Board, but the trick is really listening to your own conscience and instincts over and above the advice of the external advisers. Sometimes your mind and your gut are in two different directions and you should never make a decision unless the two are in sync, but in case they don’t agree, you should always go with your gut instinct and not the analytical framework.”

Never give up on your base value systems. If you put in hard work and establish a track record, you will get what you deserve. “I have never worried about losing a job or winning a customer. If it’s fair, it’s fair, if it’s good, it’s good. I think leadership is a lot about staying true to your values systems.”

Directors and VPs represent the company. Hence the selection of this top tier must be done very carefully, otherwise you risk the entire enterprise. “I remember there was this one guy at Amdahl who was an excellent employee but I did not make him a director because I didn’t believe his value system was aligned with the company’s or mine.”

Value systems are a representation of your beliefs and help steer the company in a specific direction. “If your value system is consistent and resonate throughout the culture of the company, decisions made by anyone in the company will reflect your input, regardless of whether or not you are physically there.” In the case of small companies this resonance is obviously a lot simpler than the larger organizations… or is it? Farhat explains, “I think the value system is who you are, how you act and it is through your personal demonstration. For example, I honored my commitment that I would take back the storage system because in my value system, the customer always comes first. That was my personal demonstration of how I upheld the company’s value system.”

Trust is also part of the value system. “Of course deals need contracts but most people end up fighting on the phrasing of the contract as opposed to focusing on trust, integrity and fair value. And in corporate America, it’s a collection of the decisions you make, which shows your value system.”

The value system can really be challenged when you have a large, irate customer breathing down your neck. How do you deal with that? “While I was there, Amdahl was actually known for its outstanding customer support. For the large customers who were spending multimillion dollars with us, if a mainframe would ever go down, we would fly out to wherever they were. Since I was the VP of Customer Service, I would read the entire log on the plane and by the time we landed, we would have a deployment plan ready to share with them. We would tell them which parts needed to be shipped in, timelines and everything. The fact that we hit the ground running from the runway just blew them away. We were honest and upfront and never covered anything up. ”

Being CEO
Farhat is very process-oriented and has set up world-class supply chains to make Fujitsu’s manufacturing its most efficient and optimized. Dell had just introduced configured PCs where customers could order exactly what they needed. “We were wrestling with Dell in that area but our issue was very complicated. Part of this custom configuration was dependent on software and part was dependent on the supply chain because you need to know what parts are available, where and when they can be delivered, so you can give the customer a date.”

Fujitsu’s existing Supply Chain was quite complex. The demand from the US was being fed into an ERP system at Fujitsu Corp, which combined the demand from the different areas, and filtered into each specific business unit region-wise. Since some of the regions had further outsourcing locations, this data then had to be shared down to those screens. “How can any one manufacturing unit guarantee/commit to a delivery unless you know the availability of all the parts necessary to make that component?”

Farhat and his team stripped everything down and simplified. They ensured everyone in the supply chain had full pipeline visibility all the way down and connected all the systems. The next part of the problem was Customs. “We actually had to figure out how to get the product to clear Customs while it was in the air. There were hundred of pieces of this supply chain which we had to optimize and we cut the delivery time from 7-8 weeks down to 3-4 days.” The more streamlined Fujitsu’s supply chain was, the quicker they could configure parts to build the end product and ship it out.

Seeing the success, Farhat’s boss offered him to run the Manufacturing Plant. Always on the management side of things, Farhat had never run a manufacturing unit but agreed to do it. “We had just introduced a new product and it was having some teething problems, so I halted all outgoing shipments. I took a team of 6-8 people and said to one of my guys, ‘Alfonso? We don’t ship until you stamp shippable.’ So that team was in charge of checking quality and was more careful in shipping out only the high-quality products.

Farhat recalls another challenge to try and balance manufacturing with demand. “Our test cycle time used to be 8 weeks and I needed to reduce this because it was causing all kinds of inefficiencies. Applying the basic concept of Just In Time, where every engineer sits on any machine rather than being selective. It took us two months but we brought the cycle time down to just 3 weeks.” This ‘process efficiency’ alone would have saved the company tens of millions of dollars. Again, Farhat was in a function he had never experienced before, but certainly understood it very well because he applied logic, mixed in the value system and put the interest of his company ahead of his own.

In short, he kept transforming the areas he was working in.

How do large enterprises select people? “It’s always been quite simple for me. I look at the person’s passion. If there’s no passion there, which can be gauged in the first few minutes of an interview, there’s no chance of me to keeping that person. Then there is skill, both technical and understanding human behavior. And last for me, is ‘fit’ and if there are enough, diverse people around me. More importantly, where on my team can that diversity best be utilized? Because if I have everyone exactly like me, how will that help me or the company perform better?”

One of the first times Farhat went on a vacation after becoming manager, had him on the phone, putting out a fire and solving a problem his team was having. “I was very worried, but with the benefit of hindsight, how did my stressing myself help to solve the problem?” Which is why he preaches his philosophy of ‘worry solves no problem, so why worry.’ Next he learned that if he worries, which is an emotion, he stopped thinking or rationalizing. “And when I stopped rationalizing, I stopped trying to solve the problem.”

It’s all about creating the value system. “If the value system is clear in allowing me to take responsibility for my actions, the system is also trusting me to make the right decisions. And that clarity is what will allow me to be in control of whatever the situation is.” But Farhat explains that we live in a social environment and constantly interact with people around us. “The number of people you can interact with at any level, is considerably small and if you want to make a greater, sizeable impact, you have to delegate and you have to trust. You need to develop a control system so your system can progress, so you can grow with it. And sure there a lot of sacrifices you make at the personal level, but you put in the hard work and remain aligned with the company and you will succeed.”And that’s how Farhat came to be one of the few Pakistanis to climb up the ladder in Corporate America.

If you think about it, the CEO does very little real work. “You worry about presenting to the Board, shaking a lot of hands, meeting a lot of customers and take care of the corporate strategy, but for the most part you delegate. So you do need to be sure you have the right team in place. You just need to put your priorities in place so you know which part of the business you will be more passionate about. For me, my technical education helped so when I had to, I could to dive deep into the business and make it better.”

And according to Farhat, the most important thing a CEO can do to make change happen around him is to change himself first. “It all connects back to the value system we spoke about earlier. I was surprised by how much change I could induce onto my surroundings and my team when I changed. It has a lot to do with empathy and very little to do with power.”

If you look around the Valley, you will find a lot of amazing businesses, startups and larger, however, only a handful in the large enterprise spaces. Farhat shares a theory on why more Pakistanis aren’t heading enterprise-level businesses. “Ironically, I think it has a lot to do with the lack of tolerance. Most Pakistanis simply do not have the right exposure to the breadth of diversity therefore lack the tolerance for acceptance and equality. India being a much broader landscape where they have more exposure to different backgrounds have developed a lot more aptitude to adjust to this.” Farhat also comments on the lack of institution building in Pakistan. “I think the Pakistani psyche has become very short termed-oriented, which is dangerous. Yes, there are very bright people and a large population of young people. But they have to be nurtured so they can help Pakistan streamline itself out of this turbulent time.”

And it’s surprising why Pakistan hasn’t reached out to an expat who has the experience to turn around any entity he gets into, and who had been leading a company whose annual sales are comparable to the country’s annual GDP.

Farhat retired from Fujitsu but is still extremely busy. He is currently president of a stealth startup in mobility space and a partner at the Newport Board Group, a consultancy that works with mid-market companies to help them grow. He is also Charter Member of TiE where he advises young entrepreneurs. He is an avid golfer and skier and like most Pakistanis spends considerable time socializing with family and friends.

Farhat’s life is full of rich experiences, philosophies and value systems. Despite having started off from Hyderabad with virtually nothing, Farhat has come a long way to setting the standard in what can be achieved if you put your heart in the game.

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