Two Cultures

Two Cultures

There are really two cultures at Fidelity: The high-flying wireless and e-business crowd, and the more traditional group handling maintenance operations. Haile's mission is to have a foot in each camp. At heart, the 60-year-old is a nuts-and-bolts guy, but his 2,700-strong techie domain at Fidelity's Systems subsidiary plays a key role in pointing the firm toward the future. Fidelity Systems includes the FCAT, which is hustling to claim the promise of 2.5G wireless service and Wi-Fi networks.

"What's unique is that Don is responsible for new thinking as well as operations," says Sharon Botwinik, an e-business organization analyst at Forrester Research who worked at Fidelity until early this year. "It helps him cross-pollinate. And having both sets of skills gives him more credibility."

Now add to Haile's balancing act the pressure of a down economy. Fidelity's assets under management have fallen from a mid-2000 peak of about $1 trillion to $903 billion today. Its heavy bets, in Web and wireless investments, on active online traders brought mixed results: 87 percent of the firm's discount brokerage customers' trades are done online, but online trading is off by almost half, as it is throughout the industry. And three years after the company unveiled its widely ballyhooed wireless initiative, less than 10 percent of Fidelity's retail customers can access their accounts wirelessly.

Yet Fidelity is pushing ahead, boosting IT spending by nearly $200 million this year—real money, considering that it spent $2 billion of its $11.1 billion in revenue on IT last year. While some of that will go to wireless and other e-business initiatives, Haile is putting lots of money into a variety of back-office projects that promise to turn the cost screws on smaller rivals during the downturn. These include desktop efficiency efforts and a general movement to XML to streamline middle-tier systems architecture. "Now's the time to be making that investment," Haile says. "Frankly, we welcome this."

The differences in the two tech cultures at Fidelity are obvious. One is the culture of a giant corporation that manages money for 17 million people, whose obsessions are reliability and managing costs. The other Fidelity is on display at places like the FCAT, where about 90 of Haile's charges work on gadgets that aren't yet ready for prime time. The wireless unit's conference rooms are named for rock bands—wireless chief Joe Ferra receives visitors in the Talking Heads room. Says Charlie Brenner, senior vice president and head of the FCAT: "Don's role is to be the pivot point between the world of innovation and reliability and steadfastness. He sees the horizon, but he's looking down at his toes at the same time."

This article was originally published on 09-01-2001
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