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The
inspiration for this column came from a press
release. It wasn't what the document said, but
what it didn't say, that piqued my interest.
On
July 24, Virginia's Center for Innovative
Technology released a prepared statement
announcing the resignation of Anne Armstrong,
CIT's president. I'd known Armstrong in a
professional capacity for years, so I read the
release with great curiosity. Oddly, there was no
indication why she had
resigned. Paul Brubaker, chairman of the CIT
board, gave token thanks, alluding only to her
"many years of dedication and service to CIT
and the Commonwealth." Most peculiarly of
all, I could find no statement from Armstrong
herself. It's standard protocol for a departing
executive to give some explanation for his or her
departure and to maintain at least a fig leaf of
good will. But there was nothing.
It
didn't add up. I'd known Anne as a dedicated,
selfless and hard-working employee of the state. I
couldn't imagine her getting into any trouble. Yet
everything in the tone of the document indicated
that she'd left CIT under a cloud.
Over
the next few days, reasons for cognitive
dissonance only increased. Brubaker,
the CIT chairman, told
the Washington Post that the resignation was “mutual and amicable.”
The Washington
Tech Journal somehow gained the impression
that Armstrong “arrived
at last week’s meeting with a resignation letter
in hand.” If everything was so hunky dory,
why did Armstrong have nothing to say to either reporter?
After
doing some digging, I found quite a different story
-- a very human story about how a competent and
respected public servant can get chewed up by
high-stakes politics and then cast aside. As best as I can tell it from interviews
with
Armstrong’s friends and associates, CIT
employees, members of the Warner administration
and others, here's what actually happened on the
morning of July 24.
Anne
Armstrong
had no inkling that her job as president
of CIT
was in jeopardy.
After three years at the helm of the state’s
technology-promotion arm, she’d forged cordial
working relationships with universities,
technology councils, elected officials and
corporate leaders in every corner of the
Commonwealth. Three months before, she’d made
tough management decisions, laying off 14 of
CIT’s 50 employees to comply with state budget
cuts, yet she'd managed to retain the loyalty and respect of her
surviving staff. Furthermore, despite her status
as a hold-over from the Gilmore administration,
she’d received assurances from her bosses in the
Secretary of Technology’s office that she had a
secure future under Gov. Warner.
Then, 20 minutes before a CIT
board meeting, Secretary of Technology George
Newstrom took her aside and informed her that she
would have to resign. If she didn’t, he assured
her, the board of directors would fire her. Taken
totally by surprise, she complied. Numbly, she
entered the board meeting and submitted her
resignation.
In
truth, Armstrong was fired, and the firing was handled badly. Indeed,
the reverberations are still rippling today through the CIT staff and Armstrong’s friends in
the General Assembly and the former Gilmore
administration. Everyone agrees that it was
Newstrom’s prerogative to replace Armstrong –
he just didn’t have to be so brutal. If he'd
simply delivered the message a few days earlier, she
would have had plenty of time to compose herself
and devise a face-saving message to the board.
The incident probably will be forgotten: Newstrom is redefining the role
for a smaller CIT focused on the Warner
administration’s priorities, and he has every
right to install whomever he wants as president.
Moreover, judged by the practice of previous
administrations, his brusque treatment of
Armstrong was
not especially heinous. But politics are unpredictable.
Armstrong has confided to friends, and details are
leaking out. The incident could provide fodder for
Republicans should they choose to orchestrate a
political assault on Gov. Mark R. Warner’s
technology policies. Already under scrutiny by
Republicans in the General Assembly, CIT could
prove to be the weak link.
CIT has seen its fair share of turmoil over the past few years.
Under the Allen administration, the center was run
by Bob Templin, a dynamic, high-profile leader who
used it as a platform to define Virginia’s
technology policy. For all practical purposes,
Templin was Virginia’s
tech guru. In the next administration, however,
Gov. Jim Gilmore folded CIT into a newly created
secretariat of technology. He appointed Donald W.
Upson, a flamboyant Northern
Virginia
technology executive who carved out his own highly
visible role as the state’s technology
visionary. Virginia
was not big enough for both Upson and
Templin, and Templin was forced to resign.
In many ways, Upson’s choice for CIT president was the antithesis
of Templin. Anne Armstrong,
Editor in Chief of Federal
Computer Week, was a respected businesswoman
with a strong background in information technology
issues, but she never craved the limelight. She
diligently carried out the orders that came down
from above. Taking over a staff that had been
intensely loyal to Templin, she earned the respect
and loyalty of CIT employees. She also won the
deep appreciation of Upson, her boss.
Although Armstrong phased out some of Templin’s pet projects, she
preserved the same basic mission and
organizational structure that he’d put into
place. The Herndon-based center supported R&D
at
Virginia’s
universities, promoted technology transfer to
business and fostered entrepreneurial start-ups.
Inevitably, though, the organization took on new
tasks to reflect the priorities of the new administration. Upson, whose secretariat had
little staff, relied on CIT for administrative
support for his conferences, policy initiatives
and side projects. Looking back, critics have
accused CIT of “mission creep” as the agency
took on Upson programs such as VirginiaLink,
E-communities and
Main
Street to E-Street.
In one major change from the Templin era, Upson downplayed the use of “metrics.” To
shore up political support for CIT funding,
Templin had devised a series of measurements that
tracked CIT’s contribution to
Virginia’s
R&D activity and economic development. Upson
expressed contempt for the number crunching, which he
deemed a form of bureaucratic navel gazing that
consumed an inordinate amount of resources.
Indeed, not only did CIT hire auditors to review
the numbers, it paid people to audit the auditors.
Still, there was no getting rid of the numbers.
CIT was required to report performance measures
every year to the General Assembly. Although
Armstrong didn't disdain metrics like her boss did, she did agreed that
excessive resources were devoted to the effort.
And she resisted the temptation of the number
gatherers to claim credit for successes to which
CIT had contributed only marginally.
After Warner took office, he retained Upson
as the only Gilmore hold-over in his
administration until Newstrom could unwind his obligations to his
employer, EDS. Likewise, Armstrong stayed on at
CIT. Although she had opportunities in the private
sector, she told friends that working for CIT was
the most exciting job she’d ever had.
George
Newstrom
had spent 28 years with EDS, an
information-technology giant with a major presence
in Northern
Virginia.
When contacted by Warner to become Virginia’s
technology chief, he was serving as head of EDS’
Asia-Pacific operations. The job he accepted back
in Virginia
had two main components. In one, he would run the
state’s $1 billion-a-year department of
information technology. In the other, he would set
Virginia
’s
legislative, R&D and tech-transfer agenda.
Arriving
in Richmond
in early March, Newstrom landed in the middle of a
crisis. The General Assembly was in session, the
budget was out of balance, and legislators were
hacking hundreds of millions of dollars out of
state programs. As Newstrom said publicly on many
occasions, the bean counters had no clear idea of
how much money the state was actually spending on
IT. Meanwhile, the legislature had CIT in its
cross-hairs. Seeing little value to the
organization, key Republicans argued that the
state should shut down the center and sell its
futuristic headquarters building near Dulles.
Shuttering
CIT would have represented a huge setback to the
governor's vision for energizing
Virginia’s
economy. The former venture capitalist ran on a
campaign platform of promoting the technology
sector across the Commonwealth, and there simply
aren’t any other mechanisms in state government
to carry out such a mandate. The technology
working group for the Warner transition team had strongly
recommended saving CIT from the budget cutters in
order to carry out the
governor’s goal of using technology to transform
Virginia’s
economy.
CIT
did survive the 2002 session of the General
Assembly, though its budget was cut drastically,
from $12.5 million in fiscal 2002 to $9.2 million
in 2003. Even then, the center’s long-term
future still isn’t secure. The Joint Commission
on Technology and Science (JCOTS), an arm of the
General Assembly, is reviewing CIT’s future, and
the center may come in for criticism by the Wilder
Commission appointed by Warner to overhaul state
government. Against this backdrop, Newstrom
rallied support from the CIT board this spring and
summer to focus CIT on goals consistent with its
diminished funding – goals that could be
explained clearly to skeptical legislators.
At
some point in the process of redefining goals,
Newstrom decided that Armstrong was not the person
he wanted to lead the new CIT. Under Upson,
Armstrong’s role had been largely an operational
one: managing budgets and staff, working with tech
councils, organizing conferences. Newstrom
concluded that the center needed a stronger,
CEO-like leader.
Newstrom
may have had other reasons to be dissatisfied with
Armstrong. The Secretary
of Technology is a big believer in measuring
performance and results. His plan for the new CIT
will contain reams of measures to track
performance on key goals and objectives. Sources
tell me that Armstrong may have demonstrated insufficient command of or appreciation for the
performance measures to satisfy him.
I
could not confirm this with Newstrom, however.
He turned down my request for an
interview, referring me to Paul Brubaker, CIT’s
chairman. Brubaker was on vacation this past week
and unavailable for comment.
One
of the few people to talk to me on the record was
Alan Merten, president of George
Mason
University
and leader of the search for a new CIT president.
He refused to discuss Armstrong, but did describe
the qualities he will be looking for in a
replacement. The new CIT president, he says, needs
to help Warner and Newstrom catalyze technology
development in the state. The new person must have
the background and temperament to make things
happen, to mobilize the support of corporate
leaders, university presidents and elected
officials for the administration’s initiatives.
If
Newstrom and the Board want someone else for the
job, that’s their prerogative. As far as I'm
concerned, the Secretary of
Technology deserves credit for acting forcefully
and decisively to save CIT. I have every
confidence that the proposals he submits to JCOTS
in a few weeks will be carefully thought through
and lucidly presented. My concern is not the fact
that he decided to fire Armstrong, but how
he fired her, how he then distanced himself from
his action, and the consternation he created
as a result.
The
same day that Armstrong was strong-armed into
submitting her resignation, CIT issued the
aforementioned press release. To those in the
know, the document raised questions that I had
overlooked when I had first read it.
After
thanking Armstrong for her service, Brubaker, the
CIT chairman, moved abruptly to the following statement:
“CIT has a new plan to move forward, a focused
plan that is goal- and performance-oriented. Our
plan will help contribute to the overall
effectiveness and efficiency of government by
concentrating our efforts on increasing federal
research and development investment in
Virginia,
commercializing the intellectual property from Virginia’s
colleges, universities and federal laboratories,
and enhancing economic development, particularly
in rural areas.”
The
implication was that CIT previously had followed
some other set of priorities. Yet CIT watchers
were left scratching their heads. As Taylor
Lincoln, a writer for the Potomac
Tech Journal noted in his story, “But
weren’t those always the main tenets of CIT’s
mission?” Indeed, he might have added, was it
not Armstrong who’d hired the first CIT employee
dedicated specifically to roping in federal
research funds? Was it not Armstrong who’d set
up the first field office in far Southwest Virginia? According to
Lincoln,
Brubaker conceded that CIT’s mission was
substantially the same as it was before. The
difference, he told the Journal,
was that the objectives were more clearly stated
now.
Why, then, link the re-statement of CIT priorities with the
announcement of Armstrong's resignation if not to
draw a connection between the two? Without
explicitly saying so, the press release implied
that policy disagreements were the basis of
Armstrong's departure. But none of the subtle policy adjustments
Brubaker noted seemed grounds for firing a senior
executive. Could there be some hidden agenda for
removing her?
Adding fuel to the
speculation was Newstrom’s decision to refer all
questions to the CIT board chairman, part of a
larger effort orchestrated by Sotec (short-hand
for the Secretary of Technology’s office) to pin
responsibility on the Board. Newstrom was the one
who had fired Armstrong after lining up the
board's backing. Why was he hiding behind the
chairman's skirt? Could it be, people wondered,
that he had something to hide?
Rumors ricocheted around the state. Maybe Newstrom was clearing the way for
appointment of a Warner favorite. Maybe he was
trying to bullet-proof CIT by making Armstrong the
fall-guy for its shortcomings. Maybe he kept her
on so she could do the dirty work of whacking down
CIT’s workforce then dumped her when they
didn’t need her anymore. I don’t give any
credence to such speculation. As I explained
above, I believe that Newstrom concluded that
Armstrong lacked the background needed to steer
CIT as he redefined it. Out of respect for
Armstrong, I'm conjecturing, the Board did not
want to insinuate that she'd been forced to
resign. But in the rush to get out a press release
after the board meeting, the authors drafted a
document that raised more questions than it
answered. Nothing ominous, just a P.R. snafu.
Unfortunately,
as I write this
column, the rumors rage unabated. Neither
Brubaker, CIT’s chairman, nor Newstrom, the
interim president, have acted effectively to quell the
speculation.
And that's dangerous. In politics, perception --
even misguided perception -- can come back to
haunt you as a reality.
It remains to be seen if the Republicans will make an issue of
Armstrong’s firing. Del. Jeannemarie Devolites,
R-Fairfax, told me she was “disappointed” in
the way Armstrong was let go – “Anne deserves
better than that” -- and she finds it
“interesting” that Newstrom would be willing
to incur a six-figure severance package plus executive
search fees, given the state’s budget straits. But
she also emphasized the Secretary has a right to put
whomever he wants in the CIT slot.
Meanwhile, battered by the budget cuts, uncertain about the future,
disoriented by the loss of their boss, CIT
staffers are dazed and confused. Their angst is
compounded by a sense of injustice. As one staffer
put it,
“I feel bad for Anne. … They let her do all
the dirty work on the budget cuts. They let her
announce two weeks ago that we’d only get two percent pay increases. … She loved CIT. They
could have handled things differently.”
-- August 5,
2002
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