The Y2K Bug and Running a Big Business Like a Small One


The world was coming to an end at midnight 31 December 1999. We had planned for it for years. It was, as one techno-wag said, “a disaster with a deadline.”

The Year 2000 rollover was going to be big. Worldwide. No escape. Like Noah and the flood, we knew it was coming. We knew this would be no mere technology challenge to be solved with exceptional American ingenuity. The Year 2000 was problematic with unknown unknowns.

The predictions were dire: The Internet would go down. Cell phones dead. The power grid dark — Armageddon.

In the late 1990s, one-half of the world’s Internet traffic passed through the Commonwealth of Virginia, thanks to America Online — AOL.com. And maybe another Northern Virginia entity in Arlington: the Pentagon.

(I think that was a secret … )

Your business professor had the Y2K responsibility for Health and Human Resources, a $5 billion enterprise in the Virginia government. The boss, Governor Jim Gilmore, a former military intelligence officer, knew what was possible — and not — to combat the Y2K Bug.

There was a lot we couldn’t do. And it wasn’t all technology.

It was a condition of continued employment that there was to be no interruption or adverse incidents to the citizens of the Commonwealth and the rest of the world.

(We worker bees could not get it wrong. The world ends AND get a bad employee appraisal. A sub-par job performance would not be the simple career-ending, world-ending mistake. It would be going out with a bang, so to say.)



Business literature notes the adrenaline rush of the “peak experience.” The Office of the Governor of Virginia had this motivation as he had the whole world in his hands.

The Web had to run for the wide world and more: Virginia’s hospital doors had to remain open; the prison doors closed. Fresh water and waste water valves had to direct flow in the correct and desired directions.

Local first responders had to be able to coordinate communications across jurisdictional silos. Governor Gilmore was among the first to realize the importance of seamless radio traffic between Fed/State/Local law enforcement. (It still wouldn’t be fixed years later, as in 9/11 or more recently.)

There were lots of challenges beyond government resources. So, Gilmore hired the biggest IT consulting firms on the planet and bought their solution packages. In my weekly staff meetings I had a dozen of the smartest experts in the business. I was not one of them.

They let me think I was in control at the head of the table. And maybe so. But these consultants wouldn’t let me, a mere bureaucrat, make a mistake. I didn’t know how to run a very large organization.

Actually, no one really does, but the Governor gave me this advice:
B.lioy”Pick a small team and run them as a small business. It will be the same except with more zeros.” I didn’t know if he was talking about the budget or about me. Could go either way.

There were some mistakes the professional tech-gurus could not save me from — I had to learn on my own. I wasted time deep in the weeds doing real work. Instead of managing managers, I wanted to roll-up my sleeves and pound keyboards. I called it, ‘attention-to-detail.’ The staff called it ‘micromanaging.’

Like most small business owners, I had trouble delegating tasks. But I had to adjust fast; I ran out of time. There was an unstoppable countdown and I had to trust the work to the professionals.

Virginia spent $215 million and nothing happened here or in the rest of the world. There were some problems in Nigeria. We now think it was some kind of scam.

Nothing crashed. Except for that super-secret three-letter-agency satellite … and some defibrillators. Not my fault. No one died.

The lesson learned was that the technology was the easy part. The real challenge was in delegation and managing projects — through people — on time and on budget.

It always is.


The Pentagon Photo via Shutterstock

49 Comments ▼

Jack Yoest


Jack Yoest John Wesley (Jack) Yoest Jr., is a Clinical Assistant Professor of Management at The Catholic University of America. His expertise is in management training and development, operations, sales, and marketing. Professor Yoest is the president of Management Training of DC, LLC. A former Captain in the U.S. Army and with various stints as a corporate executive, he also served as Assistant Secretary for Health and Human Resources in the Administration of Governor James Gilmore of Virginia.

49 Reactions

  1. Aira Bongco

    I could still remember my nanny telling me (for I was a kid back then) that it will be the end of the world. But then it didn’t happen.

  2. Jack Yoest

    Aira, yes–and it wasn’t just your nanny who feared the end of the world. It was a media story as you can imagine (if it bleeds, it ledes). But we just didn’t know.

    So we did a variation of Pascal’s Wager: If we were wrong, everyone got a new laptop and updated software; if we were wrong the power grid goes down and the forces of darkness would be upon us.

    Good upside and we avoided a tragedy.

    You are right: The world didn’t end.

    Cheers,
    Jack

  3. Jack Yoest

    Aira, oops — I got mixed up on right and wrong (happens a bit…).

    Your Business Professor,
    Jack

  4. Martin Lindeskog

    Jack,

    Have you read Dr. Eli. Gold’s book, Critical Chain? He describes the theory of constraints in a colorful way.

  5. Very interesting between the attention to detail and micro managing. In this type of situation there was a lot of speculation which made the future unclear which makes the job that much harder for the manager to decide what needs his/her attention. But being able to delegate and listen to others, especially in this situation when the experts were the ones reporting to you, is a huge management tool. It is a good thing to be prepared however and this is what the spending of 215 million did for Virginia. Some might say that it wasn’t worth it but it sounds like the correct steps were taken to avoid tragedy.

  6. Confidence is contagious, it seems like your boss told you to run the large entity like a small one because potentially it was what you have had experience with? (Correct me if I’m wrong) Or maybe that the fact that the obstacle seemed so large that it almost seemed insurmountable. But by taking a step back and focusing on one sector you were able to overcome your own reservations. By doing so you enabled others to have confidence in their work, and believe that this was not an impending Armageddon, but simply the start of a new age. No matter what the case may be when put in a leadership position, even if you don’t have a plan, you need to have a plan, like General Grant leaders always need to have that ‘4 o’clock in the morning courage’. That ideal is exactly what you exemplified.
    – Bravo

  7. Jack Yoest

    Martin, No, I have not yet read “Critical Chain” — I have ordered it and will add it to Gold’s “It’s Not Luck” and “The Goal.”

    Well, actually, I got the Audible, but you get my drift…

    If it is anywhere near as good as his other books it will be a welcome edition, so to say.

    Thanks for the recommendation,
    Jack

  8. Jack Yoest

    Luke, excellent observation on the management dilemma: How much to delegate to staff when the stakes and risks are so high.

    The manager, in this case, Your Business Professor was nervous: I didn’t know what I was doing and there was ambiguity in every unknown. I was, in a word, Lost.

    Just like most amateur managers…

    Everything did work out, but all I remember is the uncertainly.

    Cheers,
    Jack

  9. Jack Yoest

    Elias, thank you for your kind words. But I think the solution was found more in exhaustion than in courage.

    The management team was forced to get recommendations from the expert staff and then get the resources. Because we had limited time and had no option but to trust the team. There were laptops buried (like skeletons) in every closet in the Commonwealth. Every piece of hardware and software had to be found.

    My life would have been a bit easier if I had more practice in the practice of management.

    Cheers,
    Jack

  10. Gabriella Cornacchio

    Initially, I was hesitant to read this article, as I found it hard to believe that one could run a large business similarly to a small one. It seemed preposterous. Yet, in this article, “The Y2K Bug and Running a Big Business Like a Small One,” Jack Yoest has a point. The reason small businesses are so reliable is because everyone has a job and every one (typically) does their job right. The trick to running a large business is to take the work ethic of a small business. By spending more time delegating tasks and focusing on the minor details, the outcome is substantially better. This is the tactic people in charge of big businesses need to take if they want results. I really enjoyed this article because it shows that one must put in the effort to reap the rewards. In this new day and age where generation y is ruled by technology, but we still have the power to use it for our own benefits. The point, however, is not to let it overtake us. Instead, we must keep our heads straight and use it as an aid, without putting our sole reliance on it. Rather, we must still manage business through hard work ethics and delegating jobs.

  11. Jack Yoest

    Gabriella, managing any business is hard work but it can be learned. Delegation for the small business owner and the new manager seem to be the most challenging skill to be developed.

    Peter Thiel who guided multiple breakthrough companies, including PayPal wrote his book, “Zero To One: Notes on Startups.” He gives terrific advice, including–to give one thing to one person — to hold one individual responsible for an individual task or project. Everyone in his company knows, “You have one job.”

    Thank you for your comment,
    Jack

  12. Jack:
    I agree with your premise on the small business approach. After all these years, it seems to me that the approach for a good manager is the same. if a small business, then take an active hand, organize well what you do, assess costs, and enforce quality to grow the business. In a larger enterprise, the same is true, but the ‘owner’ needs to delegate more to those that share both his trust and enthusiasm for quality, and then let them run with the ball (with oversight, of course).

    We have too many managers who simply want to look at the past and assume they are doing well, without realizing that things have changed. i recently worked with a small firm– a restaurant–whose only ‘planning’ was to see what they did on a particular day the year before to reassure themselves they were doing well. of course, they had no real idea of their costs-fixed or variable, in terms of what they offered, had a huge menu requiring large inventories, and no planning for the future. The owners took a limited part in the restaurant, mostly back-bench quarterbacking, and left the work to managers who rolled from day-t-day. They were gradually losing customers over time, and profits, and didn’t even realize it.

    They still run the business the same way–they refused to accept or adapt to change, and they are still losing volume. Hiring qualified management could save this situation with some organized hard work.

    BTW, one of the interesting parts of Y2K, at least at DoD, was to find that the Department had over 42,000 applications and systems subject to the Y2K rules. With few exceptions (Mostly Command and Control) it was “wait to see what happens”. Thankfully, not much did, and we moved forward.

    Best

  13. Jack Yoest

    John, an outstanding observation on the “control” part of management–and this often requires an outside expert (you) to evaluate the small business performance.

    The ‘planning’ part of management is to decide the direction the business will take. The ‘control’ part of management is to compare the results to the plan. It sounds like your client was attempting to do this by comparing same day sales this year compared to last.

    But as you note, this is often not enough–and the real measure is that your client was losing customers. I would submit that the business could have retained these disaffected customer and increased profits if the small business owner took your counsel.

    Good comment,
    Jack

  14. Cristina Del Rio

    Professor, very interesting article and what a great advise. I believe stress is a huge understatement for what you, the team, and the world was going through that year. Having to manage a big company in this moment in time must have felt incredibly overwhelming, and when we are overwhelmed we can loose track of what the big picture is. The advise you got from your boss was great: think of it as a small business and get a small team. Before that, you and the team were looking at a blurry picture, full of insecurities due to the inexperience in technology and the uncertainty of what exactly was going to happen! And the fact that it was a big company made it a whole lot messier. However, when you think of it as a small business, you have a clearer vision of what you are facing – which at the end was not technology but how to manage the situation. Managing in general, assigning tasks and responsibility to others, delegating for your team and trusting them is the hard part, and as you mentioned, it is always the hard part no matter the situation or size of the business. I saw this everyday at my internship with my team. We always need to focus of the bigger picture and prevent ourselves from confusing what our main objective is – in your case, it was to manage the change that we were all about to face. Great job, and thank you for passing over the advice!

  15. Jack Yoest

    Cristina, you are right: management is getting things done — but each of the decisions is usually less well defined — there are often no clear answers.

    Ambiguity and incomplete data and conflicting interests each drive the management process.

    And that’s why Peter Drucker calls management a “practice” because the boss better be always learning.

    Well Done,
    Jack

  16. This article was very interesting because the way to handle this task was very well thought out. It is always hard to handle anything that new and might seem like it depends on just you. I think that the mindset to think it was being handled as a small business was very tactical. Although it was very different just starting with a specific mindset helped not freak out with all the pressure. This also shows the importance of team work. As everyone made sure everything came out just right made everything be a success.

    I agree with Gabriella because technology is a great resource to have but we have to know how to use it wisely. In this case, what seemed to be the most hard to handle was the easiest. If technology is used in the way that it should, it will give the results needed, but people have to have control not the other way around. This article was very informative and worth reading.

    • Jack Yoest

      Hally, you are right: The manager and business owner are responsible for all the unit does or fails to do — but the boss and owner should never be alone — most decisions should come from recommendations developed from research from the staff.

      Well Done,
      Jack

    • Hally, you make a good point. Teamwork is extremely important in any situation. In the professor’s situation, the team needed to put aside their insecurities and find a solution. They had immense pressure (I mean, who wouldn’t?), but they all tried their best to persevere.

  17. I have no idea what it was like to be aware of such a terrible event. Being told that the world will end is not something I’d like to hear. I can’t imagine what it must have been like to manage a company during those terrible moments. I could see how uncertain you and your team were during that time. When your boss told you to “think of it as small business” I could see how truly effective that could be. If you look at it as small business, you could understand how to manage the situation. You had to get things done no matter how big or small the situation was. In your situation, it was a pretty big one. I learned that we must focus and use our knowledge so we can manage any situation. We must never lose sight of our goal, no matter how impossible it may seem.

    • Raymond, I agree with your last point very much. No matter how tough our job gets, as manager the job is clear to lead the team and always have your goal in sight and when the time for promotion comes you have to trust the professionals to do their job. Especially in moments like this when the future is unclear. The biggest motivator for the company is to achieve that goal. We have to be clear of what we aim for always.

    • I agree with you. It would be terrible to be aware of such terrible event. And also it must have been very difficult for a manager to keep doing his work in those difficult times.

    • Jack Yoest

      Raymond, you are right — uncertainty is always a challenge for managers in most any situation or level in an organization.

      Best,
      Jack

  18. Its incredible how you managed to keep going in a moment like this. When you didn’t know what would turn out to be the future because the world was said to end. You were a small business owner who is used to do the work yourself and you didn’t know how to run a large operation. They put you in charge of various professionals and you had to trust them to do the work while you were the manager and delegated the tasks. It seems hard to imagine to be put in a position like that where you had to learn yourself how to pull through with just a little advice form the governor, which is insufficient to what the position you were put in especially with the deadline approaching with practically a small amount of time to learn. I guess this is just part of taking part in a new position of management.

  19. In the time of the events of this article you can notice how people freaked out because they thought the world would end. They got carried away with the idea that the world was going to end in the 2000s and did everything according to that “due date”. Also, being a management of an important company may be very complicated according to the circumstances. The manager had to do something for this “due date” and it was hard for him to gather all the people to collaborate in a short amount of time.

    • Jack Yoest

      Melissa, true, the concern, indeed the near-terror of many technologists during the Year 2000 roll-over was driven by the uncertainty of every computer going from (19)99 to (20)00. There were too many unknown unknowns.

      The best that the managers could do was to reduce the risk.

      Well Said,
      Jack

  20. Nikolai Senchenko

    It sounds like a huge change going from managing a small business to a large one. It’s interesting how the difficulty comes in looking at the bigger picture at letting go of the minor details. That is why it’s really important to trust your team that you’re managing in a large business like you would your partners and employees in your own small business. If the same level of trust is there, then you are more able to focus on larger aspects of the business instead of the minor details that small business owner’s face. Also, it must have been a very stressful time to run a business during the frenzy that the end of the world belief created. During that time, all you could do is put trust team, delegate the tasks that needed to be done, and hope for the best.

  21. Managing a team through a “crisis situation” has to be the utmost test out there for any type of leader or manager. I’m almost envious of the opportunity, but would also be terrified of the failure that could have been at hand. A lot of what I am seeing from successful managers is how important clear and direct communication can be and the better communicator you are, the better leader you are and the more your peers respect you.

  22. I have found that the most effective managers are those that are able to delegate not in high-pressure situations, but in situations leading up to the high-pressure situations. If a manager can effectively communicate with their team on a day-to-day basis, formulating relationships and creating work environment norms, it will be easy for a team to operate effectively with one another when they find themselves in time sensitive situations because they are aware of the strengths and weaknesses of their peers. Managers will be able to effectively delegate tasks if they are familiar with their team and their abilities. Additionally, it is easier to deal with conflict, which typically arises in sensitive situations, if peers and managers alike have relationships outside of dictating tasks.

  23. Times of trouble seem to bring out the best and worst in people, but it truly tests the manager/leader and his capability to manage and lead. The possibility of the world ending is certainly a time that would call for a lot of stress and uncertainty for the manager, as it did for you. As mentioned in the article, “”there was an unstoppable countdown and [you] had to trust the work to the professionals.” For someone who does not believe or trust in the capability of his staff, this situation would have been even more of a disaster than the world ending. However, the good manager/leader should surround himself with a great team of people that he can always trust and depend on, regardless of the situation they are in. This way, the team can work together to achieve a common goal, despite the craziness that surrounds them.

  24. Managing a team through a crisis is one of the hardest things you have to do as a manager. Anyone can be a successful manager if everything goes smooth. However the fact is that no business is every going to be perfect. As a good manager, you should be able to keep calm in critical situations so that you can make the right decision. If you do not think about your decision and get nervous, that is when you are going to make a bad decision.

  25. Professor Yoest,
    First of all I want to say that I loved this piece. Shared the link to some managers whom I feel could benefit from it!
    My questions for you are:
    How do you stop yourself from micromanaging?
    Is there really a way to instill absolute trust in your team?
    and if you get to the point where you can put perfection and attention to detail aside, how do you recover if your team lets you down?

  26. When faced with something thought to bring about Armageddon, the best thing you can do is remain calm. I think it is admirable when someone like Governor Gilmore knows what he can and can’t do. It shows that they have been thinking about a problem, both its solutions and its consequences. It takes a good leader to realize the things that are futile so he can focus on the things he still has time to work on. The best thing he can do is delegate because no one can finish all of the important tasks themselves and have time to spare.

  27. So many times we over look things, and it can cause massive panic and overreaction. I think 215 million dollars is somewhat of an overreaction. A lot of the times as a manager you need to be worried about every possible outcome or every possible failure but I think it is key to note you don’t need to spend all of your money on just simply ideas and not solutions.

  28. I found this article to be very interesting, first only that I had no idea that the state of Virginia was as essential as it was to the development of the internet. Additionally I believe that it was very important that the Governor did all that he could to prepare for what could have been an incredibly disastrous event, both economically and from a public safety concern. As has been often noted it is always necessary for leader to maintain control in stressful situations such as this. The necessity for the governor to call in numerous firms to prepare for this ‘impending doom’ reminds me of a Benjamin Franklin quote, “By failing to prepare, you are preparing to fail”, especially when tasked with the safety of numerous citizens I believe this was an incredibly wise decision by the governor.

  29. Successful small businesses are so successful because of their work ethic and because of their structure. By structure, I mean everyone has a role and knows exactly how to function in that role. So if this work ethic is so successful, and is usually one of the big factors in putting these businesses on the map and expanding them, why shouldn’t this work ethic carry over to large businesses? It’s not so easy to carry that kind of ethic over to such a large scale, but when it’s done correctly it can make that business wildly successful.

  30. It’s so important for managers to be able to recognize every possible cause and effect of different decisions, which is obviously not an easy thing to do. I think that the easiest way to do that starts with building a strong, trustworthy team as a manager.

  31. Jack Yoest

    One of things we learned this semester in MGT 310 is that a true leader must be able to adapt. When you are in a time of crisis you must adapt and not do things the same way as you would have. It is impossible to predict the future and you must be prepared if things do not go as planned. True leaders thrive in times of crisis and under pressure.

  32. True leaders are able to succeed in times of crisis. We learned this semester in MGT 310 that leaders must be able to adapt, and times of crisis are the when a leader really must adapt. Times of crisis are impossible to predict but leaders should be able to anticipate and plan for anything. A person’s true nature is shown in times of pressure and it is how they react then that can really make the difference.

  33. Elizabeth Gittings

    When someone is good at something, and they know they can do it the right way their way every time, why would you delegate it? I think this is a mentality that many people have including myself. I have a hard time allowing other people to help me with my tasks when I like it done my way or the highway. This changed when I was once told that a good manager trusts the people they hire, and that you know a good manager when they don’t have to move a finger for their work to be done. A real manager manages people, not tasks, and makes sure that these people get the job done. This article portrays that, and the unnecessary stress that managers continuously put on themselves when they pay people to do the work for them.

  34. Sometimes we take advantage of what we have. If technology didn’t exist, I believe there would be many managers trying to figure out the best way to handle the situation. Managers would want to do it themselves because they want it done right, especially with something huge like technology. Managers have to be flexible and manage people and projects in a different way while still being on budget and on time. When not knowing when something bad is going to happen or wondering if something bad is going to happen puts the pressure on. If the manager does not have a plan for when disaster strikes, the whole company could go out of business. Every manager should have a plan for if/when technology is not there or fails us.

  35. Whether you are an intern or CEO of the company, delegation is one of the most difficult tasks to perform and carry out. As an intern for Fox Business Network, I struggle with retaining and performing the specific tasks delegated to me by my manager and other staff employees, just the same as the Chief of the D.C. Bureau is constantly running around the offices and sending out multiple emails trying to figure out who will take up what task. If delegation is done efficiently, a company can run so smoothly and things would get done much quicker. That is why planning in advance is so important and no time can be wasted when doing so.

  36. Throughout my college career I have worked with many leaders in student clubs and internships in D.C. Some of the time, the leaders were very good a delegating tasks and some of the time I felt completely micromanaged and that anything I would do could not be as good as what the managers or leaders could do. I have also been on the other side where I was the leader and would not give any meaningful tasks to my assistant because I thought they would just mess up the projects that I had been working so hard on. That would then end up just creating more work and more stress for me. So if I have learned anything from these experiences I would say that you have to find a good balance between micromanaging and trusting others with different tasks. You cannot do the project alone without spreading yourself to thin and you cannot delegate the whole project away because you do need to check in and make sure your employees understand what they are working on.

  37. Katarina Percopo

    “I called it, ‘attention-to-detail.’ The staff called it ‘micromanaging.”
    This statement really struck me. Most small businesses have a hard time trying to delegate and split up the tasks at hand to the right people that would get the job done. When trying to fix a problem the boss cannot take control and do it all oneself, they must have help from their employees. A boss is supposed to manage and make decisions, not trying to do every little task the business must complete. Another thing that caught my attention was that trust is one of the most important aspects of a business. A boss must be able to trust their employees to get tasks done in the manner in which they expect. The employees need to also have trust and faith in their employer as well.

  38. Stephen Terenzio

    One of the greatest entrepreneurs of all time, John D. Rockefeller, has also been described as one of the best delegators. It’s important for leaders to sort through work and tasks that they can do, and send the rest down the line to employees underneath them. One of the keys to successful delegation is having the right people to delegate to. If a leader can select a team that meets their expectations and standards, there’s a greater chance they will trust delegating work to other employees. The important part, however, is the team, if you cannot delegate work down to others because there is uncertainty about their ability to perform, leaders will often end up taking on too many tasks. When this happens everyone’s work quality and production can suffer.

  39. Delegating has always been a huge responsibility of management. Without delegation, there is a loss of order, which could ultimately result in unfinished products and tasks. It is through delegation that projects can be completed on time and efficiently. When managers set deadlines and tell employees the jobs that need to be completed by those deadlines,the tasks can be done on time and the stress involved in those situations can be lessened. Everyone knows the job that they have and this ultimately results and aids in their ability to know what they have to get done and they can get it done well. Employees can focus on the task the delegator gave to them and they don’t have to worry about anything else.

  40. As the head or manager of a company it is important to delegate. You have a set of employees who all have a different set of skills. As the manager, it is your job to put the employee in the best opportunity to succeed. This can be better explained by relating it to football. A football coach should put his player in positions to win one on one battles. For example, a coach will not put his slowest player at running back because they will not succeed in helping the team win. In the same way the managers should use its employees who can best perform a specific task.

  41. An idea that we discussed heavily in organizational behavior and leadership and organizations which I took with you last semester, a big idea that was communicated is that one of the major components of the employee/manager relationship is the employee should be taking work off the managers desk, not adding to it. This is not just on the employees, another concept we heavily discussed was surrounding yourself with people who influence success, not halter it. This relates back to the manager, the ability for the manager to surround himself with the right people is crucial for being able to delegate and lead in a fashion that ultimately leads to success for the organization.

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