I recently had the opportunity to sit down with Tom Peck, chief information officer of MGM MIRAGE, to discuss his transition from General Electric (GE) to the gaming industry and inquire about his vision for the future of technology at MGM MIRAGE and the gaming industry in general.
One of the first topics we discussed was the similarities and the differences between industry segments and the organizational structures of GE and MGM MIRAGE. Peck said there are a number of similarities—especially surrounding the brands. Similar to MGM MIRAGE’s array of properties and brands, NBC Universal, a division of GE, had multiple brands such as NBC, CNBC, and MSNBC that potentially competed with each other. Both MGM MIRAGE and GE have a strong focus on the bottom line, and both had some decentralized IT operations.
Peck identified one of the key differences between the two industry titans: the brands within the MGM MIRAGE portfolio have more autonomy, each with their own property presidents and distinct personalities, allowing them to make many key decisions on their own.
Scheri: Now that MGM MIRAGE has such a prominent footprint in the gaming industry, how does that influence your perspective as CIO with decisions and strategies for the company?
Peck: Clearly, we need to innovate with an understanding of both the business impact and the impact of that innovation on our industry. Given that I work across business functions, I have an opportunity that most don’t have, so expectations are high to deliver on that opportunity.
MGM MIRAGE, as a leader in our industry, and I, as CIO, must be leaders without arrogance. Because MGM MIRAGE is the world’s second largest gaming and entertainment company and Nevada’s largest employer, I can potentially influence the entire gaming industry about where it will go with technology.
But companies within our industry can also learn from each other. The many changes in this rapidly evolving industry can provide an opportunity for competing CIOs to talk with each other about common issues and problems, whether they be regulatory, market-driven, or technology related.
Scheri: Do you have any timelines or goals for implementing and/or importing your own outside perspectives, ideas and methods?
Peck: Change takes time and needs appropriate pacing in order to be effectual. Time will be needed for understanding, listening, and learning. We have good buy-in from employees thus far on our existing technology, and we certainly want to work to continue to maintain that kind of support. We have already introduced the concept of matrix organizations and dual reporting into both a technology center of excellence and a project team. We have also introduced basic process improvement methodologies such as Six Sigma, Lean, and Kaizen to certain teams. At the appropriate time, we will begin to delve deeper into many of these concepts.
Centers of Excellence
In moving to a matrix organization, Peck has some very unique and innovative approaches that will greatly benefit the traditional casino organization. No longer simply a pool of technologists, MGM MIRAGE now leverages the concept of a Centers of Excellence—a group of technology experts in their discipline that are aligned with project managers who are assigned to customer-facing teams in the area of casino, hotel, food and beverage, retail, media, entertainment, and corporate. This gives us the optimal blend of technology expertise, business alignment, and project management rigor.
Scheri: Lately there have been more and more “outsiders” coming into major roles within the gaming industry. Do you see this as a trend that will continue?
Peck: I believe there needs to be a balance between outsiders (both company and industry) and insiders. But I do believe bringing in executives from outside the gaming industry has brought a fresh perspective to some industry challenges that have been around for some time. What I try to hire is attitude and aptitude.
Scheri: Many gaming companies are fraught with legacy systems that are intertwined throughout their operation, and little has been done to extricate themselves from these systems. At what point do you see gaming companies emerging and moving, once and for all, away from these legacy systems?
Peck: This is part of my mandate at MGM MIRAGE. We are already working on solutions and partnering with vendors to improve our solutions. Gaming, leisure, and hospitality are big business, and we need state-of-the-art solutions to stay competitive. As we create more open systems, other solution sets will follow, allowing the creation of standards, protocols, and the development of three-tier architecture and middleware.
Scheri: What aspect of your new role at MGM MIRAGE was the most appealing and what was the most daunting?
Peck: One of the more appealing aspects of coming to MGM MIRAGE was the real-time impact of technology on a company, literally second by second, as well as the customer facing 24/7 operation. The lack of standards, protocols, and best practices across the industry is a key area that needs to be addressed. Another key opportunity for MGM MIRAGE is to further refine the up-sell, cross-sell, and cross-charge capabilities between properties.
Experience, Innovation
The perspective, experience, and innovative ideas that Peck brings to MGM MIRAGE is invigorating. Many people have reservations about bringing in executives from outside the industry, but our farm league is very weak. In an industry that now has (or had) some of the largest publicly traded corporations in its midst, promoting a PC tech through the ranks all the way up to CIO isn’t going to work. Just as we have seen fewer and fewer CEOs that started as “21” dealers, the same is happening for CIOs. Formal education, well-rounded experience, international exposure, and strategic thinking are minimum requirements for “C” level gaming executives, and we have a resource shortage.
Not only is it natural to look outside the industry, but it is required. Not all non-industry executives will be a good match for gaming. They need to understand the intricacies of the operation, and be sensitive to the egos and uniqueness of our customer base.
Many people (especially vendors) claim that gaming is just like retail, consumer package goods, or entertainment. But the fact is gaming is not like those industries, or any other for that matter. It seems those people usually don’t last very long in gaming, and those vendors don’t sell much to casinos.
I think there certainly have been some high profile examples of non-industry executives who are successful in our industry, such as Harrah’s CEO Gary Loveman. And let’s not forget the many people that are now considered industry leaders, but actually came from outside the industry, like Station Casinos’ CIO Marshall Andrew.
The gaming industry has long had a reputation for snubbing its nose at industry outsiders, because of their lack of gaming knowledge and for not immediately assimilating into the culture.
So while many industry insiders may be prejudiced against non-gaming executives, they must understand the need for the outsiders’ skills and experience.
Sure, they all might not work out. But for the most part, many will critically strengthen any casino corporation’s team. It is the only way we can grow our leadership and keep up with the growth of the industry itself. And Tom Peck is a perfect example of one who demonstrates MGM MIRAGE’s vision for the future.
Some of the areas that Six Sigma can play a key role in include:
• Improving processes and reducing cycle times
• Eliminating defects before deploying technology to users
• Concepts:
• Root cause analysis—What caused the problem and how do we prevent it in the future?
• Basic Statistical Tools—Measuring speed/data movement/concurrent users
• Tollgates—Project Management and Go/No Go Decisions
Sal Scheri is Managing Director of WhiteSand consulting and has over twenty years of gaming and hospitality experience. He can be reached at sscheri[at]WhiteSandConsulting.com.
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