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CEO Spotlight: Trent Landreth, Formation Systems, Inc.

By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search

Angel Mehta: Of all the companies you've worked at throughout your career, which ones had the greatest impact on the kind of CEO you are today?

Trent Landreth: In the late '80s I joined Oracle Corporation. This was prior to Oracle having secured its position as the leading provider of relational database technology. They were the 'Bloody Years" at Oracle, as the faces throughout the ranks seemed to be constantly changing. The company was doubling revenues virtually every year but had some severe growing pains. But management was smart enough to react by bringing in professional leadership. Overall, I'd say that Oracle was an extraordinary place to be. Virtually everybody I worked with was top tier - people with exceptional skills who just refused to accept defeat and had an endless supply of energy. It was a turning point in my career because I came to Oracle as a pure techie but was able to make a very successful transition to sales; to working with customers.

I was working for Greg Brady at Oracle before leaving to help build a national systems integration company. Eventually Greg went to i2, which is how I ended up there.

No matter what happens with i2 in the future, I think it should be remembered as one of the great IT success stories. They defined the supply chain market, evolved the business to encompass total value change solutions… you know, optimizing business practices that included not just suppliers and business partners but the entire demand chain as well.

Angel Mehta: i2 has obviously had its share of problems since the bubble burst and it's pretty easy to find people who criticize the company for having made bad decisions, yet you seem so positive about it. So tell me, what are some of the things that i2 did right? What would you seek to emulate about i2 at Formation Systems?

Trent Landreth: Two things stand out. First, i2 had this policy of recruiting, attracting, and hiring only the best talent available. The belief was that one extraordinary superhuman performer, if you will, could bring far greater value to the company, and likewise to i2's customers, than a half dozen mere mortals. They hired the smartest, most motivated people around and that policy paid big dividends.

Second, i2 would measure its success in terms of an explicit total dollar value that it was delivering to its customers. In order for that number to hold any water, i2 had to invest heavily in helping their customers capture business metrics. It revealed the value that i2 enabled processes were bringing to the table.

Angel Mehta: I want to talk about Formation's offering, so start us off by explaining what the business problem is that Formation solves for its customers.

Trent Landreth: As a basic premise, understand that for any company, time-to-market is paramount. Our customers face constantly shifting consumer demands, a push towards market globalization and competitive pressures, even from private label manufacturers; so getting new, innovative products to market faster is more and more critical to the success and competitive position of the companies that we're working with. The implementation of Optiva has led to reductions in time-to-market by as much as 75%.

Another issue is that regulatory requirements for process manufacturers are constantly changing and increasingly complex. We help our customers deal with this by ensuring that the products that they're producing are meeting all regulatory requirements and constraints before the products are launched.

Do you know how expensive product recalls can be?

Angel Mehta: No clue….

Trent Landreth: It can be in the hundreds of millions, if not billions when all the costs - including possible litigation / class-action suits and the incalculable damage to the brand - are factored in. We're helping to make product recalls a thing of the past. We help eliminate the risks of incurring huge fines from regulatory agencies and the heavy cost of pulling products off shelves because something was overlooked.

Angel Mehta: Product Lifecycle Management is a category that has been around for a couple of years at least, so tell me how Formation Systems differentiates itself? What is unique about what you're doing?

Trent Landreth: Certainly PLM is beginning to solidify as a category and is increasingly becoming a cornerstone of IT architecture. But most of the available applications are designed to serve the discrete manufacturing space. Process Manufacturers - those who formulate rather than assemble their products - have largely been ignored. At least, they were ignored until Formation Systems introduced Optiva.

We have built a product (Optiva) and an organization that is unique in its ability to deliver value to its customers, including marquee companies like Coke, Valspar, Cadbury and many more - international companies that are among the most admired on the planet. In many cases, we are the only globally implemented system.

Optiva provides the only truly integrated solution for product development available for the process industries. We eliminate disparate systems and automate what were typically manual processes. We provide real time access to product development information to all levels of the organization, which, among other things, helps to ensure the best allocation of limited resources and far more proactive risk management.

Angel, ultimately our differentiation is a factor of our experience. Our founders and other key people at Formation Systems come with decades of experience developing and deploying unique solutions to process companies.

Angel Mehta: I noticed that in Gartner's Magic Quadrant for PLM, Formation was the only early stage company that was labeled a 'Visionary'… how relevant is that to customers, and how did you achieve that status with Gartner? What advice would you have for other early stage companies who want to achieve similar acknowledgements as leaders by independent analysts?

Trent Landreth: It is quite relevant, actually. The analysts" opinion of companies that are still in their formative years carries a great deal of weight - customers are looking for as much external validation as they can find because they want to minimize risk. To some degree, the fact that we have so many customers takes care of that - but certainly, it helps to be able to point to a Gartner or AMR and talk about how they've cited us as the industry leaders.


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