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| Home - CEO Spotlight - Mar 05 Issue |
CEO Spotlight: Joseph Alsop, Progress Software Corporation
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Angel Mehta: So if the primary fear is no longer about the threat from startups, where does it come from? What keeps you up at night?
Joseph Alsop: I sleep pretty well. There’s definitely a certain threat that has to do with consolidation in the software industry. However, I think the software industry is made up of so many different markets and product categories that there are always going to be growth opportunities.
Angel Mehta: Let’s talk about Progress Software. You’ve been at the helm for over 20 years, since inception, really. Over that kind of extended time period, any company is going to have to reinvent itself several times. Tell me about some of the more significant transition periods or paradigm shifts that Progress has had to make to stay alive over a 20-year period.
Joseph Alsop: I think the biggest transition we had to make was the expansion beyond the initial product line. How does a successful software company branch out from its initial success into something that’s relatively new? I think that’s a bigger challenge for a software company than for companies in other industries, although I haven’t yet been able to explain why. Still, it’s rare for a successful software company to end up with as much success in its second, third, or fourth product line as it had in the first set of products. Microsoft is an obvious exception but there are not too many others. So for half of the last 22 years we’ve been working on creating new business opportunities within the overall software infrastructure business, and I think now we’re achieving a reasonable level of success but, boy, it’s been a lot of work.
Other transitions… I guess somewhere between 50 and 100 people, where you no longer can know every little detail of what everybody in the company is doing. You go through a transition when you set up international subsidiaries and get a significant amount of your business from outside the United States or North America and suddenly have operations in many countries, and you have to find responsible people to run them. That’s another level of maturity you have to achieve.
You also have to make appropriate choices when deciding whether people who were with you in the beginning are capable of staying in the same jobs. Sometimes they can, but sometimes they don’t have the skills as the responsibilities grow. So the organizational issues of moving from a situation where you have a small number of people… 30 or 40 or even 100… with this ‘us against the world’ mentality to a more formal organization that sometimes loses some of its passion but is better organized. That’s a huge issue.
Angel Mehta: You commented on the decision about whether you can still be CEO. It is interesting to me that you’ve remained at Progress so long; even Microsoft has had to change CEOs, after all. What are the personal transitions that you have had to make as CEO? How have you had to re-invent yourself over the years?
Joseph Alsop: Moving from a state where you know what everybody is doing in an organization to where you have to rely on more formal processes, more formal communications, and more formal meetings. That’s one big shift.
Another issue is moving from working hands-on with the product to trying to find the best people to work on the products and sitting back to develop the strategy. In other words, developing mentoring skills, people assessment skills, all those things that aren’t tremendously critical when you’re very much in the start-up phase. For example, as you grow, you have to establish an HR function. My attitude, in the past, was that HR is too important to leave to HR; you had to do it yourself. Over time, you realize that you simply cannot operate that way.
Angel Mehta: Let me ask you about the concept of entrepreneurial DNA. In your opinion are entrepreneurs born or made? If so, assuming they are born, is there a kind of introspection exercise that you could recommend that people give themselves to know if they’ve got the right stuff?
Joseph Alsop: It’s a question of Calvinist versus Catholic, if you’re familiar with the different religious theories. I would not say that entrepreneurs are 100% determined by DNA… that is, they aren’t born. However, early upbringing, for certain, accounts for at least 50% of being an entrepreneur. Now having said that, the best time to start something is probably in your thirties. By then you’ve learned enough to know which way is up, but you haven’t developed the dependencies that might keep you from taking risks. Having children, for example, tends to focus you on security rather than opportunity. If you start a business in your thirties and fail, you still have time to pursue a more traditional career
Clearly there are things that you have to learn to change along the way. Things like stubbornness, being a bit of an asshole, not paying attention to risks, not being very considerate of other people, not being terribly concerned with organization and some of the other things we’ve been talking about. Those characteristics, which are entirely appropriate to being an entrepreneur, may impinge on one’s ability to lead a company when it gets beyond the early stages.
This takes me to a comment I’ll make about a board of directors. I adhere very much to Bob Townsend’s theory about boards… he’s the guy who wrote a wonderful book called “Up the Organization” about 30 years ago. It’s written in the form of memos, and the memo about the board of directors states that a board has two responsibilities:
Angel Mehta: One…
Joseph Alsop: To declare dividends.
Angel Mehta: And two…
Joseph Alsop: To fire the CEO. I always say to my board, we have no plans to declare dividends any time soon so you have only one job – to fire me. A board, or the investors in the more formative stages, have the heavy responsibility of deciding if this person who’s contributed enormously to the early stage of an organization is willing and capable of changing to be the right leader as it grows.
Angel Mehta: What is the hardest part of being a CEO?
Joseph Alsop: It’s probably having to make decisions which have adverse consequences for people.
Angel Mehta: Can you elaborate?
Joseph Alsop: For example, if you have to fire someone. Look, if someone is getting promoted, that’s great. I can be happy and celebrate along with everybody else. But if you decide that you’re going to downsize one part of the business and potentially lay people off there, you come up against the fact that the decisions you make don’t simply affect revenue, profits, position in the marketplace and what the share price is doing a few years from now. Those are numbers… numbers don’t have feelings. But those decisions also impact peoples’ lives. You can’t allow that to interfere with the decision, but it’s very inhumane to not think about the human consequences. Yet thinking about those consequences is the toughest part of the job.
Joseph Alsop is CEO and co-founder of Progress Software Corporation, a supplier of e-business application development, deployment, integration and management products, and has led PSC to its position as a global software industry leader with approximately $300 million in annual revenue. Joseph has over 20 years of management and technical experience in the computer industry. He was founder and CEO of Intercomp, Inc. (now a division of Logicon, Inc.) and later served as president and CEO of Aristonics Corporation. He can be reached for article feedback at: JWA@progress.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: amehta@sterlinghoffman.net
 
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