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CEO Spotlight: Robert Youngjohns, Callidus Software Inc.
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
A graduate from Oxford with dreams of pursuing a Ph. D in Physics, Robert had an accidental entry into the software industry. His stepping-stone was IBM, where he plunged into sales and went on to SUN Microsystems and finally to Callidus Software. In this interview with Angel Mehta, Managing Director of Sterling Hoffman, Robert talks about his journey from Oxford to Callidus and tries to clear the misconceptions the marketplace has about his company.
Angel Mehta: I read somewhere that you were part of a spy agency early in your career. Is that true?
Robert Youngjohns: I couldnít possibly comment! I was born in England and went to school at Oxford, with no real intention of joining the commercial world. My ambition was to be a Ph. D in Physics, do fundamental research and get into the teaching profession. I joined GCHQ (British equivalent to NSA) straight out of college, which was this isolated, highly secretive organization. Then one day I saw an advertisement in a newspaper, which said, ďGraduates, do you think you might have made the wrong first career choice? If so, consider joining IBM.Ē So I joined IBM. And thatís how I got into the technology industry.
Angel Mehta: IBM at that time was even more massive and dominant than it is today. How did you manage to advance up the ranks in an organization with so much competition?
Robert Youngjohns: The big turning point was when I realized that for a rewarding career at IBM, I needed to make the leap into sales. I eventually was promoted to Branch Manager, which is a pinch point at IBM because, in those times, once you got to that position, you could open up the rest of your career. I then went on to manage the IBM UNIX business in Europe, which was great fun because it was a business that was totally out of the normal range of IBM experience as it has different customers with different products.
Angel Mehta: You left IBM for SUN Microsystems and ended up running the global sales organization for them, working directly for Scott McNealy, which must have been a wonderful position. What prompted you to leave a position like that for a startup like Callidus?
Robert Youngjohns: There were a number of management changes going on; I had been through the best years of SUN with the dotcom boom, but it was time to look for something else. I was looking for an opportunity with a company that had a strong business value proposition, had products that played to a market that I knew something about and had good customers and solid products. When I looked at Callidus, those things seemed to come together. Callidus was targeting sales and self-performance management and that was something I felt very passionately about while I was at both IBM and Sun.
Angel Mehta: Was it hard for Callidus to talk you over? Did you have to be convinced or was this at the height of the boom when everybody wanted to join a start-up?
Robert Youngjohns: It was hard in the sense that I wanted to be convinced about the things I talked about. I wanted to be convinced there was a real product that had real customers and the customers cared and were getting value out of the product, and I wanted to care about those three things. The other side of it is I felt that there was a foundation at Callidus that would allow us to build a far bigger business. Callidus had been stereotyped as being really an adjunct to the payroll HR space when the reality is the business problem they were tackling was anything but HR and payroll. It was all about the fundamentals of how you manage and motivate large sales organizations or organizations where you sell through third parties. And thatís not really a payroll HR application, thatís a sales performance application. And that was the thing that really excited me.
Angel Mehta: Was that area really white space at the time? Is it now?
Robert Youngjohns: Yes. Thereís a whole backdrop, a system around sales that has not been developed. We address that. If youíre given a new sales territory, what are the things you think about? How many sales people do I have; what sort of channels do I have; who are my customers; how are my channels and sales people allocated most effectively to those customers given the potential business I get out of back-up territory management; how do I set targets that are motivationally effective; how do I make sure that I set targets that map onto business opportunity as well as to other factors. How do I then set the sales plans and monitor peopleís performance against those sales plans and commission plans, to optimize performance? How can I change those things quickly if the business environment changes, new products come out or individual products seem to be failing in the market place and then lastly how do I bring this all together with some sort of analysis tool, some sort of analytic view of whatís really going on out there and the fundamental dynamics of it? Thatís a business problem that I saw and I saw that Callidus had the fundamental tools to start to tackle that problem.
Angel Mehta: How do you respond to customers who say, ďLook, we just want a Siebel add-on or an SAP add-onÖĒ Is that not a battle youíre fighting?
Robert Youngjohns: Yes, it does happen and I think that itís a classic challenge faced by any small software company. The analysis that I make of this is that, in this industry, there is absolutely no chance of finding a happy niche and then stand still in that niche and hope not to be noticed. If youíre going to compete against the large suite vendors, youíve got to have a strong value proposition and youíve got to bring a new product to market more quickly. And, youíve got to outsell them at every turn. You are going to hear this as an objection from the IT Department in particular. The IT Department will see the benefits of integration and one vendor, one throat to choke over a whole range of applications and see that it is more significant than the best-of-breed benefits that the business users would see. But it really tests your metal and focuses you on building the best possible application you can, because there is no other way to survive.
Angel Mehta: What would you say your top business problem has been and will be for the rest of 2007?
Robert Youngjohns: I think the first and integral problem is related to rapid growth of the company. Can we recruit enough people? Can we make sure we manage our attrition effectively? Can we make sure that we donít over-commit to customers and have the resources to deliver? The second is to make sure that we really do continue to broaden the value proposition away from being seen as edge up to payroll and HR into being pioneer leaders in this field of self-performance management. And the third one is to navigate the hazardous waters of ďOn Demand/Software as a ServiceĒ versus on-premise.
Angel Mehta: Have you shifted from a point where you have to evangelize the value of management solutions to the point where itís simply a priority on everyoneís list?
Robert Youngjohns: When I arrived in the company and asked who our competitors were, I was told we didnít have any. Which was, frankly, a little worrying! So the next question that arises is: If thatís the case, what are we doing better? And the conclusion is that we didnít. Our history seemed to be littered with competitive situations where we received the RFP, won the RFP and then failed to get the contract. So thatís why I changed my entire approach here. Now the good news is, we have a lot of competitors and customers take the priority seriously.
Angel Mehta: Where does most of your time go?
Robert Youngjohns: A lot of it goes towards meeting with customers. We tend to play in at the high end of the market with large clients. All of them demand and insist on seeing executive engagement from Callidus so I get on planes and go places. Iíve got to learn much more about the geography of the United States than I ever thought I would, but itís great.
Angel Mehta: Whatís the biggest misconception you find the marketplace has about the company right now?
Robert Youngjohns: I think that the problem of many software companies and many leaders in software companies find is this crazy discussion about the relative merits of on-demand software service rather than traditional, on-premise solutions. Usually, the arguments are driven by people whoíve got specific access to people who are ďpure play on-demandĒ vendors and therefore want to make sure that the world believes that ďpure play on-demandĒ is the only way forward. I think thatís the sort of biggest misconception we find with our investors. Thatís a challenge because weíve deliberately gone for a hybrid model that will embrace on-demand as well as on-premise software. My thesis is that whatís going on in the industry is far broader than on-demand. Whatís going on in the industry is that customers basically say they do not want the vendor to become disassociated with the delivery of value from a product. On-demand is one of the mechanisms and one of the responses that the industry has and itís a very good one. But itís also about integrating services effectively the way you can track results from broader a spot than simply on-demand. So I think that with our tactic, which is offering BOTH options, we address what our customersí needs are. Itís about what best meets their business needs. We say: First select the solution that addresses your business challenge and then select the delivery vehicle. We also try not to get pretentious about it. But thatís quite hard today, when investors will throw money at anything with an on-demand tag and try to take money away from anything with a perpetual license tag on it.
Robert Youngjohns is President and CEO of Callidus Software Inc., a provider of Sales Performance Management solutions to help companies optimize revenue. He has spent more than 30 years in leadership positions with global software companies. Prior to joining Callidus Software, Robert was Executive Vice President for strategic development and Sun Financing at Sun Microsystems, Inc., and was responsible for driving new strategic opportunities for the company. During his 10-year tenure with Sun, Robert also served as Executive Vice President of the global sales organization and Vice President for its EMEA region. He previously spent 18 years at IBM Corp., and held several positions including director of the company's RS 6000 business for the EMEA region and for the United Kingdom. Robert holds an M.A. (with honors) in Physics and Philosophy from Oxford University. For interview feedback, contact Robert at firstname.lastname@example.org
Angel Mehta is Managing Director of Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies and lead investor in www.softwaresalesjobs.com , the #1 site for software sales jobs. Angel can be reached for feedback at email@example.com