|Home - CEO Spotlight - Oct 03 Issue
CEO Spotlight: Lee Roberts, FileNet Corporation
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: I’ve talked to several CEO’s of late that seem to have learned the ropes at IBM before jumping into the enterprise applications arena; tell me about your personal IBM experience and how it led into the role at FileNet.
Lee Roberts: I joined IBM out of grad school and spent 20 years there in a variety of jobs. My last job at IBM was a global one - I was General Manager and Vice-President in charge of worldwide marketing and sales for IBM’s networking business with $4 billion dollars in revenue. I spent probably half of my time outside the United States with our European and Asian markets.
Angel Mehta: How prepared were you for the challenges of global responsibility?
Lee Roberts: Look, I grew up in New York. At its core, New York is a vibrant, high-energy community. I grew up in a very mixed neighborhood and had a lot of friends from different ethnic and religious backgrounds. I didn’t appreciate it at the time, but you learn a lot of lessons without even knowing it by growing up in a diverse environment. You often don’t appreciate where you came from until you get somewhere else. So the cultural aspect of global responsibility wasn’t that much of a shock.
Angel Mehta: So what was the key priority at IBM when you were leading the networking business?
Lee Roberts: A big part of that was trying to rationalize IBM’s networking business. IBM came from a world of proprietary systems and absolute market dominance in the high-end of the market…what we would classify as the ‘data communications network’. There were really two networking environments. One was data communications, which was largely controlled by IBM, and then there was all the voice stuff that was controlled by AT&T. Then, of course, the Internet came along and disenfranchised everybody.
Angel Mehta: You mean with companies like Cisco and Bay Networks?
Lee Roberts: Yes, exactly. And quite frankly, we got caught napping. By the time I got into that job, Cisco and Bay Networks were already multi-billion dollar companies. IBM found itself in a position where it still made substantial profits by owning the proprietary network, but had a massive gap in its product line that was built by parts that come from companies like Cisco and Bay Networks.
Anyway, part of my job was to help rationalize the business strategy; make sure the operating part of IBM was stabilized and profitable. That was a tremendous learning experience for me. One, because I was not the most technical guy on earth – I grew up in sales & marketing, but was forced to learn the technology side. Two, I had the opportunity to experience a shift in thinking. IBM’s view of the universe for a long time was to look at everything from the data center – from the CPU out, and that’s NOT the way the world shaped up.
Angel Mehta: The paradigm shift inside IBM happened with Lou Gertsner, I assume?
Lee Roberts: Partially, yes. The Internet really dis-intermediated everything and IBM wasn’t fast enough to catch that wave. The last couple of years I was there was to go in as part of a team to sort ideas, determine networking strategy and figure out how to maximize its business. IBM made the decision in roughly that timeframe to get out of the networking hardware business and give that business to Cisco. Instead, IBM focused its core competence around the software aspects of the business, which has been highly profitable for them.
Angel Mehta: From everything I’ve heard, you were well challenged and very successful at IBM….so why did you leave?
Lee Roberts: I loved IBM and I still do. I view IBM as our major competitor, but it’s a tremendous company. IBM had multiple years in a row where it was viewed as the greatest company on earth, and then it fell from grace, but recovered again. In that same period Digital, Wang all the other guys that were "dinosaurs" got wiped out. So IBM was and is a great company.
Angel Mehta: But…
Lee Roberts: But I wanted to run a company. I was 44 years old and the odds of me becoming CEO of IBM were slim, none and non-existent. So when I got the call about FileNet, I leaped at the opportunity and have been here ever since.
Angel Mehta: Didn’t it seem like a step down, given how small the company was when you joined?
Lee Roberts: For sure. At IBM, you’re running a $4 billion dollar business, and have 2,000 people working for you when one day somebody calls and says, "How would you like to run FileNet that has $300 million dollars in revenue?" Your first reaction is, ‘$300 million dollars in revenue? My God, I can do that on a Saturday afternoon.’
But what you don’t realize is that running a public company is a very complicated thing. It’s very different from running a division where you have a controller. All of a sudden, you’re accountable to shareholders…you’re involved in different legal issues that you didn’t experience before. All of a sudden, you find yourself in the chair you wanted to be in and, at times, it’s lonely because there isn’t anywhere to go. You’ve got to make the decision and you realize you don’t have all the facts and data – but you’ve got to make the calls because people are looking at you.
Another lesson I’ve learned has to do with how people perceive you. I don’t think of myself as any different than anybody else. Yet, when I come to work, I get different treatment because I’m the CEO – that’s just the way it is. Other people look at you differently than you see yourself. So for example, I have a tendency to say things as I seem them, and sometimes people amplify what I say way more than I might expect them to. I still learn that lesson every day. You have to be very cautious about what you say and how you say it.
Angel Mehta: As I understand it the acquisitions for FileNet have been a bit tough. So tell me what your challenges were when you first got to FileNet?
Lee Roberts: You’re right about the acquisitions – they went down hard, as they often do in technology markets. Culture and integration aspects were tough. But overall, my challenge was that when I came in, the stock had gone from $60 to $7 in a 9-month time frame. I’m sure you can picture that scenario, Angel.
Angel Mehta: Yeah…so what was the mandate for getting that turned around?
Lee Roberts: The bottom line is that that we’ve done is continue to steer the company from this notion of being a technology-based company in a niche market to more of a technology/solutions-based company in a much bigger market. Right now, we’re really positioned as being a database company. Anything that you can’t put into a database, we manage. We’ve evolved the company to a place where we focus on helping customers do something with that information once they stored it. Which gets us into the whole area of business process management.
The real challenge, however, is growing to a billion dollars in revenue from where we are. The last three years have not been kind to technology companies, as I’m sure you know, and these years have particularly been brutal to companies with failed business strategies.