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| Home - CEO Spotlight - Oct 03 Issue |
CEO Spotlight: Lee Roberts, FileNet Corporation
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Angel Mehta: Although broader lessons have come out of that for everyone, don’t you think? About the value of real customers and real products…
Lee Roberts: For sure. In 2000, we were a dinosaur. We weren’t a sexy dotcom. We weren’t growing at 80% and making no profit and spending tons of money on Super Bowl advertising.
We were trying to figure out how to grow at 20% and return value to shareholders at a time when all Wall Street cared about was "could you grow at 300%??" – and it really didn’t matter if you burned all the cash you had. We managed through that period really well. And while most companies have seen their revenues cut by 50% or 60%, I’d say 25% of the software companies have gone out of business completely. We’ve re-focused on a broader market; we’ve increased our R&D investment substantially. We’ve been profitable for eight quarters. We’ve grown our cash consistently almost every quarter through the last 3 years. The company today is better positioned then it was during the heyday of high tech.
Angel Mehta: So now that the recovery is underway, tell me what your biggest fears are about the company.
Lee Roberts: There are a lot of things. There is what I call the ‘controllables’ and the ‘uncontrollables’.
Angel Mehta: The uncontrollables are somewhat pointless to discuss, by definition…so let’s talk about the controllables…
Lee Roberts: Controllables are things that, obviously, we can manage. The key questions are:
1) Do we have the right business strategy?
2) Can we execute against that business strategy?
So for example, I’m challenging the development team to build more then they’ve ever built before much broader set of products then they ever had to build before…so all of a sudden someone who has been an expert in one area now has to know a lot more. Can any given development team react to get the products out? Secondly, can they get them out fast enough? Can they get them at the right quality? So I worry about whether that will happen.
On the sales side, we’re going from a world where we had a relatively small sales force that knew one thing really well. Now all of a sudden, they’ve got to become renaissance sales people. All of a sudden we’re saying, "You’re not selling two levels down on the IT organization anymore. You’ve got to go sell to the CIO and to a senior business decision maker." That’s a fundamental shift in sales strategy.
The other thing, quite frankly, is keeping everybody together and focused. We managed through some brutal times and we’ve had to freeze salaries because we didn’t want to lay off people. So we had to ask people to just work harder – plain and simple. We thought it would only last ONE year, but it lasted three years. So all you can do is keep going to the well.
Angel Mehta: Although FileNet has approximately the same number of employees over the last several years, it’s been relatively successful, hasn’t it?
Lee Roberts: Yes. But it’s an immense challenge for any CEO: How do you keep people motivated when times are tough? How do you get people to believe and continue to believe that you’re doing the right things – even when the results aren’t coming in immediately?
Angel Mehta: How does being in southern California affect the company?
Lee Roberts: I think it’s probably more positive then negative. We’re the biggest software company in southern California so that’s a good thing. We can attract lots of people here. The downside is it’s not as easy to attract people here as it might be in San Francisco just because in San Francisco if you want to change jobs, you don’t have to move or relocate. Then again, there aren’t a billion other software companies around here I have to deal with – so we’ve got a higher degree of employee loyalty. There’s much more of a family feeling about the company then you might have in the Valley.
Angel Mehta: What aspects of the role do you hate the most?
Lee Roberts: The biggest challenge a CEO has is bringing everybody with him, and I think that’s where I lose the most sleep. Can I get everybody to follow me, even though we haven’t given them a raise in 2½ years and the stock is back to where it was? Everybody turns on the news in the morning and sees the terrorists attacked here, or unemployment there. It’s depressing. So can I get everybody mobilized to climb this mountain and get the job done? Hard things are asking 10% of the workforce to leave the business. Those are probably the things I hate to do the most but those are things that come with the job. Because at the end of the day it’s not a popularity contest; not everyone is going to like you, not everyone is going to think you’re doing the right job. You’ve got to do what you think is right. If you’re right about your instinct, you’ll get results. If you’re wrong, the board is going to tell you to take a hike.
Angel Mehta: Can you tell me whether most of your wins have been the result of luck, or planning?
Lee Roberts: I’d say that determination is the key variable. Luck just means that you happen to be in a place where the opportunity to succeed exists. We’re lucky because the enterprise content management space is a real one that’s going to be $10 billion in revenue. Fine. And you always have to have good planning…if you don’t have a plan you can get somewhere but it may not be where you intend. So by default, you have to have planning. But really, when I look at my life - whether it’s competing in the Iron Man or running FileNet – at the end of the day, it’s just flat out conviction and determination to get it done.
Angel Mehta: What else besides determination, would you cite as key variables?
Lee Roberts: Well, in a company you can’t do everything yourself - you need the help of others. It doesn’t matter how bad I want to do it, I can’t perform the work of 1800 people every day. You have to lay a path for people and say, ‘This is the mountain we’re going to take.’ But after that, you can’t second-guess yourself. You can’t get up in the morning and say, "Maybe I ought to change directions and climb that other mountain…" or "Maybe instead we should go surfing today…"…You’ve got to basically say, ‘the die is cast.’ Like it or not, FileNet is in the ECM business. Like it or not we’re going to be the market share leader, and like it or not, we’re going to generate a billion dollars in revenue. How do we get that done?"
Lee Roberts, CEO and chairman of FileNet, continues to guide FileNet’s global course. Since joining FileNet in 1997, Roberts has led the company’s transformation from a leading document management supplier to the industry’s top Enterprise Content Management provider. Feedback on the interview can be sent to: lroberts@filenet.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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