Trusting instinct in decision making

BUSINESS TIMES
2013-02-09 04:00:00.0


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Mark Templeton has seen Citrix Systems through boom and almost bust, and even took a demotion on the chin when he was CEO. He tells Victoria Ho why he has stayed with the company and how he's hedging his bets on making computing systems mobile BACK in the late '80s, Mark Templeton had a start-up called Information Research. Unfortunately, a couple of years later, the company went under and he had to lay off 30 people. "It hurts, and it's a pain you never forget. You affect people, but also their families," says the executive. Today, Mr Templeton is the CEO of publicly listed Citrix Systems, and has the fate of 9,000 staff in his hands. "It doesn't get easier," he says, of the stress of managing so many careers. It's a sentiment that he takes seriously, going so far as to recall in surprising detail the incidents surrounding the times he has had to lay people off in his career as a manager. "Another time was when we bought a company in 2001, where we made some mistakes on the integration and ended up having to shut it down. That affected 225 families," he recalls. According to reports, Citrix's 2001 acquisition was Sequoia Software, which made Web software. "The only other time was during the financial downturn in 2008, and we reduced our workforce by 8 per cent because of the uncertainty," he sighs. Citrix's workforce of 9,000 is expected to keep growing, as the company rides the growing infatuation with enterprise mobility in companies. Citrix is a Florida-based software firm founded in 1989 that provides virtualisation software. The technology allows servers to share resources and pool their power together to enable a host of functions for data centres. Virtualisation technology is considered the backbone of clustered computer set-ups such as cloud computing, as well as data centres that need redundancy. Its ability to move computing resources around allows systems to stay active in the event of a power outage, because the downed servers can push their activities to active servers. Another subset of the technology which Citrix also provides is called desktop virtualisation, which allows desktops to be replicated on other devices, allowing workers to be mobile and access their office PCs remotely. This ability is proving particularly interesting to proponents of "bring your own device". They say that more companies are keen to allow employees to work remotely via tablets and laptops, even phones. Behind the scenes of this trend, companies like Citrix which provide the hooks between work-issued PCs and staff-owned devices, are set to be part of the massive US$340 billion market by 2017 that surrounds the equipment, connectivity and software that will make remote working scenarios possible. Being in the virtualisation space also pits Citrix against giants like Microsoft and VMware. But it isn't doing too shabbily itself: its latest financial results for 2012 reflected revenue of US$2.59 billion for the year, up from US$2.21 billion the year before. Net income was US$353 million, down slightly from US$356 million in 2011. Next big goal Mr Templeton joined Citrix in 1995 at the cusp of "remote access" coming into the enterprise market. Since then, the company has gone from a US$15 million organisation with one product to its current US$2 billion size. "We were a US$500 million business in 2003. We decided to break through a billion by 2006, and had three years to get there. Our next goal is to break through the US$5 billion revenue mark," he says. But things weren't always so smooth at the top. Back in 2000, the company went through a rough patch financially. "We seriously missed the expectations that we set with the board and investors, and with ourselves. Everyone was disappointed," says Mr Templeton. The "missed expectations" came in the form of an unexpected weak second quarter, after the company rode a smooth boom in the late '90s. Its share price early in 2000 was US$121 but, after the bad news broke, plummeted 96 per cent to under US$5. As a result, Mr Templeton was demoted to senior executive officer, losing his CEO title. "The board was obligated to consider whether I was the right person to lead the company," he says, adding that there was a search put out for a replacement for him soon after. He spent the next 11 months recovering his footing, before being reinstated as CEO. "That was a painful personal experience." He shook his head at the memory of that tumultuous year. "Truth is, I was a first-time CEO of a public company. Over the course of about a year and a half, I made just about every mistake in the book in terms of reorganising the company, and in terms of focusing on the wrong kinds of systems to optimise," he says. He had also pushed for radical change too quickly, and didn't communicate his plans fully with the board. "We should have focused more on forecasting revenue of customer opportunities. I didn't put those important systems in place. I think all of the mistakes that I made were the mistakes of being young and inexperienced, and lacking the maturity to know exactly what to do, and how fast to do it." "Eventually, those mistakes show up in your business results," points out Mr Templeton. Getting demoted from the top position is a tough pill to swallow, he acknowledges. "It was a time of character building. Sure, many people that I respected told me to quit." He decided to stay in the end, because he felt he had let his teams down. "I told everyone I was responsible for driving us into the ditch, and I was going to do everything I could to get us out of it." His redemption came when the company returned to profitability the following year and in his reinstatement as CEO. "Everyone faces tests in their lives. You have to show values that are beyond just looking at a spreadsheet and doing the math, and to show conviction. For me, when you stick with things you believe in, it usually works out," he says. Away from the spreadsheets, leading instinctively is a principle he upholds. "The most important decisions I've made have been around people, from choosing them for leadership roles, or in acquisitions. They're what I focus on when we acquire companies." The other instinctive decision he relies on is when to move in technology. "I use it to decide when to get urgent about things. It's easy to let the force of inertia keep you feeling safe, but in tech, where innovation and invention is important, you need to have an instinct when to move up, and when to move forward," explains Mr Templeton. This is the reason the company made its shift from remote access to virtual computing, he says. Back in its earlier days in the 90s, Citrix was on the thin client bandwagon. A trend introduced by Sun Microsystems, the vision was for office PCs to be "thin"; instead of relying on individual processing power, to be glass panels tapping off a central server. The proposition was to allow companies to enjoy economies of scale by only having to maintain the central computer, rather than each PC. Moving to a larger portfolio Eventually, the trend fell by the wayside because the technology was premature to allow it to be handled without hiccup. Citrix rode that wave, but hopped on the mobility track later - a twist on the "remote access" concept, but remoulded for today's applications which factor in a far-wider variety of devices. "We decided to move to a much-larger portfolio of products to support the mobile work style. This decision is as much instinctive as it is strategically planned," says Mr Templeton. "It starts with having an opinion about the future," he notes, leaning back in his chair. "We've had a couple of cycles like this where we look into the future and anticipated what customers would need, and rolled that back to figure out what technology gaps we need to plug to get there." Going with your gut also means you have to be hands-on to understand the factors that could influence you, he explains. "You must be hands-on and focus on the exceptions - things that go wrong or right. The bulk of everything else, whether it's ideas or innovation or the engineering process, those get handled by teams. For me, I work on the exceptions. "You can't come and sit on the throne. You won't have the respect and credibility needed to lead people if you do that," he adds. vhoip@sph.com.sg MARK TEMPLETON CEO, Citrix Systems 1952: Born in September 1975: BA in Product Design, North Carolina State University, College of Design 1978: MBA, University of Virginia, Darden School of Business 1980: Married Yvonne Templeton 1987: CEO of Information Research 1995: Joined Citrix as vice-president of marketing 1998: Appointed president and CEO 2000: Appointed senior executive officer 2001: Appointed president and CEO