In 2003, Microtune Inc. had been delisted off of the NASDAQ and was embroiled in several lawsuits and an SEC investigation. Knowing it needed to change course, the company’s board asked former president Jim Fontaine to return as president and CEO to lead that task.
Although he wanted to help, he wasn’t sure whether becoming CEO was the right capacity to do it in until a few of the company’s 180 employees laid it on the line by telling him, “If you’re not going to come back and commit yourself and you want everybody else to commit, then don’t even come back and do it part time.”
“It’s hard to ask someone else to be committed when you’re not committed yourself,” Fontaine says.
With that, he returned in full force, and the company has made great strides during the past two years as it increased revenue by 24 percent and reduced its loss by $48 million.
Smart Business spoke with Fontaine about how to steer a company back on course and move forward.
How do you lead change?
It starts with three things to keep morale up.
One is to have a very clear goal or objective that everybody understands. When I came back in the company, we had a number of issues to deal with, so we had a very clear set of five goals that everybody understands.
Second, you have to have a strategy to achieve those goals. If you say, ‘I want to put a man on the moon,’ you put together a plan that says, ‘I’m going to get there over a period of 10 years.’
You don’t say, ‘I’m going to get it done in all of six months’ because people don’t believe in the goal, they’re not going to execute on that. You can’t have goals that aren’t realizable. Otherwise you’re going to have people say, ‘Why even try?’ We said, ‘We’re not going to do it in six months, we need two full years to turn the company around.’
Third, you have to have constant progress toward that goal. You might have setbacks, but as long you’re making constant progress, those three things together will keep the morale up.
How do you deal with setbacks?
There were some dark days in those two years. At one point, we had our plan in place — we’re about six months into it — and we had a group of engineers that just could not get over all the problems the company had gone through.
This was around Thanksgiving. We called a meeting with all of our engineering employees and said, ‘We have a plan. We have a strategy. We need you to contribute. If you’re not happy, you need to quit and you need to quit now and go find a job someplace else. Find someplace you can be happy because we’re moving forward.’
We got a lot of criticism for that, but right after Christmas, five engineers quit. Those five engineers had the talent. They had the experience, but they had a horrible attitude, and when they left the company, suddenly it was like cutting a bunch of anchors that were holding a ship down. The ship popped up, and we started to move forward on the engineering team.
A year later, people said that was exactly the right thing to do.
How do you get employees to buy into a rebuilding plan?
They have to be very much part of the strategy. If the CEO of a company just comes up and says, ‘We’re going to hit this revenue number’ or ‘Do this,’ and the troops don’t believe in it, it’s worthless. We don’t do everything by consensus, but at the same time, we do bottoms up planning.
The managers that report to me have a set of sales goals, engineering goals, manufacturing goals, and those set of goals then percolate down to each of their people, and they’ll also have a set of goals to back it up.
It ends up being a pyramid in that the people are doing all the work. I tell people in periodic communication meetings, if your set of goals don’t dovetail or match somehow into the top level goals, you need to talk to your manager, ‘Why am I doing this if it doesn’t help our overall goals?’
What inhibits a company’s growth?
No. 1, you’ve got to make long-term decisions, and No. 2 you have to do it — make a plan, execute it and don’t second guess yourself.
Trading off short-term benefits for really what should be long-term decisions. It’s difficult for any public company to do that, and sometimes you just have to go ahead and take it in the chin and make your decisions long-term.
The second part that is death to any company is indecision. There are a dozen ways we can be successful. There are more than a dozen ways we can fail. But the worst thing is when you don’t necessarily make any decisions because you’re too afraid of going off there. They key is to put together a plan, and then keep following that plan and go forward.
It all comes down to people. If you don’t have that team in place and you start to outgrow that team as you start to grow the company, then you’re forced to figure out what do you do with that person. Do you kick them out? Do you have to replace them? Does that person stifle your growth?
Put a team a place that can grow well beyond where you’re at and let them run.
How to reach: Microtune Inc., www.microtune.com
