Bob Irwin will tell you the path to becoming a $2 billion company is paved with good communication.
In just two years, Sterling Commerce Inc. has grown from more than $460 million in annual revenue in 2004 to $650 million projected for 2007, and there are no plans to slow down.
Tripling those numbers will require a clear and simple plan and great communication, but fortunately, that is Irwin’s specialty as president and CEO, as well as his top priority.
The AT&T subsidiary is surging forward, tasked with helping 80 percent of the Fortune 500 thrive in a global economy by solving complex business process challenges.
“We are on a path to being a $2 billion company by 2012,” Irwin says. “That’s a goal we are aggressively pursuing. ... The strategy we have had is the strategy we have, and it will be what we have in the future the focus is how do we capitalize on that strategy.
“How do we really get done what is possible, given the opportunities we have, the great markets we’re in, the customers we have and the great people we have. How do we really seize that opportunity?”
With 2,800 employees in 17 countries and major locations in places like London, Paris, Tokyo, Toronto, Bangalore, India, and S©o Paolo, Brazil, the single uniting force is communication. At Sterling Commerce, that means every communication needs to be simple, clear and easily understood by everyone, regardless of his or her office location, time zone or language.
A three-word mantra
Just three little words can describe Irwin’s management mantra: simplify, clarify and enable.
He says his $2 billion business plan is to simplify down to the essentials, to clarify for everyone and to enable them to go execute.
“It all comes back to simplify, clarify, and come back every quarter and refresh,” Irwin says.
His intensive business-planning process is built upon his experience as the company’s top sales executive in 2002.
After becoming president and CEO in early 2007, he worked to develop a detailed business plan and to codify it by region, as it’s a global company; by product, as there are seven lines; by industry, as there are six main industries; and by quarter throughout a five-year time period.
The reason for such an exhaustive business plan? “So I can stand up in front of any group, clearly articulate that this is what it looks like, and more importantly, as each quarter passes, I can stand up in front of these groups and say, ‘Here’s what we said, here’s what happened, here’s what that means in terms of the plan,’” he says.
Irwin says that if five years worth of charts sounds elaborate and difficult to follow, it doesn’t have to be that way.
“What’s fundamentally important to me is to have a clear plan, a very defined strategy and business plan behind that,” he says. “It should be one that’s logical, that makes sense and can be done, and to ensure that all four parties [customers, investors, advisers and employees] understand it getting and keeping everyone on the same page. Getting everyone on the same page is important; keeping everyone on the same page is powerful.”
Irwin’s theory is that repetition is the source of all knowledge and that communication is a lot like advertising, and therefore, requires repetition.
“The single biggest problem with communication is the illusion that it has taken place,” he says. “Human beings are not preprogrammed or prewired to hear, assimilate and understand every single word a person says. People learn in different ways, and it takes time to assimilate what’s been heard to understand it. It takes repetition to understand. It matters not what I say it matters what you hear. Simplify and clarify, and you can enable people to understand the message. You have to repeat it often, using other avenues.”
Those other avenues include e-mails that Irwin sends out on topics of interest to employees.
“Core pieces of information, communicated in multiple different venues through multiple different mediums,” Irwin says. “Essentially the same information, delivered in different ways, at different times and with increased frequency.”
Undeterred by oceans of distance, Irwin has developed global meetings as tools for communications. Town-hall meetings are held one day each month. Generally, there are at least two town-hall meetings, handled by Web conferencing one for the Western Hemisphere at noon Eastern time so it’s not too early for California and not too late for Brazil or Europe. Then there’s one at 6 a.m. Eastern time for the Eastern Hemisphere, which puts it at midafternoon in India and early evening in Japan. The miles between offices are easily bridged by technology although it does odd things to Irwin’s hours as he facilitates the distance meetings.
“It is weird, doing a town-hall meeting at 6 a.m. by yourself,” he says. “It’s just me, there’s no audience. People are thousands and thousands of miles away. It’s a different experience.”
Enlisting the power of recognition to keep clarity of focus, the company launched a new program called the Winner’s Circle in August. A quarterly series of company gatherings organized by region, the events are accompanied by parking lot bands and barbecue, as well as pats on the back. Inside, a videoconference provides an update on company strategies more importantly, it’s a litany of the successes of team members. If a new product was released by the engineering department, who on that team did it? Irwin wants to know and he wants the rest of the company to know.
“He’s on video in Dublin, person X who did thing Y,” Irwin says. “We call them upfront and tell their story. We will also have customers, live or on video, talking about how Sterlites [employees at Sterling are referred to as Sterlites] made a difference to them. When you get right down to it, it really is all about the people and what great Sterlites we have, bringing quality products, services and support to our customers. It could be anybody significant. We tell everyone about it, bring you up on stage, make a big todo of it and give you a big round of applause. We recognize you.”
He says sales departments have long relied on bonuses and incentives to keep employees fired up. The Winner’s Circle takes recognition to the outer layers of the organization.
“I’ve been in a sales career, and it’s easy to overstate the financial rewards,” Irwin says. “The best you can do to motivate employees is to publicly recognize them in the moment of their accomplishment. It has to be public. It’s one thing for the manager to pull the employee aside and say, ‘Hey, you did a good job on this. Well done, I’m proud of you.’ Do that same thing in public, and it will have six times more powerful an impact on that human being.”
A global gathering that recognizes Japanese employees in front of their San Francisco peers, and vice versa, can be a logistical nightmare, but it’s worth it.
“It’s important for any company to recognize the achievements of all departments that don’t usually get recognized,’ he says. “We need to build the understanding that what I do, what you and what everyone does is important to this company.
“The importance is to celebrate and recognize the success of human beings of our Sterlites in that quarter. At the end of the day, our success at Sterling Commerce is driven by the quality, the capabilities, the skills, the talent, the competencies, the passion and the commitment of our people.”
While the company enjoys a relatively modest market share in the application software business, that’s about to change.
“Establishing leadership is our first prong, that’s built on supply chain and demand chain management,” Irwin says. “The new market we’re going to enter is payments management.”
Sterling’s recent acquisition of four companies TR2, Yantra, Nistevo and Comergent has put them on the road to an increased market share and a deeper toehold in the industry. Those acquisitions got Sterling into new markets and brought new customers into the fold of their base of almost 30,000 customers to accelerate growth.
Extending the company’s solid market share in integration software will mean expanding the markets the company competes in.
“There are three markets we don’t compete in that are tangential or adjacent service-oriented architecture, security and business intelligence,” he says.
Signing up channel partners, alliances and joint ventures with other companies will extend that reach. As an example, an IBM retail solution has Sterling Commerce products imbedded in it.
For each of those key business areas, there are two ways to thrive: organically by marketing better, selling better, becoming more effective and more efficient or through acquisitions. The key is carefully selecting which opportunities to pursue.
“It’s important to focus our time and attention, energy, and resources on a simple, clear plan of attack to realize the opportunities ahead of us,” Irwin says. “We have so many opportunities we could pursue. There are so many good products, so many good markets and we have so many wonderful customers that it’s easy for us to have an idea a day of how we can take advantage of the market, sell a product, expand customer relationships.
“We have a bouquet of opportunities and a banquet of opportunities. My biggest challenge is to make sure that we’re focused, that we have a simple plan, that it’s clear to everyone, and that we enable everyone at Sterling to focus on the task at hand.”
It starts with focusing on what Sterling already has. “If we want to expand markets in which we compete, we take products we have today and build out,” he says.
“That’s a clear and simple path to $2 billion all we have to do it execute. Nobody would say we have to change the world or reinvent Sterling. Everyone would say, ‘Well, that makes sense.’ It’s a lot of work, it doesn’t sound easy, but that makes sense. Any of those constituents would say that sounds completely consistent with the strategy we’re known for. It doesn’t sound like it’s changed much, it’s just getting more clear on how to get there.”
HOW TO REACH: Sterling Commerce Inc., www.sterlingcommerce.com