How Alain Couder restructured Oclaro's leadership for a new phase of growth Featured

7:31pm EDT November 30, 2011
How Alain Couder restructured Oclaro's leadership for a new phase of growth

As he looked around at his executive leadership team, Alain Couder saw no clear disorder or conflict. The reason that his company’s leadership was not effective had nothing to do with a particular leadership style or group dynamic. But then again, the issue wasn’t really what people weren’t doing at all. It was that they didn’t realize what they needed to do.

“They didn’t know what they didn’t know,” says Couder, the chairman and CEO of Oclaro Inc.

Oclaro — the product of two startup companies worth more than $200 million apiece — had quickly emerged as a tier-one company with potential to reach No. 1 in its core optical and high-powered laser markets. After completing three more acquisitions, it had risen to third in its industry and become an employer of thousands of people around the globe. Yet, that meant many of the $393 million company’s employees, who had come from smaller companies, now lacked the skill set required to operate in a larger, global company.

“To get all of those startup people and turn them into a company that can be operating at $500 million in revenue and get to $1 billion was my biggest challenge,” Couder says.

Choose the right people

With a career that included working at both large corporations and small startups, Couder knew from experience that Oclaro was not prepared to scale for the next phase of growth.

“Because of my background working in companies like IBM or HP or others that are really well-structured and well-organized, it was clear to me that Oclaro was not that way,” he says.

So he began the process of putting in place a new leadership structure — one that that made sense for Oclaro’s new size and objectives. He hired an external consultant to go into the company and take stock of its operations, people and processes. By using an outside consultant to evaluate his team, he was able to eliminate partiality and really find out who would be able to help scale the company.

“Specifically what you learn is that they go into the company and see how you operate,” Couder says.  “They see what information systems you are doing. They speak to your managers and then they tell you, ‘This guy knows what he is doing and this guy needs to learn or needs to be replaced.’”

After getting this feedback, the first decision Couder made was to replace three of his key executives. While these personnel decisions can be difficult to make, a CEO has to be confident that the leadership team he or she has in place will be able to lead effectively when moving to the next stage.

“I choose an executive team that is appropriate for the size of the company,” he says.

“I make sure that I treat the people who are leaving well, but that I put in place people who are stronger and can help me scale the company to the next level.”

When you are growing a company significantly, you want to bring on executives who have experience and past success in their area of expertise. They also need to have the right personality and values to be a good cultural fit at the company.

“[It’s] are they going to be able to work in a constructive fashion with the rest of the team?” Couder says. “If you bring in someone who has a very different set of values than the ones that you have in place for the company now, then it just doesn’t work well.”

How do you identify the people who can scale successfully?

“It’s talking about what you want to achieve,” Couder says. “You create a dream of what can be achieved and then you explain what it takes to do it.”

When you start doing that, you’ll have some people who are enthusiastic and some people who start to resist change.

“I work with them and coach them and try to help them improve, but at some point in time when the company scales, some people are going to scale with the company and some people are not,” Couder says.

Once you’ve explained the vision, it’s more worthwhile to focus your time and resources on the people who seem energized about the vision for growth rather than on to trying to convince the opposition.

“You need to spend the time with the people who are enthusiastic and forget about the other ones,” Couder says. “Otherwise, you spend all of your time with people who are resisting and then do nothing in the end.”

Eventually anyone who has a “wait and see” attitude will either leave the company or decide to be part of the change and move with the enthusiastic people. The best thing to do is respect people’s motives and then focus on who can help you grow. While two of the executives that Couder replaced remained within the company, the third one left.

“They are able to drive their own lives and their own convictions,” Couder says. “And that’s fine. That’s part of change management. Not everybody is happy in a larger company. Some people are much happier working in startups and they should go work in startups.”

Empower your people

Leading an organization with more than 3,000 employees meant Couder and his executive team needed to start shifting their attention to more of the big-picture goals and high-level decisions of the company.

“You always need to shoot for the No. 1 position,” he says.

That means people lower in your organization need to shift to take over new responsibilities and decisions, as well.

“When you scale a company, you want to be able to move the decisions lower in the organization,” he says. “So this is the notion of empowerment.

“In a startup, the CEO is at the center of everything, is aware of all the decisions being made, in touch with every customer — he is involved in all of that. As you scale the company, if the CEO continues to do that then the CEO becomes a bottleneck.”

When you take a set of people with a startup mentality and ask them to manage in a larger, more structured corporate environment, you need to give them the right tools and support to be successful in that culture.

“It’s then helping the people you choose succeed in what they are doing,” Couder says.

“And as a result of that, the CEO becomes increasingly in charge of setting the right direction.”

To empower his managers as decision-makers, Couder implemented a global management training program for leadership teams all across the company. The three-day training program included approximately 80 managers and included twice daily training on leadership best practices.

“We coached them on leadership, how to make decisions, how to coach your team, how to train them, how to make them go, how to make them passionate about what they do, how you can create a team that is going to win together and all those kinds of things which are so important to success,” Couder says.

You and your people both want to feel comfortable with them making decisions independently. So first, you need to spend time giving them context of how to make those decisions and their impact on company.

“This is a part of the delegation and control,” Couder says. “As the company gets larger, I delegate more and more, but I want to make sure that we still have the proper controls in place and make sure that everything is moving the way that it should.”

By giving managers leadership best practices and skills that they can pass on to their teams, you push those practices out and the organization itself can become more nimble in decision-making for growth. Moving forward, a good measure of your team’s empowerment is how many decisions get pushed up in the organization. If it seems like too many, sometimes giving yourself some distance to think and reevaluate your own decision-making process can help you gain perspective. It also gives management a chance to brainstorm new ideas independently.

“One of the pitfalls is to always be acting and acting,” Couder says. “In fact, if I take a week of vacation, the team always comes back with new ideas and new things to be done.

“As you have a larger company, the best ideas are in the company. The CEO doesn’t need to have any ideas. He just has to listen.”

Dance to the same music

Lastly, when you are talking about scaling a global, multicultural organization such as Oclaro, which has operations in Europe, R&D in North America and manufacturing in China, to more than $1 billion in revenue, everyone in the organization needs to be working toward the same goal if you are to have any chance of success.

“You need to get the whole team and the whole company to be pushing and pulling in the same direction,” Couder says.

“So it’s also to encourage people to talk to each other and to learn from each other.”

That is where internal communication becomes incredibly important.

“There are three dimensions to the flow of information, top down, bottom up and also networking at the company level,” Couder says.

For a company that is growing very quickly, it’s vital to have good communication so that everyone’s expectation is clear and employees can work in harmony across different departments, divisions or operations.

“We need to make sure that we learn the same dance and that this dance fits the music,” Couder says. “Before in the company, you had different music and different sides and different dances, and therefore, the cooperation inside was a lot more difficult.”

To get everyone on the same page, Couder created a cross-functional task force to simplify and streamline some of the company’s key processes such as product life cycle, and train everyone — executive team included — on a set of leadership best practices. Part of that training included learning a standard vocabulary for operations that would be used by everyone in the company worldwide.

“You create a common language and that helps to have everybody dance to the same music across the company,” Couder says.

“When we talk between different geographies between China and the U.K. or California, we have the same terms and the same words,” Couder says. “We know exactly what we are talking about. There is now no ambiguity in what we want to do.”

When it comes to top-down communication, Couder believes that there is no replacement for meeting with your team in person.

“Through the questions, I get a pretty good understanding of what they know, what they don’t know and what kind of progress they are making,” he says. “That is one measure I use, and unfortunately I can’t find any replacement for travel. Video conference is great, but it doesn’t work for that. …You need to feel and communicate your actions with the people.”

Couder schedules a half hour with each of his direct reports three times a month to talk about their progress and maintain alignment on the organization’s goals. Whenever he travels, he also meets with his leadership teams during brown bag lunch sessions to find out what is working, what isn’t and offer his support to meet any challenges.

With a strong, empowered team that has everyone pulling in the same direction, Oclaro is no longer a bunch of pieces, but one united company that can scale successfully for growth.

“If you want to be able to be organized as a company, you can be empowered but within a certain context, within a certain set of processes and methodologies and tools that are common to everybody in such a way that it boosts harmony in the way we work,” Couder says.

“We know that we now have the best practices and the tools, and the means and the people involved to be able to compete in a much more effective way.”

How to reach: Oclaro Inc., (408) 383-1400 or www.oclaro.com

The Couder File

Alain Couder

Chairman and CEO

Oclaro Inc.

Education: Paris, Ecole Superieure D’Electricite

Born: Paris

First job: Teaching in Africa at the Abidjan University

What would your friends be surprised to find out about you?

I have raised six kids and have nine grandchildren.

What do you to regroup on a tough day?

Hiking in the mountains is my favorite getaway.

What is your favorite part of the job?

Strategy

Do you have an innovation tip?

You always need to invent a better way of doing what you do, a better way of communicating, a better way of writing a memo, a better way of making a presentation. It’s not only about product innovation. It’s about finding ways of doing things better in a smarter way. It’s about working smarter, not only harder.

Couder on choosing the company’s name: Oclaro is the new name that we choose to merge Avanex and Bookham. We are big believers that when you merge two companies of similar size and you have one which is acquired and the other which is the dominant … by adding a new name and a new set of values, that helps in fact create a new company. Oclaro stands for optical and clarity, which is how we created the name.