A lost profile: Carol Bartz

It is rarely the case that news conspires to rescue you, however temporarily, from the grip of blogger’s block. With all reports pointing to an imminent — now confirmed — announcement that Autodesk chief Carol Bartz will be Jerry Yang’s successor at the helm of Yahoo!, it’s a good opportunity to unearth an old, unpublished and somewhat hagiographic profile I’d done on her back in the spring of 2005.*

“Take a look around you. Observe all the objects in this room. If it hasn’t been designed by God – and most of the stuff around you hasn’t – then it was probably made using our software.”

As far as powerful slogans go, it doesn’t get much better than this. And Carol Bartz, CEO of Autodesk, Inc., the world’s leading maker of design software, may well be the only high-tech executive in a position to say such a thing with a straight face.

Back in 1992, when the fiery Midwesterner was taking over from embattled CEO Alvar Green, few would bet on her making such pronouncements 13 years later. In fact, at a time when most major software houses of the ‘80s where hitting rough waters, it didn’t even seem all that likely that there would be an Autodesk to speak of 13 years down the road.

The company was showing signs of stagnation at a time of dramatic change – increasingly looking like a fine candidate for the museum of the software industry’s fading romantic era. Bartz herself had serious health problems to compound the dissent she was facing within the company. And still, she managed to turn things around more than once, keeping Autodesk afloat during the most trying times, deeply transforming it in the process. Hers is as much a tale of tenacity and long-term vision, as it is one of an executive who understood her times and embraced change. In the tumultuous 1990s, companies that had people like Bartz at the helm thrived. Those that didn’t, simply faded to obscurity.

Under her watch, Autodesk’s revenue has nearly quintupled, from $287M in 1992 to a projected $1.46B for 2005. Thanks to her strategy for horizontal and vertical diversification, the company has managed to milk the success of its flagship product, AutoCAD, while also expanding beyond its constitutional niche of computer assisted design and manufacturing (CAD/CAM). Growing by acquisition, Autodesk entered the Geographical Information Systems market in 1995. That same year, it acquired Canada-based Discreet Logic, strengthening its foothold in the fledgling 3D digital effects market. Today, the entertainment industry is one of Autodesk’s most dependable clients. Most of the action-packed Hollywood blockbusters of the coming weeks will have been made using tools from the Discreet suite, while its 3-D modeling and animation software, 3ds Max, is one of the most popular tools among game developers.

But what has probably been Bartz’s greatest success in her 13-year tenure, was that she managed to navigate the Autodesk ship expertly through the US IT industry’s most perilous times: first came the dot-com bubble, which drew engineering talent away from traditional software companies like Autodesk and into faddish ventures with spotty business plans; when the bubble burst, its shockwave left few high tech firms untouched; and then came the precipitous decline in IT spending after 9/11. For companies like Autodesk, those four years were decidedly not of the go-go variety.

And still, they survived (one of the few major software houses of the ‘80s that are still around today) to become the fourth largest software company in the world. It is also one of the hottest tech stocks in the market, best performer in the S&P 500 for 2004, its value tripled over the last couple of years of generic viagra 50mg. Analysts expect at least two more years of solid growth.

The Mother of All Managerial Challenges

The picture did not look quite as rosy back in 1992 – neither for the San Rafael-based company, nor for its incoming CEO. In fact, the personal and professional trajectory of Carol Bartz in the 1990s has that against-all-odds quality that would sell handsomely in the biography section.

She had been a 15-year IT veteran in sales, product line management and international operations, with companies like DEC, 3M and Sun Microsystems, when she was offered the helm at Autodesk, in April, 1992. She found the company at the lowest point in its 10-year history. AutoCAD still dominated its niche market of 2-D design software, but had become stagnant in terms of updates, with developers struggling to support all three major operating systems of the day (DOS, MacOS, and the emerging MS Windows). There was little serious operations management to speak of, and the peculiar rule-by-consensus management model that had been established by the founders seemed to be inhibiting the company’s continued growth. With revenues sagging, the stock in a virtual freefall, and no discernible light at the end of the tunnel, the natural leader of the company, mercurial co-founder John Walker, seriously feared a hostile take-over bid.
He circulated a controversial memo, ominously titled “The Final Days of Autodesk,” calling for an infusion of fresh ideas and a corporate organization more in tune with the times, if Autodesk were to avoid the fate of companies like Lotus and WordPerfect – software houses that had seen their fortunes dwindle, after holding dominant market shares in the 80s. The document circulated widely inside the firm and was soon leaked to the press, where it caused quite a stir. To speak of a growing sense of foreboding in the company’s Marin County headquarters in those early days of 1992, would have been an understatement.

Walker, who had obviously played a key role in the ouster of CEO Al Green, seemed elated at the choice of Bartz as his successor. In his typical florid prose, he welcomed her as the leader to guide the company in its finest hour, “onward to the Golden Age of Engineering.” “How could we possibly fail,” he asked, “except by caution born of cowardice, or lassitude stemming from lack of knowledge of a destiny as simple to plot as a straight line on a schoolchild’s notebook?”

If Bartz ever believed that last line, she was in for a rough ride.

For she would soon find out that reforming Autodesk’s operations and product strategy, would be a piece of cake compared to the more pressing need to redefine the company’s culture.

In 1992, Autodesk was a unique company, even by Silicon Valley standards. Its 16 founders, perhaps best described as a band of dissident engineers, shared a deep distaste for higher management, corporate hierarchies, and the “suits” that iconified them. Known as “the Core,” and led by the iconoclastic Walker, those practically uncoachable old schoolers, could hardly have been an incoming manager’s dream.

In Autodesk’s ten years of history, the attitude of the Core had become somewhat constitutional – part and parcel of its corporate DNA. Bartz’s unenviable mission was to ease (if not force) the graduation of that bastion of hackerdom into the tough world of IT adulthood. For all his desire to see the company change course, Walker himself was part of the problem. He had been working from Switzerland since the late 80s, but he remained vocal and highly influential among Autodesk engineers, while at the same time refusing to become part of Autodesk’s management hierarchy. The same held true for 11 more founders, who were sprinkled around the company, forming clusters of resistance to change.

What Bartz could never have imagined, was that she would have to start tackling that mother of all managerial challenges, not from the comfort of her San Rafael office, but from a hospital bed. On her second day at Autodesk, she was diagnosed with breast cancer, and was forced to recede to the sidelines for a good 5 months, for chemotherapy and surgery. Exhibiting the folly of a zealot, she postponed her chemo course for a full month, in order to name a CFO and get a grip on the wheel. Needless to say, she never managed to stay away for the entire prescribed time.
As soon as she’d put her immediate health worries behind her, she set out to implement reform in earnest. The primary goal was to boost non-AutoCAD renevue – which stood at a measly 10% -, while also strengthening the AutoCAD franchise. The answer was fairly obvious and had been floating around in San Rafael even before Walker’s memo: diversification inside, as well as outside the core market. That meant marketing a variety of application-specific integrated AutoCAD solutions, while also expanding into neighboring markets. Like all long-term strategies, it was a gamble. Much like the now-obvious decision to bet AutoCAD’s – and Autodesk’s – future on the emerging platform of Microsoft Windows. In time, both moves would play out handsomely.

And then came the hard sell – getting the hackers on board.

Luckily, Bartz was well equipped for the challenge. Having majored in computer science at the University of Wisconsin, and then gone on to work with some of the finest geeks in the business – people like Sun’s Bill Joy and Andy Bechtolscheim – she had both the knowledge of the culture, as well as the necessary “geek cred” to handle the Core. Her no-nonsense management style, a mix of tough love, openness, and respect for technical prowess made her as good a “suit” as any, and helped ease the Old School’s misgivings.

That is not to say that the journey into adulthood did not have its casualties. Some were relatively high profile, like dreamy-eyed hypertext and ‘computer lib’ guru Ted Nelson.

Upon her arrival in San Rafael, Bartz found that multiplatform support of AutoCAD was not the only major resource drain in the company. A number of so-called “blue sky” research projects were in progress – that is, research with no immediate commercial interest, other than a vague hope that its fruits would help the company in the long run. The most well known was Ted Nelson’s Xanadu – an effort to build a massive hypertextual library of published knowledge, by means of a radically new regime for the management of intellectual property. Nelson had sold Walker on his ambitious idea back in 1983, and the project had since been housed and funded by Autodesk. By the time Bartz came on board, Xanadu had been running with little to show for a good 15 years, and although it hadn’t yet been dubbed the “longest-running vaporware story in the history of the computer industry” by the mavens at Wired, its prospects looked rather grim.

Unsurprisingly, Bartz decided not to hedge her bets. To Walker’s chagrin, Nelson’s project was spun off in August, 1992. “It was a tough decision,” she recalls, “because I had tremendous respect for these people. I have always been a strong supporter of out of the box thinking, but wanted to make sure that it was also inside-the-envelope thinking.” The “envelope” was Autodesk’s new core strategy, and projects like Xanadu would not be part of it. In tune with prevailing attitudes in the tech industry, innovation for innovation’s sake would quickly become a thing of the past.

Collaterals aside, the transition worked out all right. Bartz shrewdly outmaneuvered resistance, slowly eating away at the Core’s influence. When Walker left for good in 1994, most of the other former founders followed him out the door. There was no coup d’etat. The transition had been, for the most part, bloodless.

If Autodesk’s new self-image – and Bartz’s reformist cred – ever needed a poster child, that can be none other than Carl Bass.

Bass, a very talented, and entrepreneurial programmer, wasn’t exactly a ranking member of the Core. He had joined the fold in 1994, when his company, Ithaca Software, was acquired by Autodesk. But in many respects he typified the renegade engineer. His chemistry with Bartz, never quite right, soon became explosive. “He would come into my office and be all ‘problem’, problem’, ‘problem,” Bartz recalls. When asked to suggest solutions, Bass would not even try to deliver. Unable to deal with what she saw as a counterproductive and adversarial attitude, she did not hesitate to fire him, over the objections of several senior VPs.

When, months later, Bass promised to drop the negativity and asked to return, Bartz was glad to give him a second chance. “Carl came back and he was the model employee,” she remembers, quick to preempt reverence for her people management skills: the chief motivation behind Bass’s impressive transformation had been the birth of his first child – he needed the insurance!
When the time came, he readily put aside the hacker style, and embraced his new role as a “suit.” His relationship with Bartz blossomed. So much so, that when he left to scratch that entrepreneurial itch, during the dot-com craze, Bartz brought him back the expensive way. Autodesk acquired his company, Buzzsaw, in 2002. Bass was named COO. Soon thereafter, with the help of new CFO Al Castino, he orchestrated a restructuring of operations that significantly boosted the company’s sagging operating margins in the wake of the dot-com bust and post-9/11 slowdown of IT spending. Today he is Bartz’s right hand, and her heir apparent.

But Bartz is not looking to retire, so don’t bet on that change of guard happening anytime soon. Her long tenure at the helm in San Rafael isn’t simply the result of her strong leadership and strategic prescience. She has been lucky to have had an unusually patient board of directors. In an industry where top executives, short-triggered for instant results, rarely keep their jobs for more than 5 years, Bartz has been in hers for a whopping 13 (not all of them good), and still going strong.
“A lot of it has to do with the way I have handled my relationship with them, from day one,” she explains. While her constitutional candor certainly helped, perhaps more important was that she effectively communicated to her board the need for a long-term strategy, a balanced outlook on the state and future prospects of the company.

Nowhere was that more evident than in the annus horribilis of 1997. Consolidated revenue dropped by 7% that year, behind a weak showing of AutoCAD user upgrades, and a slow European market. However, 1997 was also the year that Bartz’s strategy to reduce the reliance of the entire company on a single product line finally started to bear fruit. Autodesk introduced 20 new products that same year, and non-AutoCAD revenue climbed by nearly 30%. Investors and directors were able to see the light at the end of the tunnel, and renew their trust in their CEO’s long-term view.
After having witnessed the sharpest peaks and valleys of the industry, in that roller coaster that was the 90s, Bartz has learned to look beyond short-term fluctuations, up cycles and down cycles. Her favorite strategy mantras – “this too shall pass,” and “fail fast forward” – smack of calm confidence, rather than fatalism.

This pragmatic balance in the big picture is now part and parcel of what she calls “the Autodesk Philosophy.” And it extends beyond corporate finances, and into the work life of its employees. For all the abandonment of the hacker spirit, Autodesk remains a fun place to work – at least if one believes recent polls in publications like Fortune and BusinessWeek. The legendary Friday beer bashes, a staple of the Walker days, are long gone, but there is still a lot left to make life at Autodesk enjoyable. The company offers one of the most progressive benefit plans in the industry, including a paid sabbatical every four years. It allows employees to bring their pets to work, and is one of the leaders in telecommuting – about 46% of the company’s nearly 3,500 employees worked from home, as of 2003.

Looking at the demographics of her engineering team, however, Bartz cannot help but notice a glaring imbalance that plagues the entire IT industry – the gender gap in engineering does not seem to be closing. Standing out as one of the very few prominent women in what has always been an Old Boys’ Club, she has strong ideas about the causes of that imbalance. Today, she sits on the President’s Council of Advisors on Science & Technology, where she pushes for reform in science and math education. “It is a kind of sexism, what happens in the fifth grade, and how girls are steered away from math and science. It is terrifying,” she says. Her proposed remedy consists of three words: “single-sex education.”

Her personal experience bears on that. Having graduated as class valedictorian from high school in her hometown of Elma, Wisconsin, Bartz enrolled at the William Woods University, an all-girls college in Missouri. It was there that she fell in love with computer science. But most importantly, it was in that environment that she was able to get involved with student government, something she says she would probably have shied away from had she been in a co-ed school. Serving as officer of her dorm, and treasurer of the student body, Bartz’s was exposed to the pressures and rewards of leadership. It is fair to assume she handled it pretty well.

The New Game

There are many ways to tell Carol Bartz’s story – the woman in the Old Boys’ Club, the “suit” in hackers’ paradise, the cancer survivor, the successful and long-lived CEO of a major software company. But what is perhaps the best way to think of her career in the US software industry is as an agent of change. In leading the transformation of Autodesk into a modern company in the mid-1990s, and then making it a global force in software 10 years later, Bartz proved to be the right “suit” at the right time – in more ways than one.

And even though the company seems to be enjoying the best years of its history, Bartz knows full well that challenges still abound, in an industry that is as volatile as ever. The era of ubiquitous, networked computing represents an epochal shift perhaps as significant as the one that brought Bartz to San Rafael in the early 90s.

The first major challenge in the new era is to create an integrated environment for downstream information management in design projects. As companies go global, increasingly outsourcing their operations, there is a need to share and collaboratively edit design documents over the network. It seems like a natural extension of what Autodesk has been doing for the past 20 years, but the mere scale of the project forces the company out of its comfort zone, pitting it against enterprise software giants like Oracle and IBM.

And then there’s the location-based services business – one of those nebulous “next big things” that have most of the 800 pound gorillas in the IT industry groping around in the dark, looking for gold. Autodesk has been investing in this market since 2002, launching products like Traffic Connect, a service that provides up-to-the-minute, personalized traffic information to wireless subscribers via text messaging. For the time being, it is little more than a money-losing hedge, and it is anyone’s guess whether Autodesk can make it profitable, especially in the presence of such mighty company as Google, Yahoo! and Microsoft.

But in the face of rapid change, tougher competition and disruptive technologies, Bartz looks as plucky as ever. And for good reason – she’s been there before.

Now Yahoo! is obviously a much different story. Bartz will provide the leadership lacking in Yang’s tenure, but, at 60, may struggle to adapt to a market, a product line and a corporate culture that have little in common with those of a traditional software company like Autodesk. Wall Street is not exactly elated over the news. On the other hand, Bartz’s agenda at Yahoo! may be modest enough to make those worries somewhat tangential: to right the ship just enough to make it appealing to potential buyers.

* Props to John Markoff and Greg Zachary, who invited Bartz to their tech journalism class at Stanford that year. Zachary did an excellent profile of Bartz for Business 2.0 back in 2004.

2 σχόλια

Από: Sofia

Excellent post, really interesting. I rarely read such long pieces but this had me hooked.

14 January, 2009 στις 12:26 pm
Από: Yorgos

Tnx! And I rarely write such long pieces, so not much more of that down the line =)

15 January, 2009 στις 2:24 am