With Vantive Corp. suffering through 18 months of red ink, managerial upheaval, shareholder lawsuits and sinking stock values, some industry watchers have gleefully begun referring to the company in the past tense. That, says Vantive's new CEO Tom Thomas, is a big mistake. Thomas, who came on board earlier this year, recently spoke with SFFA Senior Business Editor Douglas McWhirter about Vantive's past, present and very bright future.
SFFA: Some analysts suggest that Vantive's recent problems are the result of the company trying to be everything to everybody and overextending itself. Is this the case?
Tom Thomas: In some cases we were clearly too focused on one competitor and trying to chase that particular direction a little too aggressively.
TT: Yes. There are several Harvard business case examples of this where you have two leaders going at each other and you allow a third player to emerge, and I think that's what happened to Clarify. Vantive and Siebel were going through an aggressive posturing period and lost sight of the fact that the market is growing significantly and there is room for several major players. I think we got ourselves defocused on what we were trying to get done.
SFFA: What other factors have led to Vantive's problems?
TT: The way the business has grown over the last several years has created what I call stress marks. When you've grown as rapidly as we have, you don't have all the processes in place and everybody is just aggressively trying to get the job done. That was creating some issues for us. It was clearly a time for the company to be taken to the next level, which is the decision that it did make.
SFFA: That included a managerial shake-up.
TT: Taking a company to the next level usually calls for change in management. There are people who have been with the business for quite a few years who have grown it from a very small, start-up level. It's time to get some new energy and get some new plans in place to grow the business. What we did was take a hard look at what the organizational alignment looked like. It had gotten a little too top-heavy in my opinion. It wasn't upheaval so much as it was a structured approach to align the organization to be more effective going forward.
SFFA: Vantive's stock lost 75 percent of its value over the last year. Are you feeling a lot of pressure to do something about stock performance?
TT: Obviously anybody in my role feels pressure to grow the valuation of the company. Not too long ago, the stock was at 6 1/2; a couple of weeks ago it was as high as 13. A lot of people are sending me thank you letters for raising it up 100 percent. Maybe I should resign and come back again. That's a little tongue-in-cheek, but I think people clearly see us as a company that has a lot of opportunity to move forward.
SFFA: How do you plan to turn the company around?
TT: What I'm doing is bringing focus back to the business around the overall market where we do well. For example, by any of these analysts' estimates, the market is growing by 30 to 50 percent and will continue to do so for the foreseeable future. So when I look at that, I see that I don't have to just chase one competitor. I have a huge market that is growing. We have 850 customers that like our products. There's not too much wrong with this picture. We needed to get regrouped and refocused on where we want to take the business in the next few years.
SFFA: Where exactly do you want to take the business?
TT: There is a huge shift that is occurring-we call it the customer power shift. The customers are becoming much more in control than they ever have been before. They now have choices-they have a lot of choices-to move their loyalty from one company or one particular product. It is very much the responsibility of businesses today to do whatever they can to retain those relationships. We think this shift is happening; in fact it is happening aggressively. Our products are being lined up to support this power shift.
SFFA: Will Vantive continue to offer the product suite it has traditionally offered, or will it take a best-of-breed approach?
TT: We will continue to offer the product suite that we offer. We are also aggressively looking at opportunities to partner with the appropriate people to fill out those solutions where it may be practical. We are going to continue to acquire and look for opportunities where they can help us fill out our product line.
SFFA: In this new customer-focused market, what specific challenges does Vantive face?
TT: I think the challenges we face are many of the same challenges that everyone else does and that is acquiring the right people and skills to help you go to market. That is probably the fundamentally largest problem we have right now. We have to build and grow the workforce that can support the market potential that is out there and the clients we have. It's a good problem to have, but it is a significant challenge.
SFFA: Has Vantive's performance over the last year had an impact on your ability to recruit the best and the brightest?
TT: Obviously I can't speak for the entire last year, but I think what we have is some people who have been with the business and grown with it for quite a while and decided it was time to pursue some other things that they wanted to go do. In that respect, sure it has had some impact on us. I don't know that it's all performance related. I think we are the most undervalued game in town right at the moment.
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