Sharing the vision
With a plan in place and the right people to execute it, Peterschmidt began sharing his vision with employees, investors and customers.
“Spend a tremendous amount of time communicating internally and externally — how you’re doing, where you’re going, are we getting where we want to be, what comes next, what new things have we learned,” he says. “It’s those primary steps that you have to do.”
He started with employees to rebuild their faith and confidence in the company and its capabilities. To combat the cynicism, Peterschmidt constantly communicated the opportunities, positive realities and goals. “I started showing people the opportunity that the company had — that we were in a big industry … and that if we did these right things, we would build a world-class company, and that we had a right to be a world-class company and to expect that we should be a world-class company,” he says.
Peterschmidt wanted the confidence-building to snowball, so he added more communication. Between semi-annual executive planning meetings, he kept management in the loop by holding a weekly worldwide conference call. “If I’m the head of European operations, I’m now not 6,000 miles away and nine hours out of phase, but rather, I’ve got a live update and synching that goes on at the beginning of every week that goes on with every executive in the company,” Peterschmidt says.
He wanted not only management to be in the know, but employees, too, so he added quarterly meetings for them and spoke not only of the past quarter but also about the future and their role in it. “I told the employees, ‘Companies, when they get into survival mode, a very natural reaction of management teams is to pull all the decision-making back up to the highest levels of the company,’” Peterschmidt says. “I said, ‘We’re going to turn control of the company back over to you. We’re going to start letting you make more of the decisions over the last couple years that you’ve not been allowed to make. We’re going to put you back in power,’ to demonstrate to them that we have the confidence that they are capable of doing much more.” To do that, he created a leadership-training program to educate mid-level managers about what leadership means and the challenges leadership presents. He also created a clear evaluation program so employees know when and how they receive evaluations and the incentives associated with their performance.
Investing in people and educating them showed employees that Peterschmidt had a real interest in them and not just in the dollar. That philosophy also transferred to customer relations. “There were times when they came to us at the end of the quarter, ‘If we just dropped the price, or we did this, we could get the deal,’” Peterschmidt says. “Collectively in the management team, we just started saying, ‘No, we won’t do that anymore.’ That rippled through the whole company — ‘Holy cow! These guys are serious. They’re willing to risk missing the number for the quarter because they won’t take a bad deal anymore.’”
And as employees began saying no, they found customers saying, “OK, we’ll take it the way you offered.” Saying no made customers recognize the company’s value and gained Openwave more respect in the market.
Peterschmidt took that positive momentum and ran with it on an external campaign at two global industry conferences, conducting more than 160 customer meetings during five days at one and 115 at the other. He also logged more than 60,000 air miles in four months, meeting with customers everywhere to ensure that he understood their needs and that they knew where Openwave was heading. Then he went to the investment community and told it what to expect. “In essence, we gave them a scorecard to keep score on to let them know where we were going, how we’re going to get there and when we were going to get there,” Peterschmidt says.
He met with 20 to 30 financial institutions a week to brief them and get feedback on what they thought of the company’s plan and progress. He also met with more than 125 financial institutions in five days, garnering $300 million in a secondary stock offering in December 2005. “It’s not, ‘We’ll just go out and talk to a few analysts and everything will be OK,’” he says. “It’s a lot of work and a lot of commitment on the part of the company to do that.”
Two years of pavement pounding have paid off, as Openwave increased revenue to $412 million in fiscal 2006, up from $291 million in fiscal 2004. Peterschmidt also turned fiscal 2004’s $30.5 million net loss into a $5.2 million profit last year. But despite improvements, he won’t rest on his laurels. “People are seeing that we’re not just getting to a certain level and cruising, but we’re constantly adding to the capability of the company against the plan that we showed them,” he says. “The company is up and running. It’s in motion. It’s growing, but everybody knows that we’ve got three or four years of a lot of big stuff and things that we have to do to stay on the track that we’ve set for ourselves.”
HOW TO REACH: Openwave Systems Inc., (650) 480-8000 or www.openwave.com