Marengi The Hun
Received: September 18, 1996 06:23am EDT From: PC Week
From PC Week for September 16, 1996 by Lawrence Aragon
When a former Novell executive said the company's new president, Joe
Marengi, has the management style of Attila the Hun, he didn't mean it
as praise. But that's how Marengi takes it. "That's one of the highest
compliments he could pay me," he says.
Huh? Are we talking about the same Hun here--the one known as "The
Scourge of God"? One and the same. Turns out Marengi, who became
Novell's new president in the aftermath of Robert Frankenberg's sudden
resignation three weeks ago, is an Attila-phile. He considers the
management book "The Leadership Secrets of Attila the Hun" required
reading. "It's something I live by," he says. And now that he's at the
helm of Novell, it's something that the rest of the 7,700-employee
company is going to have to live by, as well.
Now Marengi, the 43-year-old former head of worldwide sales, plans to
shake things up as much as Attila did. At the NetWorld+Interop show this
week, Novell will roll out IntranetWare, its largest product launch
ever--part of an "aggressive" marketing campaign with "Marengi's
signature on it," says a source close to the company. But that isn't the
only change harkened by his appointment. Deliberate executives such as
Frankenberg used to be at the top of the list for CEO slots. Now, with
the industry operating on the ultra-compressed cycles of Internet time,
companies may be starting to favor executives, such as Marengi, who
would rather be wrong than diffident.
It still isn't clear whether the company has come to grips with the new
reality. For one thing, the board has not committed to Marengi as its
leader. Although Marengi has "a mandate," board director Larry Sonsini
is quick to add that acting Chairman John Young retains "oversight on
anything strategic or fundamental." Sonsini also insists the CEO search
remains "wide open." And although Marengi may be ready for Novell, you
have to wonder if Novell is ready for Marengi. The company's culture of
consensus makes it difficult to move quickly; new Novell VP Denise
Gibson describes it as "analysis paralysis." It isn't certain that a Hun
at the helm will be accepted.
Result: Confusion continues to reign among Novell's customers and
partners. They say Novell must quickly crown an undisputed No. 1 to ease
fears that the company remains on simmer instead of boil. Confronted
with these issues, Marengi responds with his characteristic certitude:
He is in charge. "I wouldn't enter into a job as a place-keeper," he
declares, adding he fully expects to be named CEO.
Such cockiness stands in stark contrast to his predecessor's style.
Marengi and Frankenberg could star in a remake of "The Odd Couple."
Frankenberg, 48, is bespectacled and husky. The 43-year-old Marengi, on
the other hand, is a 6-foot-1 "stud"--in the words of one associate--who
turns down mayo on his turkey sandwich and bench presses 350 pounds.
Frankenberg, a steady CEO with a Hewlett-Packard pedigree, was reluctant
to rock the boat. But Marengi, who's never run a company before, is
itching to throttle-up Novell, just as he did as a U.S. Coast Guard
captain.
Less than a week into his new role, Marengi (pronounced Ma-REN-jee)
spent two days with Novell's top 50 managers at the company's Orem,
Utah, campus, pumping them up in a "revival meeting." They set detailed
goals for the next 30, 90 and 180 days, covering product shipments, as
well as financial, marketing, partnering and other issues. One of his
mandates: Become far more responsive to customers and partners. Basic
orders: Promptly return all phone calls. While there was some
trepidation among the managers, most are excited to have a "b--buster"
in charge, says one Novell sales exec.
Marengi's management style is simple: "I set high expectations, and I
expect people to meet them," he says. Much of that attitude comes from a
stint in the Coast Guard. At just 25 years old, he was made captain of a
12-man patrol boat, the Cutter Point Barrow, and found himself in some
sticky situations doing drug interdiction off the California coast.
"When you're in charge of a ship, you cannot go anywhere else to ask for
help," he says. "It's the ultimate in responsibility." But he's quick to
add: "I'm not an autocrat. I give people room. I don't tell people how
to do it." This is where the whole Hun thing comes into play. The way
Attila managed his vast kingdom, according to Marengi, was by letting
tribes maintain their identity after he sacked them.
And that's what Marengi aims to be for Novell. As far as he's concerned,
the company can become a powerhouse again. The one missing ingredient: a
take-no-prisoners attitude, he says. Other Novell execs agree. "The
biggest thing Joe did in the past year and a half was provide a lot of
informal leadership--that augmented Bob's style," says Ron Heinz, VP of
North American and channel sales.
Marengi makes no bones about his No. 1 priority: "Winning is the only
option," he says. "Playing the game at 100 percent is one of the demands
I make on myself and one I'm making on my management team now." And
don't think he'll hesitate to use the hatchet. Marengi makes no
apologies for slashing WordPerfect's international sales force. He
contends that eliminating "redundancies" helped WP's 16-bit suite jump
from from 3 percent market share to 12 percent--at about 70 percent of
the cost. WordPerfect's failure to thrive stemmed from Novell's
inability to create a Windows 95 version in time for Microsoft's
mega-launch. "Retailers rightfully relegated us to a second-class
status," Marengi says.
Kanwal Rekhi, who retired last year after six years as Novell's CTO and
as a director, says Marengi has "fire in the stomach"--just what Novell
needs. He says Frankenberg was indecisive and reactive. Even the
WordPerfect and UnixWare sales weren't Frankenberg's initiative; Wall
Street's disenchantment left him no choice. Rekhi says that, from the
end of Noorda's tenure through Frankenberg's reign, Novell was "stuck in
neutral." And that frustrated many executives, including Marengi. "Joe
is action-oriented," Rekhi says. "He would come to me and he would say,
'Why don't we get up and do something?'" Tim Jeffries, a close Marengi
friend who is VP of sales for Intelligent Electronics Inc., adds that
"as Novell wandered through a valley of malaise, it was incredibly
challenging for Joe." Why did Marengi stay? He truly believes in Novell,
and a key part of his character is a deep sense of loyalty, Jeffries
says.
Despite a general decline in Novell's sales with the encroachment of
Windows NT, Marengi maintains he's made headway as Novell's sales chief.
Novell sold 20 percent more NetWare units last year, he notes. NetWare
revenues were flat last year, but only because Novell sold so many
lower-priced upgrades. What's more, under Marengi's oversight, Novell's
GroupWise messaging product--which competes with Microsoft Exchange--has
surged from just 2.5 million users two years ago to 6.5 million today,
says Stewart Nelson, general manager of Novell's Groupware division.
Marengi also counts among his accomplishments expanding Novell's sales
efforts around the world. But Marengi's sales leadership also comes
under scrutiny with the success of UnixWare and WordPerfect under their
new owners.
Now that he has more than sales under his command, Marengi is confronted
with myriad challenges, not the least of which is regaining the respect
of Wall Street. Novell's shares, which traded at close to $23 in the
spring of 1995, have been stagnant at $11. Then there are the inroads
that NT is making against NetWare. Analysts say Microsoft is gaining
ground for two reasons. First, Novell has done a terrible job of
communicating its strategy to customers. "I've been in the LAN
marketplace for years, and I can't clearly articulate what they're going
to do with NetWare or what they're going to do to be a real player with
the intranet," says Terry Klein, a VP for Dell, which bundles NetWare on
some of its servers. Second, Novell hasn't addressed thorny technical
issues, such as making all of its networking services work with other
other platforms--not just Novell Directory Services, says Craig Burton,
an analyst with the Burton Group.
Despite its challenges, Novell is by no means finished. It has an
installed base of 55 million users, or 60 percent of the network
operating system market. It still has a solid channel, and the naming of
a salesman to president is being praised by resellers. And even though
its sales and earnings have declined, it's still profitable. Novell
reported net income of $59 million, down from $102 million a year ago,
in its third quarter, which ended July 27. What's more, it has some $1
billion in cash. If the company can find the right person to take the
helm, it has the time--and money--to become an Internet/intranet player,
says Forrester analyst Jon Oltsik.
But, insists Oltsik, Novell must give carte blanche to whomever it names
as CEO. "If they handcuff that person in any way, this is a company that
is not going to recover," he says. And that, ultimately, leads to the
question: Is Marengi the right person for the job? A Novell source says
Marengi is definitely campaigning for the post, and he's winning
converts in the executive ranks. But others aren't so sure. "I think
they need to go outside of Novell to someone with fresh ideas--someone
who can bring a newer vision to Novell," says Neil MacDonald, an analyst
with Gartner Group.
But look what happened the last time Novell's directors brought in an
outsider. They made a safe bet on someone no one could question.
Frankenberg is a rock-solid manager from a rock-solid company. But he
wasn't what Novell needed. Now the company is on Internet time, and the
clock is ticking. And that means the board can't afford to over-analyze.
Every day it delays a decision on a CEO is one more day of reinforcing
the old Novell image as the slow-moving competitor.
If it drags out the CEO search long enough, the decision may be made for
it: "Whether they empowered Joe or not, he's going to take the power and
act," says former Novell CTO Sheldon Laube. "They put a tough guy in
charge."
Tough, just like Attila the Hun. |
