I.B.M. Veteran Finds a Challenge at Symantec
nytimes.com
CUPERTINO, Calif. -- "When the
invitation came to abandon a
stellar career at the International
Business Machines Corporation to
take the top job at the Symantec
Corporation, a floundering software
publisher in Silicon Valley, John W.
Thompson did not hesitate. It had been
his dream to run a company, and I.B.M.
was a long shot.
But 18 months into Mr. Thompson's
tenure, Symantec, purveyor of the
iconic Norton Utilities and Norton
AntiVirus software, is straining to
achieve the goals he has set for the
company — and for himself.
Mr. Thompson left his job as general
manager of I.B.M.'s $37 billion
Americas unit, ending a 28-year career
with Big Blue to stake his reputation on
turning around the $600 million
Symantec, which has been left behind
in the boom in Internet-related
business opportunities.
The challenges and risks of Mr.
Thompson's mission are formidable. He
aims to wean Symantec from its
reliance on the consumer market for PC
software and transform the company
into a competitor in the high-growth
market for corporate computer network
security products.
Symantec enjoys steady income from its Norton brands. But there is far more
growth potential in the market for network security products, which use
encryption to protect private networks and electronic commerce systems from
viruses and intrusions. Analysts predict the annual growth rate in that market to
be 30 percent.
Mr. Thompson's objective is to strengthen Symantec's revenue growth to match
that rate by the spring of 2003. But lately he finds himself beset by investor
skepticism.
Some securities firms downgraded Symantec's equity rating from a "strong buy" to
a "buy" or "accumulate" after the company announced its second-quarter
financial results Oct. 19. Although the 47 percent earnings gain on a 14 percent
increase in revenue compared with a year earlier exceeded expectations, analysts
were disappointed with growth in sales to business clients, which was surprisingly
weak at 8 percent. Much of the weakness lay in the poor sales of Symantec's
pcAnywhere product, which lets workers tap into corporate networks from remote
locations. Symantec's share price dropped 14 percent on the earnings news. It has
recovered somewhat since then, closing at $37 on Friday, but remains well under
the $50 to $70 range it traded at for most of the year.
Mr. Thompson, 51, who reluctantly bears the distinction of being the first African-
American to head a major Silicon Valley technology concern, said he was
determined not to let Wall Street's obsession with short- term results distract him.
"I don't worry about the downgrade," he said in an interview at his Cupertino
office. "I worry about whether our company is operating according to the strategy
we have in place. If we are, then revenue growth is going to take care of things."
Since arriving at Symantec in April 1999, Mr. Thompson has moved aggressively
to restructure the company around his goal of strengthening sales to corporate
security clients. By December he had whittled the company down to its core
business by selling two of its divisions, the Internet Tools unit with its Visual Café
product line and the ACT line of contact manager software.
The new boss also shook up the top management, replacing two-thirds of the
senior executives who had served his predecessor, Gordon Eubanks. As many as
40 percent of Symantec's 2,800 current employees have joined the company since
Mr. Thompson took over. "It's hard to change focus and promote from within," he
said. "But as the company grows, there will be enormous opportunity for
everyone."
Steve Cullen, Symantec's senior vice president for
consumer products, said there was nervousness
after Mr. Thompson arrived. "At first there was an
apprehension along the lines of that old adage that
anybody is replaceable," said Mr. Cullen, one of the
few executives from the Eubanks era to be promoted.
"But John focuses on results. He cares about people
who execute and deliver for the company."
More changes will come at the end of the year, when
Mr. Thompson is expected to complete a $975
million deal to acquire Axent Technologies of
Rockville, Md., a leader in the lucrative business of
producing "firewalls," software to prevent hackers
from breaking into electronic networks.
"The first thing John Thompson did at Symantec
was to identify a vision," said Kevin D. Wagner of
Adams, Harkness & Hill in Boston, one of the firms that downgraded Symantec's
rating. "The vision is still there, but the company has quite a bit of work to do. Its
quarterly growth in enterprise sales has been erratic, but once Axent and its
firewall products are folded into operations, I think you'll see growth-rate
stability."
Mr. Thompson knew he would have to prove himself to shareholders, but he was
taken aback when his debut in Silicon Valley was greeted as though he were a
Jackie Robinson breaking the color line of technology industry management. It
was a social role loaded with expectations that he had not anticipated. His initial
reaction was to resist, and he went so far as to exclaim to a San Francisco Examiner
reporter that he refused to be "the poster boy for African- Americans in Silicon
Valley."
Shortly before his arrival, the Rev. Jesse Jackson had visited the area to start a
"Digital Divide" campaign criticizing the lack of ethnic and gender diversity among
executives at major technology companies. Mr. Jackson's Rainbow/PUSH
Coalition collected data on board membership for 50 technology companies
showing that a total of 379 directors included only 25 women, 8 Asians, 5 blacks
and 1 Latino.
The campaign hit a raw nerve among the Valley's corporate elite, which viewed the
Rainbow/PUSH approach as divisive. Ultimately, Mr. Thompson relented, joining
the public debate after he persuaded Mr. Jackson to change the name of an April
conference to "Digital Connections" to emphasize the importance of
inclusiveness. Mr. Thompson addressed the gathering, along with
Hewlett-Packard's Carleton S. Fiorina, who broke ground in her own right as the
first woman chief executive of a major technology company.
Discrimination does not appear to have been a factor in Mr. Thompson's
professional experience. The son of a postal worker and a teacher who he said had
instilled in him a disciplined work ethic, he took a job as an I.B.M. salesman
immediately after graduating from Florida A & M University with a degree in
business administration.
There seems little doubt that his rapid rise at I.B.M. was the result of talent. He had
planned to stay for two years and then go to law school, but his studies were
derailed by a growing family and a succession of promotions. He would later take a
midcareer leave to earn a master's degree at the Massachusetts Institute of
Technology's Sloan School of Management, then ascend I.B.M.'s management
hierarchy.
"One of the characteristics of a good leader is the ability to concentrate," said
George Conrades, chief executive of Akamai Technologies and a former I.B.M.
executive whom Mr. Thompson said was one of several mentors in his early career.
"John has enough energy and drive and he has great people skills. He knows how
to take Symantec to the next level."
The complaint that people in minority communities are deprived of access to
technology careers rings false to Mr. Thompson. "This industry has an insatiable
demand for talent," he said. "If someone shows up and has the right skills and the
drive, he'll get a job."
But Mr. Thompson said he was doing his best to reach out to the community
when he had time, making appearances in local schools and acting as a mentor for
young minority entrepreneurs. "I'm not here to create an image for myself as some
black messiah in Silicon Valley," he said. "But I've got 30 years in the industry and
I've learned some things I'm willing to share, as long as I don't miss a beat in my
No. 1 priority of running a company.
"I'm not going to be distracted," he said. "They will never say I failed because I
was distracted. And they'll never be able to say I succeeded because I was black." |
