17 Oct How a Midwestern girl became the CEO of a multi-billion-dollar software company
Carol Bartz was raised by her grandparents in Alma, Wisconsin, a town of some 800 souls on the banks of the Mississippi river. In high school, Bartz was a cheerleader. She programmed her first computer in 1968, while studying computer science at the University of Wisconsin-Madison.
Majoring in computer science was a weird thing to do during the late 1960s, when Bartz’s fellow students were rioting to protest the Vietnam War. Bartz recalled that her college roommates thought she was crazy for choosing to spend her time in the computer lab, communing with “the establishment,” instead of hanging out on State Street.
But Bartz persisted. And her persistence has paid off.
Fortune Magazine recently described Bartz as one of the 100 most powerful women. She has served on the President’s Council of Advisors on Science and Technology, and she currently holds positions on the boards of directors of BEA Systems, Cisco, Network Appliance, and the National Science & Technology Medals Foundation.
Asserting Her Right to Lead
The company Bartz runs, Autodesk, was founded in 1982 by fourteen engineers. Instead of founding their company around a product or service, Autodesk was founded around the purpose of never having to work for managers ever again. The company’s founders “tried to get venture money, but they were so weird, they couldn’t get any money,” Bartz said. Instead of selling equity, Autodesk’s founders took AutoCAD to ComDex and sold it directly off the floor.
They have never looked back.
“They were free-wheeling for the first nine and a half years,” Bartz said. After that, things fell apart. There was a shareholder revolt, and it was decided that the company had better bring in some professional management. The professional management turned out to be Carol Bartz.
When Bartz joined Autodesk 1992 the company had an excellent brand, but 99 percent of its revenue came from just one product. Additionally, the company was filled with employees who resisted the very notion of corporate leadership.
“I had a lot of work to do with the team to get things going,” Bartz recalled.
Shortly after becoming CEO, Bartz asked every person who worked for her to attend a company-wide meeting. Only fifteen or twenty people showed up.
One of the people who attended this meeting was a disgruntled engineer who badly wanted Bartz’s job. He insisted on bringing his large, clunky personal computer to the meeting, and he tried to distract Bartz by banging loudly on his keyboard. Whenever Bartz would ask the man a question, he would grunt a response.
When the meeting was over, Bartz asked the man to take a walk. “You know,” Bartz began, “you really don’t need to come back to the meeting. In fact, you don’t need to come back to Autodesk at all.” The man said he had to return to the office, since he had left his things inside. “We’ll get your things back to you,” Bartz told him.
“You can’t take insubordination,” Bartz said. “I replaced the entire executive team over the first six months.”
After asserting her authority and resolving the company’s personnel issues, Bartz started to diversify the product line. She hired mechanical engineers, civil engineers, and media specialists, and she asked them to create products that would appeal to designers in various industries.
Stability
This daughter of the midwest has achieved her considerable success by helping a high-flying California software company achieve greater stability. “One product is not stabilization,” Bartz said. “One geographic area is not stabilization. And one industry is not stabilization.” Today, sixty percent of Autodesk’s business comes from products other than AutoCAD. The company’s products are offered in 19 languages and sold in 170 countries around the globe.
Twenty percent of Autodesk’s products are sold directly, 5 percent are sold over the Internet, and the rest are sold through a single-tier or two-tier distribution system. By retaining the right to sell directly and through the Internet, Autodesk retains its ability to introduce new concepts into the market and to expand into many different countries.
Today, Bartz’s biggest problem is software piracy. At Autodesk’s first Russian users meeting, a thousand power-users showed up. Before the meeting occurred, Autodesk had never sold a single product in Russia.
“You don’t steal a car,” Bartz said. “You don’t steal a newspaper. You don’t steal a carton of Tropicana orange juice. Why would you steal software?” AutoDesk spends some $200 million each year to engineer its products. Its shareholders need to see a return on this investment so they can continue to spend money on developing new software.
Bartz said that in the United States, 24 percent of software is stolen. In Europe, this figure is 34 percent. In some other countries, up to 99 percent of software is stolen. Bartz estimates that for every copy of software that is sold, eight copies are stolen.
Bartz is especially annoyed when corporations steal her products and use them to make other products that they then sell. She said that if all the people who used her product paid her, she would have the ability to create a lot more products and address a much larger section of the market.
Bartz gives her employees four and a half paid hours each month to do something nice for their community. Some of her employees choose to use this time volunteering in their schools, while others bank their hours and then take off on a week-long AIDS bike ride. Bartz insisted that it is possible for a company to make a profit while doing things for its community. “But if you don’t have profits, there is nothing left over to do good with,” Bartz said.
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Teresa Esser is a contributing columnist for the Wisconsin Technology Network and author of the book, The Venture Café. She can be reached at teresa@wistechnology.com.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.