When Larry Weinbach took over as chairman, president and CEO of Unisys in September last year, he faced a daunting task. The company had accumulated a whopping $US2.3 billion in debt, its workforce was demoralised, and acquisition-hungry IT vendors were circling like buzzards over a collapsing cow. Weinbach points to the gold three-legged stool lapel pin on his jacket and says that's how he set about turning the company around. He says he had to get Unisys employees to focus on just three things - customers, employees and reputation - and to recognise that the three legs of the stool had to be equally strong to make it work. Weinbach recently spoke with IDG's Don Tennant to explain how he did it and how he intends to keep the momentum going.
IDG: Were you 100 per cent confident that you would be able to turn the company around?
Weinbach: You're never 100 per cent confident, but when I joined the company I felt comfortable that I could turn it around. I didn't know any of the people in the company; I came to the company with the management team that was there. But I believed, based on homework and research, that I had a very good opportunity to turn Unisys around.
What's the first thing you found you needed to fix when you came in?
I came up with three things that immediately needed fixing. One was the relationship with the customers; number two was the relationship with the employees; and number three was our reputation.
I concluded that that would become what I will call the vision, the strategy, and the tactics for the company. I told all of our employees on the first day that there's only three things that I want you to worry about - customers, employees and reputation. It's kind of like a three-legged stool - all three legs need to be strong to make it work. And you can see that all of our employees have a three-legged stool pin. We wear our vision statement and our strategy right on our jackets and our blouses.
Unisys has a close working relationship with Hewlett-Packard, as evidenced by your agreement to resell HP PCs and servers. Given that HP has seen better times, if CEO Lew Platt came to you for advice, what would you tell him?
I don't know enough about Lew's business to give him advice at this point. I do know that in the IT business, you have to make sure you control your costs; you have to stay on top of that cost structure every day.
HP publicly announced that their cost structure surprised them. I know Lew, and I know it's a very fine company. That's nothing more than a lightning rod to the rest of us - don't let it happen to you.
Do you think Sun Microsystems can go indefinitely without breaking down and supporting Windows NT?
I believe Sun is in a fight today where emotion may be taking over from common sense. I know (Sun CEO) Scott McNealy, he's a very fine guy. But I think he's emotionally involved. I learned a long time ago, in business never let your emotions get in the way of your common sense.
So I believe that long-term, NT will be the standard. It will be the standard because it's cheaper to operate in an NT environment than it is in a Unix environment. If it becomes a standard, there will be more applications developed for the NT environment.
Therefore I think sooner or later Sun, along with everyone else, will migrate to an NT environment, until somebody comes up with something better - which will happen.
How about Linux? Might that be the something better?
I'm not close enough to Linux, but my view of Linux right now is there's a huge interest in Linux as kind of a backlash to Microsoft. And I'm not sure whether it's because Linux is a better product, or it's just the backlash against Microsoft. I believe it's more the latter, but I can't say with confidence.
Is there a pie out there that you'd like to eventually have a piece of that you don't have a piece of now?
As I look out - and I'm looking at the longer-term horizon - there's no question that we're going to have to have more capabilities in electronic commerce and with dealing with companies on the Internet.
We presently have some capability, but I really believe that the Internet will be very important to our future business. So yes, we do have our eye on what we need to do in that area. I don't see anything strategic in the next year because I can't afford to get our people off-focus.
How do you handle the friction within Unisys between the product guys and the service guys, who are presumably supposed to be product-agnostic?
Well, the company was hardware-centric when I arrived. That was a major concern of mine, trying to change the culture of the company. The first thing I did was go to the board and tell every senior executive that reports to me would now be put on an incentive bonus system which would be totally discretionary - at my discretion, with their support.
And it would be based upon the results of the company - not just the results of any individual group within the company.
So what I'm trying to do is get people to understand that Unisys is the stock; and Unisys as a company is either going to make it or not make it.
It isn't a piece of hardware; it isn't a solution; it isn't any part of our networking services. It is really the all-round capability we have as a company.