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The art of XSI

The art of XSI

When Max Goldsmith, general manager of Powerlan's XSI division, started selling insurance door-to-door to pay for art school tuition, little did he envisage a career in IT spanning more than 30 years. But then, Goldsmith has never been one to follow the crowd.

If you asked him what he was like in the corporate sense, he'd probably admit to being "difficult". But difficult or not, Goldsmith's career in IT has seen him rise to the ranks of NSW manager of Canon and general manager of Remington, before he and 11 others decided to take a punt and buy XSI.

The year was 1989, at a time when getting banks to fund entrepreneurial ventures was nearly impossible, and Goldsmith had organised a meeting for the remaining employees of the then Remington-owned division Systems Industries (SI) to decide their future. Remington itself was undergoing a series of acquisitions by other multinationals, and visiting international president George Harvey asked Goldsmith if he wanted to forget the storage and computer business and go global with Remington's consumer offerings.

"Well George, that's 60 per cent of your profits and that's what I do," Goldsmith said at the time. "I left multinationals because I didn't like working for them."

XSI had been around for four years after Remington bought the Australian operations of SI in 1985. As general manager, Goldsmith was charged with reporting on the company and was told in no uncertain terms by Remington's management that "if you think SI looks good then you go and do it", which he did.

In the first 12 months, Remington's SI division had become one of the most profitable in the company and marked the first time Remington had kept an acquired company as a separate entity.

"I think [Remington] felt that I was difficult and it was better to have me out of the place and out of the bloody way," a bemused Goldsmith reflected. "I used to clash pretty heavily with John Scott, the managing director."

"I tend to attract blokes who are a bit like me, who are a bit difficult if you like, within the corporate group - guys who don't necessarily like the regimentation. We became a good business very rapidly and became the greatest profit generator within the organisation," claims Goldsmith.

Goldsmith had been with Remington for 10 years by this stage, after earlier spending eight years with Rank Xerox, where he started as a sales trainee and departed a district manager. He had also done a stint with Canon as it set up its Australian operations, reportedly being the printer vendor's fourth employee in the country.

"That was pretty exciting at the time, starting up the company and developing it," Goldsmith reflected.

But Goldsmith had a bigger task in front of him, with Remington preparing to shut down its computer divisions, asking Harvey himself if he could buy the Systems Industry division.

"So I called the 11 guys who were still working in the division and said ‘OK, mortgage your house and give me the money'. And all bar one did that," Goldsmith said.

The company became known as the ex-Systems Industry business, hence XSI, and Goldsmith recalled that going it alone presented some interesting problems in its own right, with suppliers asking questions of XSI's sustainability.

"Customers were happy to deal with Remington because it was so big, but would they deal with us as a private company?," said Goldsmith of the new company's discussions with its suppliers. "So we got a bit of a fright. We went around and talked to our customers and the interesting comment we received was ‘providing you guys can stick together as a team, we'll continue to do business with you'."

Only one of the original members has left XSI since, due to health reasons, and Goldsmith claimed it never started out as a 20-year plan. "At the end of every year we get together and ask ‘will we do another year?' and every year we say ‘yes'."

Over the past 10 years, XSI has grown from around $1.5 million to upwards of $20 million in revenue annually. However, while the company was ready to take the "next step", it hadn't worked out what that was going to be.

"The company decided we'll never look any better so it's time to go out and see what opportunities there are. We looked at things like public offerings or venture capital - all sorts of things," Goldsmith claimed.

The conclusion XSI came to was a merger, and Goldsmith toyed with the idea of teaming up with companies such as fellow storage integrator eData. According to Goldsmith, eData CEO Garry Humphreys had done parallel with the tape market what XSI had done in the disk storage space.

But in the end it was Theo Baker's Powerlan that Goldsmith and the old guard at XSI decided to amalgamate with. "So in March this year we jumped," he said.

"People say to me, ‘how did you get there, what did you do',? I tell them I have no idea. I just did things. I guess my philosophy is just to do something good every day, move forward every day and in the end you will come away successful," Goldsmith contemplated.


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