Jade Software CEO Craig Richardson likes a challenge. Just 37 when he took the top job in 2009, the Australia-born chief executive of the company closest to being a household name in New Zealand IT is relishing the thought of levering his small company at the ends of the earth onto the world stage. His role in previous companies has been as chief financial officer, where he says he just provided the opinions.
“There’s a big difference between providing scenarios to actually having to work through them and commit to something.”
Richardson, a fellow of CPA Australia (Australian Society of Accountants), held the purse strings at NZ Steel and Vodafone in Australia and Sweden before moving into the CFO role at Coca-Cola Amatil for New Zealand and Fiji. In 2009 he moved from there into the Jade CFO role. It was at a time when the company’s fortunes were beginning to strengthen after a brush with financial oblivion in 2003.
Richardson took over from former acting Reserve Bank Governor Dr Rod Carr who had replaced founder Sir Gil Simpson six years earlier, at a time the company was said to be losing $60,000 a day.
The company’s trajectory from exemplary New Zealand IT company with echoes of Bill Gates to dotcom wreck, and its stagger back up the charts, was part of the attraction of the CEO role for Richardson; even if the idea of moving from managing a $500 million company to a $50 million one hints at downsizing .
“Not at all,” he laughs. “And besides, the $500 million company was one of the smallest I’ve worked for in my career.”
He says the advantage of working for large multinationals such as Vodafone and Coca-Cola Amatil is that you learn a range of skills. The disadvantage is that you often can’t apply what you’ve learnt because of the regulations, rules and processes that govern how a large company works.
“This was an opportunity to take what I’d learnt and apply it in a company that has fantastic potential. When I joined Jade it was doing well and the immediate focus was how to survive the global financial crisis. It was also an opportunity to think more about where the company is going in the future.”
Convincing the Jade Software board he was the right man for the job meant selling them his vision for that future. “I was fairly bullish in the vision I thought the company could have. After all the work the two previous CEOs had done, it was the right time to talk about positioning the company to be more innovative and get it to be much, much more compelling and relevant with what is happening today.”
Richardson says Jade Software is a well-known brand name in the New Zealand market but is not well understood. “People often don’t know what we do or where we do it.”
He says the company has moved into a new phase — from being technology-centric and using only its own tools to develop traditional software applications, to assembling a new generation of problem-solving products for very demanding global markets. “Now it’s time to get our head around aggressively marketing and selling our risk management, law enforcement and real-time analytics products into growth markets.”
Swaying the chair
As a very small fish in a global sea, Jade must be “very focused on where we play and concentrate on sales and marketing, not just technical excellence,” Richardson says.
It’s that vision that swayed the Jade Software board to appoint Richardson in the top role. Chairperson Ruth Richardson (no relation) says the company had “gone through the valley of death financially” and were after a person with hardwired and proven financial skills, who would have the flair and foresight to transition Jade to a relevant and profitable products business.
“Craig showed he had the ability to focus the business and translate it from a legacy style business into new products and offerings. We were looking for leadership potential rather than a hardened CEO because we needed fresh thinking,” she says. “Craig’s potential shone through because he was a CFO-plus, and we could see all those pluses in the way he presented himself, the way he talked about his previous roles and his aspirations.”
“We needed innovative leadership that inspired the ranks, excited the customers with the Jade offerings and satisfied the shareholders. Craig possesses those qualities in spades.”
The people problem
Craig Richardson sees Jade’s future about being a premium brand that captures higher margins, moving away from its typical competitors by providing only development services.
“It’s about creating products that we make once and sell multiple times in high margin, high growth markets,” says Richardson, and he sees that future in the operational intelligence market marking a trend away from information gathering to reporting on it and then analysing it.
There’s a sense he’s only half-joking when he says the biggest challenge of swapping CFO and CEO roles is that people become real problems.
“They move from being counters on a spreadsheet to being real people as you go from dealing with a scenario to how something actually plays out. As a CFO you’re taught to take the most conservative and prudent positions, when as CEO you need to do the reverse and you have take risks.”
Richardson learnt early in his career that taking a risk wasn’t a bad thing.
One of his early mentors was the former head of Vodafone Australia and New Zealand, Grahame Maher, who died late last year. “He was an inspiration because to someone like me who grew up as an accountant and spent my whole academic education learning to eliminate risk and be conservative, Grahame was the reverse.”
From Maher, Richardson says, he learnt how he could take calculated risks and try new things with the hope of exciting new markets and consumers while still underpinned by a great business model.
“Grahame was always about trying things and not worrying too much if you failed. In a big corporate environment it’s easy to become risk-averse, but he was about saying, well, if you fail the same thing three times, then maybe it’s time to rethink it.”
The company’s operational intelligence vision was recently rewarded with $3.2 million in research and development funding and it has aligned itself to innovation hothouses like The Distiller, a technology cluster based in Dunedin.
Richardson says the challenge in taking new ideas to market is that while New Zealand is a small country with a truly global attitude, it can be difficult to convince others a Kiwi company can do the job.
Self-belief and pride are the foundation stones that help Jade stand firm in the face of such small-mindedness, says Richardson. “We’re proud to be a Kiwi company but don’t want that to be the first point of objection, so dialling down our home address and aggressively selling our global presence will continue to be key theme in our marketing.”
In today’s uncertain economic climate no doubt there’s a host more still to come — not that Richardson is worried, he’s looking forward to the challenge.
Craig Richardson’s top three tips for making a successful CFO-CEO switch:
1. Work for successful CEOs in great companies — that’s where you learn and build confidence.
2. Perfect and develop your sales skills and marketing capabilities. Sales create value and marketing vision.
3. Be prepared to fail because if you’re not taking risks you can’t succeed.
Where the buck stops
CFO of Lyttelton Port Company, Kathy Meads, says a key difference between CFO and CEO roles is decision-making.
“CFOs are often more methodical, while a CEO might think more intuitively and less analytically. The advantage to being the CFO is you have the ability to know what is required of the CEO because often you’re helping making [decisions] happen.”
She says the challenge for CFOs keen to make the move into a CEO role is that increasingly CEOs have a strong sales and marketing background that’s not part of their skill set. Where CFOs do have an advantage is in the breadth of experience they can boast. This makes CFO roles transportable across industries, which often isn’t the case for CEOs. Meads has had various CFO roles, including spending six years with Ngai Tahu and before that Telecom.
“CFOs are not just counting the beans anymore. CFOs are much more closely aligned with the CEO as they’re organising and managing both strategic and financial information to help make decisions.”
She says the CFO-CEO relationship is a partnership where the different skill sets of each role complement each other to the benefit of the company.
CFOs are often reticent to talk about their ambitions and probably wouldn’t see themselves as primed to take on the CEO role.
“I’m really comfortable as CFO because I like to think I’m adding a lot of value strategically and building capability within the company. I enjoy the partnership as much as the ultimate decision-making. I think it can be lonely at the top, and the further up the organisation you go the lonelier it is because, after all, the buck stops with the CEO.”
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