What aspects of your background prepared you for a merger of this scale?
Tom Krause: Growing up in the Bay Area, I took an immediate interest in technology, corporate finance, M&A and investing. I got into the venture business early on but realized that to be a good investor you need to understand what makes a business tick. So, at a fairly young age, I decided that I needed to get some operating experience.
Eventually, I took on a business development role at a small semiconductor company called Techwell. It was just me and the CEO on the corporate side, and everyone else was designing chips. Diving in headfirst, I took on responsibilities well out of my comfort zone, from managing distributors to handling sales in Japan. I was even given the opportunity to define product roadmaps. These experiences not only gave me operational expertise, but also helped me refine my interpersonal skills. I learned how engineers think and what keeps them interested, and how to build trust with customers to get their honest view about technology and product.
We’ve gone back to our roots which is often what drives a rebirth of innovation and success within these companies.”
A few years later when I joined the predecessor to Broadcom, Avago Technologies, I had the chance to interact with people across the organization and realized that I can build consensus. I learned how to motivate people to share my vision of how to build a technology company — primarily through acquisitions — and how to make those businesses better for customers, partners, employees and investors.
When I took the CFO job at Broadcom, which Avago Technologies had acquired and subsequently was given the Broadcom name, I was involved in a lot of outward-facing activities, such as managing, communicating and setting expectations with the board, investors and debt holders. I also dealt with big balance sheets and managed risk. That experience made me realize I wanted to make the investment calls, manage the deals, and drive execution and integration. This confluence of experiences made me realize I wanted to be a CEO and set me up to be successful in building Cloud Software Group.
Reflecting on your first year as CEO, what was it about Citrix and Cloud Software Group that made you think this was the right move?
The approach I’ve taken is to establish clear foundational tenants that make up the culture of Cloud Software Group: accountability, discipline and the pursuit of excellence.”
Tom Krause: I’ve had a fair amount of experience buying, restructuring and refocusing businesses that have incredible potential, but are not performing to market expectations. For example, companies can end up spreading themselves too thin across too many different initiatives, and this often happens at more mature organizations. As a result, they get distracted and discipline fades. Over time, the core business starts to lose its way which leads to poor decision making, poor results and demotivated employees.
My approach has been to refocus on our installed base, our core technology and our roadmap. We're listening to our customers and, as a result, have created a lot of customer-driven innovations. We’ve also dramatically improved customer success by emphasizing efforts in customer retention and making sure support and expansion opportunities exist within accounts. In short, we’ve gone back to our roots which is often what drives a rebirth of innovation and success within these companies.
How do you manage the merger of two different company cultures at this scale and global reach? How do you set the cultural tone as CEO?
Tom Krause: We had to embrace the fact that these companies have had a lot of success and have built a tremendous amount of value. The cultures at Citrix in Fort Lauderdale and at TIBCO in Palo Alto and now Santa Clara are unique and have developed over a long period of time. We want to preserve that. My job as CEO is to embrace the history, acknowledge what's been created, and bring that along while we create a new culture, together.
The approach I’ve taken is to establish clear foundational tenants that make up the culture of Cloud Software Group: accountability, discipline and the pursuit of excellence. We want to figure out how to be the best version of ourselves. That’s hard to do in technology; it’s not always about looking at what others are doing, but rather saying, "Hey look, we've got a great product, we've got great customers. How do we do better with what we have?" We want our people to think like investors about what's good for this business and what's good for our customers over the long term.
Ultimately, our goal is to establish a common operating framework that enables a broad range of software businesses to operate smoothly, and to empower the individuals who run them. As a leader, I don't believe in micromanaging; instead, I set clear goals and guidelines to define what success means.
How does your leadership style inform communication across the organization, including with the board?
Tom Krause: Six quarters in, we have built a strong and established leadership team. Many have been in the technology business for a long time. I also have a combination of folks who came from the legacy TIBCO and Citrix businesses and new people that we've brought in. Having a mix is important.
Six quarters in, we have built a strong and established leadership team. ... I also have a combination of [legacy] folks... and new people that we've brought in. Having a mix is important.”
I think about communication across a few different levels. When I’m getting to know people early on, I’m overcommunicating. We hold a lot of one-on-one meetings to reflect on what we're doing, what the strategy is and give people the chance to ask questions and gain clarity. That repetitive approach helps get everyone on the same page. We also host regular all-hands meetings with the company, as well as in-person meetings at most of our major sites. This is an opportunity for people to communicate with me directly, which is critical.
Beyond that, I’m not a big fan of scheduled one-on-ones with my direct reports. Instead, I have formal quarterly reviews with leaders and their direct reports across each of the businesses and their functions. This time is dedicated to measuring ourselves against our long-term strategy and our nearer and midterm initiatives.
Board communication is a variety pack. We have structure where it makes sense, but there are also quite a bit of unstructured discussions.
How do you balance the expectations of your two investing partners, Vista Equity Partners and Elliott Investment Management?
Tom Krause: Our investing partners bring a tremendous diversity of experience. They come from different backgrounds, which is valuable, yet also have the same thesis when it comes to how to run the company. I’m blessed that my partners communicate and work well together.