Q&A: CA CEO offers behind-the-scenes view on legal, business challenges

John Swainson also talked about exorcising 'the ghost of Sanjay'

LAS VEGAS -- In an exclusive interview with Computerworld Editor in Chief Don Tennant at CA World here on Tuesday, CA President and CEO John Swainson spoke candidly about a range of issues confronting his company, including the prospects for taking civil action against CA co-founder Charles Wang. Excerpts from the interview follow:

There was quite a bit of acrimony between IBM and CA in 2004. CA's Mark Barrenechea in April of that year said software was an "afterthought" at IBM, and he called Steve Mills, the head of IBM's software business and your boss, the "VP of afterthought." How'd the conversation with Mills go when you told him less than six months later that you were going to take the CA job? That was not an easy conversation, because I worked for Steve for 13 years. I had and have great respect for him. He has done an incredible job building a business inside a company that didn't historically value software. There's a nugget of truth in what Mark was saying -- software was an afterthought at IBM at one point in time. Steve has changed that.

So clearly, when I told Steve I was leaving, that was a painful discussion for him. It was personally painful, and it was business painful. But I kept it very professional, he kept it very professional, and it has remained a professional relationship ever since, even though we compete like mad.

What struck me when you got the CA job was that CA really scored a coup by snagging IBM's WebSphere guy. In what ways has CA benefited specifically from your WebSphere background? In one way, my experience with WebSphere isn't directly applicable to CA. CA is not in that business. WebSphere is an application runtime. CA, with a couple of very minor exceptions, doesn't make application runtimes. We're in an area of the business where I hadn't spent any time in my career.

However, that being said, the process of building WebSphere was somewhat analogous to the process that we're going through at CA right now. You've got customers with all this historical stuff, whether it's Windows or mainframes or Unix or whatever the heck it is, and they now need some way of tying it all together -- being able to see what's going on, being able to manage it, being able to secure it and being able to add new stuff on top of it without having the whole thing collapse. So there are parallels to the process.

After the accounting fraud that took down your predecessor, Sanjay Kumar, did the board of directors adopt a policy stipulating that the positions of chairman and CEO would not be held by the same person at CA? Is that why you're not chairman? The policy of the board says the board is indifferent about that. The practical nature of the situation is that you had to have the chairman and the CEO separate. The chairman's role for the last two years has been, and will continue to be for a little while longer, anyway, to deal with the regulators, the legal issues, all of that sort of external stuff, leaving the CEO to deal with running the company. There may come a time when it makes sense to combine them, but that was not the time.

Clearly, in a stable company where you've got a board that is well-formed and focused on your business processes and priorities, I actually think in those environments, having the CEO and chairman in one person is probably a better model. But in a time of crisis, when you have lots of stuff going on, it's better to have them separate.

Do you think that if such a policy had been in place during Kumar's tenure, some or all of the problems could have been avoided? It's speculation. It might have helped.

Have you met Kumar? I met him twice -- once in 1999 and once in 2000, and not since then. Interesting man.

Have you ever met CA co-founder Charles Wang? I met Charles once back in the mid-'90s. Very difficult meeting. I have not met him since then, which probably says a lot.

Do you expect that CA will bring a civil suit against Wang, as recommended by your board of directors' Special Litigation Committee? We have not made any determination about that. The SLC gives a recommendation to the court as to how these cases should be disposed. Once the SLC's report is accepted [by the court], then the company needs to decide what it does next.

In your view, what needs to happen for justice to be done? I don't know. And I say that very honestly. I do not know what should happen next. I think we've got to let the court [process] play out. On one hand, there's sort of this natural inclination for revenge. On the other hand, the company needs to put this stuff behind it and move on. I cannot tell you where the board will come out on this. This is clearly not a decision I will make by myself. It's a decision the board will make with due consideration of all the facts after the SLC report has been accepted.

The SLC concluded that Wang created a "culture of fear" at CA. Do you see any vestiges of that left at all? No. The ghost of Sanjay is in the halls, but there's not much of Charles left at CA. Charles has been gone a long time. The company has gone through an enormous amount of turmoil. There are a lot of new people. By my estimation, only about 30% of the company was there when Charles was there. So there are more new people in the company than old; there are many more people who don't know Charles than do. And Charles didn't leave a big legacy of stuff around. He had been disengaging from the company, as I understand it, for quite a while before he actually left in 2002. So Charles' really active days in the company were a long time ago.

In 2005, I wrote an editorial in response to a full-page ad you had taken out in Computerworld and other publications that was written in the form of an open letter to your users to explain your new vision for CA. The vision centered around what you called Enterprise IT Management, or EITM. My response was an open letter to you, in which I said this: "That's not a vision, John. That's what your users do. All the time. It's their job description. Referring to it by the goofy EITM acronym doesn't elevate what they do to a vision. It reduces it to marketing blather." In retrospect, do you think I had a valid point at all, or was I completely off-base? You were completely off-base. Your point is well-taken. It is a very simplistic message. Some might say, too simplistic. A lot of people said WebSphere was too simplistic, too. It is astonishing to me how in this industry, we don't do the simple things well and to completion. We do lots of hard things partially. So the fact remains that no one to date had actually put forward a way to take the end-to-end panoply of stuff that people do in IT and figure out how to connect it, how to manage it, how to secure it, or any of that stuff. So to say EITM is people's job description is true. But they're not doing it. And they're struggling to do it with chewing gum and baling wire, and there was no vendor who was standing up and saying, "OK, I'll take that on. I'll figure out how to make mainframes talk to PCs, and manage them together and figure out how to make Microsoft [Systems Management Server] stuff talk with IBM [Resource Measurement Facility] stuff and at the end of the day give you a consistent view of what's going on." No one did that.

In that same editorial, I faulted you for your decision to eliminate all 300 of your customer advocate positions worldwide, and I quoted one of your users who told us that for him, that was a "black mark" against CA. In hindsight, do you still believe that was a good decision? I do. That was one of my best decisions, and here's the reason why. What was happening was that 300 people were ending up being the customer voice. And 5,230 [sales] people were abdicating their responsibility. In other words, the sales force felt that because there were these 300 people out there doing this stuff, they didn't need to worry about customers. And I said, "I'm going to take that crutch away." A sales force cannot not be worried about its customers, and their customers' success and customer satisfaction. And the fact that these people were out there, supposedly as the proxies for that, is a crutch that [I didn't want them] to have. Then those people ended up having other jobs and they didn't go away, but I took them away and said, "Now, every salesman's first responsibility is customer success." And it worked.

When you talk to your customers, what's the one thing they praise CA for, more than anything else? They really like our products. We have enormous loyalty around product. And there are some tremendously strong personal relationships between parts of the organization and our customers.

What's the one thing they criticize the most, the thing they most often say you need to change? A lot of them say, "We need you to move faster on getting EITM to realize the vision. We need to have the pieces connected better, we need to have more integration between this and that." So each of them has a specific thing that he would like us to do. Many of them have ideas about how could you market this better. A lot of them are very interested in what are we doing to help them with some of the new technology areas, whether it's SOA or mobile/wireless stuff.

What's the best decision you've made since you became CEO of CA? I'm very happy with the management team that we've hired. It took time to find the right people for those jobs. I'm very happy with the decision to create EITM, notwithstanding your open letter to the contrary, because I think it gave the company and it gave customers a rallying cry. It gave us an umbrella under which we can put a lot of things. I'm very happy with some of the acquisitions we've made.

I think the reorganization of the sales force was a critical decision that we made at a very difficult time. If you remember, this time about a year ago we had really screwed up our whole commission process. While unrelated to the organization of the sales force, that was causing churn and consternation in the sales force because no one knew if they were going to get paid or how much they were going to get paid. We looked at that and said, "This is a big problem, we have to fix it. But at the same time, we also have a sales force that's organized wrong -- around products, not relationships. And since we completely screwed this thing up, we might as well take the extra time and organize it the way we want it." So we bit the bullet and did the reorganization of the sales team between June and September of '06. It got back on its feet again.

And the worst? I told someone once that I thought we would have everything sorted out in a couple of years. That may not have been a decision; it was just a really foolish comment. And it certainly reflected a little bit of my naivete about how challenging a process it would be.

What's your biggest headache right now? I don't think I have any headaches in the sense of huge things to fix. There are a lot of business issues that we need to work on. We still have an awful lot of work around re-engineering the business processes at CA. CA didn't have normal processes that a company of its size would have. It had processes of a company a quarter, a third or a tenth its size. It behaved like a small business. And if you think about the way small businesses behave, they entrust a lot of power to individuals, they don't have well-defined processes for those individuals to make decisions. This is, to some extent, tied up with [Charles Wang's] view of how the business should operate, and the company overran that in terms of size and scale. So getting well-defined processes in place is still a huge priority for us, and will continue to be for a couple years.

Copyright © 2007 IDG Communications, Inc.

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