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LEADERSHIP IN A CHANGING ENVIRONMENT SciQuest as a Case Study Stephen J. Wiehe.

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Presentation on theme: "LEADERSHIP IN A CHANGING ENVIRONMENT SciQuest as a Case Study Stephen J. Wiehe."— Presentation transcript:

1 LEADERSHIP IN A CHANGING ENVIRONMENT SciQuest as a Case Study Stephen J. Wiehe

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by these forward- looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements. Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in SciQuest's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement you see or hear during this presentation reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

3 SciQuest transformation timeline Our key leadership concepts My leadership misconceptions Principles we live by DISCUSSION POINTS 3


5 A LITTLE BEAKER AND A LOT OF MONEY $375M of Invested Capital $2.2B Market Capitalization -Early 2000 $60M Market Capitalization -Late 2000

6 SCIQUEST.COM A B2B Exchange for lab supplies –“ for the lab” > 500 Employees $25M per Quarter cash flow burn –(2 ½ Quarters operating cash in bank) $64M Revenues –2.5% Gross Margin (revenue less cogs) * –$3,200 per employee Market Cap (‘00) $2.2B Enterprise Value less than $0 A bank, a web site, a publishing company and a software company A charismatic CEO A proud and headstrong culture 1995: Founded 1999: IPO 2000: Dot com crash Feb 2001: New CEO Timeline

7 We are a family. We are changing the world. It’s not about the numbers – it’s about doing something different. Our culture is special – it’s something we are very proud of. Profits don’t matter – they will come with time. We can’t be wrong – we were worth over $2B. It’s only a short-term valuation problem in that the market doesn’t really understand us right now. We are a new economy company. THE MINDSET

8 A B2B Exchange for lab supplies “ for the lab” Understand how value was created 500 EmployeesTerminated over 425 Employees $25M per Quarter cash flow burn 2½ Quarters operating cash in the bank $2M per Quarter cash flow burn $50M at year end ’00 $64M Revenues 2.5% Gross Margin* $3,200 per employee Subscription fees 80% Gross Margin Market Cap (‘00) $2.5BWent private 2004/IPO 2010 Enterprise Value $0Enterprise Value $25.25M $375M of Equity raised$20M of Equity raised “It’s all about the vision”“It’s all about our customers, shareholders and employees” “We are family” culture”A new culture, which is our culture today. THE CHANGE


10 SCIQUEST TODAY Market leader with $500M market cap SciQuest is the largest publicly held pure-play provider of cloud- based business automation solutions for spend management – offering deep domain knowledge and a leading, customer-driven portfolio. 500+ customers Proven ROI Highly satisfied customers 500 global employees Based in Cary, N.C. 2011 Acquired AECsoft 2004 Taken Private 1999 IPO New Management 2001 Taken Public 2010 Founded 1995 Acquired Upside 2012 Acquired Spend Radar 10 Acquired CombineNet 2013 SciQuest GROWTH

11 INVESTMENT HIGHLIGHTS Multi-billion dollar, growing addressable market Leading provider of spend management software with differentiated cloud-based platform Multiple long-term growth drivers Proven ROI and customer success with highly-satisfied customer base Recurring revenue driven by multi-year subscription agreements Generating attractive long-term growth rates, profitability and cash flow conversion NASDAQ: SQI

12 CONSISTENT REVENUE GROWTH 34 Consecutive Quarters of Growth ($ millions) 201120122013


14 KEY LEADERSHIP CONCEPTS Collaboration over consensus Respect and recognition for the individual Facts then opinions Proper use and respect of power Focus on the ‘right things’ -Environment -Incentive programs -Shareholder value


16 CULTURE is a tangible result of…


18 LEADERSHIP MANAGEMENT and are not the same things


20 Leadership is a process LEADERSHIP MISCONCEPTION #1

21 Leadership is a behavior Why? You lead others by what you do, not what you say. Transparency is a vehicle, trust is the key. It must be continual, not periodic. LEADERSHIP MISCONCEPTION #1

22 A leader needs to be ready with an answer LEADERSHIP MISCONCEPTION #2

23 A leader needs to be ready with a question Why? Initial questions allow for clarification of the issue or problem. Questions allow for conflict without stating such. Questions allow you to send a polite message of incomplete staff work without embarrassment. Asking for input or ideas could be viewed as weak or losing power, which is a fallacy. LEADERSHIP MISCONCEPTION #2

24 A leader needs to be a great speaker LEADERSHIP MISCONCEPTION #3

25 A leader needs to be a great speaker, but an even better listener Why? Seek to understand – then be understood. At the center of every joke is a nugget of truth… You can listen and think faster than you can talk and think… LEADERSHIP MISCONCEPTION #3

26 Great ideas come from debate and conflict LEADERSHIP MISCONCEPTION #4

27 Great ideas come from an open, constructive and positive discussion driven by questions Why? “Facilitator” style leaders are more powerful than “Directive” style leaders. Conflict creates situations where ideas and people become positions – and positions are very hard to change. Everyone contributes and therefore buys-in to the idea. The situation will change over time and course is easier when everyone was part of the original idea. Three parts to every conversation LEADERSHIP MISCONCEPTION #4

28 A leader mandates change LEADERSHIP MISCONCEPTION #5

29 A leader mandates change can mandate change in times of crisis; in all other times, a leader must coax change Why? CEOs are used to being direct – “tell” is the normal behavior; Asking by “how” or “why” are more powerful and longer lasting. Focus on positive reinforcement, not negative. Removal of stress from a situation yields better results than the addition of stress. LEADERSHIP MISCONCEPTION #5

30 A leader needs to be tough -they set the standard -they need to maintain power and an air of authority LEADERSHIP MISCONCEPTION #6

31 A leader needs to demonstrate the correct use of: LEADERSHIP MISCONCEPTION #6 -Power -Feedback -Anger -Respect Why? Power: Give power and authority away daily. Understand where the power is in a meeting and respect the lack of it. Feedback: Asking for it opens a dialog. If you are willing to receive it, you are teaching others how to receive it so they are more willing to take it. Anger: It’s counterproductive. Stops all dialog and problem solving – at the worse possible time – when you need it. People will pass it on. Respect: Always give respect unconditionally – then you can expect it back.

32 Great leaders are successful people LEADERSHIP MISCONCEPTION #7

33 Great leaders surround themselves with successful people Why? Growth and opportunity come from below, not above. Don’t think of problems as personal. Great leaders always put needs of the company, its customers and employees first. LEADERSHIP MISCONCEPTION #7


35 Have an “open kitchen” (rule of Buca di Beppo) Measure outputs, coach inputs First the bad news Set the table Time of warning = time of delay Feedback is a gift -Find a mentor and ask for feedback -Say “THANK YOU” for feedback – all feedback -Say what needs to be said, right time, right way Lead or be led Deal in facts … “seek the truth” -Microdata not micromanagement -You can’t communicate enough! Focus on defining the problem; it should be 95% of the effort It’s ok to call ‘Time out’ Focus on the journey… not the destination Trust & respect are key ingredients in success -You have to give them first before you can earn them -They simplify all interactions

36 It should be our #1 priority Leading is lonely Mandates fail Collaboration over consensus Investment is a requirement SOME THOUGHTS ON EDUCATION 36

37 Education is our #1 priority -Perception versus reality What’s the goal? We can’t legislate growth and success -We need to get out the way and let it happen naturally Invest in many small initiatives not a few large SOME THOUGHTS ON OUR ECONOMY 37

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