Things have turned out well for Brian Weatherly and the Software of Excellence group – but the future didn’t always look so bright
When Brian Weatherly was on the Senior Executive Programme (SEP) at London Business School (LBS) in 2003, he was learning business lessons in the day and trying to implement them through calls back to his crisis-hit company in New Zealand at night.
“When I set off to LBS the company was mildly distressed, but during those four weeks it went to very distressed,” he says. “We knew we had less than 90 days before we wouldn’t make payroll. The bad news just kept on unfolding.”
Weatherly had just been made CEO of Software of Excellence (SOE), a management software company for the dentistry industry, founded by his brother and a financier in 1989.
The 150-strong company had sales in Australia, the US, UK, Ireland and the Netherlands amongst other countries, and had a turnover of NZ$10 million (£5.85 million). It had gone public and would often merit coverage on television news and in national newspapers. But then profits started falling. The key shareholders were falling out. And the board wanted someone to steady the ship. The board turned to Weatherly – a computer science graduate who had been the company’s third employee, was one of the five key shareholders, and had been managing the team of 45 programmers. It wasn’t a role he had ever sought, and he had to take it over from his brother, but he said yes without much hesitation.
“And that was one of those doorways that you casually step through and then think, ‘Oh my goodness, what have I just done?’ I felt a bit like Frodo Baggins in The Lord of the Rings – you go to a meeting and the next thing you know you have embarked on some horrible life-changing mission.”
Despite his experience managing the team of programmers, Weatherly knew he had limited knowledge of how to run a company – and so did his board. So they sent him to LBS for the SEP.
And that’s where he found himself studying by day and calling New Zealand at night from his bedroom overlooking Regent’s Park, trying to work out what was going on back home. It was a heady four weeks.
Two key moments from the SEP helped Weatherly with his approach to the company’s problems, and remain valuable for him today.
One was around how to tell people tough news. He remembers the lecturer talking about how it is important to relate to colleagues and be friendly with them, while at the same time being a completely professional manager giving direct feedback.
“The lecturer demonstrated this with one of the class members,” says Weatherly. “He put his arm round them, and then sat down across a table from them and looked them in the eye. It was a piece of theatre but it really got the message across.
“It’s something I still do when I’m training my managers; I repeat exactly the same piece of theatre that I saw in the lecture.
“And I think the beauty of the School’s lecturers is that they deliver their key points with a bit of drama. If I had read the words it might not have had the impact. But seeing just 10 seconds of it spoken or done dramatically has a lot more impact.”
The second key moment came from Professor Rob Goffee’s work on authentic leadership, which Goffee sums up as: “Be yourself, more, with skill.” For Weatherly this was a breakthrough. He returned to New Zealand and started putting his learnings into action straight away.
The heart of the problem was that the other four key shareholders couldn’t get on. They had different views of what the company’s strategy should be and things were getting personal.
“When I became CEO I thought these people would come together and help but in reality they remained very divided to the point where they wouldn’t sit in the same room. So I thought, ‘I know you guys are brilliant but if you can’t get on board and work together then I have to fire you’.”
Weatherly dug deep, drew on his business training and started reorganising the company: “In those early days I would pinch myself and say, ‘Before you walk out of that meeting, there are words that have to leave your mouth’. You can do it your own way, you can do it nicely, but you cannot walk out of there until you’ve said what you’ve got to say.
“I’m still quite mild-mannered but over time it becomes second nature: saying tough things to people isn’t the hurdle that it once was.”
As well as removing his four key shareholders, one of them his brother, those tough things included redundancies and reallocations that reduced the staff from 150 to 100 in a year. Meanwhile Weatherly was bringing in new people who were casting fresh eyes on the company’s problems.
And the power of objective insights was demonstrated by one particular issue. SOE had been losing money on its US operations, leading Weatherly to think the company had a geographical problem. But one of the new recruits analysed the data and found it was a much wider problem.
SOE sold products but it also offered contract programming, tailoring its products for individual organisations. It turned out the company was very profitable in its product sales but the services offer wasn’t working – and SOE happened to have more service sales than product sales in the US, so it was more noticeable there.
“We had 50 bespoke contracts in the US that were 50 unique ways to lose money,” notes Weatherly.
The new management team sat down and analysed what parts of the business were profitable, what could be fixed in the time frame available and what should be separated. It was the key to the turnaround and Weatherly says the lessons he’d learned at LBS were the catalyst.
“It was a revelation. We divested our services out, and that was the magic, the silver bullet. The original product-based company had always been a good business but we had been channelling investment out of that into services, so we returned that investment back into the products and they went from strength to strength.”
It was also good news in terms of family relations as Weatherly’s brother bought one of the two services companies that were broken out and has run it successfully ever since.
Weatherly also needed to clear up the shareholdings of his former colleagues. He started working with a venture capital company but then developed the idea of selling the business to the US Fortune 500 company Henry Schein, the world’s leading distributor of products and services to dental, medical and animal health practices. The sale went through in 2007.
“When there’s a big change like that you can never be 100% certain how things will work out, but it’s turned out to be a good place for the business,” says Weatherly. “Schein has a really strong, respectful, entrepreneurial culture and the business has gone on to thrive.”
The SOE group within Henry Schein has expanded its business and acquired the leading dental software providers in France and Spain. It has some 230 employees and turnover is more than five times what it was in 2003 with healthy profit margins – incomparable to the loss-making company Weatherly rescued.
Today as President of International Dental Solutions for Henry Schein, Weatherly spends about half his time on the road – travelling between the SOE group, the wider Henry Schein group in the US, his family in New Zealand and his base in Kent in the UK. Somehow he’s found time to start flying gliders in addition to playing in his rock band which has the dentistry inspired name of NitroMen (“guaranteed to add a kick to your party”) and marathon running. And he feels fortunate to have arrived here, after the testing times of 2003.
“Back then things were messy and uncertain, but it takes a few years to work these things out,” says Weatherly. “We couldn’t know where we were going at the time. It’s like when Louis Gerstner stood up and said: ‘The last thing IBM needs right now is a vision’. It’s only with hindsight that it all makes sense.
“But for me it’s been a fantastic journey. I’ve seen so much of the world and met and worked with so many people. And I would never undo that.”