The New Autodesk     Added Value

Choose Wisely

After reviewing the reorganisation of Autodesk around product lines proposed in Marc Stiegler's “The New Autodesk” (see page [Ref]), which seemed to me, on the whole, pretty reasonable if a tad fussy, it suddenly dawned upon me that the reorganisation was the entire response to Information Letter 14 (see page [Ref]), and this dismayed me profoundly. I had recommended a reorganisation (albeit much less ambitious than the one Autodesk was embarking upon), as a means to the end of drastically increasing the investment in our products—both in development and marketing and sales. It now seemed clear to me that the management was going to roll out this reorganisation, shuffle boxes on the org chart, then go on precisely as before—neglecting the products that brought in the money. It was a fact, for example, that two and a half months after Information Letter 14 was published, the number of programmers working on AutoCAD had actually dropped from the level cited in the letter. I wrote these two memos to Marc Stiegler, as the member of senior management I felt I could most effectively communicate these concerns, to urge management not to squander the opportunity they had to genuinely turn the company around. Re-reading them in 1993, I think they're a little intemperate, but that's a reflection of how distraught I was with what appeared to be a betrayal of Autodesk's future. These memos had no effect, as far as I can determine.

From: John Walker, Tue Jun 18 22:28:43 1991
To: Marc Stiegler
Subject: New, Improved Autodesk

Thanks for the copy of “The New Autodesk” paper,[Footnote] which came to hand today, and for the acknowledgements therein. I've just finished reading the document, and I have a mixed reaction. I want to share my impressions with you, because I think they may be useful in understanding how the plan is received within the company and, more importantly, in charting the actions which will occur in the days which will follow. Having been born during the presidency of “give 'em Hell Harry,” before the advent of tact, what follows may be more “old Autodesk” than new. But, here goes.

First, the plan itself. I have no objections whatsoever to the goals, structure, or the people chosen. The plan looks fine and should have a good shot of achieving the ends for which it was created. Certainly, once the dust has settled, things should at the very least be better than before, if for no other reason than that accountability has been implemented for many functions which were buried in the overhead previously, as you so clearly pointed out.

So why am I not ecstatically happy or recharged with enthusiasm to plunge in to this reinvigorated organisation? That's a little more complicated, and it's only very indirectly related to the details of the plan itself. The issue is one of morale and direction, and it's there that I think immediate action is required in order to avoid losing the momentum that's conferred by a period of change. I think there's a risk that the reorganisation plan will be viewed by many as exalting minute details of management structure over directly addressing the genuine problems of the company and its products. I share this worry myself. First, when the IL14[Footnote] bomb burst, I believe and I said at the time that management missed a truly golden opportunity to turn around the morale of the company. I think that by appearing defensive and reactive rather than aggressively seizing the initiative, the perception of the very problems I outlined in the letter was reinforced.

In a real sense, it was Autodesk's latest (and I hope, final) PR disaster (and do not doubt that it was a disaster—both my personal reaction to the employee meeting I attended and the comments that people addressed to me after the week of meetings[Footnote] fully justify that evaluation in my opinion). First of all, at the time the meetings were held, almost a dozen specific steps had been taken to turn around the company and arrest the drift—things which included the Windows project, the unified 80x86 release, the CD-ROM, the newsletter, and others which had been set in motion well before I raised them. Yet these steps, which could have been used to impart a feeling of renewed momentum were not even mentioned in the meeting I attended, nor if they were raised in other meetings, didn't capture the attention of those I spoke to. Instead, reorganisation appeared to have been seized upon as something management could do which would defer addressing the truly difficult issues and, in a way, delegate the ultimate responsibility for the choices that must, eventually, be made even if by making no choice at all.

I have nothing against the reorganisation, after all I put it at the top of my priority list, and I approve the plan but as I said in the E-mail I sent shortly after arriving in Switzerland by which I hoped to squelch the grognards for a while and buy time for the implementation of the plan, any reorganisation whatsoever does nothing at all to address the fundamental underlying problems that the company has gotten itself into. It only creates conditions under which, one hopes, the problems can be more effectively diagnosed and successfully corrected. Now that the new structure has been chosen and implementation is underway, attention must turn to dealing with the substantive rather than the structural—to getting Autodesk back into a position of leadership in the industry.

While the reorganisation was underway, the general reaction was to wait and see what happened. OK, we've waited and we've seen. And now the question is, “what next?.” People are waiting, and they won't wait forever. I don't mean that mass resignations are in the offing, but what's at risk is losing a once in a decade opportunity to get things moving again. What, in my opinion, has to happen within the next week, and certainly within the next fortnight, is for senior management to lay out a crystal clear plan for where it is leading the company in the next year, the next five years, and in the long term. Whether this plan comes from negotiation between PMs, GMs, and ERBs, whether from the mind of an Executive Vice President, or from the UN High Commissioner on Refugees doesn't matter so much as that the plan is unambiguous, ambitious, but achievable (Autodesk desperately needs a clear-cut success at this point).

“The New Autodesk” chartered by the plan is a creation of management. What is needed to make that structure a success of leadership, and it is leadership, explicitly from the top, which is now sought by all the people who have waited to see what was being made of their company. The problem, which has been alluded to in the guise of “vision,” “direction,” and other fuzzy words is real. And it needs addressing immediately.

I founded this company, and I've worked here for about a quarter of my expected professional working lifetime. And yet I cannot answer, with any degree of certainty, any of the following questions:

Here's the point. If I worked for Microsoft, Apple, IBM, or NeXT, in any capacity, I wouldn't have any problem answering any of those questions—the mission of those companies is evident and is clearly articulated both inside the company and to the outside world. Even if I worked for Lotus, this would be clear—I might disagree with where they were going, but I'd know where it was. When people here talk about a lack of vision, I don't think they're worried about a lack of imagination of what the future can hold; rather it's a sense that since no near- and medium-term strategy and tactics to implement it have been enunciated, there probably aren't any. And that rightly concerns people.

I sometimes think that Autodesk suffers from an inferiority complex which may date all the way back to my decision to build a leading edge company from a core of maintenance programmers. Consider this: when Steve Jobs contacted Autodesk to present his “vision of the future of CAD,” in short order Autodesk had rented Marin Vets' and turned out hundreds of people to hear him. Yet when has Autodesk's senior management presented its own vision of the future—overall, of CAD in general, and of AutoCAD in specific? If I'd been running the company (which, thank Almighty God I'm not), I would have called a similar all-company meeting within 48 hours of the circulation of IL14, and I would have walked onto the stage alone and explained where I was leading the company and how we were going to get there.[Footnote] That would have, in my opinion, if pulled off successfully (and that isn't hard), bought at least a year's worth of high morale and productivity and would have erased any negative impact of IL14. Lost opportunity #1.

Now, what you need to do is seize the second opportunity. Do the same thing—invite everybody, walk out there without notes, without slides, and without cutoff time and lay out the whole thing. The 21st century…how Autodesk can be bigger than IBM in 50 years…how Xanadu, AMIX, Hypercube, and AutoCAD fit together…why what's happening in the industry requires changes in Autodesk…what's going to be in Releases 12, 13, and 14…why we're building a new CAD system…and precisely what the milestones are, how we'll achieve them, and how we'll be rewarded as we do.[Footnote]

Then, I'd make the whole thing public. Why not, it's going to get out anyway. I'd buy a page in the WSJ and print a transcript, then run an ad every month with a checklist as the milestones were accomplished.[Footnote]

Just as in the recommendations in IL14, you salt the whole thing with easily achieved goals in the near term, so there's a sense of progress and accomplishment that blows away the sense of stagnation and malaise. Then you trumpet each success along the way, and before long the higher hurdles seem easier and easier.

Or, you can delegate, wait, plan, and co-ordinate. I think it is time to lead. People have waited, and now they're ready to get to work. They want to know what to do, and why.

General Patton, who I don't necessarily admire but who I find myself continually quoting, regarded morale as a consumable item of logistics—just like petrol, food, or ammunition. He budgeted a substantial fraction of his time to visiting the front, touring hospitals, and speaking to the troops precisely because he believed that by doing so he kept the reservoir of morale filled. Morale is an intangible quantity, but it has dramatic consequences which show up before long on the balance sheet. And I think that here at Autodesk, now in June of 1991, it's time to fill 'er up.

I fear, reading this over, that I haven't made myself as clear as I'd like to. It's hard, writing, with no sense of feedback as to whether you're getting through. But I feel a sense of urgency about this that's caused me to drop everything else to write this message and to send it now without waiting to see if a rewrite would help clarify the essence. I feel there is a truly singular chance here to turn the company around, not just by infusing people at the bottom with a sense of purpose, but by causing them to see their management in a new light, and that to pass it by would be to forfeit much of the potential you've worked so hard to create in forging the structure for the New Autodesk.

You've made a singular and widely-circulated offer to listen, and that's wise and wonderful, as wisdom comes from many minds. But I think that first and foremost, leaders must lead, and to lead they must speak. Ahead I see challenges so great that I do not know how we can achieve them. In 12 to 18 months I believe that we must ship a version of AutoCAD than runs on Windows and OS/2 which is upward compatible with the current product, but which includes a user interface that blows away Ashlar Vellum and Corel Draw; it needs to provide a bottom to top revision of the basic core facilities of the products—colours, text fonts, image import and export, ellipses, etc., etc., so that our $4000 product isn't humbled by the likes of the new Mac Draw. And I don't know how to do all that in such a short time. But I think that if you ask that kind of miracle of the right people in the right way, then give them what they need and keep them going, they'll pull it off. They never let me down.

At least that's the view from scenic Switzerland as the dusk descends, here between the cement factory and the train tracks.

It is amusing to note that Autodesk stock hit its all-time high for the ten-year period 1983—1993 on the day I sent Marc Stiegler the above memo about squandering opportunities. Afterward, as the consequences of inaction became manifest, the stock declined relentlessly, finally bottoming 8 months later at 23 1/2 after the bad quarter was announced (see page [Ref]).
    June 18, 1991   1:30  CLOSE       

    ACAD      Yesterday's  Last     Changes/      Volume/
               Close        Bid      Asked         Date
                 61        60 1/2    - 1/2        229,000

    ACAD stock is down 1/2 from yesterday's close 

    The Dow Jones Average of 30 Industrials is down 7.15 to 2986.81

After re-reading my first “salvo over the pole” memo the next day, I decided a second strike was in order. The first memo clearly identified the problem, but didn't spell out the consequences of continued inaction. I spent most of the next day drafting the following MIRV memo and lobbed it Sausalito-ward as dawn was breaking in California.

From: John Walker, Wed Jun 19 16:45:10 1991
To: Marc Stiegler
Subject: New, Improved Autodesk

After reading over the message I dispatched last night about the importance of immediately laying out Autodesk's strategy in the aftermath of the reorganisation, I'd like to clarify a couple of points that I don't think I made adequately.

Further, I didn't indicate that the message, although in reply to your mail, was in essence directed to executive management as a whole. Please feel free to share any of these thoughts with other members of the group.

Whose hand on the tiller?

My message gives the impression that I'm dumping the entire responsibility for communicating Autodesk's strategy on you, personally. That isn't my intent. People look to senior management to chart the direction of the company. The person who needs to enunciate that strategy, whose fundamental job it is to do so, within and without, and whose doing so would most effectively put an end to the sense of stagnation is Al Green, the CEO. If he can't, or won't, then Malcolm Davies, in his role as Executive VP, and from his focus on communicating the company's message to the outside world should do it. If he can't, or won't then you should do it. It isn't enough, by a long shot, to say “be patient…Ruth and John[Footnote] will be in touch.” The issue isn't the plans they're developing, but rather what you, the senior management, are asking of them—and that resources you have allocated to them to achieve those goals.

If nobody can, or will, specify this then within days the impression will gel, probably irretrievably, that nothing has changed—that people can go on doing what they were doing before, working on the same diddly projects, slipping schedules and redefining specifications at will, and there is not to be an immediate and fundamental change in the way work gets done at Autodesk.

What is at risk is the entire program of renewal I called for in Information Letter 14, which was tacitly accepted by management in meetings with employees inside the company, although, based on my conversations with analysts and reporters over the last couple of weeks, largely poo-poohed in comments made outside the company.

How much, and when?

Do you, or do you not, intend within 12 months to commit development manpower and promotional resources to AutoCAD which are comparable to those which Microsoft, Lotus, Word Perfect, or Ashton-Tate would commit to a product with similar revenue, margins, market penetration, and importance to the company? What are your specific plans, both in terms of staffing, funding, and schedules? What existing resources will you divert in order to achieve these plans, and what new resources do you intend to add, and when?

These are the substantive issues of IL14, the resolution of which a program of reorganisation was undertaken to address. I, along with the rest of your shareholders await the statement of your plans to address these widely-perceived problems. I, along with the rest of your employees await the clear direction we need to know what we should be working on, and the schedules we must achieve to carry out the company's programs.

If, in fact, it is your intention to continue the development of Release 12 with a staff which has actually shrunk substantially since the completion of Release 11, to fail to address the obvious, glaring holes in AutoCAD compared to virtually every one of its competitors, to assemble unambitious releases and then slip them from month to month, then I must tell you that is my intention to call you (the senior management as a whole) to account before the shareholders and ask you to explain why you believe such (in)action is justified and in the best interests of our company.[Footnote]

Possible and impossible.

The core problem, inside and outside the company, is a belief that “it's impossible,” or “those guys in Sausalito will never be able to do it,” or “that would take a totally different way of running the company.” Well, OK, maybe it will. But don't tell me that with 165 people in software development and 140 million in the bank you can't deliver a product that has functionality and ease of use comparable to products from start-up companies with staff measured in the tens. Or that it's acceptable for the company's flagship product to acquiesce, release after release, to user interface standards which would not be even momentarily contemplated in products developed by smaller, less richly funded, and more peripheral efforts from our own company such as Tapestry[Footnote] and AMIX.

Do the people working on AutoCAD today know, and believe, that their lives are about to undergo an enormous change—that the standards for performance and the ambitiousness of what is undertaken in the project, and the scale of resources committed to it are about to jump by a factor of from 5 to 10? I don't think so, at least from the contact I've had with them recently. And if not, why not?

Is it because there is no such intent? If that's the case, you are continuing down the path of neglect of the product and eventual extinction of the company's revenue stream.

Is it because they haven't been told? If that's so, then the very people you most need on your side have been excluded from the turnaround in the company's course at the very moment you must get them on board to have any hope of success—they're the people who have the knowledge of the product that's essential to transforming it so, like it or not, they're the ones you have to work through to achieve any near-term results.

I wrote Information Letter 14 in an effort to set in motion the changes I, and many other people, believe necessary in order to achieve all the wonderful things we know this company has the opportunity to accomplish. In it, I handed you a tool to remake the company in any form you felt best, and I have thrown my full support behind that effort. And now I await the results. Be assured, I will not countenance continued drift.

Whether you have in me an enthusiastic contributor or the worst nightmare a corporate management can have: an articulate, wealthy, major shareholder acting in the interests of the other shareholders and in keeping with the goals for which he founded the company, asking of management in public simple questions for which they have no answers, will be decided in the near future.

Choose wisely.

The New Autodesk     Added Value