Communication and Culture - Alan Masarek - Avaya - Episode #44

No one wants to be a cash talent organization. They want to be the growth side and how you manage that in a way that is respectful.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys. Today's guest is a five time CEO. He's a transformational leader with a proven track record of driving growth and innovation in the technology and communication industries. Most recently, he was the CEO of Avaya, where he led the company's transformation and drove its growth in the enterprise communications space. Before Avaya, he served as the CEO of Vonage, where he successfully pivoted the company from a residential voiceover IP provider to a leading global business communications company, culminating in its acquisition by Ericsson for 6.2 billion in 2022. He was also the co founder and CEO of Quickoffice, a mobile productivity suite that was acquired by Google in 2012. He is known for his expertise in scaling businesses, executing complex turnarounds and building high performing teams. Please welcome Alan Masurek.

David, thank you very much. That's very kind. I appreciate that. Nice to be here.

I'm very excited. I've been waiting for this episode for a while. I don't know, I think we met, you know, 15 years ago or something.

Long time ago.

Yeah, it's been a while. All right, first question. What is the one thing you've done, big or small, at the companies you've been CEO of that's had the biggest impact? And you absolutely do. Again, if you're CEO of another company in the future.

You know, it's. First of all, it's great to be with you and you know, I know you always lead with that question. I was thinking about that and not to disappoint or to be provocative, but I don't think there's one thing is the punchline. And you know, I've got this unique background, having done, you know, startups and then run very large global companies with many thousands of employees and north of, you know. Well, north of a billion dollars in revenue. And what I come back to all the time is that one thing is it's a series of things, you know, in the startup days there is that enthusiasm around the startup and the never say die or we all have been through as a startup. And so while it may be a little bit less evangelical in the large companies, the passion is the same and the themes are the same. And I always Go back to sort of a very simple set of rules of under the ambit of the one thing which is am I attacking a market that is worth winning and is winnable? Remember the challenge often reason most of us fail in startup land is you can do everything right. Ultimately the market doesn't develop or the competitive set is too great, or regulation or technology shifts swamp you. But I still going back, I'm always thinking about the opportunity, is the market worth winning and winnable? And then I'm a, I'm a very, very focused on talent. I always come back to how do I assemble the best team in order to pull off this task against that market opportunity. The key to getting the talent is culture. So I focus all the time around culture. To me and again it's under the ambit of the one thing. I'm in all my companies driving an ethos about being open, honest, direct and transparent. People will hear me say that all the time. If you have a large market that you believe you have a strategy that people can buy into that makes it winnable and then you create that culture, open, honest around that ethos, open, honest, direct and transparent, you can attract and retain the right talent to come in and execute on it. And then thereafter I focus on communication which seems so basic, but it's about how do I take this complex task about trying to win that market and distill everything down as simply as possible and communicate it in that repetitive fashion. And the last thing is I think the challenge in running companies small to large is we ask our teams to achieve often what they can't even see yet what they can't imagine. Our job as leaders is to lay that picture out clearly simply in bite size so folks understand where they're going. Because all too often, remember we ask people to achieve what they can't imagine. It's the job of the leader in order to help them imagine it and then assemble the piece parts in order to go out and get it. So that is a long winded one thing.

No, I said so many things in there. I want to talk about, about the communication. I want to get like tactical on the communication. When you say that. Is that an all hands meeting once a month? Is that a email that you send every week? Is that a one on one that you're doing with all the employees that you, when you join? Like how? Because I, it's so, it's. You actually said that in such a clear way of you're asking them to go somewhere they, they can't see and you have to help them see that and kind of repeat yourself over and over and over and over again. But what's the mechanism that you use to do that?

So first of all, it's all of the above communication. Meaning? Meaning it's the one on ones, it's the group meetings, it's the global all hands meetings. It's doing it in a repetitive fashion. Larry Page from Google and John Doar from Kleiner Perkins co authored a book. And in that book, one of the things that John Doar said that had really stuck with me is as a leader in the communication, when you've said something so many times that it begins to hurt your own ears coming out of your mouth, the audience is just beginning to get it. So the way I think about communication is distill it down almost like a brand, distill it down to a very simple construct that you say over and over and over again. And so that it means the same thing to somebody in Kentucky as it does in Kenya if in a global operation. And that is very, very difficult. I'll give you a specific example. At Avaya, we were a very, very troubled company. And just everything, a lot of things broken. My first all hand, which is on day three, my message was prepare to win. I didn't know the strategy, I didn't know the situation, but I was trying to convey confidence to an organization that had been losing and struggling for years. And my first message was prepare to win. Over the course of the year, as we began to get our feet underneath us, the message became Aaya is roaring back. Later, the message became Aaya is roaring forward. They're subtle and simple, but you go over and over and over again. You're always coming back to that same theme. The larger the organization, the more important the simplicity and, and the repetition that communication is. And quite frankly, it has to be authentic. All too often, if you think about this, I see this on boards, see this all the time. The CEO and their team, they present a set of metrics. One meeting and the next meeting it's a different set of metrics. I'm like, no, no. What I want to see is things change, obviously, but you want the core metrics of health of the business and you want it in an open, honest, direct and transparent way. Track them. Hopefully they're going up and to the right the way you'd like them to. And when they're not, you're explaining why you're not changing the metric. But most people change the metric. If that's the idea. Just it's simple. We're trying to move this battleship this way and there's all sorts of distractions as to why it's going to move one way or the other. And how do I keep it on track? Last point on that is in the days in our startups when you knew every person, hell, you hired every person, communication was easy because it was direct. You could touch them on the shoulder when you get to Avaya. When I walked to the doorway we had 10,000 people. We paid salaries in 53 different countries. You're not touching everybody on the shoulder. How do you communicate out to an organization that large that's lost its way and everybody and their brother's got a different view of what it's going to take to turn the battleship. That's why I think communication simply is so important.

What you just said about the early days versus a 10,000 person company, would you recommend to a CEO of a 50 person company that they do this? Obviously it's not the same as at a 10,000. But do you recommend even at that stage that they are doing what you're talking about, even though they can have the direct, even though they can have the direct relationship, you still believe that this is what you need to do?

I do. It's about a simple message that's authentic which is about the core task. So if the strategy is go generic, price, delivery, quality, whatever it is in a particular your Walmart, it's about price, you know, it's you're somebody else. It's about quality, whatever that is, whether it's five people or 500 or 5,000 or 50,000. I think the habit as the leader is very early on. Understand who you are, get the messaging as simple as you can and rinse and repeat on it. Now the task is harder the bigger it gets. But I think you need that's the muscle memory you want to develop.

I love that, I love that. I want to just continue on this for a second. I talk to people about the operating rhythm of a business being like the breathing apparatus where you know it's going to be doing this at this cadence on this time. What other parts of the operating rhythm? When you think about your operating rhythm, Leadership team meetings, one on ones like what were the other pillars of your, of your operating room?

I do every week I meet with my direct reports individually once and then I have a staff meeting of my direct reports once a week and then I do, I try to do an all hands globally. I'd like to do it every month typically works out every Six weeks. Those are some of the operating rhythms. And then I'm trying to get the reporting metrics, as I mentioned before, simple, actionable, consistent. When I got to a buyer, the weekly executive CEO deck, you know, the, the dashboard was 77 slides. 77. I don't even know how much time went into assembling it. I don't have the patience to read 77. I never read the whole thing. Not once. Not once. Because I was like, you know, it's you, you can't see the forest through the trees when you're sort of, you know, down in the, in the data. It's interesting. That's a company as profoundly messed up as Abaya was. It was very heavily instrumented relative to, you know, we, we do, you know, we're, we're vessel services, we're hardware, we're software, and you know, take hardware as an example. So, you know, there's deep data in the hardware group, which is how much of our supply chain is having to be, you know, sent in by, you know, air freight versus ocean going freight. And what's the cost? Delta? It's important data, but when you sort of focus on that all the time, you kind of lose the thread, which is, you know, how is the hardware business doing on, in, you know, in, at the summary level, what are the macro trends? Do we need to be in the hardware business, et cetera, et cetera. There's a lot of those things that you're heavily instrumented, but you're kind of losing the threat.

Almost too instrumented. I mean, it is, it starts to be right to some level. I've seen that before and actually I'm part of the problem where I would say to the cfo, no, we need to see this, this thing just happened. So we need to see this data point. This thing just happened. And then before you know it, you do end up with this huge deck. Actually, one of our investors, Excel, I remember distinctly we had a meeting one time and Rich Wong from Excel said to me, dave, how long does it take to put this deck together? And I was like, why? He's like, well, it looks great, but almost too like, I don't need it to look this great. I don't need this much data. You're, you're, you're just spending time reporting, basically, you know, and it was, it was a really interesting lesson for, for me of like, let's focus on the things that actually matter, right?

When a business is not going well and is needed transformation, particularly when the culture is poor as well. Where, you know, you put your head up, you get shot. We have a bit of that, quite a bit of that. So what do you do? You, you know, you duck and cover, right? You're keeping your head down because, you know, so you become a slave to process. It goes back to that report. Well, hey, the boss says I got to produce that report on, you know, what came into the air freight versus ocean freight. Like that. And as long as I follow process, the process says I got to get 10 approvals in order to buy a pencil, right? As far long as I follow process, I'm good to go. I'm not going to get shot. You become slave to process, not slave to logic. And then everything just kind of craps out. Boy, I saw that big time when I got there. And so that's again, you go back. Why you got to just peel it all back. What's important, what am I trying. Goes back to the one thing which is not one thing. What am I trying to do here? Is it worth winning? Is it winnable? The way I'm approaching it, what do I do in order to make it winnable? Do people believe in that strategy? Can I assemble the right talent based upon having a favorable culture in order to target or to go after that mission and communicate? Rinse and repeat. Boom, boom, boom. That's the way I see it all the time. And it is amazing how big companies, I mean, look at, think about in our business careers, you know, the, the, the dust bin, you know, of failed companies, you know, Kodak, Panasonic, wang Data General, BlackBerry, Nokia, whatever it is, who just, they had 80% market share in their respective markets and died. Again, it's because this follow process, not follow logic. Right off the cliff. This happens over and over and over again.

So one of the things, you know, Vonage, Vonage acquired Vocalocity, which was the first company that I led and I was a part of. And you took Vonage through a crazy transformation. I mean, crazy transformation. I'm pretty sure I sold my Vonage stock after that acquisition at the lowest of the low. You know, from where you, where you took it. Did you, walking into it, did you know what a project that was like? How, how aware were you? I mean, it was, it was, that was a pretty crazy transformation. I mean, going from a residential phone company that was doing ads, like infomercial ads, to a trusted business phone, you know, communications platform, really more than a, like with the APIs and the this and that, like, that's a ridiculous, really, it's a kind of Ridiculous transformation. Like, did you know what you were walking into when you started that? I assume, yes. I'm curious.

You know, I'd have to say, in fairness, no. You know, I had sold Quick Office to Google, hanging out at Google for a couple years. This opportunity comes along, and I was intrigued by much larger business than I had ever, you know, worked at before. We were about 800 million in revenue at Vonage, the company I sold to Google. We were doing 50 million in revenue, about 300 people. So we had this very successful exit. I'm there at Google and I'm, you know, starting to get bored. And this Vonage thing came along and I spoke to friends in the market who said, don't do it, and people who knew a hell of a lot more about communications than I did. Now, I think I went there because I'm sort of somebody fundamentally always interested in being interested. And the challenge was just interesting. My wife tells the story that we drive up, I have the job, and I'm going there for a visit to the headquarters. I hadn't been there yet. I'd interviewed all the board in New York and that we're based in Jersey and Bonds had a huge corporate campus. And we drive into the corporate campus and she said, the blood drained out of my face because the place was gigantic. And I'm like, know, you know, it's like the dog that caught the truck. Now what do you do? It's like. And I. So I think when I got there and. And it's interesting as well. I always, I always try to go into a board meeting with a theme goes back to simplifying communications. And the early themes of the first two board meetings, quarterly board meetings, public company advantage, were about bending the curve, meaning the residential telephony, the home phone market. When I got there in the fall of 2014 for Vonage was in its sixth consecutive year of decline again. The iPhone was invented in 2007. Smartphones were exploding. The first Android device was the end of 2008. That was the peak, as the smartphone proliferation really accelerated, of residential telephony. And that was in 2008, its peak. When I got there in 2014, we were in the sixth consecutive year. Now in 2025, we're in the whenever is that 15th, it's done right, whatever the hell it is. 20th consecutive year. That category is a melting ice cube. Nonetheless, I walked in. The founder and chairman, big personality, still owned a healthy chunk of the company. He was not giving up on residential telephony. And in my head, it was like how do I bend the curve by the third meeting? So I had, in the first two meetings, the theme was bending the curve. Third meeting, the theme was we can't invest to try to defy gravity. Point being is this sucker's going down and we can continue to sort of, you know, convince ourselves otherwise. But this is a melting ice cube. And as long as we acknowledge that and realize what we need to do, only until we sort of are open, honest, direct and transparent, as painful as it may be to those folks who are really wed to the consumer business, that direct to consumer residential telephony, we're never going to change. At that point, your old company, VOC Velocity was all we owned in the B2B space. So we were. And that was about 10% of the revenue. So we're 90% what we used to call consumer and 10% business. You're right. Once we began that transformation through a series of acquisitions and then aggressive follow on investment, it took about three years before the lines crossed. The shrinking consumer in revenue was, you know, surpassed by the growth inorganically and organically of the business sector. And along that way we were able to be clearer and clearer that the residential business was simply the cash cow to fund the growth in business. It was challenging because we were public the entire way. If ever there was a situation, in hindsight it would have been better to take it private and not do it in the light of day of public. As a public company, this was it. But you didn't know it at the time because, you know, no one was going to finance the falling consumer revenues because everybody believed that the negative slope was like this. In reality, was, in reality, the negative slope was, which it typically is, was quite flat, was a negative slope. But it was not this precipitous fall off a cliff. It was just this general melt. Wow.

And, and my sense, from everything I've read, watched, heard from people who were working there, really that transformation came through, like you said, actually earlier, came through culture. And that was probably like the centerpiece. I mean, obviously it was the business strategy, but it feels like the centerpiece was culture and changing the culture of that company, which, I mean, doing a residential thing and doing a business thing are like, that's just like a different mindset for a company. Right?

I mean we culturally, at Vonage and Avaya, we use the same thing, we refer to it an ambition around making Vonage and then later Avaya a destination place to work. A dptw. We use DPTW everywhere. Think about the folks who have Been advantage for many years. And the last six years you've been shrinking and the stock price has been a mess. Right. The best talents already left and everybody's become, you know the old parable about the boiled frog. Everybody's a boiled frog. They've just been in the hot water too damn long. You're not going to pivot with that group. You just can't generally. And so how do you take Vomage, which was this old tired brand by this point, and create. And again, and the people in it, I hate to say, kind of reflected that to some extent. And how do you reposition that? Well, the first thing we did was to functionalize the organization. So what we had when I got there, we were divisionalized into be used. We had the consumer BU and we had Vocalocity, the business BU. So it was 90% consumer, 10%, the former Vocalocity. And they fought like cats and dogs because investing in the 10 was bleeding the 90. And you know, the 90 were why in the hell are you investing in this bump on the pickle called Bokelocity? They were fighting like hell. So the first thing we did was to functionalize the organization. So we got rid of the BU structure so that now I had a head of engineering, I had a head of sales and marketing, I had, you know, et cetera.

I didn't know. I didn't know that.

I didn't know that that tended to depoliticize. Am I a consumer guy or gal or gal or am I a business guy or gal? That wasn't perfect, but it tended to depolitize, depoliticize it. Now you're just looking at the incremental dollar of investment. In incremental dollar investing. It was very clear in what was happening in the B2B enterprise communications market that that was the place to generate stock price performance. But it was challenging early on in that communication, somebody wanting to be open, honest, direct and transparent to say to the 90%, you're the cash cow. No one wants to be a cash cow an organization. They want to be the growth side. And how you manage that in a way that is respectful, that you can get that performance. Things like that does change over time. And nothing was crystal clear in the first moment that we did it. But you just rinse and repeat on the same messaging and you're. And everyone's beginning to see what's happening and they're either on the train or off. And you know, early in my career I used to say do I could convince somebody to get on the train as I got a little older, I'm a little less optimistic about that. People often, you know, change is so inherently, inherently unsettling. Often people are, sometimes they're actively oppositional, but most of the time they're passively oppositional. But neither instance they're not going to get you to the other side and somebody's got to be full throated in where you're going. They're bought in fully or you need to change them. That's some of the experience that I had. You know, think about Vonage for a moment. For those who don't know where we were based, we were like, you know, commuting distance to New York City, but it wasn't an easy commute. So we have lots and lots of people who live in New Jersey who you, where we were based who used to, you know, work in the city. And they had this job advantage. They didn't have to commute. It was wonderful. So they had self selected. Even in the midst of the business shrinking over many years and a lot of problems they were having, they stayed mostly because it was good for them personally, because they didn't want to have to go through and have a two and a half hour day commute, you know, collectively on both ends of their commute to New York City. Well, that's not the recipe to bring in the best and brightest to the organization. People who are just sort of, you know, self select to stay there because they're trying to avoid the commute to the city. So we really had to make a lot of changes. And a lot of those changes came through the acquisitions where we acquired leadership and different mindset in some of these earlier stage B2B companies that were just a lot more switched on, they were a lot more focused on the engineering side. You know, think about residential telephony. There's no UI that you can sort of program around. It's a damn phone, you know, you know, 10 buttons. So it's like we brought in a whole different engineering mindset and then a lot of different leaders who were more accustomed to sort of earlier stage venture back much more switched on, much more fast moving companies. But it, you know, ultimately it was, you know, oil and oil and vinegar. Oil, excuse me, oil and water in many instances.

How, how involved were you in the hiring when you first arrived? Let's again, let's use vonage for now. Like did you get involved? Did you get involved right away? Like, here's how we're going to start changing. I'm going to show you myself. Did you, did you hire just your direct team and then let them, you know, how did you handle that? Because it's all comes out of the people which obviously comes down to the hiring process and systems.

So I get very, very involved in it. I get very involved in it on the one hand and through the experience I had advantage. I was much better at it at Avaya because it doesn't mean one group was bad and better and the second group was better. It was just. This is a learning. At Quick Office, which had 50 million in revenue at its peak and 300 employees, you still had a direct relationship. I could know everybody at, you know, Vonage, which when I got There had about 2400 employees. You couldn't. So I had to get better at hiring indirectly levels down and I wasn't as good as it the as because I had been so involved in a direct way in Quick Office and in other smaller companies.

Interest. That's, that's interesting.

At Avaya I'm better at it just having gone through it for six years. Advantage. I am a huge believer then and now that the first two layers are the most important. First two layers, meaning the direct reports to CEO and their direct reports. And so if you have a normal span of one to six, one to seven, and you would typically as a CEO, if you think about the functional areas, have nine or 10 direct reports. Engineering, marketing, sales, product, CFO, GC, et cetera. If you've got nine or 10 of those, use round numbers 10 and their span is one to seven, you would have 70 underneath those and 10 of your direct parts. You're talking about those 80 people. There's a fascinating theory called Price's Law. Price's Law, which says in any productive endeavor, in any productive endeavor and business is a is a prime example. The square root of the number of people in the organization do more than half, half the performance. So if you're in a startup with a 100 people, startup with a hundred people, what's the square root is 10 people. And you know, in our startup world, those 10 people drive the ship. Now your startup gets successful and now it's a thousand people. Square root of a TH is only 33. So that those people who are the most important, it's a flat line at Avaya. Wow. You think about it, you've now got 10,000 people, it's 100. So that's. So if you think about the first two layers that are driving the ship and then pick your metaphor. An A will only come work for an A. So if you have a B as a hiring manager, he's not going to be able to get an A. You. All those metaphors that we've been talking. We talk about all the damn time. Yeah, but it starts there. You got to be really, really careful on those first two layers, in my opinion. And that's something that I learned through mistakes, honestly, at, you know, elsewhere, you know, you learn, you know, they stick with that person too long. Typically, yes. Did I get involved enough and who they were hiring? Maybe not enough. You know, you can again. I think it is. It's so critical. It's so critical that I think that is a lesson that I've learned that I'll. I'll take to whatever future gig I do.

How much time would you spend in an interview process for your direct. A direct report of yours? How much time would you spend personally interviewing that person? Interviewing, engaging with that person before you hired them?

A lot. A lot. You know, somebody who's direct report to me typically because they come through a search firm that I was familiar with. So I worked a lot with Spencer Stewart, and I knew that team really well. They knew me really well. And so I hired many, many people through, you know, several of similar. Several of the teams that I'm. I still know, I'm friends with to this day. It's better Stewart. I've used other search firms, but I happen to like Spencer a lot. And I would get. I'd spend a lot of time with folks and usually culminate in a dinner. But I also had a bit of a hiring committee, which I didn't do as often before. Right. Some of the folks that I really, really trusted as a real good, you know, gauge of talent, I would always have them interview them again. Not always admonish, but always at a. Via. Oh, you know, just the lessons I learned as you sort of get better at it because, you know, it's just, you know, you meet. Sometimes you meet people, you go, damn, man, that person just smart as a whip. And you finish that conversation, you say to yourself, I think I might have heard all the smart things they had to say in that first meet.

You know, I. I had somebody told.

Me a great line because, you know, one of the toughest ones, one of the toughest ones to hire. I've always found it as cr. And somebody told me a great line one time, you meet this salesperson that comes in and they've got 20 years. You know, the resume says they got 20 years of experience. The big difference, you find somebody picking Sales. I've seen this where they genuinely have 20 years of experience or they did their first year 20 times. All right, I've. And that's something that just through repetition, I'm like, that guy's done his first year 20 times. You know, so you're not building underneath that person.

Do you have one thing you look for, like if you clearly have these philosophies about run businesses, like, do you have one thing when you're looking at that, that direct report? That is the most important attribute that they have.

So I probably, yes, I probably default to intellect. I'm really big in having smart people around, around me because yes, I want to see integrity, passion, you know, this work ethic, I want to see communication skills. But I, I tend to default to folks who really have the gray matter between the years because I mean, just changes. You're trying to figure stuff out and you want somebody who is going to really be a problem solver with you. So I will tend to default to the. I have often defaulted to the really bright utility infielder than specific role player. You know, the old, the baseball metaphor. It's somebody who can, you know, play, you know, shortstop and third base and second base, you can move them around versus somebody who's just the savant. All they can do is play second base. I'm a little bit more prone to go to that breath.

You know, someone. When, when I was hiring for C level execs, one of our investors, they said, let's try to find people who, the next thing or the thing after that they can be CEO of something, you know, where basically they have the ability maybe not today, not tomorrow, and maybe they don't even want to be, but at least they have the capacity, capacity to understand the whole business. And they could be CEOs in the future. And it was an interesting way to think about that because actually, as the company gets bigger, if they don't understand business, and if they don't, it becomes a pretty big problem. That took me a long time to learn that one.

First of all, I agree with that advice and I totally agree with that advice. A lot of boards will sit back and say to the CEOs, who's your ready now successor now? Most of the time, though, I don't think they're. Most of the time, my experience, there isn't one. Because what happens, you want somebody who can, I completely agree, grow to that CEO level, but there's such a scarcity of good talent out there, somebody who's CEO ready now that Ready now. Successor is going to go be CEO somewhere. So it's pretty rare you find somebody that, you know, if I got hit by a bus, give it to him type thing. It's just rare. And we all look from a, you know, from a, it's you know, good board governance. You know, what is your ready now or in two to three year ready, you know, successor. My experience is it is unusual. You know, we had, you know, go back to like I'll put in a plug for my chief marketing officer Ad Abaya, Josh Mueller. And I, I tell this, I'm very open about it. I think he is a future CEO. He's just got, he's, you know, I always talk about that, you know, he's got just that ability and I gave him the hardware business as to GM the hardware and be cmo, which is the most bizarre set of responsibilities. But he did great at it. Did great at it and he'll be a cmo. I'm not, I'm completely convinced of it. And it'd be a terrific one because he just. Guy's got the scale, he's got the breath.

You mentioned succession. You know, one of the things as I went through the process from venture to late stage to private equity, as you got later stage, especially private equity, they were very big on succession planning. Not just for me, but actually for the entire executive team. And I had never done succession planning ever in my career.

Yeah.

And they were very, I mean they were like I want line by line, every leader and can you talk about your ex? Not for your own successor but like for your team. How did you handle succession planning? I actually think it is one of the things that should be taken from late stage things. Public companies, private equity owned companies too. Early stage. Because every time I lost an executive it derailed me or I went crazy because I had to take on like if I had done succession planning at 200 people, you know, at 50 million of ARR, like that would have helped me so much I think at least, you know. But I'm curious to get your take cause you mentioned succession.

Look, we did, at the instruction of the comp committee, we did all the classic succession planning across you know, the, the major. Two layers down. We mapped.

Oh, two layers.

Two layers, mapped it all. And in the classic way. Ready now, ready later or, or not at all. Yes, we did that. And I, and I know that's super important. You know, if your head of engineering got hit by a bus, who's the person that's going to step into. I so I'm not dismissing that at all. It is very, very important. At the same time, I think sometimes the sticking in the private equity world, the focus on it is because there is such a transactional view of the business. So that if you're not, if it's not going well, I need to make a change. Boom. Who do I pop in there? It's. And again, it's about, you know, you're planning for, you know, bad stuff happening. So I think there is a. It is absolutely prudent to do it. I completely agree and I think mapping that is really important. My own experience is the ready now CEO successor is particularly rare for what I. Because what I mentioned, there's such a scarcity of CEO talent out there that if you truly have a ready now CEO, they're going to go be CEO. So they're going to get poached and go be CEO somewhere.

Right.

Particularly the income opportunity for them to go from being, you know, you know, a functional leader to CEO is dramatic and they're going to take that role and I would encourage them to do that. So I think that the, the exercise is exactly correct and should be done in all the major functional areas and perhaps two layers down. But I think the expectations of it should be pragmatic.

So you did, how many acquisitions have you done across the various companies you've been CEO of? A lot. I mean, I don't know how many.

But I've done probably 15, I'm guessing. So I know we did eight at Montage, we did one at Avaya, and in earlier Cook Office, we did, we started with an acquisition, did a follow on too. So yeah, probably if you look all the course of my career, close to that number dozen, 15, something like that.

And when you were looking at these companies, I'm asking this now from I've had, you know, the market dynamics have changed in terms of funding and companies are kind of in this holding pattern. There's a bunch of companies looking to get acquired. They can't raise more money. I've talked to a lot of founders kind of going through this. How did you find those companies? Like, did you, did they come to you and say, we're selling and here's our investment banker and you bought them or did someone on your team identify them and said, hey Alan, Mr. CEO, I'd like to buy. Like, can you, can you tell? Like just so people can hear from the. I don't think a lot of people actually know what happens on the other side of the table, you know, and how you're operating in these companies.

So I, I think that almost never did the call come in from the investment banker. You should look at, you know, I got a book I want to send you. I would say that's an almost never. The acquisitions came about from the team based upon fulfillment of a well articulated strategy. And, you know, there are levels of gray in that. Hey, the advantage. The acquisition of Nexmo in 2016 was the complete game changer of the company's trajectory. For those who don't know, Nexmo was the number two player relative to Twilio before Twilio became the rocket ship. From growth and valuation point of view, it's pulled back a lot in the last few years, but in those early years, good God, it was a rocket ship. We bought Nexmo, we paid 235 million for it. I think it had about 93 million in revenue. By the time I left Vonage in The middle of 2020, it did about $550 million in revenue. Everything from organic growth, other than one small tuck in, little $25 million tuck in. So. And by the way, Erickson buying The company for 6.2 billion was for that asset. Wow. Wow. Really skin it all back. It was a bad asset. So that came about because one of my team members, who I respected a great deal, started talking to me about it, saying, we gotta, you know, we gotta be here. And a little bit of luck happened where, you know, I happened to be in San Francisco for the super bowl and I went in a day early and we met with the team and the, and the. Their banker and, you know, and we walked out of there and I was like, it's like the funniest thing. I was like, I know we need to buy that company. And I couldn't explain to you exactly why, but I know we need to. It was one of these things, you know, just hit me in the gut like, man, that thing is, we gotta do that and. But it would never have happened. You know, this is my chief product officer who came in in that same role from Vonage, Omar Gervais, who's now a CEO, but Omar now is Chief Product officer at Avaya as well. And I have a great deal of respect for him. And he's telling me we got to do this. And he understands markets really, really well. He's very, very strategic. And we ultimately did it. And that really was the. That made a huge difference.

So, yeah. So when the company is like in the, In a place where they need to sell themselves and they hire a banker and they think like, I'm going to reach out to all these strategics and you know, that's how I'm going to sell the company. In your experience, which is my experience as well, I'm just, I want you, you know, you've been, you've done a lot of acquisitions. Like that's not the way these deals happen most of the time. Of course there are exceptions but, but for you, that's not the way these deals were happening.

For strategic deals, you know, selling to a strategic. I believe that is the distinct minority of the way the deals happen. In the PE world, it happens much more often. We see, you know, scores of PE to PE deals and that's different. That's different. But the strategics are going to know you. They're going to know you because they're, you're in your, they're in, you're in their market. And I'm, you know, like when I sold to Google, we a lot of times, big. If you talk to folks who listening to this podcast who are looking to be acquired by the, you know, the Mag seven type of guys, you. It almost always has to start with a commercial relationship in my view. And the way I kind of distill it is people buy friends. It's not like the corp dev guy calls his corp dev. You know, the banker called the corp dev guy at Google and says you should buy XYZ Co. Because I mean, it just doesn't get into your brain space if you're the, if you're the corp dev guy at Google and it's the 17th inbound you've had that day. I think it's got to start with the line of business leader who's in a commercial relationship and is like, shit, I want to control that roadmap where I need those technical resources or whatever it is. And it starts with a commercial contract that then introduces corp dev into the discussion. And that's precisely what happened at Google. We had a commercial relationship with them at Quick Office Corp. Corp Dev got involved, they nibbled and it went quiet. A year later we did a second commercial deal. Corp Deb re engaged and it went through to an acquisition.

It's interesting. Yeah, I think that, that this is important. I think this is very important for people to hear. I think sometimes even, you know, even boards, you know, even these venture boards who've been involved with so many different companies, they basically tell the CEO that this is what it's, you know, hey, go do this and you're gonna be Able to go and like, and you're gonna sell the company doing this strategic thing anyway. So I thank you for that. I don't know what your answer is gonna be for this because you've had so much experience. But in all the companies you've been a part of as CEO, what is the biggest challenge you've ever faced? The list, I can't imagine how long it is, but what is the biggest challenge you've ever faced and how did you overcome that?

There's lots of them. But I'll give you a more recent example which I think is we are all Dealing the other CEOs listening to this. We're dealing with the impact of private equity like never before. Meaning if you look at the collective market cap of public companies, you got the Matt, you know, the magnificent seven or eight, pull those to the side. Then you've got, you know, a smaller number that we had years ago of other public companies that are, you know, obviously of different sizes. And then we have these private companies that are looking to are either public that got taken private, you know, so often and you see so much activity from the Vistas or the Turbo Bravos or the Apollos of the world and IPO market's been shut. And so you have this world right now where private equity is just their thumbprint on industry. The is everywhere in my experience. So then you go back and you're the CEO and you're doing everything in your power that's focused on building shareholder value. But you, you get caught up sometimes in fund dynamics. So think about it. You were, you know, you're an investment within the, you know, flagship XYZ fund and that fund is doing not so well or good, whatever, but it's now they're fundraising for the next one. And what's happened because there's been way too few exits in the last few years, the IPO market is shut, is that the pension and mutual funds and such who invest in private equity tend to be over allocated to the category because there's been fewer returns that the they track it through this thing called dpi. And so the fun dynamic kicks in that says, well crap, I need a liquidity. And so then you go back to your business plan, your strategy and your strategy says it's going to take me four years or whatever in order to get here. But the fund dynamics say no, I want you to do it in one year. Reconciling that is really, really challenging, if not impossible because everything, you know, as CEO is, I'm trying to do the right thing. Some of the right things may not be a one year, maybe a four year. Those are, those are odd dynamic. And I think you have to learn that in the CEO. If you go back to people listening to this, whether you're in an earlier stage venture backed company, you still have fun dynamic issues there. Although you tend to have patient investors because that's their job. The PE world, because of this phenomenon of fewer realizations than there once were and a lot of people who paid big numbers back in the hype cycle in 21, it creates an odd dynamic which is distracting to the CEO. And you can be really mindful of that because unfortunately fund dynamics will win out often over good sound business. That's just the practicality of it.

No one's actually talked about that so clearly before on here. I believe that the venture piece, to your point, it's less than the PE side. But when you've got a company that's a decade old, you do have the stretching of the cap table. Someone used that term with me one time where you've got the people who've been in for 10 years and you've got people who've been in for a year. And the fund dynamics for the nine investors you have or six investors are super different. And you don't understand. Actually most CEOs do not. Well, they're not being told the fund dynamics. And also you don't even understand to ask. You don't even understand to that. That's why they're saying weird stuff to you. Like why are they saying sell the company? It doesn't even make sense that they're telling me to sell the company. And then you're like, oh, because that guy wants to retire and this person is doing. And the fund is trying to fundraise so they need the returns actualized. And you're like, but no one says that to you, you know. Right.

Because everybody has, you know, again, everybody wants to say look or Vera, is this, you know, we back good teams, we're going to be, you know, hands off. We're all about just doing the right thing. If it takes longer, it takes longer. But, but the reality is that's not really the case. And so that's something you have to be really mindful of. Those can be very challenging.

So now you step down and what are you doing now? Like what are you doing with your, with your time with your podcast?

Well, so like I just, I just stepped down end of the year. So just 10 weeks ago I'm already driving my wife Crazy. The, you know, I'm on. I'm on. I chair a public board, I chair a couple private boards. I just joined a university board. Super involved philanthropically. So I like a lot of the give back things that you're doing, David. The. And trying to quiet myself a little bit to let see kind of what I feel like I'm missing. Or put it this way, we all have. Not to get too philosophical, but we all have a life force and, you know, what fulfills us, you know, what makes my cup, Alan Mazaric's cup full, different than yours, different than the next person. And you got to figure that out. You got to figure that out because, you know, a lot of people, you know, we've done well financially. People. Why the hell would you ever go back to work? Well, you're not doing it specifically for the money because you're just, you know, there's things that fill your cup, you enjoy it. Where that's going to show up. Is it, you know, going to show up in a. Not for profit and, you know, being more philanthropic. Men bring kids. I mean, you know, who knows? Or running something commercially, I don't know. But I do know that, you know, I'm super interested in being interested, going on the board of this private university in Connecticut. It's fascinating. You know, I've run, I've run profit boards, you know, not for profit boards, public boards, but I've never run a university board. And higher education is a broken business model. At my first board meeting two weeks ago. Fascinating, fascinating. Something I've never been exposed to.

Did you always know as like that you were a leader? Did you always know that you were a leader, an entrepreneur? Was that something like from when you were a child that, that you, you know, had a dream of being CEO one day of something. How did you get to this place?

Well, not to sound immodest, but I've always been a leader and it's always been a very comfortable place that I've just naturally fallen into, whether it is captain of the team, president of a class, president of attorney, president of an organization. I tended to always be in those roles. Somebody said to me one time, it's like when two people are walking down the street, one of them is in charge. And traditionally that's just been me. It's just what it is. It just. It doesn't mean it's. There's ego, there's nothing. It just kind of this is who you are. And I'm very comfortable in those roles. And I think that Being effective as a leader has so much to being this fact where it sort of is a default for you. It's just natural. It doesn't matter what your business card says, it just sort of, you naturally default into that. And that's always been the case for me. You know, when we've had, I'm sure you've had the same issue I've had. I remember there was an executive who we ultimately exited and this is Adebaya. And she got her authority from her title, not from her competence, not for her ability to lead. It was from her title. It was like, hey, you look where I sit on that org chart. I'm above you.

I've been through that. Yeah.

And I would counsel her. I'd say it needs to come from people follow you out of choice, you know. Yes. You know, it's been codified by your title, but it's got to come before that. So I go back to that ethos, open, honest, direct and transparent. I'm not telling you to do something I wouldn't do myself. I'm not telling you to do something out of ego. I'm not, you know, taking credit and pushing blame. I'm, you know, I'm just trying to do the right thing. I'm not going to bat with that, you know, I'm not going to, you know, I'm not going to bat a thousand. No one does. I'm going to screw stuff up and if I screw stuff up, I'm, you know, tell me and we'll fix it and we'll move to the next thing and make decisions quickly and fail forward and all those sorts of things. And at all times I'm going to come at it from a position of authenticity and do the best we can. And I think that is pretty straightforward and natural. Go back to companies that have failed, go back to that dust bin. I don't know those CEOs of those companies, but whatever, you know, who knows, you know, they were stuck in their ways and wouldn't listen to criticism. They wouldn't self cannibalize in Kodak. You know, digital photography versus paper. You know, the, you know, leadership goes back, you know, study of leadership. You go back to the military and it's hierarchical. Most companies grew up in a hierarchical command and control structure. Salute the boss, salute that fall off. That's the thing. That's kind of the way it was. Stephen Covey has written brilliantly about what he calls the speed of trust which is moving away from hierarchical leadership. Doesn't mean you don't have hierarchy. Of course you have hierarchy, but it's not command and control. It is more about. Goes back to things I said at the outset. It's about trying to bring in the best talent and drive things more bottom up than top down. You and I talk often about Israel. You know, arts are in Israel. Think about the idf, think about the Israeli army and how they talk about that, how innovative they are and creative they are. Because, you know, at every, you know, there's an after action report at every, you know, you know, every day after what they just saw the evening before or whatever. And you know, the private can argue with the colonel. I mean, you know, it just, that's the way it happens. And you get better because you're always about trying to learn versus, you know, salute the boss. You know, I'm going to say mom on something. So it's, I think it's, it's, it's those types of leadership qualities that create the culture that the best and the brightest want to come work at. It's fun. There's a great thing I remember in that Speed of Trust book which I, which really struck me, which was this is Stephen Covey in Seven. You know, his father wrote Seven Habits and all that. If you think about low trust environments where we are interacting with somebody in a low trust environment, think how prescriptive you are in explaining what you'd like them to do. You know, there's 10 tasks, I need you to do them this way. But you know, you're super prescriptive. It's not very enjoyable to be so prescriptive. And you're following up. Did you do task one? Did you do task two? Because it's a low trust environment, so what happens? Everything jams down to slow motion because that's the way you're interacting with everybody. You know, in this command, low trust, command and control environment. Salute the boss. I told you to do task one. Did you do it to my liking? Did you do it the way in which I wanted you to do it, as opposed to all I'm looking for as a result? And I've hired you and your great talent and I've emboldened you and empowered you to do it. And you're not going to bat a thousand. I get that. And if we make a mistake, we'll move on. I always tell, you know, kids this all the time, you don't have to bat a thousand, you can't bat a hundred. You know, you can't be 1 out of 10. You have to bat With a high batting average. I'll give you trust because you're competent. You bat with a high batting average. You're not perfect, but you're confident. Think how fast that is. I don't have to be prescriptive. I'm checking in on results. It's enjoyable. It's less intense. It's less. Everything moves faster. Everything moves faster. And so those are the ways I think people want to work. And though, you know, we've all been an organization where they say, oh my God, that guy just, you know, he micromanages. Well, it sucks the life out of you, in my opinion.

In your career, have you had a mentor, a role model, somebody who gave you a break somewhere along the way? You know, someone you looked up to?

I had a mentor in college who was a successful business guy who. I was president of my fraternity my senior year, and he had been president like 30 years earlier. He was a mentor. And then I went to work. After college, I went to work for Arthur Anderson. I was a public accountant for five years. And then I went to Harvard Business School after those five years. And a client of mine who had also gone to HBS hired me as an intern between. He had created a private equity firm, hired me those between the two years and then on graduation. So the lucky break I had is he plopped me in out of the private equity firm into one of the broken. Into a broken portfolio company to run two divisions of that company. I had no business running two of those that go. And. But he plopped me in there. That was the lucky break because I found that I really enjoyed the operation. It was rare. You know, obviously I'm. I've got a really good background in finance and accounting, given my background, you know, five years ago, accounting under my undergrad, five years of public accounting in Arthur Anderson, Harvard Business School, private equity for three years. I know that stuff pretty well. So it's like. Then I go into operations. I find I love the run of the company, and that's rare. So I look all my peers from business school, they've been. They're bankers, they're private equity guys, they're venture capital guys, mostly consultants. You know, not too many people actually go and run the company. And I found that I love the marriage of the two. And that's why look at a lot of the things I've done in building these companies. I've done things inorganically because I have a, you know, I know what to do there. That's the way I was trained.

As you've built These companies sold the companies, transformed the companies. All the things you've done pretty intensely. The only way you're going to be successful, you've also grown your family. And, you know, how, how do you think about the term work life balance is the only term, you know, I don't know that exists, but I'm, how do you think about that? And, and I don't know if you want to call it sacrifices. Someone else told me it's not a sacrifice. It's, you know, I've chosen like. But what do you, what do you think of, how do you think about that?

Maybe because I'm old, I don't know. But I don't really buy the whole work life balance thing because I, if you enjoy what you're doing, genuinely, it's not the drudgery of work. A lot of the work life balance goes back to, you know, Industrial revolution times where you're, you know, I'm held under the thumb by the boss and I work my eight hours, punch out and then I have my free time. And so I want that clean separation between the two. And I just think that is sort of a, a relic of the past. It's sort of, I know it's trite to say, well, if, you know, if you do it, you'll, if you work, you know, if your job is what you love, it's not work. I know that's, you know, a little bit of a people, A lot of people reject that, but I find that my wife and my family have been very supportive of my career and they hadn't always gone, you know, well, at times, you know, I've had startups that failed and that's a miserable experience for the whole family. Let me give you my old man's view of return to office, which is I. And this is particularly for the young, younger listeners here. The. I think for most jobs, virtual is a mistake for particularly younger people. And when you go back and you say you have this fight that seems to be flipping back to the old ways of in office, working people say, well, I'm going to do hybrid and it's going to be three days in and two days out, two days home. I think you negatively reinforce that old work life balance stereotype. Almost like, you know, okay, Monday, Tuesday, Wednesday, I gotta, you know, drag my ass to the office and I'm under the thumb of the man and Thursday and Friday I'm free and I'm boom and I can do my thing and I'm more productive and blah, blah, blah. I don't buy that. I don't buy that. I think that there's so much to be gained from the interaction, the, you know, the serendipitous interaction with everybody else. Learning from a boss and a peer and a, you know, hell, when I first time went to Arthur Anderson, I never understood what a. Back then we used to call a secretary. I used to watch the partner, how he dealt with his assistant. I'd never seen such a thing, you know, I didn't know that, you know, so it's like I didn't come from that world. So everything is a learning. And so I think, enjoy what you're doing. If you don't enjoy it, do something else. I speak to young people all the time in these sort of mentorship opportunities. And I always go back to the same speech, which is I always say, think of your career as a skyscraper. A skyscraper has to be built on a big foundation. You're not building a big skyscraper on a narrow foundation. So when you go to work, you want to learn as much as you can as quickly as you can building that foundation. Unfortunately, unfortunately, a lot of people who start that job and it takes them eight hours to master it. After a period of time they master it. It only takes them five hours to do that. Eight hours of work. So what do they do? They sit on their hands for the other three hours. My advice to people is ask for more. Ask for. Because your whole idea, particularly earlier in your career, is to build that foundation. Too many people will want to, you know, not work the other three hours. Or people think about their career like, what do I have to do in order to make another dollar or two an hour? That's the way most people think of things. Now, that's not the folks who are going to be CEO typically, but I always flip it on a seer. And I'm saying your role is to learn the most you can. I've spoken to young people so many times and they, you know, I had two job offers, which is the one they took, the one that paid $2,000 more a year.

Yeah.

And I go to my go, dude, that's like a six pack after tax, that's a six pack of beer each week. I mean, come on, where could you learn the most? Had the most interesting opportunity to me. And I roll this whole thing even under the return to office idea, which is you're there to learn. And learning, it's the non verbals. Last word on this thing is I had many, many conversations with folks at Avaya as we moved Back to a five day a week and had a discussion at an all hands one time. And I ask somebody, I go, look, how different are we as humans since 2019? Pre Covid, I said, I will grant you that the collaboration tools zoom or like what you and I are doing right now are better. But are we any less the herd animals that we were in 2019? I would say no. And so what has worked for many years, I think can and should work again. It doesn't mean you're going back into the office to be stuck in some cube and you know, the old satire or like the office and crap like that. It's not that, you know, we as an employer have an obligation to create an inviting, stimulating work environment, both physically and, you know, in terms of the work environment, but also in terms of the nature of the work you're doing.

Yeah, I actually agree with you completely. And I feel that especially for young people, if you think about my career, your career, most people's career, like early days, you connect with all these people, you learn how to work, you learn, you get exposure. I was talking to a PE firm and they were telling me, we go back to the office five days a week, or we go back to the office voluntarily, and all the partners are there five days a week, and we have lunch that we pay for that. The associates are invited to, to spend time with the partners because they weren't spending time with them in Covid anyway. And they said none of the associates show up. It doesn't make it like literally the heads of the firm are sitting there in a conference room. If you just showed up, you'd be the only associate. But they're like, no, I got to walk my dog, or I got to, you know, do whatever. And it's, it's. I find it actually, really, I think for this generation who came out of college in Covid, they're missing. And it's also fun, by the way, let's be honest. It's also like a fun period of time when you're 22, 23, 24, you're out of school, you're meeting other people like you're in a new city or whatever. Like, so I actually agree wholeheartedly. And I am starting to see with some of the companies I'm working with that are in person who are having a hard time hiring a year or two years ago, they're getting candidates who are young who are saying, I, I actually don't. I've never been in an office, but I feel like I'm Missing out. Yeah, I actually would like to go to an office.

Yes. I have a friend of mine, my daughter is going through the exact same thing. And I think that it is, you know, the. As the economy slows a bit, you know, that, you know, is the buyer or seller market is flipping a bit.

Right, last question. Knowing everything you know today, which is a lot, you've dropped a lot of knowledge today. And we, we could probably go for four hours knowing everything you know, what is the one piece of advice you would go back and give yourself before you started your first ever job at Anderson?

I think I would give myself the advice that I've been giving these young people that I speak to a lot in various settings from one group that's juniors and seniors in high school and then a bunch of college kids and then recent graduates. This notion about, you know, take on as much as you can as quickly as you can. I did that pretty well, I think, at Anderson. But I think that is critically important. A bit of a lost art these days. And so that's the one I would really, really push. There is a tendency, I think, for young people to kind of salute the boss a little bit, almost too much. And again, they're nervous and they're a little, maybe a little intimidated. Think about when you have a young employees come in and you can tell they're just nervous as hell and they're asking you all these sort of, you know, kind of standard questions and as opposed to somebody comes in and they're just comfortable, they're authentic, they're, you know, talking about the football game this weekend or where the heck it was, you know, and I think that you want to help you always, you want people to develop those skills because, you know, again, you know, and that's why the return office is so important. I, I think because that's where you learn that those interactions, breaking bread with somebody, it's just so important. So I think that's the thing I would say, yeah, I've been very fortunate. I've been very fortunate and I've got a lot of great, you know, I got gratitude for that, you know, and I want to give back and help. I can't tell you how many conversations I've had with my son or my son's friends, things like that, over the last several years on this sort of, you know, how they view the world. And a lot more often in a, in a very cynical way, very cynical, very almost fatalistic way sometimes, and which is a shame. And I sit back and say, how do we restore that optimism that I know I had. It goes to the core without getting political, goes to the core of sort of the restoration of the American dream. It's about equal opportunity for all. Doesn't mean equal results for all. Just means equal opportunity. Work your ass off. Achieve. Don't, don't. But I think you got to restore that optimism so that, you know, the playing field is level and people have an opportunity and they can grow and build and. And enjoy themselves doing it.

Alan, thank you very much for doing this with me. My pleasure. I've enjoyed this. I think people are gonna love this. I'm gonna have to cut this, like, 10 different parts because there's so much in here. So thank you for doing this, David.

My pleasure. Be well, and we'll catch up soon. Okay.

All right. Awesome.

Bye.

Bye. Thank you very much. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week.