The New York Times, November 19, 2000, Sunday

Money and Business 

 IBM Veteran Finds a Challenge at Symantec 


CUPERTINO, Calif. When the invitation came to abandon a stellar career at the International Business Machines Corporation to take the top job at the Symantec Corporation, a floundering software publisher in Silicon Valley, John W. Thompson did not hesitate. It had been his dream to run a company, and I.B.M. was a long shot. 

But 18 months into Mr. Thompson's tenure, Symantec, purveyor of the iconic Norton Utilities and Norton AntiVirus software, is straining to achieve the goals he has set for the company -- and for himself.  

Mr. Thompson left his job as general manager of I.B.M.'s $37 billion Americas unit, ending a 28-year career with Big Blue to stake his reputation on turning around the $600 million Symantec, which has been left behind in the boom in Internet-related business opportunities. 

The challenges and risks of Mr. Thompson's mission are formidable. He aims to wean Symantec from its reliance on the consumer market for PC software and transform the company into a competitor in the high-growth market for corporate computer network security products. 

Symantec enjoys steady income from its Norton brands. But there is far more growth potential in the market for network security products, which use encryption to protect private networks and electronic commerce systems from viruses and intrusions. Analysts predict the annual growth rate in that market to be 30 percent. 

Mr. Thompson's objective is to strengthen Symantec's revenue growth to match that rate by the spring of 2003. But lately he finds himself beset by investor skepticism. 

Some securities firms downgraded Symantec's equity rating from a "strong buy" to a "buy" or "accumulate" after the company announced its second-quarter financial results Oct. 19. Although the 47 percent earnings gain on a 14 percent increase in revenue compared with a year earlier exceeded expectations, analysts were disappointed with growth in sales to business clients, which was surprisingly weak at 8 percent. Much of the weakness lay in the poor sales of Symantec's pcAnywhere product, which lets workers tap into corporate networks from remote locations. Symantec's share price dropped 14 percent on the earnings news. It has recovered somewhat since then, closing at $37 on Friday, but remains well under the $50 to $70 range it traded at for most of the year. 

Mr. Thompson, 51, who reluctantly bears the distinction of being the first African-American to head a major Silicon Valley technology concern, said he was determined not to let Wall Street's obsession with short-term results distract him. 

"I don't worry about the downgrade," he said in an interview at his Cupertino office. "I worry about whether our company is operating according to the strategy we have in place. If we are, then revenue growth is going to take care of things." 

Since arriving at Symantec in April 1999, Mr. Thompson has moved aggressively to restructure the company around his goal of strengthening sales to corporate security clients. By December he had whittled the company down to its core business by selling two of its divisions, the Internet Tools unit with its Visual Cafe product line and the ACT line of contact manager software. 

The new boss also shook up the top management, replacing two-thirds of the senior executives who had served his predecessor, Gordon Eubanks. As many as 40 percent of Symantec's 2,800 current employees have joined the company since Mr. Thompson took over. "It's hard to change focus and promote from within," he said. "But as the company grows, there will be enormous opportunity for everyone."

Steve Cullen, Symantec's senior vice president for consumer products, said there was nervousness after Mr. Thompson arrived. "At first there was an apprehension along the lines of that old adage that anybody is replaceable," said Mr. Cullen, one of the few executives from the Eubanks era to be promoted. "But John focuses on results. He cares about people who execute and deliver for the company." 

More changes will come at the end of the year, when Mr. Thompson is expected to complete a $975 million deal to acquire Axent Technologies of Rockville, Md., a leader in the lucrative business of producing "firewalls," software to prevent hackers from breaking into electronic networks. 

"The first thing John Thompson did at Symantec was to identify a vision," said Kevin D. Wagner of Adams, Harkness & Hill in Boston, one of the firms that downgraded Symantec's rating. "The vision is still there, but the company has quite a bit of work to do. Its quarterly growth in enterprise sales has been erratic, but once Axent and its firewall products are folded into operations, I think you'll see growth-rate stability." 

Mr. Thompson knew he would have to prove himself to shareholders, but he was taken aback when his debut in Silicon Valley was greeted as though he were a Jackie Robinson breaking the color line of technology industry management. It was a social role loaded with expectations that he had not anticipated. His initial reaction was to resist, and he went so far as to exclaim to a San Francisco Examiner reporter that he refused to be "the poster boy for African-Americans in Silicon Valley." 

Shortly before his arrival, the Rev. Jesse Jackson had visited the area to start a "Digital Divide" campaign criticizing the lack of ethnic and gender diversity among executives at major technology companies. Mr. Jackson's Rainbow/PUSH Coalition collected data on board membership for 50 technology companies showing that a total of 379 directors included only 25 women, 8 Asians, 5 blacks and 1 Latino. 

THE campaign hit a raw nerve among the Valley's corporate elite, which viewed the Rainbow/PUSH approach as divisive. Ultimately, Mr. Thompson relented, joining the public debate after he persuaded Mr. Jackson to change the name of an April conference to "Digital Connections" to emphasize the importance of inclusiveness. Mr. Thompson addressed the gathering, along with Hewlett-Packard's Carleton S. Fiorina, who broke ground in her own right as the first woman chief executive of a major technology company. 

Discrimination does not appear to have been a factor in Mr. Thompson's professional experience. The son of a postal worker and a teacher who he said had instilled in him a disciplined work ethic, he took a job as an I.B.M. salesman immediately after graduating from Florida A & M University with a degree in business administration. 

There seems little doubt that his rapid rise at I.B.M. was the result of talent. He had planned to stay for two years and then go to law school, but his studies were derailed by a growing family and a succession of promotions. He would later take a midcareer leave to earn a master's degree at the Massachusetts Institute of Technology's Sloan School of Management, then ascend I.B.M.'s management hierarchy. 

"One of the characteristics of a good leader is the ability to concentrate," said George Conrades, chief executive of Akamai Technologies and a former I.B.M. executive whom Mr. Thompson said was one of several mentors in his early career. "John has enough energy and drive and he has great people skills. He knows how to take Symantec to the next level." 

The complaint that people in minority communities are deprived of access to technology careers rings false to Mr. Thompson. "This industry has an insatiable demand for talent," he said. "If someone shows up and has the right skills and the drive, he'll get a job." 

But Mr. Thompson said he was doing his best to reach out to the community when he had time, making appearances in local schools and acting as a mentor for young minority entrepreneurs. "I'm not here to create an image for myself as some black messiah in Silicon Valley," he said. "But I've got 30 years in the industry and I've learned some things I'm willing to share, as long as I don't miss a beat in my No. 1 priority of running a company. 

"I'm not going to be distracted," he said. "They will never say I failed because I was distracted. And they'll never be able to say I succeeded because I was black."

GRAPHIC: Photo: John Thompson, chief executive of the Symantec Corporation, with his Triumph TR6 in the garage at his home in Woodside, Calif. (Peter DaSilva for The New York Times)


Chart: "Not Immune"

Shares of Symantec, maker of the Norton programs, have fallen on concern that the company is overly dependent on the consumer market for personal computer software.


Graph shows daily closes from Novermber 1999-November 2000.

(Source: Bloomberg Financial Markets)