Leadership

M.R. Asks 3 Questions: Leslie Stretch, CallidusCloud

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Leslie Stretch has executed one of the biggest turnarounds in recent software history as CEO of sales performance management software maker, CallidusCloud. Since taking the helm in 2007, he has moved the company to a recurring-revenue, cloud-based model and moved from negative territory to a $1.3 billion business in the process. I asked Leslie how he did it.

M.R: Callidus has reinvented itself – both product-wise and financially. You’ve got $180 million in cash and have grown your SaaS business 30 percent for each of the past three years – profitably.  Thinking back over your journey as CEO, do you remember the strategic decisions that proved key to your eventual success?

Leslie Stretch: When I stepped into the CEO position, I made a personal decision to be “all in” – that is, physically, financially and emotionally committed to the business.  I’m proud that Callidus’ valuation has increased 26 times since I joined, but its success is not because of me. I was lucky to join a capable, high-performance team and go “all in” together. 

The biggest business decision we made was to go to the cloud. We made that decision at the end of 2007 and invested disproportionately in building a modern, multi-tenant cloud platform to provide our sales incentives capability to companies of all sizes and industries. It was incredibly important to have a supportive board during this period. It was also key to keep the core technical architects of the old business and to part ways with managers who couldn’t get to the cloud.

The second critical decision was to move from a point solution to a broader suite, just as Salesforce has done, and just as Oracle and SAP did before everyone else. We agreed to do this through buying and building capability. We build a lot of new software every year and we do not look to our competitors to drive our pace of change. We committed to original innovation in partnership with our customers.  The service we give customers is central to our culture because, as a SaaS company, we make a lifetime commitment, not a product sale.

To make this all happen profitably, we first recognized that we didn’t have other people’s money to burn. Once you internalize that reality, and couple it with the fact that you are already public, you have no choice but to embrace the right financial discipline. Every one of our team members has had to personally sacrifice to make the bottom line on occasion, but they have been rewarded through the steady improvement in valuation – which still has a very long way to go.

M.R: The American Business Awards named you as their computer services “Executive of the Year” in 2016. What was the best part about being recognized for your work? What other CEOs do you look up to?

Leslie:  I attribute this award to our team. I am not a high profile CEO. In fact, I have never picked up any of my awards. I am grateful for each one but I let one of my team members go and receive the public accolades they deserve. In fact, a funny thing happened when our EMEA (Europe, Middle East & Africa) leader, Christina Kemper, arrived in Rome to accept a recent award: They thought she was me – “Leslie” – and that was just fine with me.

When I look at the occupation line on my passport, it says “software builder” as it has for thirty years. It reminds me that I am still doing the same thing at Callidus that I’ve always done: Working with a great team to build software that out-innovates other companies and satisfies the needs of our customers.

That’s why I admire Salesforce CEO Marc Benioff. I believe he is the leader of a movement, not a company. He is a solid example for all CEOs, a great leader for his employees and the industry, and “all in” for his company and his team. I also consider SAP CEO, Bill McDermott to be one of the most underrated leaders in software. The SAP machine is much more potent than people think: Bill has built a great company with a fabulous history and a super culture. 

M.R: CallidusCloud was recently honored as a “Great Place to Work.” What have you and your team done to earn this designation? 

Leslie: Well,  I don’t think we have done enough yet. We are working hard to follow a philosophy that elevates “critical non-essentials.” It’s an oxymoron but its meaning is very important to me: Many things that management considers “non-essentials” – such as a nice work environment, delicious free coffee, entertainment, a gym, great healthcare, a genuine concern for our team members well being, compassion for life impacts – are actually “critical” to hard-working people. I find many executives greatly underestimate the importance of these items.

At Callidus, we have a lexicon of forbidden words, including “employee,” “staff,” “corporate,” “headquarters” and many other old world business terms because, again, our success is all about our team of “people.” At the end of the day, all we have is one another because we make millions selling electrons – it’s weird but true.  A software product doesn’t really matter on its own. So at Callidus, we believe our people are central to everything we do. 

 

M.R. Rangaswami is the co-founder of Sand Hill Group and publisher of SandHill.com.

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