Symbol Begins 2004 With Hope And Relief

As you no doubt know, Symbol has operated under a cloud ever since it was discovered that now ex-employees were essentially manipulating numbers inside the company. To sort out that mess, Symbol has endured a tough investigation into its financials and business practices. The ensuring process has literally turned the company upside down.

In the past year, the company has added several new board members, replaced 14 of the 16 senior most people at the company, and completed a thorough review of its financial history dating back several years. In the final week of December 2003, Symbol named William Nuti as CEO and chairman and filed with the Securities and Exchange Commission its long-awaited 2002 Annual Report on Form 10-K, which includes a restatement of financials for the years 1998 through 2001, as well as the first three quarters of 2002. Previously president and COO, Nuti replaces Richard Bravman, who has stepped down from his executive and board positions. Previously, Bravman disclosed that he participated in a single transaction in the second quarter of 2001 that was initiated by others at Symbol that involved the premature recognition of approximately $860,000 in revenue.

Through all of the changes, Nuti says Symbol has persevered and crafted a winning strategy, one that hinges heavily on partner participation. Today, roughly 40 percent of the company's business flows through partners. By the end of 2004, the company hopes to see as much as 75 percent of its business flowing through partners. In his own words below, Nuti outlines why he's upbeat about Symbol and where his company plans on going from here.

VB: At the end of the day, what was the rationale for Richard Bravman to step down?
Nuti: At the end of the day, it was his decision to step down from the point of view that, I believe, he felt it would help to potentially drive a favorable conclusion to our process with the government. Whether or not it does that, I cannot tell you. But I think he felt that if there was at all an impediment to Symbol being able to move forward in a positive way, he was going to do everything in his power to change that. He took the difficult decision of stepping down.

id
unit-1659132512259
type
Sponsored post

VB: This change, this upheaval ... do you feel like you're at the end of the process? Is the end in sight?
Nuti: That's exactly how I feel. This is a major milestone for the company. This brings a tremendous amount of closure in a number of ways. First, with the filing of our 10-K, our internal investigation is complete; it's over, as is the restatement process. Complete. Over. This is a huge accomplishment for the company and allows us to focus all of our collective energies on the Symbol of tomorrow. As we enter 2004, we've put a major issue behind us. Although the internal investigation is complete, there will certainly be ongoing action, I think, taken against former Symbol associates based on whatever the government decides to do. None of that, I think, affects our company adversely operationally. The very fact that they are ex-Symbol associates and carry that banner may make for a bad press day here and there. But, essentially, it has very little or no bearing on the day-to-day operations of the company. That's point one. This is a major event for the company; make no mistake about it.
Secondly, we feel a tremendous sense of achievement for the company. Look, this has been a very difficult year for the company, internally and externally. The first two quarters of 2003, macro-economically, were pretty challenging. They were geopolitically pretty challenging. Business investment was slow in the first two quarters. Through all of that, we have had a very solid year financially, organizationally and operationally. We've executed Corporate America's best practices with respect to organizational and cultural change programs. This is something we hope to write a book about one day.
Third thing I would tell you is that we are very well-positioned for the future. That's well-positioned from a market point of view, well-positioned organizationally, etc. We have changed out 14 of the 16 senior most executives of the company in the past year. And the work we have done over the past year has prepared us to transition into the new year with great confidence. We were changing the tire of this car going 60 miles an hour in 2003. Not only were we able to focus very much on the restatement process and internal investigation, but we were able to balance that with a focus on the Symbol of tomorrow. And it shows up in our financial results that we have posted in the last three quarters, and it certainly shows up when you walk around the halls of Symbol and you see the incredible amount of change that has taken place this past year both organizationally and culturally. So we have a lot to be proud of. Yes, this brings a tremendous amount of closure, but, no, it's not the final stage of this process.

VB: You still have Heidrick & Struggles, if I'm not mistaken, engaged to help fill out some board seats. Is that correct?
Nuti: Yes, that's correct.

VB: So where are they in that process?
Nuti: We are, in fact, in the phase of the beginning stages of interviewing several people. As you know, we added three new board members just a few weeks back. And we hope in the first six months of this new calendar year to bring on several new members to our board of directors.

VB: Is that a tough challenge in that you want to reach out and get some outsiders that have some bonafide pedigree, but that the higher reach the more reluctance to join a company perceived to be in the throes of trouble you may encounter?
Nuti: Actually, the recruitment process has been much simpler than I expected from the point of view that several of the people, who are also very high-profile people in business, are interested in coming here for a few reasons. One, they are attracted by the same thing that I was attracted to and that the 13 other members of the senior executive team who joined in the last year were attracted to. That is the vision of the company with respect to enterprise mobility. The second is the fact that many of the new management team come from very high-profile companies, Fortune 500 or Forbes backgrounds. Many have run billion-dollar-plus businesses. There's a lot of senior-level people out there that know us and would like to be part of our team.
Third, actually, there's a counterintuitive aspect to this. Having gone through this, coming on board to a company that has gone through this, is an awful lot safer than joining a company who has not gone through this in the age of corporate governance that we are through. That's because it is highly unlikely we are going to do anything other that take the most conservative decisions and positions on things given the previous issues the company has faced. It's a little bit of a safer bet from that point of view.

VB: How do you move forward from here? What's your top priority for 2004?
Nuti: For is to stay the course on what we believe to be a world-class business plan. The plan that Rich, myself and the team built over the last year is the right business plan for Symbol. We're confident of that. We're confident of the vision. We're confident in what we need to do operationally, from a strategy point of view in terms of execution. So for us the top priority is to stay focused on staying the course, and it's all about execution.
We're at an interesting point in history. We're at the cross-hairs of three very unique things coming together. One, we are entering a new age of the IT revolution that we like to call "the age of mobility." We're really at the dawn of a new age where mobile technology is going to play an ever-important role increasing success of business. Secondly, our core technologies drive real business benefit. Our core technologies today, very simply put, can easily create an ROI that justifies their purchase. We drive real employee productivity. We truly create competitive advantage for our customers. We drive operational efficiencies. In many cases, our products help improve our customer's revenue streams. There is truly a real ROI here. Thirdly, the technology, our core assets and the technology we have in the company are maturing from a technology-adoption curve point of view. A few years back, you couldn't as successfully scale a very large enterprise mobility architecture, which combines mobile computing, Wi-Fi networking and mobility appliances. That was due to the lack of maturity in standards in Wi-Fi and the lack of maturity in standards of performance in mobile computing. Today you have that. We are at a unique position. Sometimes good luck is better than anything, but we are in a very lucky position. These three things are coming together, and we have to execute our business plan.

VB: Anything that you are going to do in '04 anew that you are not doing today in terms of markets served, technologies offered -- that sort of thing?
Nuti: We will be expanding our presence into other vertical markets. We are focused today on six: retail, transportation and logistics, warehousing, manufacturing, health care and government. We have a wonderful position in retail, a building position in transportation and logistics, an improving position in warehousing and manufacturing, and we have new growth opportunities in both health care and government, which includes both state and local agencies as well as the federal government, including DOD and the civilian side. That's one thing. The second would be selling more of a solution. The third piece I would point to would be a focus on operational excellence beyond where we have been. We are a company that has done a fair job operationally, but we are going to get our arms next year much more around our process, the simplification of business processes and the automation of business processes so that we can drive greater productivity.

VB: Any holes in the technology portfolio that you are going to fill in 2004?
Nuti: Great question. There are some holes in the technology portfolio that we are absolutely going to fill next year. I would say the two key spaces would be the mobility appliance area and, secondly, RFID.