Chuck Berger is Kenandy’s Chief Executive Officer. Prior to joining Kenandy, Berger was the president and CEO of Extreme Networks, a leading provider of high-performance networking solutions. Before joining Extreme, Berger served as CEO of both large and midsize companies including ParAccel, DVDPlay, Nuance Communications, Vicinity Corporation, AdForce, and Radius. He also held executive positions in sales, marketing and finance at Apple and Sun Microsystems.
Steve Brooks: Can you tell me who your inspiration is and why?
Chuck Berger: I had the very great privilege of working for almost the entire decade of the 1980s at Apple Computer. For a good chunk of that, I worked very closely with a person we just lost a year ago, Bill Campbell, who really inspired me in a number of ways. His relentless drive to coach and mentor people to get the most performance and the greatest contribution out of both individuals and teams that was possible. It really transitioned Apple from when I joined, which was then only a one or two year public company, into a multi-billion dollar run rate by the 80s.
I learned a lot about leadership, business strategy as well as how to really develop both individuals and teams. In the background, the whole Apple Computer first leg of revolutionising the computer industry was happening. It wasn’t until the second leg of Steve’s contribution that he changed three or four other industries.
Steve Brooks: How would you describe your leadership style now?
Chuck Berger: My leadership style is to try and recruit the absolute best players for my key executive positions in the belief that I need to hire functional leaders that know more about their function than I do. Great leaders and A players will hire in their own image so give them a wide range on how they run their part of the business. My role is to make sure they’re all functioning together as a team and support them when they need additional help.
Steve Brooks: What are your personal challenges for the next 12 months?
Chuck Berger: Like any relatively early stage company, it’s how do you ramp against what is an incredibly quickly growing demand for ERP in the cloud in general. Specifically for Kenandy and the Salesforce platform, a company that’s only a few years old and has raised $55 million. It’s always a challenge to meet rapidly rising market demand and demand for your own company’s products against a relatively young company.
Steve Brooks: What was your darkest business day and how did you overcome it?
Chuck Berger: My darkest business day probably goes back to my first CEO assignment. I was running a company called Radius. It was several years before Steve returned to Apple. We made peripherals for the Mac marketplace. If you go back and look at the history of Apple in the mid-90s, they crashed and burned badly. In fact, that’s what created the window for Steve to come back.
The old joke was when Apple gets a cold we got pneumonia. It came very close to us going out of business as a result. How we overcame it was just a determination and drive that we weren’t going to let that happen to us. We found creative solutions that essentially caused us to completely restructure and financially engineer an exit of a number of parts of the company to a point where we returned more to shareholders than they had ever seen in Radius stock before.
Steve Brooks: What’s your proudest moment?
Chuck Berger: There’s more ahead at Kenandy. Looking at my past, doing my first IPO with Adforce back in 1999 and then ultimately selling the company for one and a half billion dollars. It was a four-year effort from a raw start-up to an obviously substantial valuation that gave tremendous return to my investors. A great reward to my employees who had worked so hard to do that and a good indicator to our customers that they had picked the right horse to go with.
Steve Brooks: Can you share a tip for new CEOs?
Chuck Berger: I can still remember, although it was 25 years ago, walking across the parking lot at Radius my first morning saying, “Wow, this is all on my shoulders now.” Share the great news and make sure your team is excited and motivated. Build the very best team you can but never forget that in the end, you own the good and the bad. It might be a trite statement, but the buck definitely stops with you. In this new role there’s not someone else standing behind you that’s going to put up the catcher’s mitt when things go wrong.
Steve Brooks: What’s the worst and best decision you’ve made as a CEO?
Chuck Berger: Well I would have to say in both cases it revolved around hiring. I won’t mention a specific name but I made an extraordinarily bad hire in a prior job in a sales VP function that nearly sank the company and certainly didn’t help my career. On the positive side, it’s definitely the key executives I’ve hired over the year through their intellect, commitment, energy and leadership that have made my companies and myself far better than I could ever have done on my own.
Steve Brooks: What’s the latest business book you’ve read?
Chuck Berger: I have read all the standard books, Good to Great, Porter’s Competitive Strategy, Built to Last. The one I enjoyed and learned the most from because it caused me to relive times where I learned an awful lot of my career was the biography of Steve Jobs by Walter Isaacson. It’s a great recounting of a company that has obviously gone on to be the most valuable company in the world. A reminder that it went through many fits and starts along the way, particularly through the 80s and 90s before it got on the track that it’s on today. You have to be able to deal with that adversity and stay with your vision to get to greatness.
Steve Brooks: What’s your vision for Kenandy?
Chuck Berger: We have a very clear vision here. Cloud computing has become an inexorable force in the way enterprises of all sizes conduct their IT operations. ERP has been late to the game but it’s the most important application for any company regardless of what business they’re in. Riding that transition to the cloud with a newly architected next-gen ERP that brings functionality to customers and their most important application that’s never been available is what our mission and vision is.
Steve Brooks: What’s on the radar in terms of future tech for Kenandy?
Chuck Berger: Continuing to really do two things. One, enhance the functionality and performance of the Kenandy ERP. The second, creating even stronger leverage from the Salesforce platform and the Salesforce ecosystem. I think one of our greatest strengths in the market versus virtually any of our competitors is not only do we have a complete ERP aimed at light manufacturers and distributors, we’re on what I consider to be the richest cloud platform and certainly the longest and most tested cloud platform in the world.
Steve Brooks: You mentioned light manufacturing, are there any specific verticals you aim for at all?
Chuck Berger: We have not verticalized our business. There are clearly businesses where vertical applications are required so we avoid those. Like the fashion industry where you’ve got a tremendous breadth of sizes, colours, models, and a needed ability to mix and match that. There are ERPs focused very specifically on that vertical. There are highly regulated industries for which we have not built that capability into our product. When you get beyond some of those corner cases the needs the customers have from their ERP if they’re a manufacturer or a distributor are pretty similar.
ET: Is your focus in the US only?
Chuck Berger: Our key focus is here in North America. That said, we live in a global world today and we actually have a subsidiary of Becton Dickinson and Company running a pretty large plant in Limerick, Ireland, today. We’re bidding on a business in both Germany and Italy. Both of those companies are multinationals. We just signed a large deal with Johnson Controls. They are obviously a global company. We’ve found that while you can focus your marketing and sales efforts on one part of the world which happens to be our home market, you either get pulled into other markets because even the smallest companies today are multinational, or in the information economy the companies outside of North America find you. We can create value for them as well.
ET: International expansion is always fraught with risk. Do you see yourself pushing people into other countries or do you take a channel approach initially?
Chuck Berger: We’re definitely evolving a partner strategy here in the US. We’re emulating the Salesforce model. While their sales are almost entirely direct; their implementation and systems integrations are virtually 100 percent done with partners. We’ve built out over 20 partners here in the US with far in excess of 50 resources to help us with implementations. One of the deals that we’re working on in Europe right now is a systems integration partner that was just bought by one of the top three names in systems integration. We’re building out a partner network to help us on the integration, administration, and ongoing operations side.
ET: Is that your first interaction with one of the major SIs?
Chuck Berger: We’ve had discussions with the larger SI’s. If you go to Dreamforce you see Accenture, Deloitte and Bluewolf (IBM) all over the place. This upcoming engagement will be our first engagement with that tier of SIs. We do a lot of things with more of the mid-tier SI companies like NeuNet and Procore and others here in North America.
ET: What are the key challenges faced by the industry ?
Chuck Berger: The major challenge we face is on both sides of the table, both the customer and ourselves.
The most important IT-related business decision you’re going to make is what your ERP is as well as understanding what your needs are today and what they are likely to be in the future.
The challenge that we face to make sure that they get all the information they need to buy the best product in the marketplace, which of course we think is Kenandy.
ET: You’re saying that the customers need to make sure that they’re betting on an ERP platform/solution that will evolve in what is becoming a very rapidly changing landscape for industry?
Chuck Berger: Absolutely. If you look at virtually all of our competitors, and it seems like everyday I learn of a new company that’s in the ERP space, they’re selling products that were architected 15, 20, 25 years ago. It’s about building a new architecture that takes advantage of everything we’ve learned over 25 years but it isn’t bound by that. Innovator’s Dilemma is another great book about how legacy companies that have been around for a while can’t break free of their legacy architectures to move into the new world as it evolves. That’s why Kenandy started from scratch five years ago building against today’s tapestry not a 30-year-old tapestry.
ET: What does the competitive threat landscape look like at the moment?
Chuck Berger: As I mentioned a minute ago it seems ever-expanding. The key competitors we see in the manufacturing market are Epicor, Sage, Microsoft Dynamics, and NetSuite. In all of those cases they either have a very deep legacy of on-premises or multiple applications that customers have to pick from. They have relatively new and immature cloud limitations, many of which are simply hosted versions of an on-premises architecture. Those are the key people we see in the marketplace surrounded by another 30 or 40 names, frankly, that seem to pop up on a daily basis.
ET: NetSuite and Plex are cloud ERP solutions though.
Chuck Berger: Yes, absolutely. NetSuite and Plex are, though Plex is generally in heavier manufacturing than we go after. Both of those companies started as cloud products and architected from the ground up to be in the cloud. Both of them started or certainly NetSuite did, 20 years ago.
ET: One of the common areas that we’re hearing vendors talk about is reducing implementation time often from years to months. Kenandy talks about weeks. What are your current implementation time scales and how do you achieve that?
Chuck Berger: We have a $200 million division of a Fortune 100 company that we’re implementing right now from start to finish. We will implement that in 90 days. It might stretch to 120. I’ve run manufacturing companies where it took a year and a half just to upgrade from one version of Oracle to another. A 90 to 120-day implementation for a mid-market company, whether it’s standalone or a mid-market company owned by a large enterprise, is pretty revolutionary. How we achieve that is through two things. One, the product architecture is incredibly seamless and simple. We talk about 150 business-ready objects which are really very wide, deep data schema, data tables. In one enterprise customer we replaced 20,000 data tables with 150 business-ready objects.
I know you’ve been through ERP implementations yourself and 80 percent of what you go through transitioning to an ERP is manipulating and syncing data that lines up behind many, many modules in the architecture. In addition to business-ready objects, we have no modules. We’re one continuous end-to-end application. From the ability to do a quote either on our own product or SalesForce’s product all the way through to tracking the product from a service standpoint once it’s in the field. That’s a single app not eight or nine or a dozen modules. The very power and simplicity of our architecture allows us to implement quickly.
Secondly, it’s the processes we’ve built, particularly over the last 12 months, in our services organisation and with our partners to make sure we support the customer in addition to being as ready as possible. Often the biggest challenge isn’t the technology or making the technology work. It’s the customers understanding what their role is in the implementation in terms of having data ready and resources available to support the implementation. Our services group has been tuned up quite a bit over the past 12 to 18 months.
ET: How do you see the company changing in the next two years? How do you see yourself creating that change?
Chuck Berger: In the last few months of 2015 and 2016 we increased our customer count by 4x, exceeding 50 customers. We’ll double that again this year to exceed 150 customers. Clearly, we need to attract great people behind strong processes as we go through that explosive growth.
ET: How do you prioritise your day?
Chuck Berger: I focus my normal work day on two things. One, spending time with customers, understanding what they’re happy with, what they’re not happy with and what we can do about the latter. Second, spending time with my own team to keep track, again not on a grinding hands-on basis but to keep a strong sense of where their part of the business and going and how I can better support them.
ET: What’s the one question you’d like to ask another CEO to answer?
Chuck Berger: What have you learned most as being a CEO yourself over however many years that is?
ET: Can you answer that question yourself?
Chuck Berger: Certainly I think I have and that is absolutely you need the best team and people around you as possible. Secondly, you talk about what do you spend your day on. It’s critically important, it’s so easy to get focused on day to day execution and implementation. It’s critically important on a periodic basis to step back and make sure you’re on the right strategic path. I learned that in my first company. We executed just beyond belief excellently and we were totally dependent on Apple. When Apple crashed we nearly crashed along with them. If I had been a better CEO at that point, stepping back and making sure not only from an execution standpoint but from a strategy standpoint we were on the right path, that transition might have been a little less painful.
ET: Thank you Chuck.
