Through hands-on testing of the company's design software, a CEO tries to reverse a sales slump
By Ryan Flinn
(Bloomberg) — Carl Bass gets inspiration for running design-software maker Autodesk Inc. from an unlikely place: a woodshop where he fashions beds and baseball bats by hand.
While spending his off-hours at a studio near his home in Berkeley, California, Bass uses the company's software to design objects out of wood and metal. The hands-on testing helps him spot where the technology is difficult to use—a perspective he rarely gets sitting in a boardroom, he says.
"When you're an executive of a company, it's easy to get far away from what your customers see," said Bass, Autodesk's chief executive officer, in an interview from his workshop. "Otherwise, what you get is a presentation from a bunch of people telling you how great what they're doing is."
Bass, 52, will need to apply those lessons as he strives to reignite growth at San Rafael, California-based Autodesk, following five straight quarters of sales declines. While the company's software helped design the new eastern span of the San Francisco-Oakland Bay Bridge and create the effects in "Avatar," many of its customers have cut back on spending.
Competitors Dassault Systemes SA, based outside of Paris, and Parametric Technology Corp. in Needham, Massachusetts, have seen sales rebound quicker from the recession: Both posted revenue gains this year after losses in 2009.
Analysts are divided on their recommendations for Autodesk stock. Nine advise buying the shares, nine have a hold rating, and three recommend selling, according to Bloomberg data.
Autodesk's stock has climbed 21 percent this year. It fell $1.59 to $30.77 on May 14 in Nasdaq Stock Market trading.
To get the company back on track, Bass is focused on fast-growing overseas markets and adopting cloud computing—a way of serving up applications, information and computing power via the Internet. By using the software himself, he's also trying to anticipate customers' complaints.
"You install it, and say, 'Why did it take me 40 minutes to do that? Why did it ask me 72 questions?'" Bass said.
The company is best known for its AutoCAD product, first released in 1982, a drafting program used by engineers, architects and movie producers to make 2-D and 3-D models of skyscrapers, city streets and virtual worlds. Bass is trying to enhance the software, which costs thousands of dollars, to give it a slicker look and more intuitive feel.
"It always seemed a shame to me that we might sell a $5,000 piece of software that doesn't look as good as a $49 video game," Bass said.
The Boss's Input
For Autodesk employees, Bass's tinkering can mean more work for them. The joke among the company's division heads is they each want Bass to spend time working with another department's software—not their own.
Bass says he spent 30 years designing and building things without any software.
"I kind of liked things being separate," he said. "At a certain point, it became useful enough to enable me to do stuff I couldn't do any other way."
Bass wasn't well known when he took charge of the company from star CEO Carol Bartz in 2006, says Sasa Zorovic, an analyst with Janney Montgomery Scott LLC. She quadrupled revenue during her 14 years at the helm, transforming Autodesk from a small software developer into the market leader for 2-D design. That was a hard record for Bass to live up to, he says.
'Hard to Follow'
"All in all, I would say he's done well, though I wouldn't say exceptional—it's hard to follow Carol," said Zorovic, who has a "neutral" rating on the company and doesn't own the shares. "He's been kind of dealt difficult cards by the economy. His entire tenure has been basically marked by this wretched downturn that we have had."
Bartz, 61, stayed on as chairwoman of Autodesk after handing the reins to Bass. She left the company last year to lead a turnaround effort at Yahoo! Inc.
Bass didn't take a direct path to becoming CEO. After starting college at Cornell University, he took a five-year break to build boats in Seattle. Bass finished up his degree and helped start a company called Ithaca Software. He joined Autodesk after it bought the startup in 1993.
When Autodesk's newest product came out a year later, analysts panned it for being too slow. Bartz fired Bass for joining the chorus of critics instead of providing her with a solution. She invited him back five months later, after top engineers said they needed his software skills.
"He was the kind of guy who had very strong views about things, very impatient, and he could be a pain in the ass," J. Hallam Dawson, a member of Autodesk's board, said in an interview. "There's a fine line between somebody being persistent and somebody being stubborn. And maybe Carl approaches that line sometimes."
The board originally didn't want to consider Bass for the chief executive position, Dawson says. But upon the insistence of his former adversary, Bartz, the board came around.
"There was a little suspicion that while he was a very talented technical guy, that maybe he didn't have the range of skills necessary for management," Dawson said. "The board's been able to test Carl with this very difficult period that we're just starting to come out of, and I think he's performed extraordinarily well."
To contact the reporter on this story: Ryan Flinn in San Francisco at +1-415-617-7176 or email@example.com.