To Autodesk -- and Beyond?

Carol Bartz has become a force in technology, thanks to her success at the CAD software maker. A government post could be in her future

Carol Bartz's first days as the CEO of Autodesk were nightmarish. Back in 1992, the maker of CAD (computer-aided design) software sold only one product and was badly mismanaged, recalls Charles Foundyller, CEO of consultancy Daratech in Cambridge, Mass. "The place needed adult supervision," he says -- and Bartz was to be that. But soon after her appointment, she found out that she had breast cancer.

Bartz, now 55, says it never occurred to her to quit. "I had made a commitment," she says. "I think part of that Midwestern farm heritage" -- Bartz grew up in rural Wisconsin -- "is that you have a job to do, and you do it. The cows don't wait just because you don't want to milk them that morning." She returned to work one month after her mastectomy -- vs. the six weeks her doctor had recommended -- and rolled up her sleeves.

Today, Bartz's cancer is gone -- and Autodesk's (ADSK ) products are the standard for computer design. At $952 million in 2003, revenues are 1.6 times what they were when she took over, making it the sixth largest PC-software company in the world.


  In fact, Autodesk will cross the $1 billion sales mark for the first time this year, analysts predict. That's a huge achievement considering the setbacks it suffered in the recent economic downturn, when its revenues dropped. "A lot of the credit goes to Carol," says Jonathan Rudy, an analyst with rating service Standard & Poor's in New York.

As Autodesk has prospered, Bartz has became a major power in the tech industry. In 2001, she was nominated by President Bush to the President's Council of Advisors on Science & Technology, a role in which she has helped shape the Administration's high-tech and research and development agenda. Bartz is also a member of the boards of software maker BEA Systems (BEAS ), networking king Cisco (CSCO ), storage maker Network Appliance (NTAP ), and the National Science & Technology Medals Foundation.

And yet, "if you met Carol on the street, you wouldn't know she's a CEO," says Dan Warmenhoven, CEO of Network Appliance. Her friends say it's Bartz's straight talk, people skills, and toughness that have allowed her to get this far.


  Her mother died when Bartz was eight, and she grew up with her grandmother -- a no-nonsense woman. At the University of Wisconsin, where Bartz studied computer science and wrote her first program, she demonstrated against the Vietnam War. After graduation, she rose quickly from sales positions at Digital Equipment, now part of computing giant Hewlett-Packard (HPQ ), and at tech powerhouse 3M (MMM ), to become vice-president for worldwide field operations and an executive officer at server maker Sun Microsystems (SUNW ) during the years when it grew from 800 employees to 12,000.

"When a company grows so rapidly, many managers can't scale -- but not Carol," says Crawford Beveridge, chief human resources officer at Sun, who used to work there with Bartz (Beveridge also sits on Autodesk's board).

Bartz's biggest challenge, though, was straightening out the mess at Autodesk back in 1992 -- and then guiding it through the difficulties of 2001 and 2002, when its sales shrank 13%, to $825 million, amid the general economic downturn. She had to lay off 6% of her 3,700 employees.


  To make things worse, Autodesk's chief financial officer left for another company. But Bartz never got discouraged: "I get bored during the good times," she says. "I'm the main cheerleader" -- she was also a cheerleader in high school -- and cheerleaders are more in demand during bad times.

Bartz never looked out of spirits, recalls Marcia Kemp Sterling, senior vice-president, general counsel, and secretary at Autodesk. At the end of the day, she would work in her garden, where she grows everything from flowers to tomatoes. "During the tough times, she gets her hands in the soil," says Sterling. "She grounds herself and comes back with a new direction and vision and recharges everybody."

During the latest downturn, Bartz steered Autodesk toward a new practice of selling software by subscription -- allowing customers to use it for only a specific period of time, but entitling them to free updates during that period. That allowed for more predictable revenues vs. Autodesk's prior business model, in which customers could use its software indefinitely after purchase but had to pay for upgrades. She also shortened Autodesk's product development cycle from two years to less than a year and began pushing more advanced software that, for instance, allows for designing in 3-D.


  Hence this year's good news. A new software product, called Inventor, is selling well. Autodesk is also getting a boost from its latest release of AutoCAD, says Daratech's Foundyller. That's partly why he projects that Autodesk's sales will grow 11.4% this year, vs. 3% to 4% for the CAD sector. The company's operating margins reached nearly 20% in the quarter ended in January, vs. less than 1% a year before.

Now, Bartz hopes to improve margins further. As her execs know only too well, she achieves most of what she sets out to do: She regularly makes bets with them on everything from the timing of a product release to fluctuations in foreign currency (the strong euro was a contributor to the recent sales surge, since 57% of Autodesk's sales come from outside the Americas, says S&P's Rudy). The winner gets a free latte -- and Bartz wins hers often, Sterling says.

Over the years, she has made mistakes on occasion. For instance, Autodesk entered markets such as high-end animation that proved to be too small, says Foundyller. But such missteps have been more the exception than the rule -- and Bartz doesn't give up on new product lines easily. She knows she can't climb Mr. Everest, she says. But she can accomplish nearly everything else.


  Karen Nierenberg, executive director of The Community Breast Health Project, a Palo Alto (Calif.) information resource for people with breast cancer, recalls how Bartz showed up for a board meeting one night with a hugely swollen leg. Turns out, she had rushed from work to her daughter's soccer game and slipped, twisting her ankle. She hobbled to the game, then limped to the board meeting. Because the Project's freezer had no ice, she ended up sitting with a bag of frozen peas on her foot. But she carried on as usual, Nierenberg says.

Indeed, balancing a demanding job with volunteer work and family has been a tough feat. "I have a belief that life isn't about balance, because balance is perfection," Bartz says. "Rather, it's about catching the ball before it hits the floor."

Ever since her daughter, who's now 15, was in elementary school, Bartz would sit down with her at the beginning of each school year and promise to come to certain school events -- say, a Christmas concert or the Halloween party. "I don't care if the Pope comes to Autodesk, I'm still going to spend that time with her," she says. Recently, she canceled a business dinner to attend her daughter's first prom. She also finds time to catch some San Francisco 49ers' games.


  Bartz encourages her employees to have a life outside of work as well. Autodesk's staffers can receive several hours off a month to help out at their children's schools. A few weeks ago, Bartz taught 60 or so of her employees' kids, who showed up for the company's bring-your-kids-to-work day, how to execute a real business handshake (hand should not be limp, look the person in the eye).

And as part of her work on the President's Council, which has fueled speculation that she could eventually snatch a top government post, Bartz tries to promote programs that would encourage girls to study math and science and enable them to pass freshman calculus. (For now, her own daughter is leaning toward trying to become a Broadway star.)

After years of hard work, all the pieces finally seem to fall into place: Bartz's company is growing. Her cancer is gone. And whatever challenges remain, Bartz will get there -- if her latte score is anything to go by.

By Olga Kharif in Portland, Ore.

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