By James Z. Daniels and Gale Sroelov
Special to TechJournal South

RESEARCH TRIANGLE PARK, NC – You wouldn’t know it sitting across from the somewhat self-assured Stephen Wiehe (pronounced whee), president and CEO of sciQuest, a leading e-procurement company, that he had real concerns regarding the sustainability of the company’s culture in an anticipated period of growth. In a wide-ranging discussion, he even revealed the company has considered going public again.

My associate Gale Sroelov and I had an extended conversation with Wiehe following remarks he made at a work shop sponsored by the NC Council for Entrepreneurial Development.

He was wrestling with the challenges of growth that come as an organization traverses those development stages that inevitably confront their leaders seeking to maintain their brand culture such as flexibility, predictability, openness and responsiveness to customers, employees and external influences while pursuing profitability and managing growth and high performance.

SciQuest describes itself as the global leader in assisting academic, healthcare, and research centered organizations achieve improved performance and a high level of resource utilization via strategic procurement of goods and services. Its goal is to take procurement beyond simple automation to a more strategic role.

The company says it eliminates the biggest obstacles to effective spend management – the high cost of enabling suppliers and inefficient systems that employees don’t use.

Using tailor-made software, the company assembles relevant suppliers tailored to the requests or demands of its customers.

The combination of an extensive supplier network – nationally and globally, and a user-friendly interface empowers customers to continually improve their procurement efforts for sustainable savings.

Reaching the tipping point
Wiehe’s challenge is that his company is reaching what is often regarded as the tipping point relative to the number of employees. There are now 172 employees with anticipated growth of 15 percent over the next several years.

He and his leadership team are preparing to tackle how to sustain an open, walk-about free-form management style with a somewhat unrestrained stay-in-touch and connected to all aspects of the enterprise. They see this as the ideal working environment to fuel robust financial growth and profitability over the next 5 to 7 years.

Wiehe believes the timing to prepare for the transition is right because of the high level of employee satisfaction reflected in a thorough, extensive employee survey from the end of last year. The results show that employees were 98.5 percent satisfied with the company’s image and culture.

Additionally, the same percentage of employees said they were proud to work for sciQuest and 97.8 percent believe they understand how their efforts contribute to the company’s mission.

The latter is directly related to Wiehe’s leadership style of gaining full employee support for the direction the leadership team sets at the start of each year.

The company turnaround
When he became president in 2001, he inherited a bloated, unprofitable company of 500 employees. His years at General Electric and at SAS – a major North Carolina employer that specializes in analytics – had prepared him to severely trim the workforce to 85 with no subscription revenue.

He began the arduous task of reestablishing a leaner and more focused enterprise and leading in a role comparable to that of an organization’s founder, the ultimate entrepreneur. As revenue and transaction growth improved under his leadership, he led the organization through the stages of founder, family and now fraternity – the essential, conceptualized components of organizational development.

During our conversation, he appeared very reflective. taking on a posture comparable to that of an academic, as he carefully described the challenges of the path he had to travel. He accepts that his key role is to empower employees to buy-in to the goals and objectives that he and his leadership team agreed was the direction of the company.

GE model didn’t fit sciQuest
He gave us a peek into his leadership demeanor. He said that at sciQuest he quickly learned that what worked for this General Electric alum where there was “never a shortage of sharp elbows,” – his way of describing the GE culture notorious for its driven commitment to high performance and off-loading the bottom ten percent of employees – would not work at sciQuest.

There had to be a clear understanding, cascaded down through the company regarding precise goals and a focus on achievement. In turn employees would then know how they would contribute to those goals and be self-motivated to perform focused on the direction that had been set.

Wiehe believes that it is when employees receive clear communication of what the leadership is desirous of accomplishing and grasp how their contribution supports those efforts that they make a free-will decision to fully participate. “sciQuest,” he says, “has been continuously improving in this area.”

Much of the work within the enterprise is structured around teams. He set the stage in January when he addressed the employees and presented the four major goals for 2009 – customer satisfaction; fiscal responsibility; increased market share in new segments; and developing the employees.

He keeps tabs on whether the employees have a good grasp of where the company’s heading and how they are contributing by holding managers accountable for communicating these principles. The managers know that they are participants in the direction setting process and Wiehe measures their performance on a quarterly basis.

Internet offers tremendous opportunity
He also is a firm practitioner of soliciting feedback from employees as he walks about the company located in a modest high rise building in Cary. He values honesty as he interacts with the employees. It’s one of the dimensions of the company’s culture that he wants to maintain but is unsure of its sustainability as growth and complexity occurs.

There is a sense of real accomplishment as he describes the successful recruiting of seasoned and talented employees who find small companies appealing. One such success is Jamie Duke as their COO who left McKinsey and Company. He said he agreed to join sciQuest because of the opportunity.

“I felt then, as I do today, that the internet generally held tremendous promise and opportunity for making business transactions faster, cheaper, and better. The vision of helping bio-pharmaceutical companies and higher education organizations was compelling and SciQuest was in a unique position to take advantage of the opportunity.”

Another IPO in the works?
Wiehe sees no obstacles to an expansion of up to 300 employees over the next five years, and he is quite pleased with how these employees quickly adapt to the open and low structured and layered organization.

Wiehe described his plans for taking sciQuest public. If he does, he will have taken the company full cycle, having bought it with private investor capital while a public company and then taken it private; reduced its size from an unprofitable enterprise with 500 employees to 85 by the end of 2002 with no margin. He then proceeded to rebuild it and make it profitable.

“But for the current state of our economy, and the IPO market sciQuest could have gone public this year.” He believes that sciQuest will evolve rather than have the investors sell the company and harvest their investment. He says this with understated confidence.

Company culture starts at the top
So what has Steve Wiehe learned about shaping a culture where employees thrive and give him a fighting chance to successfully bridge the transition from small to mid size while retaining all the attributes of a small, successful, open organization?

“I brought the behaviors from GE that were very hard elbows, very sharp knuckles and it was obvious that for me to get the business to grow, that was not going to succeed. In my head was what I learned at GE; that was the environment where I survived and thrived; where I won in that culture.

“Here at sciQuest I came to understand that that is not a long term culture strategy and so by the way, if I yelled at my CFO then I’m betting that she is not going to turn around and not yell at her staff.

“My theory is if I start at the top that behavior will trickle down. So in’03 I had to make a fundamental shift from the old model to the new model. Deep down inside if I had my preferences I’d be sure to kick ass but I work real hard not to exhibit that behavior.”

Over the next five to seven years, Wiehe sees sciQuest at 300 employees with a very enviable revenue stream and profit margin. With the real prospect of the company going public in the very near term, he and his leadership team will be challenged to sustain the current culture practices as its competition takes closer scrutiny. The need for more structure will undoubtedly stretch management’s ability to be as open and interactive as they are now.

James Z Daniels retired from the Hartford Financial Services Group. He is a consultant with elisit Solutions, a web based business diagnostic tool and a writer specializing in business and culture. He may be reached at jzdanielsmail@gmail.com.

Gale Sroelov is a senior professional in human resources and an HR consultant with A & S Computer Services Inc., a consulting firm specializing in Information Technology, Management, and Human Resources for small and medium business. She can be reached at gale@ascomputer.com.

 

Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org

© 2009, TechJournal South. All rights reserved.