New Acxiom CEO Seeks To Bring Focus to Firm

For years, one word in particular could be used to describe Acxiom Corp.: "nebulous." That word applied to the corporate titles - like "company leader" - to the organizational structure, to even the function of the business.

(To see what the new organizational structure of Acxiom looks like, click here.)

Chief Executive Officer John Meyer, who took the helm of the global interactive marketing services firm in February, seems to have set his sights on bringing clarity to the Little Rock company.

In fact, the descriptor "global interactive marketing services company" was his first brainchild.

"One of the things that I've found is that it's very difficult to describe what we do," said Meyer, 52. "And some of that I think is because of our reluctance. Some of it is because what we do is not easily understood."

In an exclusive interview with Arkansas Business, Meyer opened up about his changes at and plans for Acxiom.

"When I went around and I talked to customers and I talked to employees, they only could describe what we did based on what they did as opposed to having a vision for the whole company.

"And I saw that as somewhat of a disadvantage because we have all these capabilities; we have all these customers. But, if you looked at it, we sold a customer one thing and only one thing.

"And the hard part in our business, really in any business, is establishing a relationship where the customer likes you, trusts you and is willing to buy more from you. Well, we pretty much never had that because we had guys who were thinking, 'I'm direct marketing,' 'I'm mailing' or 'I'm e-mail' or 'I'm employee background screening' or 'I'm this.'"

So Meyer and the management team's first course of action was to find a way to describe the company as succinctly and memorably as possible. (See A Few Good Words.)

Ironically, viral marketing - an increasingly effective form of marketing - had been virtually useless to Acxiom because even the employees couldn't succinctly describe the business.

None of this is to say former CEO Charles Morgan and other managers in the previous administration neglected the ambiguity. Tunnel vision, however, can be a side effect of 35 years of the same management.

Meyer found the duration of the Morgan regime surprising. He said, though, that the lengthy tenure of the former management was beneficial because "an injection" of new management had not become an exhausted effort to put the company back on a profitable track.

New Acxiom Takes Shape

Seeking to make Acxiom more profitable, Meyer overhauled its organization.

The old model divided the company into three silos: a technology silo that included the company's outsourcing work, a marketing services silo and a data products silo. Meyer said each silo operated as a completely separate business unit, providing all its own functions from sales to development to IT services.

(This organization would have made for clear-cut spinoffs had the private equity deal announced in May 2007 gone through.)

The self-sufficiency of the silos limited many Acxiom customers to doing business with only one of the three business units and kept them unaware of the other services the company offered, Meyer said.

Meyer rejected the old model, instead consolidating common functions into company-wide departments, particularly sales, IT and service delivery, such as building databases or writing marketing plans. Then he divided the company into two major categories: a "lines of business" unit and a "market-facing" unit.

Employees in the lines of business unit focus on driving growth of their particular line of business, for example, building databases. An employee in the market-facing unit focuses on building relationships in one of 12 industries and the European and Asia-Pacific markets.

The new organizational structure ensures that two kinds of people look at each deal. A person in the market-facing function - such as the employee who always works with the retail industry - analyzes the deal. And a "thin layer of experts" within the particular business line - such as digital marketing services - works with the market-facing employee on the deal.

"And so we only solve the problem once. And then in other places, because of the lateral thinking, you pull it across the organization. You become a thought-leader," Meyer said.

The Birth of a Salesman

The restructuring largely affected the Acxiom sales function by consolidating the three sales departments of the three separate silos. Meyer, however, also created a "company head of sales" position, which started as global sales leader but is now senior vice president of sales. (See The Death of a Sales Leader.)

Meyer had two reasons for creating the head of sales position.

First, he noticed that sales almost seemed like an ancillary function. "But everything really starts with a sale," Meyer said, "because if you don't have business, you don't have jobs for people. You don't have opportunities to push new things. So I really wanted to raise the profile of the sales function within Acxiom."

Second, Meyer saw that the sales function needed structure.

"We needed some discipline," he said. "We needed some discipline around how we compensated the people, how we measured their success, how we evaluated whether we wanted to pursue things or not, how we collected our pipeline so that we know what we were working on and the things we were working on were things we wanted to work on. And we didn't have that.

"I wanted to create an organization where I could turn to this person and say, 'You're accountable for this.'"

More than just the hierarchy of the sales department has been rewired. Meyer has implemented two different methods of compensation.

"Because of the way we were set up, there was kind of a blending between somebody that would manage an existing relationship and somebody that would be responsible for selling a new relationship," Meyer said.

"And when you do that, what you find - because it's much easier to just kind of shoot the fish in the barrel, do the renewals, than it is to go out and create new customers - if you're compensating people the same, people go to the place where they can get the greatest amount of benefit for the least amount of work."

Meyer, therefore, split the method of compensation into bonuses for the customer relationship managers and commissions for the hunters or relationship generators. "And I'm expecting that this will drive growth," Meyer said.

Growing Pains

For years, Acxiom was a staple on the "best places to work" lists, but that didn't last long after a series of layoffs starting in 1999.

For his part, Meyer said cutting jobs is a last resort.

"Although we've had a little bit of people reduction, we haven't had a lot. Part of what I think is important to me is to make sure that that is the last step if we have to ever do it."

For employees, however, having jobs shipped overseas is just as frightening as losing them. Either way, some of them are out of work.

To Meyer, who has spent about 22 years living outside the United States, global orientation is crucial to Acxiom's growth strategy.

Here's how Meyer views off-shoring:

"If you're going to be a global company, you truly have to make sure that the work force you have is spread in the areas where you can utilize their relationships, you can utilize the business growth. And it goes without saying that there's some labor arbitrage."

However, the arbitrage - profiting from market price discrepancies - only lasts about four or five years, Meyer said, because economies mature. "And so no longer is China an effective manufacturer for tennis shoes."

When the marketplace evolves, employees in that market can become the company's nucleus that can grow with the economy, he said. Eventually, that unit becomes a profitable diversified business unit, through bringing in income rather than just collecting foreign price discrepancies and by performing functions that a U.S. branch cannot.

"From Conway, we can't really sell to people in India. You need to have people locally that speak the language, that grew up with people, that have the relationships," Meyer said.

"Since the rest of the world is not as developed in the use of marketing services, there are functions here that we can put over there that would be valued more than they would if they're left here."

The company's expansion into Gdansk, Poland, in April was a result of such thinking. "And we need more critical mass over there - really all across Europe."

Meyer added that these are not jobs being shipped from Arkansas to Poland.

This same philosophy has recently led Acxiom to plan expansion in the Asia-Pacific or "APAC" region.

"We are looking at growing a center in China. It's a giant market. They're just starting to get started in marketing. We have a very good footprint with our existing organization, and we're looking to grow it," Meyer said.

The expansion will occur sometime within the next year and will add jobs, Meyer said. The business unit will be centered on analytics initially and then perhaps expand into other functions.

Tackling a Tough Economy

With the recent troubles in the financial industry, Meyer expects much of the company's growth to come from expansion in other sectors, such as automotive, insurance and retail.

Meyer said the tough economy has made things easier, though.

Meyer, taking advantage of what he described as lowered expectations in a sluggish economy, has sold off the company airplanes and the Chenal and Riverdale facilities and relocated the affected Arkansas employees to the Conway or downtown Little Rock offices.

As for the mergers and acquisitions side of the company's growth strategy, Meyer said he would much rather be a grower and a builder.

"I actually think that when you have to buy a technology or a capability, that's a reflection on the management not being smart enough or not willing enough to take the risk to develop it themselves. It just shows that you missed your opportunity in the market," Meyer said, adding that most acquisitions don't work.

Speaking of acquisitions that don't work: "Truthfully, having a private equity deal blow up was a good thing for me," he said.

Meyer said he wouldn't have wanted the responsibility of turning around a company with $2 billion in debt, but heading a company with $600 million in debt leaves him a little financial muscle to reposition the firm.

He added that "the worst thing to do is to go into a situation that's running perfectly, because there's only one direction to take it."

As for the stock price, which has suffered from the failed $3 billion go-private deal with Silver Lake Partners and ValueAct Capital, dwindling from $28.09 a share in May 2007 to $11.44 a share last Wednesday, Meyer said: "It needs to go up."

"As a company, we really haven't had a track record of succeeding quarter on quarter. We need to tell people what we're going to do, and then we need to beat it, and do it every quarter, day in and day out, so that we become the company people don't bet against."

"We need to get back on a growth path," Meyer said. "We also need to put some processes and procedures into the business that we haven't had before - things like in sales, things like business reviews, things like individual accountability.

"And we'll get there. We're actually on a pretty good track."

Meyer has such faith in the company and restoring a corporate culture that attracts workers that he bought about 15,500 shares out of his own pocket shortly after he started. "Put your money where your mouth is," he said.

"I believe in this. And we're asking investors to believe also. I know I can make an impact. I know this will be a great place to work. And I know it will be a good return for our shareholders, for our employees and our customers."