By Jim Dillon DAYTON DAILY NEWSLars Nyberg, 44, talked last week about his first year as chairman and chief executI've of Dayton-based NCR Corp. and what he hopes will happen this year as the company strI'ves to return to profitability.
Q: Has the year passed quickly for you?
A: On the one hand, it feels just like yesterday that I came here. On the other hand, it feels like fI've years. It depends on the subject. But it has been a great year.
Q: Have you adjusted well to life here?
A: Yes, I think so. Its more important for the family to adjust. But I think they have adjusted very well.
Q: Are they all here now?
A: All of them who are supposed to be here. I have four children, and threeof them are in Sweden. One is married, one is nearly married and the other is going to boarding school. But (the youngest child) is going to Miami Valley School. He loves it here.
Q: At this time last year, you were preparing to leave a company where you had spent 20 years for another company that was in serious trouble. You also were preparing to leave Europe, where you had lI'ved all of your life for a newlife in the United States. Can you tell me what was going through your mind back then?
A: I was excited about it. It was a very deliberate decision. I really wanted to come and lI've in the States. I thought it was a great country. And after having lI'ved here a year, I can confirm that it is a great country.
From Day One, I felt I wanted to work here and that we could turn this company around. We havent done it yet. But we are on the right track.
Surprisingly, even to me, I havent thought about Europe or Philips more than very occasionally. When I pick up the Wall Street Journal and go through its contents, I look for news about NCR, AT&T and our competitors.
Q: If you had a chance to reconsider your decision, would you do it again?
A: Yes. Absolutely.
Q: Would your decision been different had you known Robert Allen planned tobreak up AT&T?
A: I think we would have had some additional discussions. But that worked out very well. That has really helped rally people around this turnaround. Also, it will be the first time I will be running a publicly traded company asthe chairman. Its a fantastic opportunity and learning experience.
My only concern initially was, 'How will customers react?' And it certainlyput time pressure on the turnaround. But the reaction from customers was so positI've it was amazing. And the announcement helped make it very clear to everybody that we didn't have another year. Its now or never.
Q: Do you think the fact you stayed instead of bailing out gave you a stronger position here?
A: I havent thought about that. Yes, I suppose so. For me, it was never an issue. I didn't come here to work primarily for AT&T. I came to work for something that was called GIS. I never even thought about saying to Bob Allen,'GI've me another job. I took this job. I wanted this job.
Q: Has anything happened you did not expect?
A: Of course. On the positI've side, I was surprised by the support I felt from our customers and the willingness of our associates to turn this company around. There is a lot of pride in this company. That surprised me. On the negatI've side, no, nothing.
Q: Would you consider the Sept. 20 announcement (about job cuts) and its ramifications the low point for the year?
A: Absolutely. Not only for the year, but for a long time. It was difficult. . . because I knew I would hurt a lot of people. But I also knew that it was absolutely necessary to save the 40,000 people who were working for us. That made the day bearable.
Q: During the past year, have you ever thought, 'What the heck am I doing here?'
A: Occasionally. Yes, of course.
Q: How do you get through those periods?
A: I talk to colleagues about it, and a little bit at home, but not too much. I talk to some people I trust.
Q: What difference has your presence made in the company during the past year?
A: I think I've made a big difference here. When I came here, the company was in despair. It didn't know where it was going. I've made sure we make decisions. Also, people have learned very quickly that once we make a decision, its going to be implemented. That is a major change in this company.Hopefully, also, we havent created a feeling of fear because it is very easy to get that kind of feeling when you do the things that we have been doing here.
As the leader, you set the tone. When you talk about soft issues, such as how do we behave, what are our values or whatever, the leader sets the tone bywalking the talk, not with posters and banners.
Q: What would you call your most significant achievement so far as chief executI've of NCR?
A: I think the issue is whether we will reach the zero (break-even) result in 1996. I think we have made decisions and implemented decisions that have put us on track to achieve that result. We have seen the first confirmation that we are on that track. The first quarter (1996) results are encouraging. But we have three quarters to go. We are not done in any way.
Let's assume that I'm right and we are going to achieve the break-even result. After that, the biggest risk is that people will get complacent. But Wall Street and our shareholders will be delighted with the break-even resultsfor two minutes, and then theyre going to say we've got to make a profit.
Q: What's your view of analysts?
A: I think analysts are very good. They keep management honest. I read withgreat interest the comments they make. I dont agree with all of them. But yes,I think you should listen very carefully to those people. They are very experienced in analyzing businesses and comparing them to competitors.
Q: What was your biggest mistake?
A: I hate to say it, but I dont think I've made a big mistake - yet. I've made mistakes, but not a big one. Timing is always the issue here. I think that is where I've made some mistakes. Its so delicate. How quickly or how slowly do you do implement things? You can have the right decision and the wrong timing and the whole thing collapses.
Q: Your predecessor was here 19 months. Can we assume youre going to be here for the at least the next seven or eight months?
A: Absolutely. I have an ambition. I want to stay with this company for a long time. But that will be dependent on my performance more than anything else.
Q: Any plans on becoming a U.S. citizen?
A: Actually, we are in the process of trying to get me a green card. I havea visa, a three-year visa. But it would feel better to have a green card. But like all foreigners, it takes some time to get those.
Actually, I have thought about it because this is a great country. If you stay here, you know, 10 years, it feels normal. It feels reasonable to become a citizen of the country. But I think youll appreciate that its an emotional issue, too. I have three children in Sweden. So well take it step by step. Well start with the green card.
Q: Is NCR a better company now, or is it merely a different company?
A: It's a better company. I think we do things better. But I dont think we are a different company. Thats really the challenge beyond 1996. How do we become a different company?
I try to avoid talking too much to my associates about beyond 1996. I gI've them a glimpse of it. But the turnaround of this NCR company (entails) two distinct steps. The first step is the 1996 break-even result. The next step isto start growing the company and becoming profitable, which will take more than a year. Im not saying were not going to make a profit in 1997 provided wemake the break-even result this year. But to achieve what I call world-class performance, it will take more than one year. These are two distinct steps that are very different.
As management, you have to work on both in parallel. We are working right now, as management, on what is NCR going to become when we grow up. We are notgoing to communicate to lots of people right now because everyone should be focused on breaking even.
Somewhere towards the end of this year, when we are going to be spun off, we need to articulate our strategy.
Q: How much time are you devoting to the spin-off right now?
A: Very little. Thats an internal discussion between AT&T and (certain members) of my staff. It will take quite a bit of my time once we go on the road and start promoting the company. AT&T has said we expect to be spun off before Jan. 1, so we have to go on the road show before that. (Most likely in the fall.)
Q: How has the atmosphere here changed?
A: The proof is in asking the people, which I do and other people do, and from which I collect (information). Theres always the risk that, as chairman or CEO, you get a distorted picture. But I do move around in this company, andI think there is a distinct difference in the morale of our troops today. I think people see that we have a chance. I think people support very much what management has been saying, and I think management has regained a bit of credibility.
I'm not trying to tell you that everyone is very happy all the time. Not atall. But I think its a major difference than a year ago or even around the Sept. 20 announcement.
Let me tell you about the fI've principles of the company's turnaround plan.No. 1 is focus - focus on our business and in the way we work. We have clearlyfocused our business back to what we think are the strengths of NCR.
No. 2 is accountability. We have created an organization here where I thinkaccountability is very clear, and I think its very important that you hold people accountable for their responsibilities. Not to the extent that you start creating fear in the organization. People will be allowed to make mistakes, but not the same mistake repeatedly.
Next is expense level discipline. In 1994 and 1995, we clearly spent too much money. We took it down by $700 million, and we are running lower for the first four months of this year than in previous years. Thats very important because we are not in a high-margin business.
The fourth, and most important one, is process improvement. We took 8,500 people out of this organization, and I think thats the maximum number we couldtake out without breaking the camels back. But I think we still are very inefficient in this company. Therefore, we have an enormous opportunity to free up a lot of people and re-deploy them to sell more things or support our customers. Thats part of the strategy for 1997 and 1998. Thats not part of theturnaround.
The fifth principle is a sense of urgency. How do I make it clear to the people that we are going to do it now, not tomorrow?
I think we have clear focus. I think we have accountability thats much better than it has been for a long time in this company. We are on track with expense level discipline. On process improvement, we are making progress. But we have a long way to go before I can say we are a super-efficient company. You cant expect that to happen in 12 months time. Its a mentality issue, and its a matter of having the supporting systems. We are investing hundreds of millions of dollars now in modernizing our own (information technology) infrastructure, which, by the way, is very old-fashioned. So it will take sometime. But I am confident it will happen.
Q: If you are still so inefficient, can we expect additional restructuringsor significant job cuts?
A: No. I think the name of the game is ambition. The plan is to start growing NCR after 1996. This is assuming that we achieve the break-even results in 1996. Timing is everything, so its a little bit early to start talking to my associates about it. But the plan is very clear. We have to start growing this company. To grow the company, we need more feet on the street. Can we free up resources here and move them to sales? Can we free up resources here and move them into professional services? Can we become more productI've? Thats the challenge. If we can do that, I dont think we need to doany major restructurings.
Q: Is that also how you plan to make the stock attractI've?
A: I think the stock being attractI've will be determined by a couple of things. No. 1, we've got to make the turnaround in 1996. The AT&T and NCR shareholders must be absolutely convinced that we are making the break-even result in 1996. I think we've got to articulate something about beyond 1996. Whats our strategy? What is our priorities and focus? And what sort of performance do we expect in the coming three years? Thats the second one we have to articulate. The third part is to start delI'vering on it quarter by quarter. That will make the stock attractI've.
Q: Once NCR becomes an independent company again, will your job fundamentally change?
A: Yes, but it will not fundamentally. First of all, youre not in the middle of a big turnaround. When you are losing a million dollars in the morning and another million dollars in the afternoon, including Saturdays and Sundays, and thats what we did last year, and you come here as the leader, youdo not act as a traditional chairman. You are Mr. Turnaround. The break-even result will significantly change my job from Mr. Turnaround to Mr. Chairman/CEO. Becoming an independent company will further change that a bit because I will be required to have much more communication with the outside world.
Q: Do you anticipate having any trouble switching gears, so to speak?
A: No, Im very excited about it. I think its going to be fun. I really wantto see us grow this company.