Interview with John S. Chen, Chairman, CEO and President of Sybase

BrownHEN interviewed John S. Chen, Brown '78, Chairman, CEO and President of Sybase, Dublin, CA.

1. John, you are highly respected for the "turn-around" you accomplished at Sybase. Can you summarize your strategy?

We did it in three phases, beginning in 1998 when I became CEO. At that time we managed to "right the ship" by thinking strategically—finding our own niche, reorganizing, and asserting managerial discipline.

Phase 1: 1998 revenue $867,469,000; net income negative $93,128,000.
In Phase I, we defined a new direction, achieved break even and grew cash. We restructured to achieve a correct skill mix and business model. To do this we reorganized into four divisions:

1. Enterprise solutions; focused on integration, moving and managing of data and applications.
2. Mobile & Embedded Computing; focused on products and solutions to extend enterprise systems to remote and wireless devices -- the forerunner to today's Unwired Enterprise strategy.
3. Business Intelligence; focused on products and solutions enabling data consolidation and analysis.
4. Internet applications; focused on solutions for design, construction and deployment of Web-based applications and extending existing client/server applications into a new web environment.

Phase 2: 1999 revenue $874,000,000 net income $63,000,000.
In Phase 2, we stabilized revenue, ensured the highest level of installed customer base satisfaction, increased profitability, and grew cash. We also established individual division accountability, and built selected capabilities through targeted acquisitions and investments.

Phase 3: 2000 revenue $961,000,000; net income $116,000,000.
In Phase 3, we ignited our growth engines derived from strategically focused acquisitions, completed transitions to vertical and solutions focus, and built new strategic partner relationships. We also began expanding geographies, especially in China.

Phase 4: 2007 revenue $1,026,000,000; net income $157,300,000.
We’ve moved on to Phase 4 and established number 1 position in many key markets.

2. Please describe what you see as the similarities between remolding an established company and starting a new one.

You start something with a product that only some people will want. Only a niche market has a chance to grow. In reinventing an established company as Sybase our traditional database was in a mature market so we aimed our small footprint database SQL for the growing laptop market. In other words, we established a beachhead in a niche market by selling the whole product SQL anywhere we found interest.

For an established company or a new company, when your product has a huge demand, you should focus on production. This helps you maximize your market share. At Sybase we gained a 78% market share for our small footprint database. For both types of companies you lead your business into the mainstream by creating an ecosystem. In a low-growth stable market you should go to an adjacent market. This means expanding into a new niche. Ours was to create a vision of the Unwired Enterprise for a mobile world. This will lead us into mBanking and mPayments, and eventually mCommerce

3.  Readers probably do not know of your early childhood. Please describe the obstacles you overcame and how you did it.

I was born in Hong Kong after my parents left Shanghai, like many others, to make a new life there. I grew up in poor circumstances. We lived in a single bedroom. In place of a dinner table, my mother covered some suitcases in cloth. My father had graduated from college in Shanghai but in Hong Kong he worked overtime at odd jobs in factories and shipping warehouses in order to feed his family, and finally to allow us to move to a better neighborhood and schools. Throughout this time I managed to remain optimistic. I worked hard in school and dreamed of attending an Ivy League college in the United States. Those early years in Hong Kong stayed with me and taught me a valuable lesson—that anything can happen either way.

4. Is it true you studied mechanical engineering at Brown? How much does one choice of an undergraduate concentration limit one's career choice?

No. I studied electrical engineering. One’s career can be very different from what he or she studied in college. The most valuable things I have learned at Brown were not from the textbook, although I did study hard and did well. Technology advances so quickly, and people’s lives evolved so fast. What you learn today from the book can be outdated tomorrow.

At Brown, I gained the ability to think for myself and to be creative. Brown energized me to problem solving. These qualities, coupled with discipline— something that I acquired from my earlier education in Hong Kong—have allowed me to handle well the roles that I had later in my life.

In 1979, I started a 13-year career at Unisys/Burroughs and held a variety of engineering and management positions, including vice president and general manager of two of the major divisions. In 1991, I joined Pyramid Technology Corporation as executive vice president. Two years later I was president, COO and board member. In 1995, when Pyramid was sold to Siemens Nixdorf I became vice president and the following year I became president and CEO of the company's Open Enterprise Computing Division. That took me to Munich. In 1997, I joined Sybase as president and COO to help restore growth and profitability.

It is clear from this that what was important about my undergraduate engineering degree is that it gave me an education that helped me transfer my skills to create a personal package that includes my work and my other activities. Today, there is little connection between my undergraduate major and my current job. What is important today, as it was when I started, is discipline, the ability to think, my energy, enthusiasm, my goals and the skills I've acquired along the way in a variety of fields. I wear many hats. But if you ask me who I am, I would tell you, I am a businessman, running Sybase—a leading software company.

You might then ask me why I am involved in other activities, especially politics. The fact is that in America, economic and political discussions are often intertwined. Without a good understanding of politics, I can’t be a good businessman. All my involvement in helping shape U.S. foreign policies in by serving on the President’s Export Council, and on the Secure Borders and Open Doors Advisory Committee, for example, is to help us build a better business relationship globally.

5. Biology and medicine are attracting many of the best students these days. Do you think opportunities still remain in software?

Predicting is hard, especially about the future because in 10 years or so, many things we now believe permanent will have disappeared. That said, much of modern life depends on predictions and the need to be able to predict. In this prediction area alone there are immense opportunities for software that combines data mining, analysis and machine learning to help people do a better job of anticipating and coping with unusual events. The question is only how wide a range of human activities can be modeled this way. It is possible in the future that we could predict when an expert will be surprised by changes in housing prices in certain markets, in the Dow Jones Industrial Average, or in the exchange rate of a currency.

Cloud computing—so called because it involves software that lives in the "clouds" of the Internet—has caused a tidal shift in how people are actually creating software.

The future of software lies in the ways young, trained minds will go on contemplating how they might change their lives. The question is whether teenagers ever stop doing that.

6. What advice do you have for young alumni about how to succeed in a global society and economy?

At Brown I learned above all that my teachers were collaborators with me, not just disciplinarians. This aspect of my education has served me particularly well. As a technology company leader with a global market, I'm frequently invited to speak at forums here and overseas where I always strongly recommend going the collaborative route to leverage all the global resources available to innovate. We need to compete on value, quality, design, and support, while we collaborate on establishing the best global standards for innovation. Successful collaborations that were created outside the traditional business world, such as the development of open-source technologies like Linux, are being held up as models for enterprises as they meet the challenges of a competitive world.

7. Does a person in your position have opportunities to contribute to engineering advancements?  Please describe how—your schedule must be too busy for you to actually be designing software.

I am actively working to ensure a favorable environment for people to innovate on a global basis. My work is to encourage innovation and this helps engineers.

8. What are the top five qualities you would ascribe to an entrepreneur?

1. Trust your own judgment and intuition over "conventional wisdom."
2. Grow by seeking the unfamiliar.
3. Create an environment in which people can express themselves freely.
4. Learn from experience—especially how much you don't know, i.e. be humble.
5. Don't trust first appearances.

9. Would you speak about fear as a motivation or hindrance toward accomplishment? How has that played a factor in your path, if any?

When I was quite young I developed an upbeat attitude, even when life dealt me a blow. I retain that upbeat attitude today.

10. As you know, the entrepreneur’s path is filled with trials and errors, and also failures. What’s a valuable insight for entrepreneurs to keep in mind when they’re experiencing setbacks?

Look for the positive in challenging times. In other words, see the glass as being half-full rather than half-empty.

Also, always have a long-term perspective in your endeavor. In many occasions, an apparent step backwards might benefit you or your business in the long run.

11. What is the latest insight (about life, work, play) that you picked up and would like to share with BrownHEN.

We need to engage. Don’t complain about negative events that happen to you as if they are someone else’s issue. You need to roll up your sleeves and do something about it, and that is the only way things will get better.

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