The remaking of WordPerfect.

THE REMAKING OF WORDPERFECT

"We never considered hiring professional managers to help us. In fact, Professionals were the enemy. They represented 'business as usual,' which meant working for an overbearing boss, fighting political battles, and living with contention. A banker once suggested we look for someone with experience to run the company, so we found another banker. Having gained our freedom, we did not want to lose it."

That's how Pete Peterson, WordPerfect's former executive vice president, recently described the "regular guy" management style that prevailed during the 11 years he ran the company's day-to-day operations. There's always been something appealing about that style, which--with no venture money, no marketing wizards, no formal business plan--helped a bunch of amateurs bootstrap their way to a half-billion dollar word processing empire. For on.ce, the nice guys actually came in first.

But it turns out that the WordPerfect amateurs were often pretty dysfunctional managers. Peterson's own newly-published history of the company reveals that the nice guys spent a good deal of their time and energy on internal bickering, and their notions of how to run a major corporation were sometimes bizarre. Until last year, WordPerfect tracked its finances with a primitive cash-based accounting system; co-founders Alan Ashton and Bruce Bastian regularly filled top executive slots with cronies and neighbors (Peterson himself, who was selling draperies when WordPerfect hired him, is Bastian's brother-in-law); and the marketing department adamantly refused to mail upgrade notices to any of WordPerfect's 12 million users, for fear of offending retailers.

Small companies can get away with such quirky behavior, but in early 1992 Ashton and Bastian finally acknowledged that WordPerfect needed fresh blood. They ousted Peterson and brought in a professional sales and marketing manager, Adrian Rietveld, who this month took over officially as the company's chief executive officer.

Rietveld represents a fascinating choice as the head of the industry's fourth-largest company. A Dutch entrepreneur who sold his distribution business to WordPerfect in 1988, he is conspicuously an outsider in a company whose culture is close-knit, patriarchal, and remarkably homogenous. But Rietveld also knows WordPerfect unusually well for an outsider. He spent four years running the company's European sales and marketing division, and for the last 18 months has worked out of Orem, beefing up the management team, negotiating alliances, and overseeing a general overhaul of the company's management and marketing strategies. So Rietveld has had time to figure out what's wrong, and--presumably--to win the confidence of Ashton and Bastian, who still own virtually all of the company.

Rietveld will need that confidence, because it's clear that he is determined to rebuild WordPerfect from the ground up. That's a massive and wrenching job, reminiscent of Carol Bartz's still-unfinished revamping of Autodesk, another amateur-run software giant. Most companies undergo this management rite of passage when they're a lot smaller; WordPerfect, with some 5,000 employees, has immense inertia to overcome. And the timing couldn't be worse, because any loss of momentum now could cost the company its leadership in the word processing market.

But Rietveld seems to have a pretty clear idea of what he needs to do. We met with him recently during a get-acquainted tour, and he talked about some of his goals for the company:

* Get lean and mean: Rietveld inherits an organization that has become embarrassingly overstaffed. Most software companies of WordPerfect's size achieve $230-250,000 in sales per employee; WordPerfect realizes only about half that level of productivity. Rietveld plans a hefty round of layoffs later this month, but the larger problem (which he acknowledges) is an illdefined organizational structure and sloppy internal systems. "Before two weeks ago, I couldn't even get current sales figures," Rietveld admitted. Turning WordPerfect into a disciplined, numbers-oriented company will take more effort than just slashing the payroll, but there's certainly no choice if the company is going to be managed professionally.

* End the support giveaway: Much to the relief of WordPerfect's direct and indirect competitors, Rietveld has put an end to unlimited free support. From now on, users will have to register to get free support and will have to pay for help after 180 days. That's still a generous policy, but it's likely to shock WordPerfect phone junkies (who have been placing more than half of their calls after this 180-day period). Predictably, the phone junkies are already beginning to complain noisily on bulletin boards and in the trade press. So Rietveld very quickly has to find a way to shore up WordPerfect's service reputation, or risk the loss of a valuable competitive distinction.

* Define a product vision: WordPerfect's programmers have always done a decent job of responding to requests for new features, but the company has otherwise missed the boat on almost every large-scale market and technology transition- WordPerfect was late to market with a word processor for the IBM PC, late with laser printer support, late with graphical versions (for both Windows and Macintosh platforms), and late with a suite offering. One of Rietveld's biggest challenges will be to make sure WordPerfect isn't left in the dust the next time the market shifts suddenly. His first cut at a long-term product strategy is his so-called WordPerfect Information System Environment (WISE), which supposedly unifies the "preparation, presentation, and sharing" of electronic information. That sounds a bit too much like a Lotus Notes me-too message, but at least it should give customers a sense of where WordPerfect expects to go over the next few years. And Rietveld seems to have the clout to enforce his product strategy inside WordPerfect; he says he's already pulled the plug on a few pet projects that didn't fit into the WISE framework.

* Redefine the suite: For the moment, WordPerfect's most desperate market challenge is its lack of a true product suite to compete with Microsoft Office and Lotus SmartSuite. (Ironically, WordPerfect briefly flirted with the idea of selling its own spreadsheet, database, and presentations package as part of a suite three years ago, but top management decided that suites were just a price-cutting gimmick.) Rietveld's stopgap solution is a semi-integrated WordPerfect-Borland suite, but ultimately he has to convince customers. to accept suites that aren't Preadsheet-centric. That's where Rietveld's WISE architecture could pay off, by focusing more on tight integration of word processing, presentations, and communications. And Rietveld may get some leverage out of market-specific suites, along the lines of a newly-released suite for lawyers that combines WordPerfect 6.0 with three third-party legal applications. Document creation remains the core application for a large part of the office automation market, and WordPerfect still has a fighting chance in that market. But this time the nice guys have to be tougher and more focused if they expect to win.

Adrian Rietveld, president, WordPerfect Corp., 1555 N. Technology Way, Orem, Utah 84057; 801/225-5000.