He's Not Braveheart, But Cognos' New CEO Says Low-Key Approach Also Works

Next week marks three months since Robert Ashe took the helm as CEO of business-intelligence software maker Cognos Inc. Cognos watchers can be forgiven if they haven't noticed any major difference.

Ashe's appointment as CEO wasn't a case of an outsider brought in to fix a troubled company. Cognos has recorded healthy sales and profit growth for years, with only a brief slowdown during the 2001 recession. Furthermore, Ashe, 45, has been with the company for 20 years, most recently as president and chief operating officer before taking over from CEO and chairman Ron Zambonini in June. Ashe retains the president's post as well while Zambonini remains as chairman.

Ashe joined Ottawa-based Cognos in 1984 and has held senior positions in finance, operations, research and development, and services. As president and chief operating officer, where he was groomed for the CEO post, Ashe headed marketing and sales. As CEO, he also assumes responsibility for Cognos' finance and legal departments. "I'm basically the guy who's accountable for the numbers," he says.

That's different than the old Cognos way. Ashe acknowledges that his management style is more low-key compared to Zambonini's often more flamboyant approach. The former CEO was known for dressing up as such characters as Star Trek's Scotty or Mel Gibson's movie warrior Braveheart to motivate Cognos employees. Last year, Zambonini vowed to perform a quarterly earnings call in the nude if Cognos didn't meet its projections. (It did).

Zambonini is no longer involved in Cognos' day-to-day operations. As board chairman he is responsible for board-management relations and governance issues such as compliance with Sarbanes-Oxley financial reporting regulations. Although Cognos is a Canadian company, it must comply with regulations such as Sarbanes-Oxley because its stock trades on the Nasdaq stock exchange.

Ashe says he's no less passionate than Zambonini though. "I'll find my own way to motivate the company," he says, such as by making employees "feel like they are part of the vision and part of the success." He's quick to add, however: "But if the company needs me to dress up in a clown suit, it's something I'll do."

So far the Cognos ship has held its course. Second-quarter earnings will be reported Sept. 22--one day before Ashe's three-month anniversary--and the company seems on-track to meet its projections of revenue of $180 million or better. For the fiscal year ending next February Cognos expects to reach total revenue of about $775 million.

Ashe has continued a strategy the company pursued under Zambonini to buy software companies that expand its portfolio of corporate performance management software. Late last month, Cognos struck a deal to acquire Frango AB, a Swedish developer of financial consolidation and reporting software, for more than $52 million. Nevertheless, Ashe intends to nudge Cognos in a somewhat different direction, increasing emphasis on sales, marketing, and customer relationships at what has been more of a technology-driven company. Ashe, for example, is building up Cognos' sales force to promote and sell its CPM applications. "That's a key element to our success in the next 12 months and beyond," he says.

Cognos under Zambonini was more focused on technology and products, Ashe says. That's been the nature of the market where, until recently, business intelligence tools were largely bought and used by small numbers of technology-savvy data analysts. But that's changing. Today, more companies are deploying business intelligence software to a broader range of workers, many with little technical expertise. That, in turn, is driving the trend of companies standardizing on a few business intelligence products in much the same way they did with enterprise resource planning applications in the late 90s. "Business intelligence standardization is a hot trend right now," says Ashe. Top management "has realized the strategic importance of business intelligence," especially its link to corporate planning and decision-making, he adds.

Hence, Ashe's focus on marketing and forging closer relationships with customer companies, rather than just selling software products. "We really need to continue to transition the company into the relationship model and away from the transaction model," he says.

The CEO says there have been no surprises as he settles into his new role. "Just the first day with the realization that the buck stops with me," he says.