Intuit's Steve Bennett on why some General Electric alumni succeed -- and some don't
By VAUHINI VARAApril 12, 2007; WST Page R3
I would like to invite the group of Executive MBA students that were at Kellogg for a week to our group to begin to globalize our interactions. Welcome!
Some great lessons for all of us!!!
Since he joined Intuit in 2000, Mr. Bennett (frm GE) has more than doubled the company's revenue, to $2.3 billion in 2006 from $847.6 million in 1999. His trick: Apply the tried-and-true GE principles that make sense here, at a young, but maturing, software company -- and throw out the ones that are, he says, "really dumb."
When he arrived, Mr. Bennett quickly got rid of Intuit's weakest businesses and focused on the fastest-growing ones: TurboTax, which helps people file taxes, and QuickBooks, which helps small businesses manage accounting tasks. Then, he used new methods to better measure, reward and improve his employees' performance, to boost growth in the key businesses.
Now, as Intuit's old model of selling shrink-wrapped software faces pressure from the Internet, Mr. Bennett has his eye on two new growth engines. In February, he made Intuit's largest-ever acquisition, buying a company called Digital Insight Corp. for $1.4 billion.
The following are selected interview resposnes:
THE WALL STREET JOURNAL: Your background as a GE veteran is somewhat unusual among Silicon Valley CEOs. How does it make you different from an executive who has grown up in Silicon Valley?
MR. BENNETT: I think companies, to be durable and great, have to be great at innovation, and they also have to be great at execution. What I found when I came is that Intuit was great at innovation. Frankly, [Intuit founder] Scott Cook showed me notes of some of the ideas from 1996 that he had that were really good ideas that for some reason we were never able to execute on. We were a little less than a $1 billion company that was run like a small company.
At the beginning, there was always this paradigm: You can be innovative or you can be rigorous. And it's a false paradigm. You can be rigorous and innovative. What I've found here is that we've in the past few years launched more new products than ever in our history. We've had better reception in the marketplace. So actually, the rigor has made our innovation more successful, because we can execute against the great ideas. I think, actually, it's been a great marriage of innovation, which is what Silicon Valley is all about, and strategic and operational rigor.
WSJ: How would you define the "GE Way," and how you do apply it outside of General Electric?
MR. BENNETT: I think what you learn at GE isn't a lot different from what you learn in college. The key is to apply what you learn to the situation that you're in. I saw a Harvard paper on this that was really thoughtful. They talked about the match of the GE executives' skills and experience to what the company needed. Where the match was good, it was successful; and where the match was bad, it was not.
For example, if there was a GE manager that was a finance-driven cost cutter, and they put that person in a job that was about growth, the results weren't good. But in this case, we were cited as a success because they took somebody who actually had more of a growth background at GE -- me -- and put him in a company that was a growth company.
WSJ: As you started measuring more things, how did you sell people on the idea?
MR. BENNETT: I don't think command-and-control works. I think employees have a vested stake in the company's success, and they want to understand what we're doing to get better. The issue is to communicate what you're doing and why with employees. And if you get good at that, you're all on one team.
WSJ: In Silicon Valley, there's this conception that what one might describe as an East Coast way of doing business are things that slow down innovation. How did you bring both business rigor and innovation together?
MR. BENNETT: When I got here, Intuit had 10 "Operating Values." Operating Value No. 9 was, "Think fast, move fast." I changed only one word in the operating values: I changed "Think fast, move fast" to "Think smart, move fast." Because doing dumb things faster doesn't get you anywhere. Making dumb decisions quickly is the path to destruction. It's not about speed. It's about doing the right stuff. If you don't solve an important problem for customers better than anybody else, you're not going to grow.
WSJ: Jack Welch says in his autobiography that he asks himself, "What are you most afraid your competitors are going to do in the next two years to change the landscape, and what are you going to do in the next two years to leapfrog any of their moves?" How would you answer that question?
MR. BENNETT: I'd say it's a great question that applied great at GE. But our biggest competition at Intuit is substitute methods or nonconsumption. The reason that's different for us is that we grow the category to grow the business. We could focus on beating our competitors and grow the category 2%. Or we could focus on addressing customer needs and grow the category 10%. We have to do both.
GE has to focus on, "What do we have to do to beat the competitors?" But if you think about QuickBooks, we've got 90% market share. What's more important? Beating someone that has 10% market share or converting 15 million people that aren't using accounting software? Who would you focus on?
GE is in sustaining businesses. We're in emerging businesses. Our strategy is to grow the business. That's because we have such high share.