Can Quark Turn the Corner?

CEO Ray Schiavone's bold new strategy

Jamie Kripke

The Preacher Ray Schiavone has spent much of his first three years at Quark converting the troops to his vision.

Tweet

Ray Schiavone had hit a wall. It was October 2007, and Schiavone had been brought in to turn around software maker Quark, a onetime tech superstar that dominated and then completely lost its leadership in the $200 million market for desktop publishing. But after nearly a full year on the job, Schiavone felt as if he were spinning his wheels. Almost no progress had been made bringing an important new product to market. Schiavone convened 20 Quark executives from around the globe to meet at a Phoenix hotel. He wanted to hear firsthand how they were progressing. What they said was disturbing. One by one, the executives reported that collaboration within the organization was nearly nonexistent, and their work was suffering as a result.

Quark was struggling, and the Phoenix meeting made clear just how low the company's once highflying esprit had fallen. The company's blockbuster product had been QuarkXPress software, used to create newspapers and magazines (including Inc.). Then Adobe hit the market in 1999 with a program called InDesign (now used by Inc.). In 2003, Adobe launched its Creative Suite, which rolled in products such as Photoshop and Illustrator with InDesign. Quark couldn't come close. Its U.S. market share tumbled from 95 percent to just 25 percent. Some people in the industry fault Quark for losing its knack for innovation and for letting customer service slip. "They had created a lot of animosity with clients," Schiavone says of the company he joined. One blog post he read before taking the job stuck in his mind: "I love the product but the company is the devil."

Within weeks of taking the CEO job (the company is privately held; the children of the former owner and CEO are shareholders), Schiavone zeroed in on a new strategy: a push into broad publishing systems that can efficiently move text, graphics, and photos, whether for print, the Web, or a mobile phone. He also wanted to reach beyond the traditional media world Quark had once dominated to become the publishing system for sectors such as the pharmaceutical industry, financial services, and high tech. Implementing this major shift in strategy would demand an intense group effort on the part of the company's executives. And that would require extensive coordination and collaboration among Quark's various divisions -- something the Phoenix meeting made clear was not close to happening. "I needed to end the debate," Schiavone says.

The debate had been brewing since the moment Schiavone, a former General Electric executive with experience running another software publishing company, unveiled his strategy shortly after his arrival at Quark. Several high-ranking executives believed that pushing into enterprise publishing was a bad idea. Instead, they argued, Quark should stick to what it knew by making QuarkXPress so good that it could once again compete head-on with Adobe. One early dissenter was Tim Banister, general manager for desktop technology. "I thought we should double down on QuarkXPress," recalls Banister. "I was a guy who had been here seven years, and I thought I knew better than Ray."

The staff's skepticism was understandable. Quark leadership had been in turmoil for years, with two CEOs and an interim president since 2000. And the company had had a penchant for talking up new products, including a system for printing consumer packaging, but failing to deliver. "There was a lot of history -- skeletons in the closet -- of products that had been tried and failed," says Joshua Duhl, a marketing executive at Quark in 2008 and 2009.

Schiavone knew he would need allies within Quark's ranks to move ahead. So he launched a campaign to win over some of his most outspoken critics. He lobbied Banister in six one-on-one meetings, some lasting as long as two hours. The future of the company, Schiavone argued, depended on expanding its reach into new markets. He would often follow up with e-mails citing industry reports. "I was myopic and just thinking QuarkXPress," says Banister. "He pulled me up a level."

Still, a lot of resistance remained. To break through, Schiavone decided to simply set a date for a rollout of a new enterprise system -- a move that would force people to get on board or leave. The system would combine existing publishing tools with new ones developed both inside and outside the company. The resulting product would offer customers a comprehensive publishing software system. Schiavone ordered a demo system to be ready within a brisk four months.

Schiavone worried that failing to move quickly would hammer Quark's existing business. Other companies were doing a better job explaining how their products could help customers manage Web and mobile displays along with traditional publishing. "Every day I waited, I could lose my installed base, folks who were questioning where this company was going," Schiavone says.

But there were risks in moving ahead too quickly. If the new product was not nailed down, potential customers might think the solution wasn't ready and take a pass. Worse, if Schiavone pushed his teams to embrace his views and then got them pumped up for a new business launch, he risked a backlash if the new product bombed. "We couldn't afford to fail," Schiavone says. "We wouldn't be able to get employees back on board if we did.

 1 | 2  NEXT 

Read more:

Sign-up for our Leadership and Managing Newsletter

Email Address: