Following hot on the heels of Schneider Electric's acquisition of Australian-based Citect Corporation, Schneider has appointed John Ross as chief executive to Citect, with effect the beginning of April 2006. During his whirlwind introductory tour of the company's global offices, Ross met with the technical press in South Africa.
Ross has some very big shoes to fill. His predecessor, Richard Webb, has rather impressive credentials and even though Webb had only held the post as Citect's CEO for little over a year, there is little doubt that he had left a strong impression on the company and its culture. However, the new man at the helm has more than 38 years experience in the automation industry, and perhaps more interestingly, the last 18 of those years have been in various executive positions with Schneider. As executive general manager of Schneider Electric Australia, Ross was in charge of Schneider's Australian operations and responsible for revenue, totalling over AU $250 million (ZAR1,3bn).
The corporate cultures of Citect and Schneider appear to be hugely disparate and if the merger process is not managed carefully, the entrepreneurship and innovative thinking that has elevated Citect to it current status can all too easily be squashed. With this in mind, the rationale behind the appointment of Ross as kingpin to nurse Citect through what could potentially be a disastrous acquisition, becomes clearer as one speaks to him. Ross conveys a conservative, yet confident air, and despite a steady flow of questions covering a wide range of topics, he managed to portray a level of confidence in the future of the software house. His diplomatic manner and quiet nature made me almost feel that he would be as well suited as a diplomat to the UN, as he would be as mediator in a difficult corporate environment.
Ross motivates the acquisition by acknowledging that Schneider's customer base had seen a gap in the company's offering. "The company believes that it can leverage its existing strong hardware position to great advantage to both our customers and itself," he explained. "Our customers are increasingly calling upon us to provide a more comprehensive and complete offering, including services.
"Of course, Citect was already a strong company with very strong people, and that was part of the due diligence that Schneider took when deciding upon this very drawn out acquisition. We felt that Citect was a perfect addition to our hardware suite of products.
"Advantages to Citect and its existing customers, include the fact that Citect is now part of a very large organisation that is very successful at what it does. Schneider's recent quarterly results were up 25% on the previous quarter, half of that being organic growth."
Asked what changes he would like to bring to Citect, Ross said: "I would like us to move more quickly with our new products. Already Citect has a good suite of new products, but I would like to see new products rolled out more quickly over the next three years.
Ross re-iterated that, from a day-to-day perspective, there would be no changes in the Citect brand, or the relationships that Citect has with its existing client-base. "We already have an existing network of partners. That will not change. We want to keep that growing as strongly as possible. There will be absolutely no change, whatsoever. Some of our partners use competitive brands of hardware products, ie, not Schneider products. That is fine. We are not looking to disrupt the businesses of our partners.
"One of Citect's strengths has been that it is small enough and agile enough to be able to make quick operational and strategic changes without being hamstrung by enormous bureaucratic structures, and lets face it, Schneider has enormous bureaucratic structure."
"Absolutely," acknowledges Ross. "One of my key roles is to ensure that the innovation and entrepreneurial spirit in Citect continues. It is a challenge and something that we need to be aware of."
Also present at the press conference was Wilhelm Swart, MD of Citect in South Africa. "The type of acquisition that Schneider typically enters into, is one where Schneider likes to keep the acquired company independent," he explained. "Unlike other companies that may take all the acquired company's branding off and replace it with their own, Schneider leaves the acquired branding and company operations largely independent. For Citect, it is 'business as usual'. We do not report to the bureaucratic structures of the mother company. To a large extent we remain an 'independent' company."
To allay concerns that Schneider may be trying to 'be all things to all people', Swart paraphrased the Schneider CEO, Jean-Pascal Tricoire. "Schneider is an electrical and automation company. For example, we do not do trains or phones. Rather, we focus on our areas of competence, and as with all of Schneider's acquisitions, Citect falls well within these areas of expertise."
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