For a man in charge of more than 33,000 people worldwide, operations in more than 130 countries, a turnover in excess of $4 billion, two million customers, and over 3,500 active patents, Pitney Bowes chairman and CEO Michael Critelli is calmness personified. But, Critelli faces a classic CEO challenge: how to transform an unsung giant in an unfashionable industry into a market leader in the hyper-competitive digital age.

Critelli's brand of thoughtful and subtly inspiring leadership in reshaping the company is gaining increasing media attention and plaudits. Yet, neither he nor Pitney Bowes is classic headline material. Critelli joined the company in 1979 and became CEO in 1996. Founded in 1920, Pitney Bowes has carved out a lucrative low profile niche in mail and document management.

Transformation Critelli-style is intense and planned. And it is working. The spin-off of the company's office systems business, a series of acquisitions and the company's first integrated marketing campaign have raised eyebrows in the corporate world.

Michael Critelli talks to Stuart Crainer about the CEO's job and how to turn transformation into a reality.

You lead a company in a relatively unfashionable industry and in a mature market. What challenges does that provide?

I would take issue with us being in a mature market. We were in a mature market and had we not set out to reshape the market that would still have been a very accurate characterisation. The communications marketplaces that we participate in, both mail and document management, are very large markets. We believe that the parts we can address with our competencies would be about $250 billion ? and are going through massive change -- regulatory, technological and competitive change. Wherever there is massive change there is an opportunity for growth. Customers want help trying to navigate their way through change.

You are known for emphasising the role of values in your organisation. Most major companies have a list of values. Are they still meaningful and practical, or just another form of PR?

Certain values are extremely critical to our brand and our success in the marketplace. One of our brand attributes is that we rank very highly on being trustworthy and reliable. We handle worldwide well over $15 billion, probably closer to $20 billion, of other people's money. We even own a bank in the United States, so having the attribute that we are honest, trustworthy and reliable is not only a nice thing to have from a standpoint of commercial success but it is critical to our value proposition.

The other attribute which has served us well is that we have always valued the opinion of our employees. We have always tried to create a work environment in which employees of different genders, origins, ages and points of view can be successful and can tell senior leadership what it needs to hear.

The third is a sense of mission beyond making money. People need to believe they are doing well by doing good. I think that employees need to feel proud of the quality of their work and the mission to which their work is contributing. We are also known, justifiably I think, as a company which gives value back to the community. Our community activity is integral to the company's brand.

You emphasise R&D and innovation but that is something normally associated with Silicon Valley and high technology.

There are different ways to be inventive. You can invent a physical product which is completely new, but you can also invent a new market, or find innovative ways for technologies to work together which permit activities to be done in new ways.

So our innovation comes from studying problems and figuring out where there are opportunities as opposed to becoming enamored with the technology itself. If you think about Silicon Valley, a lot of those people are inventing tools rather than applications. We are an applications inventor for a specific set of marketplaces.

How long can you be effective as CEO over a sustained period?

Ten to 13 years for our size company is optimal. If I was running General Electric then 20 years may be optimal. You keep the succession pipeline fresh. One of the risks of staying in the job for 20 years is that talented people who are a little younger and aspire to my job would leave. If they can have a reasonable tenure, I can keep them engaged and have a stronger team behind me. There is a benefit to having an orderly succession process and not staying until the board of directors forces you to leave. Beyond a certain length of time you get to believe that you can't be replaced? so it is best to leave when you are still on top and still fresh.

A friend of mine told me that during the first three years on the job you're basically trying to get acclimatised. During the next 5 or 6 years you are a change agent, you put in place your programs and vision for the company and in the last 4 years you are focused on succession planning ensuring the talent is there for the next generation. It has worked out that way for me. Between 2001 and probably 2005 or 2006 is my sweet spot to be a change agent. Partially overlapping that, even today I am actively working on the succession process.

How do you create a talent pool?

The most important thing to do in any succession process is to figure out what the world might look like in five to ten years. The second thing is what kind of skills and competencies that world will require. From there you use a variety of tools and techniques to make people ready and to test out whether they will have those skills and competencies.

Obviously at this senior level, it is most important that executives get exposure to areas outside their direct responsibilities. They need external experiences to develop skills and competencies. We have changed people's job accountabilities and given them more scope and wherever I can I work with them to give them coaching and advice. We provide them with 360 degree feedback supplemented with coaches. We have very frequent interaction with the board of directors. What is different today from the process by which I was selected is that boards of directors are much more active in the selection process. They want to get to know the candidates much earlier. We create a variety of mechanisms so that the next generation of executives can interact with the board of directors. I also work in partnership with the board in them assessing me and assessing the talent which reports to me.

What do you think are your key competencies as a CEO?

I am a change agent. Why I am the way I am I don't know, but I have always been a person who comes at problems in a different way. Then I ask why isn't it this way?

I have a knack of seeing the world differently and then I try to relentlessly move toward the things which make that world a reality. I started out as a trial lawyer and I did a wide range of cases. I had to learn complex subject areas quickly and to master what the experts would tell me. I learned not to be intimidated by experts and specialists. I tell them that I need to be able to understand what they are saying in simple language. If I can't understand them they are probably not thinking clearly. As a trial lawyer I had very limited windows of time to get the attention of judges with very limited patience. They would make us do quick pitches. I learned how to do that and I learned how to force people to think clearly, simply and explain things that way.

The other thing I bring to business is a sense of thinking about it in terms of economics rather than accounting. I know accounting but a lot of people confuse accounting profits with economic profits. I tend to look at what makes economic sense.

There are two other characteristics which have helped me. One is I have a very good understanding of the value of time and speed. Having charged for my time as an attorney, I intuitively convert time to money and make economic decisions which take into account the money value of time.

The other attribute is that I tend to be very driven by getting results as opposed to worrying which budget or cost centre is affected. Tom Peters talks about a professional services mindset where you assemble a team to get a job done and then they move on. He uses the example of the film industry. I have always thought that way. Some people tend to get too fixated on their status in the organisation and the way the organisation is currently structured.

How do you divide your time?

Probably 5% of my time is spent on board and corporate governance matters. The next 25-30% is spent on meetings -- individually with people who work with me, staff meetings and a lot of one-on-ones. I have around 150 of those a year with people who don't work directly for me from all levels of the organisation. I like to get directly to the source of information. I spend another 5 to 10% of my time meeting with postal officials, politicians and other regulators. The next 10-15% of my time I spend in some form of interaction with customers. Then there are maybe a few days a year talking to shareholders, analysts and the rating agencies ? probably five days a year. The remaining time is spent on a variety of outside activities which somehow relate to my job.

How do you measure your personal performance as CEO?

There are certain things I want to accomplish over time at Pitney Bowes. But my own measure of success is probably whether I have reshaped the culture and direction of the company. There are a handful of ways I would measure that. One is whether I have leveraged the full power of the company behind a single unified brand. When I took over this was a very de-centralised company which didn't really have everyone working together. So my first measure of success is whether we are behaving as one company.

Second, are we behaving with confidence and competence in shaping the world we live in rather than reacting to it? As a person I am highly driven by the desire for security. But the only way you can be secure in the world is to be at the table when the decisions are made about the rules of engagement. If you shape the rules you have a lot more security. You can't be secure by escaping conflict.

The third measure of my success is making us a global company. I am very excited that we are in many markets today where English is not the only language spoken. I want us to be confident and comfortable dealing across the globe.

Fourth, are we being very solutions and customer-driven rather than simply providing tools and assuming customers will know best how to use those tools.

There are a couple of other things obviously. Every leader has to have a financially strong company that is stronger than the one he or she inherited. The other thing is that the company has the strength in depth of talent.

Implicit across all this are values. We have always been a company that people are proud to work for. Obviously I want to make sure that that doesn't change. In that respect I am not a change agent. I want to preserve the traditions and values we are known for.

You can't be a dictator or, at the other extreme, someone who listens to everyone. You have to balance stakeholders and make independent judgements. People put you in the job to represent the collective will of the organisation not to respond to every fad and fashion of the moment.

People often bemoan the dearth of leaders in the business world. Is this a fair observation?

To an extent, but there are many more leaders of good quality than people realise. But the expectations of what leaders can do are wildly unrealistic. The politicians and regulators keep imposing more and more obligations on leaders without regard to the other things they already have to do. Having been in the job for many years, I have the capacity to absorb some of the additional things the new laws and regulations require, but I think we are slowly creating a situation where it will become impossible for leaders to balance all of the different responsibilities they have.

 

The article is kindly provided by EFMD and Suntop Media.