SDL: A YOUNG COMPANY GROWING UP

A TALK GIVEN AT THE SDL ANNUAL BUSINESS CONFERENCE

KINGSTON, ONTARIO

FEBRUARY 1, 1977

When I see fifty young and enthusiastic Managers discussing strategies and making plans, I am confident that none of us have any reason to worry about the future of SDL. As I have said many times in the past, the future is what we want it to be as long as we are reasonably astute in choosing an approach with lots of scope. There is no doubt in my mind that the company has chosen an industry with all the scope and excitement that anyone could wish. The challenge before us now is to make good choices regarding the parts of that field in which we want to make our mark in the years to come. Part of that challenge will be to make sure that we reasonably match these choices for obtaining our desired results to our available resources. This is what you have been discussing at the Annual Business Conference. For my part, I usually talk a lot about the future. Today, however, I am going to talk about today – about a unique company whose greatest strength is its ability to capitalize on its strengths and to survive its own mistakes. A company cannot move forward if it is not willing to take risks. In the past, we have been a rather exciting risk taker. This has led to our share of great leaps forward as well as some hard landings at the end of the jumps. All the moves have sprung from an honest and enthusiastic attempt to move the business ahead to new heights and to push into new frontier areas. The result has been a relatively rapid growth to a $20 million dollar a year company. But, in retrospect, some of the risks taken were higher than necessary. While revenues grew, profit growth was very uncertain. The company is still carrying some overheads from those ‘heady’ days of youth. However, in general, we have come through this exuberant period relatively unscathed and we do have a very large base of revenue and working capital on which to build the future.

SDL has been like any youngster in its teens. Growing up rapidly has meant growing out of our clothes quickly and being a bit awkward from time to time. However, like any intelligent youth, we have learned a great deal. Now we look forward to an era of new management and new ideas. As a group, you can certainly profit by some of the mistakes your predecessors made. However, you should not be blinded by them. Columbus did not have a detailed map of the Atlantic and, if he had waited for one, the New World would never have been discovered. The challenge is to get the right mixture of innovative enthusiasm and businesslike prudence. What have we learned from our early years?

First, everyone makes mistakes. Never brood over them. Admit them, take corrective action and get them behind you as quickly as possible.

Secondly, recognizing that everyone makes mistakes, be careful about buying other peoples’. There is not much that others can do that we cannot do ourselves. Faith in our own team is nearly always faith well placed.

Thirdly, you cannot do everything at once, but you cannot do anything if you do not aim carefully and pull the trigger smoothly. This is what we are trying to do now.

We are entering a phase that does not allow us the undisciplined approach of youth. This is a tough thing to have to realize and even tougher to adjust to, and there are those who just never grow up. It is as though we were entering our early twenties faced with a growing family, a mortgage, and generally much broader responsibilities.

Just remember, it is also a time where great energy will produce great results. Like a youth entering his twenties, the future holds all sorts of opportunities that will be full of excitement and challenge. The difference at this stage in the life of a young person or a young company is the need for a more mature and disciplined approach. It is this kind of realization that led us to change our lifestyle. At SDL, we have always been aiming at a long and fruitful life, not the California lifestyle of multiple divorces, tranquilizers, and nervous breakdowns. The phase we are entering in our corporate life needs mature planning and precise execution. This is why we have been going through some reorganization. This is also why we have had the management training program with Omni systems, why we have developed better corporate procedures as you will shortly see in COMPASS and why we hold such sessions as the Annual Business Conference. It is a period that requires managers who enjoy being really professional managers. It is a time that requires some patience. It requires a great deal of steady development. The team we have got is the team we need NOW – today’s managers for today’s job. I emphasize that that job involves looking for the right balance. Maturity must not mean senility. We are not here to manage manuals. We are here to produce profits. This will require more imagination and innovative behaviour than ever before. The thing that has changed is the implementation of our ideas, not the implantation. We now need the kind of thinking that really pushes back frontiers – that careful, but imaginative approach that put a man on the moon, not the kind of shallow thinking that leads to hoolahoops or pet rocks. This is tougher, for it requires both imagination and implementation. The greatest change you will have noticed in SDL is the emphasis we are now putting on bridging the gap between our broad corporate aims and the specific results we want. Sometimes our corporate plans have been closer to corporate dreams. We are now fully awakened to what we have to do.

I am confident that we are going in the right direction. Part of this confidence arises from our approach of taking the time to set realistic objectives, plan how we will reach these, train people in what is required, and then put the plan into action. What we are really doing is applying the principles we developed in the System Life Cycle to our own business. The evaluation phase will be a very important part of this process. This is an environment in which you can learn, grow, and mature into outstanding managers. Don’t miss this opportunity. Management skills, once learned, are never lost. You can both learn and contribute a great deal in the next few years at SDL.

I have many other reasons to be confident about our position today. We have a company that can finance its own future – if we are prudent. We are not a huge company and we cannot spend like one. We can get farther faster if we make fewer mistakes – not that we expect to make no mistakes, but just fewer and, hopefully, smaller ones.

We have a tradition of being a company of new ideas, particularly in technical areas. We must continue the development started during the past year of building the sales side of the company and making SDL into a truly marketing-oriented organization. We will be an organization which retains its strong technical ability, but which now concentrates on smarter marketing of the products we develop. We will always need the better mousetrap, but we also need a lot more mice if we are going to make building that mousetrap really worthwhile.

More than any of the other assets the company has, my real reason for confidence in the future is YOU. If you came to the Annual Business Conference expecting easy, miracle answers, you now know that none exist. This is not what we expect. Miracles like meteors are short-lived in any case. What we do expect are sound plans, soundly executed. You are the base on which all our future accomplishments will be built. It is up to all of us to show that SDL is not only here to stay, but can develop that steady growth in revenue, profits, and financial position that I have already outlined to our shareholders as our aim. Our business can be fascinating. It can even be fun. It cannot be frivolous.

People expect more of an older, more mature, professional. They now expect more of us.

I know we can deliver. All we need is the challenge. We now have that.

For the first time in four-and-a-half years, we are actually losing money. This has come as a bit of a shock to the industry. Our pride in our work is such that we will not let that happen any longer. The challenge I am throwing out to you today is to have this company operating in the black by the end of this fiscal year. That is just the start.

The plans you are making for fiscal ’78 I am sure will indicate to everyone that we are not only moving back into the black but also forward to a very exciting period of profitable growth.

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