Thoma Bravo Scales Nintex with CEO Eric Johnson
12.11.18
Interviews

Eric-Johnson_2.jpg With more than two decades of financial and operational experience at mid- and large-sized software companies, Eric Johnson joined Nintex as CFO in 2014. Alongside the company’s 2018 majority investment from Thoma Bravo, Eric was appointed CEO. In his new role, Eric sits at the helm of one of the leading providers of intelligent process automation solutions in the market. Since its founding in 2006, the company has experienced significant growth and currently serves more than 8,000 enterprise customers in over 90 countries around the world. We chatted with Eric to learn more about his leadership style and the Nintex growth strategy going forward.

(Hear the full conversation with Eric on iTunes or Podcasts.com)

RJ: Eric, thanks again for joining us. We really appreciate you taking the time. For those in our audience that might not be as familiar, maybe we could kick off with a quick introduction? There’s been a lot of good things going on with Nintex. Could you share a little bit of your background as well as some recent events at the company?

Sure, I would be happy to do that. From a company perspective, Nintex is a leader in the process management and automation space. We focus on nearly every enterprise. McKinsey says about two-thirds of all processes aren’t automated in companies of at least one thousand employees. The reason for that is lack of visibility into processes. The technologies that they’ve been able to employ are too hard to use and require lots of coding or they’re too lightweight and are really designed for end-user productivity. We provide a platform that with no or low code allows an IT or operations professional to quickly build an application and automate these processes. We also have technology that helps individuals understand, visualize, and collaborate on process.

It’s a huge market with tremendous need. I have never visited an account that didn’t need what we provide. Throughout my career, across seven companies, it’s the only time I’ve ever felt that way. We had an opportunity back in March to bring on a new majority investor in Thoma Bravo. That has gotten us off to a really good start. We’ve been super focused. We partner really well and Thoma Bravo has great resources to support growth both in terms of operational experience with their operating partner model and also support for our acquisition agenda. In fact, within the first four or five months with Thoma Bravo, we went and completed our first acquisition in the last three years. We acquired Promapp, which is an innovative cloud process management technology provider that we brought into the stack. We’ve gotten off to a fast start.

On a personal note, I started out as more of an operating finance professional. I then spent time within sales and ran different components of sales ops and training, renewal sales, and a considerable amount of time in the field. I then went back into hybrid roles that included both finance and sales.

The previous four years at Nintex I have been the CFO. That enabled me to develop great knowledge of the business. With Thoma Bravo’s new investment and the change in ownership, I had an opportunity to become the CEO. I feel super blessed about that. Nintex is a phenomenal place to work. There is a really great team of people at every level. And like I said, to be in a business where you’re providing a solution that literally every customer you ever see needs is a great place to be.

We’ve got a great business model that’s heavily partner centric. We don’t do any professional services. All of the solutions are delivered by our partners, who also do quite a bit of the go-to-market for us. It’s a very good time for our business.

RJ: Fantastic. Can you tell us a little bit about the growth you’re seeing? It sounds like part of the growth strategy is based on acquisitions. Could you share a little bit more about both historical and go-forward growth?

Historically, Nintex has definitely been a “growth and profit” story. That continues. We have a massive market opportunity but, like anyone, you have to choose what components of the market you focus on and how to do it effectively.

We started out in the Microsoft ecosystem. In the early days we did a lot around SharePoint on-premise, started to go to the cloud over the last few years, and changed to more of a subscription model as folks in the Microsoft world started to leverage Office365 and Azure. That’s been a great opportunity for Nintex. Our largest route to market continues to be in the Microsoft ecosystem. Second, we have really good motion around document automation and the Salesforce market, which is the fastest growing cloud ecosystem in the world. Third would be process management led sales activities. All three of those routes to market are growing rapidly and represent good opportunities.

When I joined Nintex just under five years ago, we were about $40 million a year in billings and revenue. In the current fiscal year, which ends June 30, we’ll be close to four times as big – definitely in the mid $100’s. If you think about that growth rate, depending on the year, we’re typically growing 20% to 30% per year both from an organic and a little bit of inorganic perspective. We expect to be able to continue to grow at a high rate and remain very profitable. Historically our cash EBITDA margin has been in the 20%+ range. Those margins will continue and are actually expanding quite a bit as we go forward. It’s a really good mix of growth and profitability.

RJ: It’s not as frequent that you see the move from CFO to CEO. It’s fantastic to see that you were identified by the board. Was that driven in part by the desire to pursue acquisitions and the need to have someone at the helm who was experienced in moving along that strategic path? Or were there other factors involved? It’s certainly a great transition to see and not as typical.

There’s definitely different types of CFOs. I think certain types of CFOs set up better for the CEO role than others. My background and the reason I originally studied finance was that I loved business. Spending a chunk of years within the sales organization and a ton of my career actually in the field, out in front of customers and partners, definitely positioned me as a very outward facing, growth-oriented business professional.

When you look at what is required to have success in a profitable growth play, especially with a large leading private equity fund, I think it’s a combination of go-to-market acumen and outward skills combined with a lot of discipline, accountability, operational rigor, and some of the financial skills you get from being a CFO. When you look at the profitable growth model that Thoma Bravo and some other funds have been very, very successful with, I think the skill set that I brought to the table was a really good match.

The partnership is already very strong. We tend to work really well together. I think a lot of that is because we have very similar philosophies in terms of the discipline, accountability, and rigor with which we approach the business. That’s where a certain type of CFO can really be a good match for CEO. I think we’re off to a great start which is proving out the model.

RJ: Great. Can you tell us a little bit about your leadership style? Maybe some of the philosophies you’ve developed along the way as you worked with other organizations? And now that you’re in the lead role at Nintex, what are some of the key things you pay most attention to as CEO?

The same things I did earlier in my career continue to be leveraged now. They may be leveraged on a bigger scale, in a wider form, and a little bit differently, but I think the same principles apply.

Number one, I always felt that in every leadership role, no matter the size of the organization, it was important to lay out for the team the strategy and key priorities so that we could have alignment across whatever organization I was running. As CEO, the first body of work, which I put a lot of time into with the senior leadership team, was around our strategy. In this case we call it Nintex 3.0. It’s really the third season of the company, but we wanted to first align on strategy. If you don’t have the overall picture of what you’re trying to do, then it’s hard to get the right goals, objectives, and tactics in place to actually execute.

Second is making sure that everyone is on the same page—that they understand what we’re trying to accomplish and how we’re doing it.

I’d say the third thing is, I personally care a ton about people. In this industry, in software and SaaS, you don’t produce a physical product and everything we do is through and with people. I have a lot of passion around: if the people in the organization know you personally, if they care about both the company’s success and their success, and they know you’re behind and supporting them, they do more. This is consistent with every study I’ve ever read and my own experience. When team members feel like they have a great manager who is both driving a great outcome for the company and a great outcome for them, and who personally cares, then they come to work and they don’t do the minimum – they go the extra mile. The use their full creativity and really bring it.

What I try to do is a little bit of direction setting and ensuring that we’ve got good support for our people. If we do those things well together and we have great clarity and pace, then we tend to get a good outcome.

There are three basic core tenets we put in place at Nintex and they have been working very effectively for us. One is we say, “Deliver on commitments.” That requires focus. If we have great focus we can make commitments that we can keep. Number two, which is an internal principle and something I say a lot in my own life, “Don’t wait.” We want people to take action. If there’s a challenge or an opportunity, we want to take immediate action. And third, “Operate with respect and consideration.” That’s about how we treat ourselves, our partners, and our customers. That’s the combination of how I think about leadership.

RJ: That’s great. I think that’s an excellent way of operating – with those three core tenets top of mind always. I appreciate you taking the time out of your busy schedule. This was a great conversation. Thanks so much, Eric.

Happy to do it. Thank you for having me.

Hear the full conversation with Eric on iTunes or Podcasts.com

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