Symantec Internal Memo: Pace Of Change Was Too Slow

Former Symantec CEO Steve Bennett significantly impacted the company with internal changes and process improvements, but the company's board of directors thought the pace of change was far too slow to keep up with market conditions, according to an email written by newly appointed interim CEO Michael Brown.

In the internal memo obtained by CRN following the abrupt ouster of Bennett Thursday, Brown said he would take his temporary role to work closely with Symantec's leadership team and help drive the next phase of the company's transformation. Symantec, Mountain View, Calif., remains committed to creating 5 percent organic revenue growth and 30 percent operating margin targets by fiscal year 2017, Brown said. The time frame is a full three to four years since the company fired former CEO Enrique Salem. Symantec closes its fiscal year 2014 at the end of March.

Brown said Bennett led a series of successful initiatives that reorganized the company under his 4.0 strategy, unveiled last year. In a recent interview with CRN, Bennett said skeptics shouldn't count the company out. The transition disrupted 90 percent of the company's sales force, but he said the company was set to unveil future product improvements in the form of tightly integrated offerings later this year.

[Related: Expect 2014 To Be Another Transition Year For Symantec, Says CEO ]

"However, the board feels we weren't moving fast enough towards our 5 percent organic revenue growth target. Revenue growth is what's critical in building our company value," Brown said in the memo. "This decision is about finding the right leader to grow Symantec -- reflecting the board's view that Symantec has a tremendous market opportunity before us and terrific talent. Our priority going forward is to leverage our assets and talent to drive the next stage of Symantec's product innovation and revenue growth."

The CEO search process typically takes between six and nine months, experts tell CRN. Brown in the memo addressed the ongoing senior management changes that has plagued the company over the past six months. In addition to its CFO, a longtime executive who led the company's product development and services strategy took his leave as well.

"I know that management changes can be distracting and we've had too many of them recently, but let's keep focused on delivering new products and supporting our customers," Brown said. "We have hired some great talent during the past 18 months which, combined with the team we already had in place, gives me confidence that we can accelerate our progress -- especially in building our go-to-market capability and brand, as well as investing in new product offerings."

NEXT: Read The Symantec Memo

Symantec has scheduled an "all-hands" meeting Friday and Monday for its Americas and EMEA teams. Meanwhile, Symantec partners say they are taking a wait-and-see attitude, hoping that Bennett's vision still comes to fruition, despite the latest upheaval. Istian Islam, a partner business manager at Unicom Government, said he met Bennett in during a public sector channel strategy session engagement last week.

"In general the meeting was positive. Some executives sometimes look like they are ready to depart, but he didn’t seem that way; he wasn't disengaged," Islam said. "As partners we've been seeing a lot of organizational changes, but the rest of the details have been in limbo, with no new certifications and training."

Bennett's organizational changes had been generally well received by financial analysts. Sterne Agee analyst Robert Breza told CRN Friday that Bennett did a lot of heavy lifting, separating the sales force in a way that splits the company into its storage and core security and IT management products. It's not too far out of the question, according to Breza, for an activist on the company's board to make a move that could split away the company's storage unit. About 50 percent of the company's revenue is generated through its storage business, 25 percent through its Norton consumer endpoint security business and 25 percent through enterprise security sales.

"When it leaked that Symantec was going to buy Veritas [in late 2004], at that time it didn't make a lot of sense to anybody and it hasn't made any sense since," Breza said. "Bennett has been pretty adamant that the company wouldn't break up, but if you were looking to do so, the products are already separated and the sales force is now split more than ever before."

Following is the text of the memo Brown sent to employees:

I’m Mike Brown and want to introduce myself to you. I've been appointed Symantec's interim president & CEO. Yesterday, Steve Bennett was asked to step down as CEO and Board Member of Symantec. I know that many of our team members connected with Steve and this news may come as a surprise, so I've recorded a brief video to explain the board's decision and give you additional details. If you are unable to view the video, the message is also included below.

I will do my very best, with the support of our leadership team, to make this transition as smooth as possible for everyone. We will continue to communicate over the coming days but I encourage you to reach out to your managers and VPs with any questions or concerns you have.

Following is the message from Brown for those employees who could not view the video:

Hi, I'm Mike Brown. I've been a member of Symantec’s board since 2005 and I wanted to introduce myself to you today as I've been appointed Symantec’s interim president and CEO. Steve Bennett has been asked to step down as CEO and from the board of directors. While this announcement may seem sudden, I want to assure you that the decision was the result of an ongoing deliberative board process, and not the result of any event or impropriety.

The board recognizes Steve's contributions to Symantec, including developing and leading a series of successful initiatives focused on organizational realignment, cost reduction and process effectiveness. These changes have helped establish a solid foundation for Symantec's future -- which we want to build on -- and we remain committed to our previously outlined 5% organic revenue growth and 30% operating margin targets in the FY17 timeframe. However, the board feels we weren't moving fast enough towards our 5% organic revenue growth target. Revenue growth is what's critical in building our company value. This decision is about finding the right leader to grow Symantec -- reflecting the board's view that Symantec has a tremendous market opportunity before us and terrific talent. Our priority going forward is to leverage our assets and talent to drive the next stage of Symantec's product innovation and revenue growth.

In the meantime, we're not standing still. I'm looking forward to working closely with Symantec's leadership team to help drive the company's next phase of our transformation while the board searches for a new CEO. I know that management changes can be distracting and we've had too many of them recently, but let's keep focused on delivering new products and supporting our customers. We have hired some great talent during the past 18 months which, combined with the team we already had in place, gives me confidence that we can accelerate our progress -- especially in building our go-to-market capability and brand, as well as investing in new product offerings.

There will be an all-hands meeting tomorrow for the Americas and EMEA and Monday for APJ where you can ask questions you may have about today's announcement. Invitations will go out shortly. I know there’s some great work happening at Symantec and I want to thank you for your continued commitment and all that you do for Symantec.

PUBLISHED MARCH 21, 2014