From PostScript to Photoshop, Adobe (ADBE: NASDAQ) has a long history of innovative products. Shantanu Narayen, CEO since 2007, brought innovation to how those products were sold. His visionary and empowering leadership turned Adobe into a Software as a Service (SaaS) giant.
More than 90 percent of the world’s creative professionals use Photoshop. We take Adobe’s dominance in the creative space for granted.
If Adobe had not moved services to the cloud back in 2013, Photoshop would have faded into history. Few people remember PageMaker. See, you don’t know what it is.
“Preserving the status quo is not a winning business strategy.”
After becoming CEO, Narayen had the vision to see that Adobe needed to move its products to the cloud.
Sales of software licenses had been flat at around 3m for many years. A cloud-based subscription model would promise a growing revenue.
New competitors were emerging on the web, and the 12-24 month product cycle for boxed software was stifling innovation.
Narayen knew that migrating Adobe’s products to the cloud would not be easy. He faced a lot of internal resistance because the company had to change how they work.
Engineers had to migrate from traditional project structures with long horizons to nimble forms like Agile and Scrum. Managers and accountants had to relearn how to monitor the business and measure success. Gone were sales units, and in came Annualized Recurring Revenue.
Narayen was able to navigate the resistance by decentralizing and empowering leaders. He championed the idea of business managers and gave them more autonomy to run their business segments.
“You equip people with the responsibility to make the decisions that are required to drive their business.”
He was comfortable with stepping into the unknown and carrying employees and other stakeholders with him. He presented a vision, not a destination, and was able to motivate the team forward.
“If you can connect all the dots between what you see today and where you want to go, then that goal is probably not ambitious or innovative enough.”
Today, Narayen is executing on his latest vision. He wants Adobe to be “mission-critical” in the CRM (customer relationship management) space.
Through the acquisitions of Magneto and Marekto, Adobe launched the Adobe Experience Platform. It promises to marry traditional CRM with real-time data from browsers and products. This matches well with Adobe’s content and marketing analytics tools.
Since Narayen took over, Adobe’s revenues have increased over 3.5 times to $11.17bn and continue to grow. Adobe’s share price has also increased over 11 times since Dec 2007.