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Home / Profile / Michael Fabiaschi:
A chief executive with a sense of urgency

Michael Fabiaschi:
A chief executive with a sense of urgency

At Michael Fabiaschi’s first annual meeting as a CEO several years ago, a shareholder peppered him with piercing questions.
Many executives would run, not walk, away from the shareholder. Instead, Fabiaschi asked him to join the Zamba Corp. board.
“I asked tough questions. A lot of CEOs would have gotten as far away from me as possible,” recalls Joseph Costello, now chairman of Zamba and CEO of Think 3, a California-based firm. “Mike said, ‘Let’s get him on our board.’ That’s a rare bird.
“He is incredibly open,” Costello adds, “(and) a very fresh thinker.”
The two have remained friends since Fabiaschi left Zamba in November to become president and CEO of Perinton-based LPA Software Inc. Fabiaschi succeeded LPA founder Lawrence Peckham, who moved up to chairman.
LPA, a $20.5 million firm that ranks among the top 10 companies worldwide in development of supply-chain software, by most measures had been growing rapidly. Its 90-some customers include Eastman Kodak Co., Xerox Corp., Bell Atlantic and Dell Computer Corp. LPA employs 170 staffers, including 140 locally.
Peckham recognized, however, that the company could grow even faster than its recent triple-digit sales increases. To make that happen, he persuaded Fabiaschi to come to Rochester.
Getting bigger in a hurry is not a matter of choice, Fabiaschi notes. LPA needs to grow quickly to $100 million in sales to survive in the supply-chain industry.
“I think there is more risk for LPA in taking less risks than more risks,” he adds. “If we don’t grow dramatically, we will be leaving money on the table.” And the company will be increasingly vulnerable to aggressive competitors.
Fabiaschi, 43, left Minneapolis-based Zamba after seven years, including three at the helm. He remains on the company’s board.
He found LPA already operating at a high level. “Here is a company that last year grew 50 percent in a year of uncertainty. That’s a tough act to follow. The (management team) has done a fabulous job,” he says.
His top priority is to find LPA’s “north star”–the one that guides the company to the next level.
Before joining LPA, he directed the creation of Zamba, the firm created when Racotek Inc. acquired the QuickSilver Group Inc. Zamba ranks as the nation’s largest dedicated customer-care consulting business.
Peckham says Fabiaschi brings to LPA a world-class track record of developing operations into fast-growing, cohesive work groups. Fabiaschi’s route to the organization began when a venture capitalist, considering investing in LPA, asked him to talk with Peckham.
“I certainly was not looking. I was happy in my current job,” Fabiaschi recalls.
Last summer, he flew here to meet with officials from Danka Business Systems PLC, a Zamba customer. He took the opportunity to meet with Peckham–at the request of the potential LPA investor–during that trip.
LPA and Zamba share common customers, and the two CEOs discussed opportunities to partner. During that meeting, Peckham told Fabiaschi he was looking for a new president and CEO.
“I said I might have an interest, but I don’t think so,” Fabiaschi says.
His youngest daughter was due to enroll in college in the fall, however, so he no longer felt tied to Minnesota. Since he knew many LPA customers, he began asking questions.
The customers told him LPA sells excellent software, provides great support and saves them millions of dollars.
“It became too great an opportunity to pass up,” he says. “The people here have a real can-do attitude. The culture is very positive.
“I’m excited to be here. I walk around the company smiling. I love it.”
Fabiaschi also saw LPA’s potential. Once companies move beyond Year 2000 projects, analysts expect them to focus on their supply chains–LPA’s niche.
“Supply chain is supposed to be the next big hot market,” he says.
The current modules for enterprisewide software do not adequately address supply-chain issues, Fabiaschi says.
“We have to show people in black and white why to use LPA software instead of an ERP module. It’s got to be a compelling business case,” he says.
LPA targets Fortune 1000 companies–the same firms pursued by sellers of enterprise resource planning software.
Fabiaschi says LPA’s biggest challenge will come from heightened competition.
“This market space is going to be invaded by everybody and their brother,” he notes. “The good news is we are in a growing market. The bad news is the spotlight is on us.
“We are going to face competition in the future we did not face in the past. Competition will come from professionally run companies with lots of access to capital.”
If LPA does not reach $100 million in sales by the early 2000s, it may not survive the battle.
“At $100 million, you have enough critical mass that you don’t just go away,” he says. The company is targeting 50 percent growth in 1999 to reach $30 million in sales.
Fabiaschi says he brings to LPA a vision for the future, energy and focus.
“I’m very direct,” he says. “I start my day by taking the hardest issue and doing that first.
“There can be no sacred cows. Every issue (must) be put on the table and intelligently discussed.”
Fabiaschi’s management style reflects a sense of urgency.
“I’m not a screamer,” he says, “but I’m extremely intense. I drive things to happen.”
He works from 7:30 a.m. into mid-evening during the week, and he often puts in full days on weekends. “I love this stuff,” he says.
Fabiaschi says his job is to create an environment that attracts the best talent and empowers staffers.
“At a software company, all you have is people’s minds,” he says. “You have to be a magnet for talent.”
Costello likens Fabiaschi to a winning coach.
“I have a mental picture of Mike. He’s like a great college basketball coach,” Costello says. “He is an excellent leader. He has the ability to pull together a team.
“He sees greatness in each person. And he’s passionate like (a coach).”
Fabiaschi already has led a series of changes in his first five months at LPA, including introduction of an employee stock-option plan. He believes it is important for every employee to own a stake in the company.
He is still refining a vision for LPA and developing that vision into a companywide consensus.
“You have to have a north star. The reason I call it a north star is you sail to it, you don’t drive to it. As the wind shifts at your back, you have to be able to go with it,” he says. “We have not clearly established the north vision yet, (but) we are close.”
Some of the path has been charted. Fabiaschi has narrowed the company’s focus to its supply-chain work. Peckham had sold off LPA’s Vermont-based semiconductor solutions business in 1997.
Fabiaschi is further limiting the scope of its customer software development business.
“Supply chain will be the major focus. We will still do our customer (software development) jobs, but we will try to do custom work that is around the supply-chain marketplace.”
For example, a product LPA plans to release later this year sprang from custom work done for Bell Atlantic. Fabiaschi wants LPA to do custom software development it can build on. To that end, the company merged its product development and custom development groups.
“I am a huge believer in repeatability,” he says. “Repeatability and reusability give you predictability.”
The company this month plans to introduce its first Web-based supply-chain product.
LPA also is putting more people in the field. Since Jan. 1, it has hired 40 sales staffers and consultants throughout the United States and Europe. The company expects to hire another 20 before year’s end.
“We have been very Rochester-centric,” Fabiaschi notes. “We are having to put people out closer to our customers.”
However, LPA does not plan to move its headquarters–rumors notwithstanding.
The recent hires include a vice president of sales and a vice president of product planning. Fabiaschi now wants to add an experienced chief financial officer, one with experience either in mergers and acquisitions or in initial public offerings.
Fabiaschi is no stranger to finance himself. He graduated in 1977 from Fairfield University in Connecticut with a degree in accounting. But he left the accounting field before leaving campus.
While still a Fairfield student, he spotted what he thought was a recruiting sign for accounting managers at Burroughs, now Unisys Corp. As it turned out, the company was looking for sales account managers. Before he left the interview, the recruiter explained the company was selling financial systems and offered him a job.
“Instead of trying to sell speeds and feeds, I was dealing with CFOs and controllers,” Fabiaschi said. “I understood what they were buying a computer for rather than the technical aspects.
“That’s been the foundation of my success. I apply technology to business problems and yield business results.”
He would like to move to value-based pricing, where the price is based on how much money the software saves a customer.
“Even though we might charge $1 million for our software, if they save $30 million because of it, we are probably leaving money on the table,” he says.
After leaving Burroughs, he landed in California as vice president of MAI Basic 4, then a publicly traded technology firm. He bought six software companies before leaving for Racotek. He describes himself as a “software guy,” and says his contacts will aid LPA’s efforts.
A Connecticut native, Fabiaschi lived there until he was 30. He has spent the last seven years in Minnesota, and jokes he may be the first CEO to move here for better weather.
Fabiaschi and his wife, Debra, recently relocated here, moving into a home less than a mile from LPA’s Woodcliff headquarters. They have two daughters, Sarah and Abagail, both college students.
Outside of work, Fabiaschi’s leisure pursuits include reading, physical exercise–aerobics, strength training and basketball–and travel. A former high school basketball player, he also is an avid college basketball fan. He watched Monday night as his favorite team, the University of Connecticut Huskies, won their first NCAA National Championship.
He reads chiefly fiction, and avoids reading too many business books.
“I think business books can cloud your thinking sometimes; you become a victim of the last book you read,” he explains. “You have to be your own person.”
His favorite quotation, by management guru Tom Peters, reflects that philosophy. Peters has said he often wonders why businesses hire somebody like him.
“Peters said, ‘The way I look at it, if you have a problem in your shipping department, instead of hiring somebody like me or a bunch of MBAs, why don’t you get off your butt, and walk down to the shipping department and find out what is going on? Ninety percent of the time they will tell you, and they will tell you how to fix it.'”
Fabiaschi says he has learned more from other executives than from books. He calls Costello and Fred Anderson, CFO at Apple Computer Inc., role models.
He worked with Anderson–the executive credited for much of Apple’s turnaround and with negotiating to bring co-founder Steven Jobs back–for five years at MAI.
“I learned a lot from Fred,” he notes. “Fred has an all-encompassing look at something. I think I viewed things too much from a sales perspective before I ran into him. He is a big thinker.”
Anderson likewise speaks highly of Fabiaschi, praising his business background and good understanding of software.
“He is an excellent communicator and motivator,” Anderson says. “He is a high achiever and a hard driver. He always overachieved his sales quota. He was a guy who could deliver.”
Fabiaschi credits Costello with showing him the importance of focus, shared values and staff alignment on goals.
Costello says Fabiaschi led Zamba through the most dramatic corporate transition he has ever witnessed. It changed from a wireless data software company to a consulting services business. Fabiaschi convinced investors it was the right thing to do.
“(To do that) you’ve got to think way out of the box,” Costello says. “He doesn’t get ruffled. He keeps the focus on the long-term game plan.”
LPA recently completed drafting a 12-year plan, but Fabiaschi is keeping the plan to two years–and even that blueprint is pliable.
“I think it’s a great time to be a $20 million company,” he says, “but small and slow is not a good combination. Small and quick is, because you can adapt to industry trends quicker than your competitor.”
Peckham remains closely involved in LPA, focusing on acquisitions, developing market strategies and working with specific customers. The two meet frequently. Fabiaschi describes their relationship using an Italian word made popular in Mario Puzzo’s “The Godfather.”
“Larry is my consigliere. I don’t make a major move without talking to him,” Fabiaschi says. “Ninety-nine percent of the time he has good advice. He is brilliant.”
While Peckham has said an IPO is “likely” or “even very likely” within a couple years, Fabiaschi is less committal.
“We have enough cash, so cash is not the issue. We are keeping our options open,” he says, adding, “I always reserve the right to be smarter tomorrow than I am today. That is a Mark Twainism.”
Perhaps the biggest change at LPA occurred a month or so after Fabiaschi arrived.
At one of LPA’s weekly employee meetings, he yanked off his tie, tossed his suit coat aside and announced a switch to business casual dress. The move ended more than two decades of LPA’s button-down look.
“That is a big change for us,” says Fabiaschi, who thinks the new policy makes the workplace more comfortable.
“I’m a big believer in having fun at work,” he adds. “We have a lot of laughs around here. I want to make sure I don’t take myself too seriously.”

4/2/99

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