Steve Wiehe of SciQuest: Hugging the Elephant in the Room

When Steve Wiehe’s publicist reached out to me last month and asked if I’d be interested in interviewing him, I was simply curious. But once I’d done a little research into Steve’s background, I was enthusiastic: Steve’s a successful, engaging leader whose ideas and experience I find both useful and inspiring – and I hope you do, too.

Steve is the CEO of SciQuest, Inc (Nasdaq: SQI).  Over the past decade, he’s taken SciQuest from a struggling company on the brink of failure to a solidly performing organization with a strong senior team that executes well and consistently (and seems to be having a good time doing it). Here’s how Steve responded to the questions I asked him:

When you had the chance to take over at SciQuest, what was the most important thing you believed you could bring to the party – your ‘superpower’ that would be most helpful to them?

When I took over at SciQuest, it was in significant distress. Its market cap had gone from $2B to $60M, and it was burning approximately $25M per quarter. It was a rowdy atmosphere, with cool perks and a cool office space, but it was a broken company — partly because it had developed a business culture with a “free lunch” perspective. I felt if I could fix the company and turn it into a successful business, it would be the crowning achievement of my career. 

So to answer the question, the “superpowers” I brought to the table were my natural inquisitiveness, my view of SciQuest as a personal challenge and my drive to build a solid, well-executing company.

What did you know, a year after starting at SciQuest, that you would have told the you who was about-to-begin-that-job?

We had to slow the burn rate of the company, so we downsized the employee base from 550 to approximately 85 over an 8 month period. It wasn’t easy or pleasant to impact so many employees – many of whom had nothing to do with the company getting into trouble in the first place. While one’s natural instinct may be to avoid confronting truly difficult situations, I learned through this process that if you do the tough but necessary things while treating people with respect, honesty and openness, they will reciprocate.

I held several large “all-hands meetings” where I showed the company our financial position, so they knew our situation, then did a large layoff. When I started, employees didn’t understand the financial shape of the company even though we were public. Once we walked them through the situation, they got it. While nobody enjoyed being laid off to be sure, we were never sued and the process was relatively quiet. We showed the employees respect and transparency by giving them the data, explaining what we were doing and why we were resizing. They gave us respect back – they didn’t like it but they respected it.

This was the first time I had to face a ‘hostile crowd’ with bad news, but I knew it was the right thing. So, I would tell myself, “You will have to make some really tough, unpopular decisions. Do it with honesty, transparency and respect, and you will get it back — you reap what you sow.”

How do you get a team on the same page and heading in the same direction?

I’ve been described as a “microdata” manager, vs. a micromanager. I am very interested in getting the microdata about how and why things are happening, and I ask a lot of questions. This goes back to my youth, where on car trips my parents would literally have to limit me to 20 questions. I want to understand every aspect of what my teams are working on so that I can empathize with them, but I still want the team or individuals, on their own, to come up with the way to build and evolve whatever they are working on.

I actually define four stages of this discovery process. The first is that you need to listen to understand. Many people jump right from listening to drawing conclusions, but this is a flawed process. Instead, you need understand in order to empathize, and only after you’ve empathized can you affect change. If you skip empathy and go directly from listen to change, many times you end up forcing things onto people, which often does not fit. You also cut off the opportunity for insightful and helpful ideas to emerge.

I also believe that business dilemmas get solved by addressing ‘small-fire’ issues head on. If people across the company can learn to be comfortable with the bad news then we don’t risk having problems that gather momentum and rise up to bite us in the future—that’s the difference between success and failure in my mind. If we really take the time to understand the problem in a safe and open discussion, then the solution becomes simple and we only have to solve it once.

To illustrate this concept in action, we’ve implemented what we call a customer grading system where each of our customers gets assigned a grade—A, B or C—based on how efficiently they are using our technology to save money. We have a monthly meeting devoted to “C” customers, and it’s my favorite meeting of the month. I’m probably one of the few CEOs who takes great pleasure in talking about unhappy customers and what’s broken — because it means we’re fixing problems and setting the stage for long-term success.

I call this process “Hugging the elephant in the room.”

How would you describe the culture you’ve built at SciQuest, and how does that show up, day to day?

At SciQuest, I run the business like an Open Kitchen, which is based on an experience several years ago when my senior team and I showed up late one night at the restaurant Buca di Beppo and the only available table was in the kitchen. It impressed me that they would seat us in the kitchen because it showed they had the utmost faith in their product and standards. I believe our employees and customers should likewise have a view into the company’s inner workings. Our programmers should know how to read our financial sheets. Our customers should know how our business is managed. Internally, we have regular sessions where one management group learns about everything that’s going on with another, and vice versa.

As for the customer side, going back to our A, B, C grading system, when we show up on the customer’s doorstep and share with them what they’re doing with the technology and how they could be getting more out of it, that is quite refreshing for them. Again, it creates a much more open and insight-filled customer engagement.

Ultimately, however, it all boils down to respect. I am most proud to have built a culture that is based on respect. The Open Kitchen concept helps to foster every individual’s respect and empathy for his or her colleagues and the job each one is doing.

If you were talking with a group of young professionals in their first management jobs, what would you most want to share with them?

I believe there are two primary paths to success in business. The first is to define the problem; that should be 95 percent of the effort. I’ve spoken about that above.

The second – it’s a corollary to the first – is to focus on the journey, not the destination. What this means is that every action must be devoted to building a company that meets the needs of customers, employees and shareholders. That’s the journey. You cannot do anything that benefits one of these constituencies at the expense of another. As long as you do everything in the service of helping each of these groups, you will have a great company.

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