Avanade CEO on managing through the dotcom bubble burst, the 2007 financial crisis and Brexit

Adam Warby talks CRN through his nearly two decades with the Microsoft part-owned firm

If co-founding a tech company a month before the dotcom bubble burst is unfortunate, then becoming the CEO of that company days before the collapse of Lehman Brothers is downright unlucky.

As one of the founding figures of Avanade, Adam Warby had a baptism of fire when a month after its inception in April 2000, the then-nascent dotcom bubble burst.

Eight years later, days after he took the helm as chief exec at the Microsoft solutions provider, US banking giant Lehman Brothers went into bankruptcy, triggering a global recession.

Having to steer Avanade through those troubled waters taught Warby (pictured) about effective decision making and core elements of customer behaviour that he believes left him well positioned to chart a path through any potential future upset.

Having a long-term vision and a number of short-term aims to achieve that vision helped him navigate those turbulent times, he said.

"You have to make the short-term decisions that are practical and business focused and I think that helped us come out of the crisis stronger."

Within months of taking over the chief exec role from his predecessor Mitch Hill, Warby had to make tough choices about reducing the workforce and global operations for the business to succeed.

It wasn't always easy to keep a positive attitude during that time, he said, but he continued to follow the advice of "Don't panic, never waste a crisis and look beyond it", which he attributed to the company successfully managing the business through the 2007 financial crisis.

"Having a vision of things beyond the crisis helps keep people focused," he said. "That's a key leadership lesson I've learned - it's very easy to get distracted by things that take you off your path."

One big distraction that could possibly set off another economic upset in the UK is the hovering presence of Brexit.

But the Avanade boss is nonchalant about the potential effects of the UK leaving the EU, stating that client productivity will continue regardless of political and economic factors.

"On the one hand our clients have to live in a world of uncertainty, and Brexit is just another uncertainty," he stated.

"On the other hand, it also has tremendous benefits; the advantage that we are experiencing through the advent of digital technology is helping us get through all these issues - productivity is a key issue, Brexit or no Brexit.

"If you look at what companies really worry about, yes the UK's relationship with Europe is an uncertainty, but I think what they really worry about is how they are going to serve their client and how they are trading on a global basis.

"We'd all like this to resolve itself whichever way, but focusing on business is what we do."

Tied fortunes

Avanade was formed as a joint venture between Accenture and Microsoft, with each party holding a 50 per cent stake in the business.

However, a restructure of the firm in 2003 saw Microsoft's stake reduced to 20 per cent, but this does not mean that the tech giant is any less invested in its relationship with Avanade.

"Avanade could be considered the Microsoft division of Accenture," Warby explained, adding that the company splits its business between Accenture clients and its own direct clients.

"It's not about ownership structure, it's about what each partner brings to the story, and Microsoft is bringing technology and investment.

"We work with its client base and that extends beyond Accenture clients."

Having a vendor as partner shareholder is still unusual, though a bit more common than perhaps it was two decades ago, so what does Microsoft get out of its stake in Avanade?

"We consider ourselves one of the most successful joint ventures in the tech business ever," said Warby.

"The benefit is this unequivocal core and commitment around their platform - that's what we are here for.

"The confidence, commitment and engagement that is anchored in an ownership structure is something they can trust."

Having one sole vendor partner means that Avanade's fortunes are tied to those of Microsoft's and as one would expect, the firm's current areas of focus reflect that of its minority owner.

Applications and infrastructure is the biggest part of the business, according to Warby, as it is migrating clients to the cloud. Its other areas of focus are modern workplace, business applications and data and artificial intelligence (AI).

"We believe the journey to cloud has still only just begun," he declared.

"There are probably two main things converging that are part of our clients' digital journey; one is where people focus on their client experience, and Microsoft has a strong set of offerings there.

"One of its strengths is the focus on what we call employee experience, [the likes of] Office 365 and teams and all those capabilities.

"This cloud migration is critical because until you do that you can't do anything with it."

For Warby, the success of a client's employee experience reflects on the success of the client.

This comes from research the company did with MIT Centre for Information Systems Research, which studied 400 companies worldwide and showed that those companies that managed to combine a positive employee experience with a positive client experience resulted in a 26 per cent greater return on interest.

"We are genuinely seeing clients interested in and understanding that you can't create great digital experiences for customers without also creating great digital experiences for their own employees," he said.

"Bringing together the employee and client experience is a unique benefit that we think the Microsoft tech stack has, and something around which we have a unique value.

"For example, retail is an industry that has been massively disrupted by online shopping - what's the relevance of a store anymore? The staff in those stores have to run hard to keep up with the latest promotions and discounts.

"The idea is that you can support that staff with real-time training, online support and even maybe using a HoloLens 2 as a multi-sensory experience. It's this idea of humans plus machines, not just AI replacing people."

Cementing values

Avanade is a portmanteau of ‘avenue' and ‘promenade' and was created as a means to espouse the company's vision of "progress and forward thinking".

The chief exec is an enthusiastic advocate of the company's values, which he initially thought to be unmovable foundation stones of the company that could never be changed.

"One of my favourite of our values is ‘what is the impact on the client in the world we live in?'" he elaborated.

"When we work with clients and our teams, are we changing things for the better?

"For example, we recently started up a relationship with Microsoft around technology for social good for underserved segments: charities, not for profits, etc.

"Another value is ‘innovate with passion and purpose', which is a value we actually changed.

"When I started as CEO I didn't think you had permission to do those things; I thought values were something you chiselled in the wall, but of course they're not; they're things you live and breathe."

Despite what may happen with Brexit and a global economy that seems to be slowing down, Warby believes he has the experience and has done the legwork to see Avanade through any potential financial disruptions.

"Have a great team, invest in your people and create a culture that is going to last more than a year," he advised.

"These hark back to the foundation of Avanade, which was to blend the passion for technology from Microsoft with the focus on clients from Accenture, and that has been the heartbeat of this business for nearly two decades."