As the Triangle rides out of the recession, corporate leaders like Stephen Wiehe will help steer the way.
Wiehe is CEO of SciQuest, one of dozens of this region's small technology companies that continue to hire and expand. These companies probably represent some of the best opportunities for job creation, especially with layoffs and cost-cutting continuing at traditional large employers such as IBM, GlaxoSmithKline and Nortel Networks.
"The real recovery is going to be driven by smaller companies," Wiehe said in an interview earlier this year.
Certainly, some of the companies won't survive as the slower economy and competition take a toll. But a few will become homegrown tech success stories - and job engines - following the path of SAS in Cary, Cree in Durham and Red Hat in Raleigh.
On Friday, SciQuest started down that road by filing plans for an initial public offering of stock. The company hopes to raise as much as $75 million.
When Wiehe (WEE-HEE) joined SciQuest nine years ago, it wasn't clear whether he'd be able to save the Cary company at all. It was losing millions on a dot-com business model that proved unsustainable. Its stock was foundering.
Under his leadership and with the backing of private equity firms, SciQuest went from publicly traded to privately held and completely revamped its business model. Wiehe slashed the company's work force from a peak of 550 employees in 2000 to about 85 a year later and has slowly rebuilt it.
"It was like pruning a tree," Wiehe said. "We had to resize the business without killing it."
As he's rebuilt SciQuest, Wiehe's had to change his management style, honed as a young executive at General Electric and at several small software companies. He's evolved from a turnaround CEO hired to fix a business struggling to survive the dot-com bust to a leader for a fast-growing company.
His next challenge is conquering the risky waters of Wall Street by taking SciQuest public again, 11 years after the first time and six years after it was bought by private investment firms for $25 million.
SciQuest's revenue growth slowed last year as the recession raged, but it's still profitable. For 2009, revenue rose to $36.18 million, up 21.5 percent. Net income more than doubled to $2.63 million. The company now employs more than 160 people and plans to hire nearly 50 more this year.
The original business plan was to sell scientific equipment over the Web. Now SciQuest employees develop and sell software and services that allow pharmaceutical companies, universities and other customers to buy all sorts of goods and services online. The University of North Carolina system recently signed on as a client to help reduce its procurement costs. The state of Georgia uses SciQuest to buy a wide range of products, including body bags.
Won't take credit
It's entirely possible another CEO could have done what Wiehe has accomplished at SciQuest. He's quick to defer credit: "You could easily replace me. I don't write code. I don't sell products," he said.
But board members, investors and colleagues point to Wiehe's leadership as key to restoring SciQuest's financial health and employee morale. He insists on transparency, honest and rapid communication about bad news, and a conservative fiscal culture.
"He wants to make sure we hold people accountable but also that people look at this as a great place to work," said Ann Thomas, who rejoined SciQuest last fall as vice president of human resources. She worked at SciQuest under Wiehe when he dismantled much of the former company and quit when it shrank so much it didn't need an HR executive.
"We're still a small enough company that he knows everyone, talks to them in the hallway," Thomas said in an interview last month. "That will be challenging as we continue to grow."
One of Wiehe's management mottos is to have an "open kitchen." That is, managers have to be willing to share what happens behind the scenes, even when there are problems and bad news. "We screw up a lot," he said.
No fear of challenges
Wiehe, 46, enjoys fixing things. He was an avid woodworker but ran out of room for more furniture in his North Raleigh house. So he switched hobbies and began collecting and repairing pinball machines. He's rebuilt more than two dozen that line his finished basement. He brings in a few on a rotating basis for SciQuest's break room.
The son of two teachers, Wiehe doesn't shy from challenges. He started his career with GE, a corporation with a reputation for tough executive grooming - the company is famous for weeding out the bottom 10 percent of employees each year. He graduated from its rigorous, two-year Financial Management Program and became treasurer of GE Plastics at age 25.
"I grew up in GE, and I know confrontation and sharp elbows," Wiehe says.
He later ran a software company in Europe, and then became CEO of another one that he sold in the late 1990s. At that time, he and his wife, Juliet, a Duke University alumna, were living in New York but decided to move to the Triangle.
Wiehe read a newspaper story about a Triangle software company called Red Hat recruiting Matthew Szulik as its new CEO and decided it was probably a good place to continue his own career.
Wiehe soon found a job as CEO of DataFlux, a Raleigh software company that was acquired by Cary-based SAS in 2000. His father-in-law put some money into DataFlux, an investment that paid off big when the company was acquired.
"That was the only time he was glad that I married his daughter," Wiehe jokes.
Navigating a recovery
Before the recession hit, SciQuest officials were considering plans for another initial public offering of stock, but they postponed those ambitions when Wall Street interest in tech stocks slumped in the fall of 2008. Now that interest is reviving, leading to SciQuest filing its second IPO plans Friday. Such a deal could take months to pull off, assuming the stock market cooperates and Wiehe can persuade investors that the company has a bright future this time around.
An IPO would enrich Wiehe and many of SciQuest's executives and employees who hold stock options. The company gave him 94,035 restricted shares last year with an exercise price of $1.02 each. His total compensation was $620,543, SciQuest reported in a regulatory filing.
Despite his finance background, Wiehe also knows the importance of softer skills as a corporate leader. Every few weeks, he'll call for a "beer Friday" to let SciQuest employees unwind together at the company's offices before the weekend.
During the past two years, he's reinstated some of the perks that were eliminated during the lean times, including a matching retirement plan and gym memberships.
"As the business succeeds, we pay it back," he says. "Does that mean we'll get back to the wild spending ways of the old dot-com days? That's not in our DNA anymore."
When SciQuest bought adjacent space at its Cary headquarters to expand last year, Wiehe insisted on keeping the existing carpet, even though it didn't match. As the recession hit last year, he scaled back monthly employee lunches to keep costs down. Instead of a lavish holiday party, there was a lunch.
Outside the office
Wiehe is a registered Republican who was quick to question government bailouts of big auto companies and banks. He works out religiously, listens to classic rock and watches the History Channel's "Modern Marvels" and other programming.
His house, with an assessed value of $1.1 million, according to county records, is in a neighborhood where former Pittsburgh Steelers coach Bill Cowher and several Carolina Hurricanes players live. Wiehe is a big fan of the hockey team.
He occasionally holds"pizza nights" at his home,inviting local lawyers, investors, fellow CEOs and others to eat and play pinball. It's mostly a social gathering, but with more than a hint of networking. He's closely involved with CED, is now chairman of the Research Triangle Park support group for entrepreneurs, and enjoys playing a mentoring role for other local executives.
"It's important for leaders to have a vision beyond raising of capital and a great idea," said Kip Frey, a local investor who was on SciQuest's board. "They have to be able to take the idea and make it grow. His range of experience and hisaspiration level are the type that have the potential to take a company, drive it to a new level."
Despite his successes, Wiehe prefers to emphasize his humble roots. When he gave a speech to a dinner meeting of the Harvard Club of the Triangle last year, he joked that he was underqualified with his undergraduate degree from the University of Kentucky.
He also defers leadership at home to his wife, Juliet, who was in GE's financial management program when they met. She persuaded Wiehe to apply for the program. She's also convinced him of the folly of rooting for any college basketball team other than Duke.
Juliet says that GE gave her husband a solid foundation for running and expanding a business while maintaining strict financial discipline.
"He likes to be successful," she adds. "He's not somebody who will seek out competition, but he doesn't like to lose."
And he doesn't like whining. "He doesn't want to hear something can't be done," she says. "He wants to hear ideas about fixing problems."
