CalBusiness


Fall 2008

Top Acrobat at Adobe

CEO Shantanu Narayen, MBA 93, focuses on the next generation of software and leadership.


By Hubert Huang


Adobe Systems has come a long way since Shantanu Narayen, MBA 93, first started working at the San Jose software company a decade ago. Although Narayen has been CEO for less than a year, he has been instrumental in building Adobe into a 7,000-employee tech giant whose software sits on more than 700 million computers and devices worldwide. Now Narayen is keenly focused on steering Adobe through an increasingly Internet-focused software landscape — and developing leaders within the company to tackle that challenge.


For executing a vision that spurs financial prosperity, fosters employee development, and fulfills its responsibility to the community, Narayen has been named the Haas School's Business Leader of the Year. Each year, Haas honors a member of its community who exemplifies the type of business and thought leader the school is committed to creating. The school will present the award to Narayen, a member of the Haas School's advisory board, at its annual gala Nov. 7 at the
Ritz-Carlton in San Francisco.


"Narayen's success at Adobe is an inspiration to all of us
at Haas," says Dean Rich Lyons. "We are so fortunate to have such an innovative, forward-looking leader as an exemplar for our community."


Narayen joined Adobe in 1998 as vice president of engineering after working at Apple and Silicon Graphics. He became executive vice president of worldwide products in 2001 and was promoted in 2005 to president and COO, which placed all product research and development, day-to-day global operations, marketing, and corporate development under his purview. He became CEO in December 2007.


"Adobe's success over the last eight or nine years is largely because of Shantanu," says Bruce Chizen, who preceded him as CEO. "His ability to learn and understand the complexity of sales, nuances of marketing, and legal and financial issues of running a company is unlike that of any individual I've ever worked with."
But Narayen won't take full credit for that success. Rather, he's a strong believer in giving individuals who show initiative additional responsibility and room to grow as leaders.


"To create new businesses and drive growth, you need to have a leader who wakes up wanting to make an impact," Narayen says.
Under Narayen's guidance, Adobe has enjoyed 20 percent annual growth since 2002, with sales reaching a record $3.2 billion in 2007. And the third release of Adobe's Creative Suite —
an integrated collection of desktop applications such as Photoshop, Illustrator, and InDesign — outsold its precursor by 40 percent.


Narayen also co-managed with Chizen the $3.4 billion acquisition of then-competitor Macromedia in 2005. Some pundits questioned the merger, but Narayen saw how well Macromedia's product lines complemented Adobe's.


"We had the video authoring tools, they had the video playback. We were great in imaging and illustration; they were great in animation," Narayen says. "It was actually quite obvious."
Macromedia's Dreamweaver, Fireworks, and Flash are all key components in Creative Suite, which now boasts 43 percent market share among the country's 6 million creative professionals. "What's most gratifying is we've brought to market something neither company could have created as successfully standing alone," Narayen adds.


Not Flashy
Narayen doesn't fit the stereotype of the bold, acquisitive CEO.  Unlike many executives who answer questions like a smooth-talking politician, Narayen responds in an unassuming tone. And consistent with his relaxed demeanor, he works out of a modestly sized, non-corner office, in contrast to the typical workspace of other Silicon Valley CEOs.


Narayen was born in Bombay but spent most of his childhood in Hyderabad, India. His mother taught American literature; his father ran a plastics company. He graduated with a bachelor of engineering from Osmania University. He then moved to the
United States, where he earned an MS in computer science from Bowling Green State University.


After earning his master's degree, Narayen moved to California to work in tech. Looking to develop management and leadership skills to handle greater responsibility, Narayen enrolled in the Haas School's Evening & Weekend MBA Program while working for Apple. Applying principles learned in the classroom directly to the workplace, he gained a real-world understanding of how businesses function. Even the commute to Haas itself proved invaluable.


"Back then the program was in San Francisco, so a bunch of us would drive together," Narayen recalls. "I can't tell you how many great conversations we had carpooling back and forth."
After getting his MBA, Narayen worked at Silicon Graphics and went on to co-found Pictra, a company that led the way in digital photo-sharing on the Internet. While trying to sell Pictra to Adobe – albeit unsuccessfully – he caught the eye of Chizen and was then hired by Adobe.  "Running Pictra was an incredible experience," Narayen says. "I did everything from collecting the mail to figuring out corporate strategy."


Narayen joined the Haas School's advisory board in 2005 and has become a strong proponent of the school's Leading Through Innovation strategic initiative.


 "Innovation is a great theme to rally around and speaks to the core values you want," Narayen says. "What's great about the Leading Through Innovation initiative is that Haas – much like businesses – really thought about its strategic plan. When you're training the next generation of business leaders, that's what you need to do."


Bringing Sand Hill to Adobe
Developing a new generation of entrepreneurs at Adobe is a major priority for Narayen, who sponsored the company's Entrepreneurs in Residence program. The program lets any employee pitch an idea to the company, much as a startup would one of the venture capital firms lining Menlo Park's Sand Hill Road. If the company accepts the pitch, it finances the employee's venture and sets metrics for the employee to qualify for additional funding.


"By the time Shantanu's done at Adobe, he will have recruited and trained a number of candidates ready to take over senior leadership," says Charles Geschke, co-chairman and co-founder
of Adobe, "all while leading an aggressive expansion."


Ultimately, Narayen's ability to foster innovation within Adobe will play a large role in determining its future expansion. As software delivered through the Internet and mobile devices increasingly becomes the norm, Narayen is continuing to direct Adobe's expansion beyond the desktop.


The unveiling of Acrobat.com in June demonstrated how Adobe will leverage existing products to gain an advantage in Internet-based computing. Acrobat.com — a suite of hosted services including word processing, file sharing, PDF creation, and Web conferencing – can be accessed through the Internet browser, but also ties into the latest version of the widely used Adobe Acrobat.


"We've always understood cross-platform and heterogeneous systems better than any other company," Narayen says. "We probably distribute more software than anyone else today."


Giving to the Community
As important as Adobe's financial success is to Narayen, he places equal emphasis on preserving the core values of community responsibility instilled by Adobe's co-founders. Adobe donates 1 percent of profits to charity and encourages employees to do the same through its matching gift program.
Recently, the company launched the Adobe Foundation, a private nonprofit foundation dedicated to driving social change and improving Adobe's surrounding communities. The company also has expanded its Adobe Youth Voices program, which empowers youth in underprivileged areas by teaching them to share their experiences through visual media.


"The culture of Adobe makes it a special place to work, and it's been a special place since John Warnock and Chuck Geschke co-founded it and Bruce Chizen expanded it," Narayen says. "Now that we're a global company, we know we can have a deeper presence in these markets by enabling education and working with kids — not just shipping our products there."


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Shantanu Narayen, MBA 93

Business Leader of the Year, Shantanu Narayen, MBA 93

 

"Adobe's success over the last eight or nine years is largely because of Shantanu."
—Bruce Chizen, former Adobe Systems CEO