- change ups
Ferrara Sees Bright Future
Clad in a tailored suit that’s navy blue almost to the point of blackness, and sitting in a black leather lounge chair in his spacious corner suite, Ferrara holds forth about the psychological and emotional powers of his company’s most precious commodity: color.
“Color had such emotion to me. It had such interest. You look at color, it affects so much of everything that goes on in the world,” Ferrara said, describing his initial interest in what has become his primary intellectual currency since he took the presidency of X-Rite Inc. in 2001.
Over the last five years, Ferrara has been on a mission to define X-Rite, to remove the gray areas of extraneous services and focus on what he sees as its future: The simplicity and endless promise of making the world more colorful.
In an odd way, Ferrara is a good fit for X-Rite. Both the man and the company are somewhat paradoxical.
At 5:30 in the morning, Ferrara is working out at East Hills Athletic Club. At 5:30 in the evening, he’s in his office smoking unfiltered Camel cigarettes. He’s a New Yorker, but he’s lived a quarter of his life in Grand Rapids. He has an engineering degree from Villanova and an MBA from Harvard, but he’s more likely to ruminate on the abstract notion of color than fixate on the technical details of his company’s color calibration and measurement equipment.
As for the company, its corporate headquarters is a nondescript, glass and concrete facility that would fit in with any office park in the country. But it’s not in an office park. It’s in the middle of one of the busiest hubs of consumer commerce in West Michigan, a stone’s throw from RiverTown Crossings mall. The company is becoming increasingly global — including a pending merger with Amazys Holding AG, a Swiss competitor — but, at the same time, it is building a new headquarters in Kentwood and strengthening its commitment to Michigan. And the biggest paradox of all — and one that Ferrara immediately set about changing when he took his position — is that X-Rite had built itself a healthy business in the emerging color industry, and then decided that color was no longer its thing.
“It was the decision of the board that this wouldn’t be a color company. There were a number of initiatives that were started — a number of initiatives. But I looked at it, and I decided that it’s color. It’s the pride. It’s the DNA. It’s the intellectual property. It’s the people. It’s the whole thing.”
Coming into X-Rite, Ferrara saw that the company had lost its momentum.
“The pride of some of the people here, when I met them for the first time — this was a hot company at one time. A hot company. But you could tell that their spirit was broken here. You know, they weren’t doing well,” he said. “And I just thought I could be the change agent here.”
While much of the change he foresaw would be strategic and organizational, some of it was concrete and immediate.
“When I got here, it was all white in the lobby. It looked like a hospital. Nobody knew what the hell we did. But now, we put that display in the lobby,” he said, referring to a museum-like, walk-through explanation of what X-Rite is and how its products serve its various markets. “We show people around. We show them what we do.”
For the first two years at X-Rite, Ferrara did a lot of that. He said that business relationships had faltered. Innovation had stalled. He spent two years making sales calls, getting longtime customers re-excited about what the company had to offer.
“They wanted us back. They wanted X-Rite. They wanted the technology.”
After two years as president, the board asked Ferrara to take over as CEO in 2003. His mission was clear.
“The company hadn’t grown. The company was floundering. … The mandate was, ‘Grow the company,’” he said.
The past three years have been a flurry of new partnerships, acquisitions and technological advances. The most recent acquisition, the merger with Amazys, will nearly double the size of the company. It will allow entry into new markets and access to new partners. Right now, the two companies are working out the “synergies” of the upcoming merger.
“What will emerge from that is a slimmer company, and a company that can put visionary resources around software and hardware solutions for the retail and consumer marketplace,” Ferrara said.
Jobs will also come out of the merger. He said that of the roughly 1,000 employees of the combined company, more than half will be in Grand Rapids. The remainder will be in the company’s European headquarters in Regensdorf, Switzerland, and in a software facility in Boston.
X-Rite may gain one more asset in the merger: Ferrara’s successor. Amazys CEO Thomas Vacchiano is joining the company as president. Within 18 months of the completion of the merger, Ferrara expects to retire.
“It’s hard to imagine ‘after X-Rite,’” he said. He might buy a company in the Boston area with the intent of letting his daughter (who also has an engineering degree and an MBA) run it. He might teach. He might try to live abroad in various places he has visited during his career.
He’s not too worried about that right now.
“My job is to get the market cap up, make a long-term play here, and leave this job with better shareholder value than when I came,” he said. Currently, the company’s stock trades at around $12.50 per share on the NASDAQ exchange. In 2001, it was below $6. That’s good growth, but Ferrara wants more before he goes.
“I’ve got to get these companies integrated, make sure I’ve got the next guy ready, and work like hell on getting the stock up,” he said.
Then he’ll be out the door. He doesn’t know if that means going back to Saudi Arabia, Ireland, Thailand or any of the other places he called home during his career. He does know that he won’t be hanging around the board of directors or consulting.
“When you’re done, you’re done. Like Johnny Carson. He wanted to play golf. He wrote some jokes for Letterman. But he was done.”