Several recent articles have lauded the success of Ottawa-based Bridgewater Systems. With skyrocketing revenues, a growing market, and money in the bank, the firm’s prospects have never been better. The street appears to love the story. But it was a much more difficult story to sell in 2003, with one notable exception.
Bridgewater was founded in 1997, one of many Newbridge spinouts, a graduate if you will of the Terry Matthews school of stellar startups. The first few years were bumpy as the firm struggled to find its place in the evolving IP telecom marketplace. Matters were made worse in 2000 when its main benefactor, Newbridge, was sold to Alcatel transferring in the process its equity position in Bridgewater. It can safely be assumed that tiny Bridgewater was not atop of the French behemoth’s list of priorities.
At one point, Bridgewater’s board of directors seriously contemplated abandoning the telecom market altogether. They hired Toronto-based Derek Smyth as CEO and tasked him with levering his extensive software experience to move Bridgewater into the enterprise marketplace. But it did not take long for Mr. Smyth to conclude that enterprise markets were not the answer. He quickly returned Bridgewater to the telecom marketplace and focused instead on improving the firm’s sales and marketing effectiveness. Over the next year company revenues and prospects began to improve. Unfortunately, adversity was just around the corner again when in 2003 the commuting weary Mr. Smyth made the difficult decision to leave Bridgewater to join venture-capital firm Edgestone Partners in Toronto. The board immediately set out to find a seasoned CEO to navigate the next leg of the company’s journey. Armed with a promising market, a team of 65 motivated employees and revenues approaching $10mm the board was optimistic that it could recruit an ‘A’ player to the organization.
One can never be certain how the candidate market will respond to a given company/opportunity and surprises are not uncommon. In this instance, despite the company’s apparent promise and momentum, the North American candidate market yawned at the opportunity. Some executives dismissed Bridgewater’s technology as ‘too niche’, others argued that the breakthrough markets would never materialize while yet others scoffed that big-name competitors would ultimately destroy the firm. Still other candidates did not want to move to Ottawa or even commit to the commute. In the end, a great many of the targeted so-called ‘A’ candidates, the proven winners who had taken similar businesses to their new heights, declined. Even those who expressed interest did so skeptically, needing to be convinced. And while the board worked hard to educate them, several of these candidates turned down the opportunity after conducting their due diligence.
And then a certain individual raised his hand. Ed Ogonek was known and respected by several board members having turned-around Ottawa-based start-up Akara and sold it to Ciena. As a condition of that transaction Mr. Ogonek committed for a period to a senior role in Ciena making him unavailable to Bridgewater at the outset of the search. But as the search proceeded, circumstances changed at ever-changing Ciena and Mr. Ogonek expressed interest in Bridgewater. What made him different from almost every other high calibre candidate was the potential he immediately saw in the firm and his confidence that he could help realize that potential. Such certainty in a sea of naysayers, refreshing though it was, made him at the time either prescient or delusional. The firm’s stellar performance under his subsequent leadership has answered that question in no uncertain terms.
Bridgewater’s success can be attributed to many factors. These include market foresight, innovative technologies, the steadfast vision of founder/CTO Russ Freen, savvy positioning, and skillful execution. Bridgewater is also a Paul Masson story of ‘no wine before its time’. The company persevered long enough for its market and technology stars to align, much in the same way that they have at another decade-old Newbridge ‘dog-to-darling’ spinout, Dragonwave. But make no mistake this is also a story of good leadership, of the decisions made and the steps taken by the last two CEOs, especially those of one individual who could see the opportunities that so many others could not…and knew what to do about it. Hats off to Ed Ogonek and everyone at Bridgewater! They deserve all of the good fortune and accolades they receive..
Robert Hebert, PhD is Managing Partner of Toronto-based executive search firm StoneWood Group (www.stonewoodgroup.com). He can be reached [email protected] or call (1) 416-365-9494 EXT 777