Diebold CEO engineers transformation of company

A transformation is taking place in the hallways at Diebold’s corporate headquarters. The fresh paint is orange along one corridor and bright green along another. Diebold employees voted and the bright colors won.

Crews also are working on sections of work stations, known to some as “cube farms.” Plans are to install work stations with lower walls. Co-workers won’t be hiding behind 6-foot partitions.

Talking and sharing ideas will be easier.

Dressed in khakis and a light blue shirt with a button-down collar, Andy W. Mattes blends in with other casually dressed employees as he walks the halls toward a cardless automated teller machine the Diebold Credit Union is testing in the building.

Mattes — who recently finished his first year as Diebold’s president and chief executive officer — wants to show off the company’s ability to take technology, develop an idea and make it work. But as he walks, he also notes the changes that have been ongoing since spring. Low-cost remodeling that shows the company is in transition, Mattes said.

It’s part of a realignment process, he said. Diebold is reorganizing, pushing new technology and refocusing on customers. The change won’t come fast, but it has started and Mattes likes the early results. “We don’t have to tear everything down in order to rebuild.”

TWO YEARS AGO

In April 2011, there was nothing low-cost about Diebold’s future plans. The company said it would build a new world headquarters. Thanks to tax breaks, that facility would most likely be in Northeast Ohio.

After more than eight months of searching, Diebold announced a $100 million complex just a few miles north at a site visible from Interstate 77. By late October 2012, those plans had fizzled. Three months later, Diebold’s directors had ousted the chief executive and begun searching for new leadership.

While Diebold went from building a palace to seeking new leaders, Mattes was taking a stab at venture capitalism, helping start-up companies in California’s Silicon Valley. Officially, he was senior vice president for global strategic partnerships at Violin Memory, a company that makes flash memory computer storage systems.

Mattes had spent more than 25 years climbing the ranks of international corporate giants Siemens and Hewlett-Packard.

A native of Nuremberg, Germany, he joined Siemens in 1985 and remained until 2005, rising to the post of chief executive officer at Siemens Communications USA in Boca Raton, Florida. He joined Hewlett-Packard as chief sales officer of the technology solutions group in 2006, then left the company in 2011 after working as senior vice president and general manager of Enterprise Services for the Americas. In that role, Mattes oversaw 40,000 employees and was responsible for revenue of approximately $10 billion annually.

Talking with Northeast Ohio media the day after he was named president and CEO, Mattes said he was impressed by Diebold’s technology. Research had shown him that there was more to Diebold than ATMs.

“We’ve got more assets than people generally give us credit for,” Mattes told reporters. He believed the company had a lot of positives, but needed a kick-start.

NEW FOUNDATION

Mattes introduced a program last fall dubbed “crawl, walk, run.” Change wasn’t going to happen over night. Work would be needed and it would be a slow start, a crawl.

As Mattes saw it, a lot of heavy lifting needed to be done. He describes it as rebuilding. Right now, the company is strengthening its foundation. When that is finished, refurbishing can begin and additions could follow.

It’s a three-year process, Mattes said, adding that in baseball terms, Diebold is in the second inning. He likes the progress so far.

“It’s invigorating to see that what started out as a chart is turning into activity, which is turning into things that we can measure,” he said.

Diebold had invested $100 million this year to upgrade systems and operations. Much of the money has come from cost savings programs and is being used for innovations, Mattes said. Improvements have been made in technology, and Diebold has transformed its back-office operations by installing a global system that puts all operations on the same page.

Service has been changed to service regions instead of individual countries. That has helped Diebold consolidate costs. The sales force has been transformed and expanded.

The goal is for Diebold to become faster, more efficient and nimble, Mattes said. “We have to bring the beauty out.”

SEEING PROGRESS

It has been challenging, Mattes said, but he’s happy with the progress he has seen.

On that first full day at Diebold, Mattes met with employees in the headquarters for a “town hall meeting.” He sensed quickly that he would have to work hard to sway Diebold employees.

That first meeting, Mattes recalled, featured employees slouching in their chairs, arms crossed and challenging expressions on their faces. But through the year with each meeting, the attitudes have changed, Mattes said. Employees ask questions. There are good conversations. Mattes believes it’s a sign the company is moving forward.

During Mattes’ first year, the company is showcasing new products. The cardless ATM is similar to a prototype vehicle an automotive company might roll out at car shows. It’s sleek and cool with all the modern gadgets, and it might end up in general use one day.

Another innovative product is drawing interest from foreign banks hoping to reach rural areas in their counties. Diebold engineers locally and in India devised an ATM that operates on batteries and solar power, as well as traditional electrical service. Customers in India and Pakistan have purchased units, while banks in Africa and South America also are looking the machines.

The company also is making strides in its electronic security business. With a recently added operation in Brazil, the company is working on electronic security for bank transactions.

Bank transformation is another area where Diebold has seen growth. The company has helped a number of banks and credit unions around the country redesign their branches and develop offices where ATMs handle simple transactions such as deposits, while employees are available to assist with loans and new accounts.

The company has worked to keep investors and customers informed of changes. Investors have responded positively, pushing the price of Diebold’s stock from just under $28 per share last September to just more than $38 per share this past week.

It has been an exciting year, Mattes said.

“When you work hard and you see that things are starting to move, and they are starting to move in the right direction, it’s very encouraging and I really believe in the potential of this company,” he said. “We have such a high ceiling, we’ve got so much room to grow, and we just have to make sure we stick to our ideas, execute properly and get stuff done. The more of that we do, the better our results are going to be.”

Reach Edd at 330-580-8484 or edd.pritchard@cantonrep.com

On Twitter: @epritchardREP