UPDATE: Xero's Drury to hand over reins to Steve Vamos next month
By Paul McBeth
March 5 (BusinessDesk) - Xero chief executive and co-founder Rod Drury will next month hand over the day-to-day running of the company to veteran tech executive Steve Vamos, who's been tasked with transforming the software firm to a multi-national organisation.
The handover will be effective from April, leaving Drury to focus on innovation and strategy as a non-executive director, with the board placing a high priority on the accounting software company's succession planning, it said in a statement. Vamos is a former head of Microsoft Australia and Apple Computer Australia and New Zealand and is currently a director of Telstra and Fletcher Building. He said he plans to keep those directorships but will consult with the chairs of both organisations and see how things play out in the future.
Chair Graham Smith told a conference call the appointment offers a smooth succession for Wellington-based Xero to transform from a founder-led company to a multi-national entity, with the scaling up of the business requiring a different set of skills. The board had been discussing succession over the past year, and that "came to a head towards the end of the year".
Vamos had been a consultant to Xero for the past 18 months on developing its leadership structures for that transition. His availability was one of the factors the board considered, Smith said.
"Success of the next phase relies very much on leadership alignment and continuing to hire the very best talent for global execution," Smith said. "We did look at internal candidates - there are certainly several people internal to the company, but at this point, we felt we needed Steve's skills, particularly that he's gained over many years from large multi-national corporates, so that's where we ended up."
The board chose to keep its succession planning confidential to avoid creating "a huge amount of uncertainty both inside and outside the company", he said.
Drury helped set up Xero nearly 11 years ago, listing at an early stage of the business's life and gaining momentum as the company attracted customers. The Wellington-headquartered, shifted its listing from the NZX to the ASX last year to boost global fund managers' ability to hold Xero as it heads towards profitability. The company has more than 1.2 million subscribers, operates in more than 180 countries and employs more than 2,000 people in 17 offices. It is valued at A$4.55 billion by market capitalisation.
Sydney-based Vamos said he doesn't plan to make any changes immediately to the company's Wellington base and that he'll be spending a great deal of time in both Australia and New Zealand.
"I"ll take my time, but I'm open to moving and place myself to where I think I can best serve the business," he said.
Drury told the conference call he doesn't have the skill-set to transform Xero into a multi-national entity from what he described as a product company and said he's been thinking about succession for the last few years.
Xero has a "very, very clear" innovation roadmap in place and now needs to prepare for the next five-to-10 years, wit the aim to generate revenue of $100 million monthly rather than quarterly.
"We're moving from an Australasian company with good success in the UK and US to a business with pretty complex operations across a number of territories," Drury said. "It's clear we needed the next set of skills from someone who knows how to take this business from a great foundation and really get international connectivity."
Vamos officially starts on April 1 and won't join the board of directors.
Xero's shares fell 4.5 percent to A$31.39 on the ASX, having gained 15 percent so far this year. The stock listed on the NZX at $1 apiece in 2007 and only shifted to a sole listing in Australia this year.