After a globetrotting high-tech career, Les Rechan would seem to be just the right person to lead Halogen Software’s quest to become an international software powerhouse.
The 54-year-old executive was born in Niagara Falls before his family moved just across the border to Buffalo when he was a youngster. Upon graduating from Brown University in Providence, R.I., in 1984 with a degree in computer engineering and organizational behaviour, Mr. Rechan embarked on a three-decade career that took him to Chicago, London, Singapore, Seattle, California and finally Ottawa, where he joined the company then called Cognos as chief operating officer in 2006.
Cognos was eventually acquired by IBM, and Mr. Rechan continued to work for the multinational tech giant as general manager of its business analytics unit until 2014.
Never one to just put his feet up, he then joined the boards of several tech organizations. One of them was Halogen, where his old friend, former Cognos CEO Rob Ashe, was already a board member.
But he didn’t stay out of the executive suite for long. When Halogen chief executive Paul Loucks, the company’s CEO since 2000, unexpectedly resigned in July 2015, the firm turned to Mr. Rechan on an interim basis while it searched for a permanent replacement.
Four months later, Halogen removed the “interim” from Mr. Rechan’s title, putting him in charge of a growing company that now employs nearly 500 people worldwide, 410 of them in Ottawa.
“I wouldn’t have joined the board unless I strongly believed in what Halogen Software does,” he says in a New York accent that belies his Canadian roots. “I’m a big believer in people – people matter most in any company. It’s the biggest expense line, but also the biggest differentiator – whether it’s a company, whether it’s a government agency. What we do is connect with people and really enable people to grow and succeed in companies.”
Mr. Rechan believes Halogen is just scratching the surface in its effort to sell its talent-management software around the world. He says there are 300,000 companies in Halogen’s “sweet spot” – small and medium-sized businesses with between 100 and 5,000 employees – and 90 per cent of them aren’t using any software to recruit talent, measure performance or train employees.
The way Mr. Rechan sees it, that equates to $15 billion worth of customers waiting to be served all over the planet.
“It’s an untapped market,” he says.
Halogen, which went public on the Toronto Stock Exchange with a $63.5-million IPO in 2013, has been diligently working to establish a global presence for years. Headquartered in Kanata, the company now has U.S. offices in Charlotte, N.C., and San Jose, as well as overseas operations in Australia, Britain and the Netherlands. It sells its products to more than 2,100 clients in 55 countries from China to Switzerland and offers customer support in 23 languages.
Like most software-as-a-service companies, Halogen has invested heavily in sales and marketing to boost its customer base, an effort that has yet to pay off at the bottom line. Despite earning record-breaking revenues of $65.7 million in fiscal 2015, the firm still posted a loss of about $13 million, bringing its total losses over the past five years to more than $70 million.
But Mr. Rechan says he’s confident the company is just getting warmed up. International markets – those outside Canada and the United States – currently account for a mere 11 per cent of Halogen’s sales, a figure he believes will rise dramatically in the years to come.
“There certainly is an opportunity to get a higher mix, absolutely. We do extremely well in some of these markets. We can do better in some of them, as well,” he says, citing Australia, Britain and New Zealand as countries with major growth potential.
Still, he stresses every market is different. Compliance laws vary from country to country; the way certain verticals, such as health care, operate can change substantially from one nation to another; each culture has its own way of doing business.
In its ambitious bid to become a world leader in its field, Halogen must avoid the temptation to rush headlong into markets it doesn’t understand, Mr. Rechan cautions. For now, he says, he is focused on building a stronger foundation in the regions Halogen already serves, rather than continuing to extend its reach further.
“The challenge in these global markets is once you get into them, you realize just how much you don’t know,” he says. “We’re really working with the footprint that we have versus adding new locations.”
Recently, Mr. Rechan has turned his attention to signing up partners such as employee recruitment software producer Jobvite to complement Halogen’s own services. Though the firm has grown organically throughout its history, Mr. Rechan isn’t ruling out the possibility of future expansion through mergers or acquisitions.
“I’ve done a lot of acquisitions throughout my business career,” he says. “There’s a lot of different places you could go, so in order to optimize this, you need to have a vision. But then you also need to be opportunistic around what makes sense, where can I get synergy, what makes sense in terms of affordability. We’re constantly looking for those opportunities.”
In the meantime, he says, he’s happy with the direction the company is headed. Halogen is projecting record-breaking revenues of between $72 million and $73 million for fiscal 2016, and Mr. Rechan believes its growth trajectory will continue on its upward path.
“If you look at the past nine months since I’ve joined the company, the results and where we’re going, I really think the team has done a very good job of really unifying around our vision,” he says. “We want to continue really growing this thing as aggressively as we can.”
THE BOOK ON LES RECHAN
President and CEO, Halogen SoftwareJuly 2015-present
General manager, IBM Business AnalyticsNovember 2011-April 2014
Vice-president, IBM Business Analytics Sales, February 2008-October 2011Solutions and Services
Chief operating officer, CognosMay 2006-January 2008
Senior vice-president and general manager,January 2006-May 2006CRM Strategy, Oracle (San Mateo, Calif.)
Senior vice-president and general manager, July 2004-January 2006Americas and Global Manufacturing and Distribution Industries, Siebel Systems(San Mateo, Calif.)Senior vice-president and general manager, May 2003-July 2004North America Operations, Cadence Design Systems (San Jose)Chief operating officer, Onyx Software (Seattle)February 2001-November 2002General manager, Asia Pacific January 1999-January 2001communications sector, IBM (Singapore)General manager, Asia Pacific travel January 1996-December 1998and transportation industries, IBM (Singapore)Director, global travel and transportation January 1995-December 1995industry solutions, IBM (London)Client executive, solutions manager, August 1984-December 1994transformation consultant, systems engineer, IBM (Chicago)