Over the past five years, the pace of change in accounting software has been astounding. In Australia, much of the innovation has been controlled by three kings of accounting software: Clive Rabie from Reckon, Tim Reed from MYOB and Chris Ridd from Xero.
Each is perfectly suited to his role and brand, but, apart from a wealth of experience in the software and technology fields, they share surprisingly few similarities. The upbringing, attitudes and life experience of these leaders have forged unique personalities that distinctly impact the products they develop.
Each of these three kings leads an army of software developers, brand managers and sales reps, who battle for market share. Together, they form a more powerful force than perhaps even they realise, shaping and moulding the future of the accounting industry.
As long as they do it right, they are also making our lives easier along the way.
CLIVE RABIE, GROUP CEO, RECKON – the corporate mover and shaker
The turning point in the career of Reckon group CEO Clive Rabie came when a good friend died on a squash court. Rabie was 30 years old, the same age as his late friend, and owned a few Healthy Life franchises. His friend had worked in the head office of Healthy Life.
"I suppose I just associated the business with him," says Rabie, now 54 and married with three children. "You never can be absolutely sure what encourages you to make these changes in your life, but it was clear to me that I needed change."
Change was something with which Rabie had become familiar, personally and professionally, over the course of his life. Growing up in South Africa during a time of apartheid, he spent much of his youth yearning for change. Whereas most of us are comforted by the place of our childhood, Rabie says he was always keen to leave.
And leave he did, but not before completing two years of compulsory national service. "It wasn’t fantastic," recalls Rabie, "but in a funny way, it was a good experience. I’m not against the idea of some people having experiences that take them out of their comfort zone."
After completing national service and then a bachelor of commerce degree, Rabie moved to Australia in 1982 and took a job for 12 months with Coopers & Lybrand.
But his calling was business, so after building and then handing over the Healthy Life franchises to one of his brothers, he launched a sign manufacturing business that evolved into an importer and wholesaler, then accepted a major contract from Toyota for sign maintenance.
It was here the Reckon connection was made. In order to manage the Toyota contract, Rabie developed his own CRM software. It was such a success that he took it to Reckon founder Greg Wilkinson to sell as a new product called Workflow Manager.
When Reckon hit trouble in the early 2000s after an expensive foray into financial services website development, Wilkinson called Rabie in as a consultant. But that role never quite panned out.
"The day I walked into the business, I never left," says Rabie. "I love the software, and I think it is just such an interesting industry."
Rabie helped turn Reckon’s fortunes around by focusing on what the company did best: selling boxed software. More recently, he has overseen Reckon’s move into the cloud, which involved cutting long-held ties with US software giant Intuit. A lack of control over the software’s code meant Rabie could never be sure it would be perfectly tailored to the Australian market.
"For companies such as ours, there are two positions to take," says Rabie. "In Australia, you’ve got Reckon, MYOB and Xero living very close to the local accountants and therefore catering for that market. Then you’ve got the international players that are going for a small percentage of the Australian market. We don’t want a small percentage – we want 90 to 100 per cent."
TIM REED, CEO, MYOB – the strategic people manager
When MYOB made its move into cloud software, it was a return to the internet for its CEO, Tim Reed. Earlier in his career, the father of three had worked in Silicon Valley after completing a Harvard MBA. The internet businesses for which he worked from 1995 to 2003 – including Internet Profiles Corporation, DoveBid and Elance – would help to shape the web as we know it. But it is individuals from Reed’s past, rather than experience, that he credits for turning him into the manager he is today.
The first was his father. Reed’s parents were both schoolteachers, but the year Reed was born, his father gave up his career to start a small business. Living with his wife and children in Drouin in rural Victoria, and later in Marysville, the entrepreneur went on to launch four more businesses over the next 40 years, including a bus line, guesthouse and tour business.
"I saw firsthand the ups and downs of running a small business: the long hours and the sacrifices, the hard times and, when things are going well, the rewards," says Reed, now 43. "He had a good work ethic and a healthy attitude to risk. Some of that pounded itself into my DNA."
When his parents divorced, Reed moved with his mother, brother and sister to Melbourne, where he earned a first-class honours degree in commerce. This led to a job at LEK Consulting.
At LEK, Reed spent one year each in Australia, Asia and the UK under the tutelage of Richard Fuller, now a British MP. Fuller "stretched me, supported me and exposed me to some fantastic opportunities", recalls Reed. "He gave me opportunities to mix with executives who had decades more experience than I did. He gave me a lot of rope, but on no occasion did he let me hang myself. I see myself doing these things now with staff members."
Reed’s American-Hungarian wife Karola, who he met in Silicon Valley, helped convince him to move back to Australia in 2003 once they had begun raising a family. He planned to open a microbrewery, but a meeting with Neil Gamble, CEO of software company Solution 6, turned all that around.
Reed was employed as general manager of Solution 6’s Australian operations, and nine months into his reign, the business was purchased by MYOB.
"Over the last decade, the pace of change in the channels through which MYOB develops relationships with customers has been astounding," he says. "The core promise, that it makes your business life easier, hasn’t changed. But everything we have to do to deliver on that promise is different."
The cloud opens up powerful possibilities for accounting software, says Reed – from the capacity to submit information to clients, accountants or regulatory bodies, to the ability to see your business in aggregated form compared to others in your industry, to mobile access and mobile payments.
"The pace of innovation is certainly not going to slow down any time soon," says Reed.
"That’s what gets me out of bed every morning."
CHRIS RIDD, MANAGING DIRECTOR, AUSTRALIA, XERO – the disruptive surfer
It is easy to toss around the word ‘disrupter’ without it meaning very much or to have it used by an organisation desperately hoping to be seen as such. In reading media stories about Xero, you see this word a lot. While interviewing Chris Ridd, the 46-year-old managing director of Xero Australia, you hear it even more. In spending time with Ridd, it becomes clear that some of his own, distinctive DNA has flowed into the business. This self-confessed surfing lifestyle junkie is the very embodiment of a disrupter.
He grew up in a "classic middle-class family" in which his parents – his father specialising in financial advice; his mother taking part-time jobs – put their four children through private school. Ridd completed a year of accounting at Melbourne’s Swinburne University of Technology before shifting to economics/marketing. That’s where the predictable career path ended.
The next 12 months, he says, were spent on a beach. His career path was disrupted. "My friend and I surfed and partied, and I played guitar," he says. "I look back on that time with a lot of fond memories. I hardly had a cent to my name but it was just good fun."
When the real world came calling in 1989, Ridd was one of 18 people (and only four Australians) accepted into the Australasia graduate intake for NCR, a tech powerhouse then similar to IBM. His first day of work was spent on a business class flight to Malaysia for three months of intense sales training.
In 1995, Ridd was wooed by Microsoft, a business that, at the time, was also playing the role of disrupter. "The late ’90s was an exciting time in information technology," he says. "You could feel the energy, as you can in accounting software now.
"Then Microsoft became too big and a bit arrogant and ended up in trouble with the US Government. It goes to show that you can’t get complacent. You have to remain focused on the market and on the customer."
Ridd stayed with Microsoft for 15 years before moving to Xero Australia and says it was a career-shaping experience. Now, he insists on a disciplined customer focus. Feedback from users is immediately analysed, prioritised and put into play. "We have a real-time view of exactly what our customers want," says Ridd, now a father of three and still a keen surfer. "There’s a saying around here that it’s not the big that eat the small, but it’s the fast that eat the slow."
That’s the way things used to be at Microsoft and that’s the way it is now at Xero, he believes.
"I see the passion our developers have for the work they’re doing," says Ridd. "If you’ve got a band and you give them a piece of music they hate, then they’re going to do a shitty job playing it. But if you give them a piece they’re passionate about, then you’re going to enjoy listening to it.
"It’s the same with software development. As long as we can retain that passion, it gives us a tremendous competitive advantage in the market, and our users will share in the feeling."