Beyond the religious and regional influences, corporate culture at Novell was shaped by its management. Despite some token statements made by Ray to the contrary, Novell was always Ray Noorda's company. To an unusual degree, his personal decisions, policies, and behavior affected how Novell managers and employees behaved. It is almost impossible to overestimate his influence.
People who have worked for Ray say he is a poor manager of people who nevertheless manages to run his companies successfully. He is the sort of manager who is well-suited to running entrepreneurial enterprises: bright; perceptive; hard-working; able to motivate people one-on-one; obsessive about making sales and controlling costs; "married" to his business. From his managerial strengths flow his weaknesses: irascibility when confronted with fools; quickness to judge (sometimes leading him to the wrong conclusions); an inability to delegate appropriately and a tendency to work himself beyond the limits of his effectiveness; neglect of his management team; a tendency to embrace false economies; and a lack of interest in anything beyond the business. His passion is his business.
Ray's standard operating procedure is to mull over problems and situations, sometimes for weeks or months. He may seek advice on parts of the problem from various individuals in one-on-one meetings. When an opportunity to solve the problem presents itself, Ray tends to leap at it, and he may commit all his "troops" or resources to it. He is willing to make the entire organization stop and turn on a dime. That's what Dick Eales meant when he told Eliason that Ray likes to do things "quick and dirty."
Ray's frugality is legendary and had a direct effect on Novell's corporate culture. His concern about expenses, both corporate and personal, transcends mere thrift; he is almost pathologically cheap. Some of the best "Ray stories" relate to money. After Novell went public, he reduced his salary to a figure between $30,000 and $40,000 per year, making him by far and away the lowest paid CEO among corporations of Novell's size. For years, he drove an older model pickup truck; he only gave it up when it broke down on his way to the airport and he missed a plane. He was delighted when he turned 65, because he qualified for senior citizen discounts on air fare. At Novell, he has a reputation as an inveterate food moocher with internal radar to help him locate cookies and popcorn. Once in New York, he arrived late for an analysts conference. Not wanting to spend the money for a cab, he took the subway and got lost. Imagine: Hundreds of millions of dollars lost in the New York Subway system!
He imposed this somewhat warped sense of economy on Novell. No one would have dreamed of flying first class -- it would have been grounds for dismissal! All Novell employees, from executives to clerical workers, had to share rooms when traveling on company business. (Ray not only wanted to save money; he also wanted to make sure employees weren't hiding out in their rooms.) From time to time, Ray would personally review expense reports. A personal telephone call, a room service charge, or -- God forbid -- a pay movie could mean the end of a career. Once Ray decided you were a spender, a seeker of comfort, you were finished.
Many of Ray's attempts at thrift may have worked if consistently applied, but he frequently stepped over dollars to pick up quarters. For example, to reduce expenses, he insisted on personally approving the list of employees who would attend trade shows, so that only those who were absolutely necessary would be there. Well and good. But due to his hectic schedule, he invariably approved the list at the very last minute, so Novell was unable to take advantage of discounted, advance-purchase air fares. Where Ray saved perhaps $100,000 per year by forcing employees to share rooms, he wasted perhaps $500,000 per year by purchasing airline tickets at the eleventh hour.
Another example was the printing the company bought. In 1988, Novell spent an estimated $23 million -- nearly 10 percent of its total revenue or five times its R&D budget -- in printing manuals, marketing communications pieces, and corporate communications projects. Most of this printing was marked up between 10 and 30 percent by various advertising and design agencies. By hiring a print buyer, negotiating volume discounts, and imposing some discipline in this area, annual savings of $3 million and more might have been possible. Yet when a print buyer was finally hired, management support was only grudgingly provided for this function, and when the print buyer quit, the position was essentially eliminated just 18 months after it had been created.
Then too were the costly acquisitions. Although Ray nickeled and dimed in operations, in several acquisitions, he was willing to pay more than market share because he was impatient to conclude the deal. Indeed, Ray's frugality seems incongruous with his entrepreneurial spirit, his willingness to risk everything. How can such a penny-pincher be such a high roller?