Kenexa

Topics: HRExaminer, John Sumser, Reviews, by John Sumser

Kenexa Analysts Summit 2011 Dallas, TX - Review HR Examiner
One of the hardest parts of an analyst’s job is digging to find the truth. There are many ways that any story can be cast. Great marketers are precisely good at telling great stories. The analyst gets to try to pin things down.

When I left Chicago and headed to Dallas for the Kenexa Analysts’ Summit, my expectations were pretty low. I’ve been close to the action on several of the company’s acquisitions. I’ve worked closely with former executives. I’ve engaged in complex conversations with some of the company’s people.

In my view, the company was a collection of cats and dogs masquerading as an integrated suite of software. Over the years, the firm has struggled to get a stock price that matched its peers. They were good at telling the integrated toolset story. Kenexa, not so much.

You may know that I was on the board of Salary.com at the time that Kenexa purchased it last year. During the transaction, I got a chance to watch Kenexa a little more closely. It was a difficult time and I would have been hard to impress in the first place. Regardless, I wasn’t.

Imagine my surprise when I walked away from last week’s analyst summit with a powerfully positive view of the firm.

You should understand these Analyst confabs. Held in an interesting hotel, they are day long gabfests where the conversation is led by key executives. The analysts get an opportunity to hear the company’s story; the company gets an opportunity to tell it. In a perfect world, the company would know each analyst well enough to deliver the appropriate slice of the picture. In the real world, companies use these get togethers as a test ground for their market pitches.

The analysts are a somewhat harsh audience, so new spin gets a good going over.

Kenexa is led by a fellow named Rudy Karsan who is an actuary with a Math degree. He founded the original company almost 25 years ago, and has been growing Kenexa ever since. Rudy is a charming business guy who is known for doing what he thinks is right. Sometimes, he swims against the tide.

In today’s marketplace, the Wall Street financial people (remember them?) believe that a software company has value in proportion to the degree that revenue comes from licenses or subscriptions. Overhead and staff related to customer service, installation, integration or other service delivery is essentially deducted from market value.

It’s a silly view of technical companies rooted in the days when software looked like blank spreadsheets. It’s a dysfunctional notion that causes many software firms to make really bad decisions.

And, it turns out that Kenexa isn’t buying it.

At the summit, the company proudly outlined its offering as a blend of software, data and services. From here, it looks like a company that has its head on straight. Kenexa is charting its own course by crafting service offerings that blend modalities to make customers successful. They are building a company first and navigating the stock market second.

It was refreshing.



 
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