by Tim Terman
As Ray Lane drove through Silicon Valley in his red Ferrari,
I got the impression that he's a guy in control. Lane, trim and
fit for a man of 52, was on his way to meetings in San Francisco,
and he asked me along for the ride.
OK, so Lane was in his car (he also has a black Mercedes SL600 V12 and a silver Porsche 911 Carrera) and I in my office in Morgantown speaking with him by telephone. Driving time is "dead time," Lane said, and he likes to talk to people using his cell phone and headset as he commutes.
Lane's personable exterior hides a fiercely competitive interior. He laughs often and describes himself as a person who likes to be told "you've won," whether it's in golf or business contracts. He's good at both. His handicap is single-digit and he routinely shoots in the 70s. In business, he's hailed by many as the man who put Oracle where it is—the second-largest software company in the world—and who saved the company from its own hard-sell tactics in the early 1990s.
Lane, who was Oracle's president and chief operating officer, left the company during the summer. In late August, he announced that he is joining the venture capital firm Kleiner, Perkins, Caufield & Byers as a general partner. He told the San Jose Mercury News that, although he still has plenty to offer as a business leader, time with his family is most important to him now. "Ultimately," he said, "time is the most important asset you have. Not money. Not fame. It's time, and it's how you utilize that time."
Last year, Oracle's revenues increased more than 20 percent to $10.1 billion. Compare that figure to 1992, when annual revenues were only $1 billion. Lane joined the company in 1992 and, as his official Oracle biography explained, "streamlined business practices, revamped worldwide customer support, recruited senior industry leadership, and implemented new business procedures and product distribution models." That's PR-speak for "He shook things up."
"When I arrived at Oracle, it was in disarray," Lane recalled. "It had hit the wall after five years of hypergrowth and lack of controls. They couldn't deliver on expectations or commitments, and sales people were exploiting a 'ruleless' society, selling everything in the price book, making big commissions, and then never returning to the customer. I fired a lot of managers in order to get a team of experienced professionals in the job." He also hired the firm McKinsey to survey customers. Guess what? "They hated us, and we had lost all credibility."
After focusing on Oracle's business practices, customer service, and product delivery, Lane moved on to the competition. "We targeted competitors one-by-one and methodically beat them in the market," he said. The company grew from 8,000 employees to 46,000 and from $1 billion to over $10 billion in sales in eight short years. Earnings increased over the same time.
Lane also started a consulting business at Oracle that today employs 15,000 people and does $2.5 billion in revenues. He moved Oracle toward a new area, business applications, which is now worth $3 billion. "Oracle is the second-largest applications company in the world, added to its number-one position in databases, and it's a far cry from the shape it was in 1992," Lane said.
Raymond J. Lane Jr. is from Pittsburgh. His father was a mechanical engineer who designed rolling mills for the steel industry, and his parents hoped their son would be an aeronautical engineer "pushing buttons at Cape Canaveral," as his mother, Ruth Esther Lane, who is 76 and still lives in Pittsburgh, told him when he was growing up. He entered WVU planning to do just that, but halfway through his sophomore year he balked, deciding engineering was not stimulating enough.
"My father passed away at this time, and I was looking for the excitement of business and social interaction," he recalled. "My mother would never go for it, so I chose a math degree and a heavy dose of extracurricular activities—so we both were satisfied."
For Lane, WVU was an auspicious beginning that helped him find success via his own growth and development. "Going to WVU was one of the best decisions I ever made," Lane said. "My choices were Penn State, Purdue, and Carnegie Mellon. I applied to WVU late in my senior year because I was advised of WVU's new engineering campus at Evansdale. They made me feel important, and I developed a sense of fitting in very quickly. But the real influence was the amount of personal attention I received. It was a decision that changed my life."
The experience at WVU changed Lane, but not because he took every math class available, which would be enough to change anyone. Actually, it was the opportunity to experience leadership at a young age. He joined Kappa Sigma fraternity and became its president. "At 20 years old, that was a major thing for me. It made me face responsibility, decision-making, and influencing my peers, all of which I had little experience doing. It challenged me early to be a leader, and I didn't know it at the time but it created the foundation for my principles of leadership. WVU changed me from an introvert into a leader, and I don't think it was an accident. WVU, even today, provides a balance of academic and social responsibility second to none."
He was class president in his senior year and belonged to the Mountain and Sphinx honor societies. "WVU fit me like a glove and maximized my opportunities to improve," he said.
During his senior year, Lane attended recruitment events and looked at the types of opportunities offered to mathematicians. An interviewer with the CIA suggested that he visit the IBM recruiter. "He thought my personality and combined technical, societal, and leadership skills were a perfect fit with IBM."
Thirty years later, as a leader of an industry that barely existed in 1968 when he graduated, Lane has this advice for those who want to be leaders: "You've got to get in the path of progress and innovate constantly. You can't be successful paving cow paths or selling buggy whips."
The path of progress, for Ray Lane, was 10 years with IBM, then on to Electronic Data Systems (EDS), where he was a division vice president. His last job before Oracle was senior vice president with Booz, Allen & Hamilton, where he pioneered and led the Information Systems Group, a worldwide consulting practice to help senior managers get better results from information technology investments.
Lane is still on Oracle's board of directors and is as sanguine as ever on the promise of technology. There's no question, he said, that the world is being transformed by technology: "We are in a revolutionary environment that is changing our lives—and those who haven't been changed will be.
"The Internet has brought it all together to everyone. You can be smarter at anything you do, given the transparency of information on the Internet. Shopping, studying, selling, deciding—all become easier, faster, and cheaper. But the real home run will come from the Internet's restructuring of every industry's supply chain and giving total visibility of that supply chain to consumers," he said.
Here's how it works, according to Lane: "Ford built a manufacturing megalith based on producing cars with Ford materials manufactured or produced by Ford. When you bought a Ford, it really was a Ford. In the 1970s and 1980s this vertical integration broke down and manufacturers made parts for Ford, and then Ford assembled the vehicle and branded it. This is largely how the automotive supply chain works today, only it has become super complex, with Ford and GM having 30,000 suppliers each.
"This has reduced the cost of components of cars but it has increased the cost of getting those components. There's the process of purchasing, ordering, evaluation—there are lots of people in the supply chain, and it's all paperwork." In a Ray Lane world, paperwork is inefficient, costly, and unnecessary.
"What will happen as the Internet proliferates is that Ford will capture the information needed on the car being ordered, and the suppliers will be wired in so that they are getting perfect information on Ford's forecast. You'll go to Ford.com, look at pictures, do a 10-minute test drive at the local dealer (or in full-motion video on your home computer), and configure the car on-line, for an on-line price. That's five years from now."
For this to happen, and for an automobile to be delivered quickly to customers, car companies will need access to global supplier information—suppliers of door handles, tires, tail lights, cup holders, and engines. And the suppliers will need information on customer orders.
"The guy making the tail lights now doesn't have any idea how many Ford will need," Lane said. "Everyone in the automobile supply chain makes a little extra. That's $40 billion annually wasted managing the excess, an incredible waste that drives up the price of cars." Remember, he said, that's $40 billion wasted in the automotive supply chain alone. "This is only one industry. So, multiply that number by 20 to get approximately the waste that the Internet can do away with in the next five years by on-line ordering, purchasing, and receipting," he said.
The combination of an obvious inefficiency that can be eliminated and a chance to make big deals with lots of zeros sets the agenda for Ray Lane. "I guess I am a zealot for business efficiency, but the fact that opportunity is there-and so obvious—makes me impatient to exploit it." he said.
"Companies waste so much money, almost as much as government, just because they are afraid of change. The same processes stay in place, and expense that can be avoided and returned to shareholders or taxpayers gets wasted.
"The Internet can change all that, allowing on-line ordering, purchasing, and supply chain management. The potential savings across all industries is in the trillions. That not only translates into big savings for companies, but big wealth creation for the companies that can offer the solutions that make it happen."
After redesigning Oracle, Lane is redesigning his own life. A good day is "when I'm able to not leave the house before 9:30 a.m. and I can touch base with my family," perhaps listening to his 18-month-old son say a new word (Lane also has three daughters). On that same good day, he'd win a contract—"I love to hear someone say, 'You've won.' "—help an employee or customer with useful advice, and then share a bottle of wine and dinner with his wife, Stephanie.
A bad day would have none of the above and he'd "sit in my office through 10 meetings with people bringing their problems in—almost like a doctor." Of course losing a competitive deal would put him in a bad mood for a couple of days, during which everyone would know to stay away. "I'm not a good loser," he said.
And Lane doesn't like it when high-level employees leave without giving him a chance to talk them out of it. Such occurrences are frequent in an industry where corporate headhunters lurk behind every office watercooler. Lane should know about this scenario. He was offered the chief executive job at Novell Inc. in 1996 and has been a leading candidate in just about every CEO search in the past five years including Electronic Data Systems, Hewlett-Packard, and Compaq.
For fun, he's a golfer first. He also skis and likes bird hunting. He likes to scuba dive in the Cayman Islands (he got scuba certification in 1985) and jogs. He owns three homes: one in Palm Springs, a ranch in southern Oregon, and the one in California.
"The ranch is my favorite place. I love to get away in the mountains, to be alone and enjoy the outdoors." When he's traveling, and he does a lot of it, mostly on business, his top choice is the Tuscany region of Italy.
Of all the motivators in the life of Ray Lane, he is driven by a competitiveness, stemming from a zeal for productive work, which he learned from his father. "My father died when he was 43, and he didn't spend much time with me. But I don't begrudge him for that. I did at the time, but I don't now. I respect him for what he did."
What he, Lane senior, did was to earn a degree from Carnegie Mellon (then Carnegie Tech) while working days, attending school at night, and studying until midnight. "He did this most of my life, and there's one major thing my father gave me: a work ethic."
Of course, if he'd followed his father's advice after graduating from WVU, Lane would never have joined IBM, EDS, or Booz, Allen & Hamilton, and then Oracle—all heavy-hitters in computer technology. "My father warned me to stay away from computers. He was learning about them as part of his own degree and said, 'Son, whatever you do, stay away from these things. This is the hardest thing I've ever done.'
"I didn't listen to him."
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