Interview With Patrick Henry, CEO of QuestFusion

Patrick Henry CEO

Let’s start off with some questions about your career and experiences as CEO.

What, if any, are the differences between a great employee and a great leader?

All truly great employees have some ability to lead.  A great employee knows how to lead and how to take direction.  Whether an employee is leading a project or leading a team, the ability to set a direction, articulate a vision, and keep things on track is critically important.  The best ways to build leadership skills are by being a line manager and by being a project manager.  I like line management because you actually have responsibility for your team.  You work with the team members to set their goals, help them fight for the resources they need to accomplish the goals, and hold them accountable.  I like project management because people on the project do not typically report directly to you.  You have to build influence management skills in project management.  All great leaders use influence management 90 percent of the time, even if they are leading their direct reports.

I recently wrote an article about diversity in the workforce.  In addition to building diverse teams, some of the most important things I seek in employees, senior executives, and members of a board of directors include:

  • Intelligence
  • Honesty and integrity
  • Good work ethic
  • Focus on results
  • Passion
  • A desire to win, and a hate to lose
  • Good listening skills
  • Confidence, but not cockiness
  • Willingness to do the work for fact-based decision making
  • Ability to rely on gut for decisions
  • Ability to articulate, sell, and defend decisions
  • Ability to operate in a decision-making environment with the presence of uncertainty and ambiguity
  • Ability to both lead and follow
  • Knowledge of how to play on a team
  • Politically savvy, but not political by nature
  • Specific domain knowledge and competency

When you ask about great leaders, I think you’re talking about the senior executive who runs the entire organization.  I have been the CEO of three different companies, and now I run my own consulting business and some other small businesses.  As the CEO of a large organization, leadership skills are critical.  It seems, at times, that the higher you are in an organization the more you must use leadership and influence management, versus the command-and-control style of management.  A great leader sets the vision and works with his or her team to drive the strategy and plan to achieve that vision.  Great leaders know how to articulate the vision.  They have passion for what they are doing.  They lead by example.  They use influence and passion to excite the workforce to want to do great things.  They hold a high standard of excellence for themselves and their teams.  They love to win and hate to lose.  If something goes wrong, they take full responsibility.  When things go right, they share the glory with the whole team.  They understand people and know that you cannot manage all people the same way.  When asked about my management style, I say it is situational.  My management changes depending upon the environment and the situation.  You use a different set of tools and resources and have a different sense of urgency when a house is burning down versus when one is being built.  You motivate different people in different ways.  You have to be more hands-on with some people than others.  You have to take the time to get to know people give critical feedback and coaching.  It is all very simple to talk about but very difficult to do, especially on an ongoing basis.  But there is no substitute for great leadership.

What qualities do you think make a successful business person?

Good business people are good with people, and they exhibit exceptional judgment and persistence combined with patience.  The know how to hire, train, and motivate teams.  They have the skills necessary to build and lead high-performance teams.  They can identify good business ideas and know how to shape a plan around the idea to bring it to fruition.  Great business people are passionate and enthusiastic about what they do.  They have a seemingly endless supply of energy.  They like people, and people like them.  They are always looking for ways to add value to themselves, their companies, and their employees.  They operate with a high level of integrity.  They possess all the qualities that I listed above that I seek in a good employee.

Is there anything you wish you did when you were younger that would help you as a CEO today?

I have been extremely fortunate in my career to be exposed to a broad variety of roles that were great preparation for being the CEO of a small- to medium-sized company.  I also had the good fortune to work with some great managers, leaders, and mentors.  I don’t think I have the background to manage a very large company and the bureaucracy that comes along with it.  Although I lack that experience, I’m not sure I would want to be the CEO of a super large organization.  I like to be in touch with the day-to-day operations.  There is an old saying, “You can’t swing around a pick-up a water skier in an aircraft carrier.”  I like to think that I can manage ski boats all the way up to battle ships.  That is still a pretty good niche.

Can you talk about some of the jobs you had early in your career and if you learned anything there that you apply as a CEO?

I studied engineering in undergrad and worked as a co-op student in engineering to help pay for my education at Georgia Tech.  That hard-core engineering work was fun, but I wanted to be closer to the business side of technology when I graduated from Tech, so I started my career in sales in the tech division of a specialty materials company.  It was great experience, being in field sales, working with the factory, and working hands-on with customers.  After five years in sales, I went back to school to get my MBA at USC.  This was another great experience for me because I got broad exposure to a diverse set of students, and the curriculum was a great ‘rounding-out’ of knowledge, especially for someone who had a background in engineering.  After grad school, I moved to Silicon Valley to work in marketing and eventually general management.  At one of my companies, I was also toggled back and forth between staff and line positions at a high level in the organization.  This experience was really broadening and very helpful once I became a CEO.

What do you enjoy most about being a CEO?

There are several things that I like about being a CEO.  I like to win, and I like to see a direct fruit from my efforts.  Being the CEO of a small-to mid-sized company, you can definitely have that.  I like leading teams, helping people grow, and working with customers to solve their most difficult problems.  I also like the variety of work in the CEO position; no two days are alike.  You get to work with the smartest people and the most difficult people to lead, since they are all leaders themselves.  It is an amazing job!

What do you enjoy least about being a CEO?

The toughest thing about being a CEO is making the hard decisions about downsizing or killing projects when a business is not being successful.  If you care about people and their families, which I do, it is very hard.  The only way to do this somewhat comfortably is to keep the bigger picture in mind.  The health, growth, success, and survival of the organization are more important than any individual.

What are the differences you noticed working as CEO or in leadership roles at large and small companies? 

I have never been a CEO at a large company, but I have been in senior management positions.  The most difficult part for me is the dysfunction that exists at senior levels in the organization and the bureaucracy to get things done.  It may take six months to make a decision in a large company that can take a few weeks in a small company.  It can take three months to make a decision, in what should take a couple of meetings max.  It can be very frustrating if you have a bias toward action.  The processes in a large company are set up to slow the decision process, really to ensure that some ‘bonehead’ doesn’t do something to sink the ship.  In large companies it is about preserving the base as the top priority.  In small companies it is the complete opposite.  There is very little to no base to preserve, so it is about growth, taking prudent risks, and speed of decision making.  This does not mean shooting from the hip or not doing the work to have a good fact-based decision.  But the red-tape and bureaucracy does not exist, at least if the company is managed properly.  Another big difference between large and small companies is the scope of responsibility of all employees.  There is an old adage:  “What is the difference between a large company and a small company?  In a large company they have three people doing the same job, and in a small company they have one person doing three jobs!”  This means that the DNA you need in small versus large business is very different.  That is why the selection process, the hiring process is so important in a small- to mid-sized company.  Training will not help someone who has the wrong DNA.

Would it be possible to effectively run a technology company without your background in engineering or some kind of similar training?

I think it would be very difficult to run a tech company without an engineering background, but it is not impossible.  I have a close acquaintance, Jeff Thurmond, who used to be a general manager at Broadcom, a very technical engineering company.  Jeff is super smart, great with people, and has strong tech acumen, even though he does not have an engineering background.  But this is a very rare exception.  I have found that my engineering background is very valuable for getting to the bottom of difficult and thorny issues.  I have a pretty good bullshit detector, and part of that comes from being strong technically.  I have not done a hardware design or software coding for many years, but I still have a good sense of the technology and the development process, which has been invaluable for me as a CEO.

Is there anything that makes working in technology different from other industries? From a leadership and general perspective?

The pace of change in tech industries is much more rapid than other industries; there is a different velocity.  Also, there are many more situations where breakthroughs occur, and this is akin to acceleration.  So, if you use a car analogy, working in tech is like the Indy 500 every day, and working in non-tech is more like Sunday leisure driving.  Don’t get me wrong, there are other significant challenges in other industries, but the pace is much different.  Where are things similar?  In the need for leadership, the proper amount of process, the need for fact-based decisions, and the focus on customers.

Besides the actual technology what changes have you seen in the tech industry since you’ve become a CEO?

The biggest changes I’ve seen in tech is the more sophisticated nature of marketing and the quality of leadership and management.  I came into the industry when it was still the ‘Wild West.’  The CEOs were all very charismatic and had big personalities.  Some of these people are still around, but ‘professional managers’ have replaced most.  This is especially the case with the larger tech companies.  There is still a lot of room for creativity and entrepreneurship with young companies, but even the best founders of those companies are from a different generation and are not as ‘old school.’  There is a greater sensitivity to diversity, political correctness, and ‘keeping in line.’    It isn’t necessarily a bad thing; it is just different.

What do you think is the biggest challenge CEOs in the tech industry will face in the next 10 years?

I think breakthrough innovation and growing your company domestically in the US, have already become more difficult, and it looks to get worse over the next 10 years.  This is the result of several major problems.  First, the immigration laws and policies in the US are completely messed up.  It is very difficult to get H1B visas for the best and brightest students, yet our boarders are completely open to illegal immigration for low-skill workers.  Second, the trade practices in the US make it very difficult for US companies to compete in some very important and lucrative markets.  I am generally a free trade philosophy person, but it only works if there are free trade policies from the other countries as well.  Our biggest issue is with China, and not much is being done.  We should drive a more aggressive trade policy with China and try to build a closer and more collaborative relationship with India and maybe some South American counties, if possible.  The third issue is the corporate tax policies in the US.  Our tax policies are very tactical, and they create a set of behaviors to drive more jobs overseas, even for US corporations.  The forth big issue is the unrest in the Middle East.  It is a big issue economically because of the reliance of fossil fuels for our economy.  The US is doing a little bit, but not enough, to reduce our dependence on foreign sources of energy.  Finally, the US tax and health care policies are very punitive for small companies that are doing most of the job creation in the US.

Can you share a story or a moment of when you realized what it means to be CEO of a company?

As a CEO you have the ultimate responsibility for the company.  You are the chief steward of the company and the shepherd for its safety and growth.  I have a few situations where this really hit home:

  • Taking Entropic public in 2007
  • Going through a very difficult situation with Entropic during the great recession, which hit its depths in early 2009
  • Emerging from these depths and being named Entrepreneur of the Year, a Top Influential, and earning a spot on the Best CEO list.
  • Parting ways with Entropic in late 2014

In all cases, whether it was a positive or a negative, it was the CEO taking the ultimate responsibility.  The highs can be very high, and the lows can be very low.  As a CEO, you need to have a temperament to be more even keel in these situations, and not “read your own press clippings too much.”  I remember early in my career, Jerry Sanders, then CEO of AMD, told me, “How can the same person, only a few years apart, be a genius and an idiot?  It isn’t possible.”  As a CEO, you need to have a thick skin and still maintain a tender heart.  You need to be willing and able to do the right thing, even in times of great adversity.  You need to operate with the highest levels of integrity, even in the face of huge temptation.  Not everyone in a CEO position does that, but I have tried to do my best to strive for that.

What do you think if means to be a CEO at a major company today, and do you think the general public has a different idea of what someone in your position does/what types of challenges they face?

CEOs have a huge responsibility to create success for their stockholders and employees.  It is an extremely difficult job, and it involves a lot of risk.  Yet, CEOs, especially those of major corporations, are vilified in the press, and disparaged by the general public.  Why?  CEOs get paid a lot, especially those running big companies.  The gap between the working wage and the compensation of CEOs has continued to grow.  The promotion of this statistic is used to fuel the fire against CEOs.

Are some CEOs paid too much?  Definitely.  How much should a CEO get paid?  It depends on the value they create and the wealth they create for others.  The general public doesn’t really care about the struggles of a CEO, nor should there be an expectation that they care.  It just is.

As someone who has been CEO of multiple companies, can you talk about what aspects of the job are inherent to the CEO position and what things can change with the company?

I think the constant on a CEO position are leadership, head cheerleader, and the general manager of all aspects of the business, the focus on driving the overall strategy, and the communication with all stakeholders.  The differences are the products, customers, suppliers, other stakeholders, and the unique personalities and business challenges.

Having been CEO of a company at different stages in its development, do you or did you approach things differently from a leadership perspective at different stages in the company’s growth?

Yes, how you manage and how you engage with customers is very different at different stages in a company.  When you are pre-product and pre-revenue, the focus in on getting a product that is complete enough that it solves a real customer problem and that your offering does that better than the competition and other alternatives.  The temptation with engineers is to perfect the product.  They will keep working until that happens, unless there is an outside catalyst for completion.  The best outside catalyst is a real customer.  So, keeping the ‘sales funnel’ wider at an early stage of a company is crucial.  Prioritizing features around key target customers is also important, but in such a way that you have a product for the general market and not something that is over customized.  As you generate your first dollar of revenue and have your first customer, the next challenge is gaining subsequent customers.  In the early days of Entropic, the board was constantly asking when we would ship the product to the first customer.  As soon as that happened, everyone says you have a customer concentration problem!   As the company starts to grow, it is about how to scale and how to incremental innovation to stay ahead of the completion.  This stage is about execution and time to market.  It is about servicing the customer better than the competition.  It is about having a unique value proposition and building layers of competitive advantage.

Building on the last question, do you have any advice for start-ups looking to preserve their culture as they grow their business?

Company culture is very important.  The key thing about building a culture is having a vision of “who do you want to be when you grow up?”  It is critical to do things that are aligned with that vision from day one.  What do you stand for?  How do you operate?  In hiring the first 50 to 100 people, you should be thinking about the culture you are building and whether the candidates fit.  Once you get 500 to 1000 employees, it is difficult to change the inherent culture.  That is why it is so important to hire the right people in the early stages.

Can you explain some of the differences between being CEO of a company like QuestFusion that deals primarily in consulting or intangible products versus being CEO of Entropic where you sold physical objects?

The biggest difference between QuestFusion and Entropic right now is size.  Entropic had grown to be a multi-million dollar global company with 700 employees, and QuestFusion is a sole proprietorship, at least for now.

The charter for QuestFusion involves strategy consulting, business development and angel investing.  I also have a companion blog called where I write about relevant business topics.  In the case of Entropic, I was an operating manager with a management team, a board of directors and lots of employees.  QF is just me, with some help from my daughter Ella, my fiancée Amanda, and some outside interns.  In QF I am mainly giving advice and helping other small companies get off the ground, or helping large companies with their strategy decisions based upon my knowledge of the markets I have historically serviced.

Selling services as opposed to products is different.  The value proposition is more intangible.  You have to use conceptual selling even more.  You have to give examples.  You have to build a network, including a strong referral network.  We are in the very early stages of QF, but I’m happy with our progress so far.

QuestFusion offers strategy consulting and venture financing. Understanding you probably won’t tell us which one you prefer working on, can you explain how the two interact?

The focus of QF is primarily on startup and growth companies.  These types of companies need help with strategy, business development, and raising money.  If I like an idea a lot, I am willing to make an investment of my money, and not just my time.

Are there any general strategy tips for tech companies your willing to share now?

See my 8 ideas video blog on TCM.

How about venture financing advice? Are there any common misconceptions that you noticed in your time at Quest Fusion?

See my Myths and Realities video blog and the Five-Part blog series on TCM.

What’s it like giving advice to a new generation of CEOs everyday as CEO of QuestFusion?

I have been very fortunate in my career and have seen a lot.  I have been involved in all aspects of multiple economic cycles, multiple product full lifecycles, and all stages of growth of companies.  I have hired thousands of people, and have worked with hundreds of customers.  I feel that I have a lot to give.  It is very fun and super gratifying.  I think I have a very good value proposition.  It is an exciting new chapter for me.

Are there any common issues you’re noticing with QuestFusion clients? Issues that seem to be affecting the entire industry?

Everyone is trying to figure out how to grow and be profitable.  Startups are trying to generate the first dollar of revenue, find the first customer, and break-even.  These are the most common themes.

As CEO of QuestFusion you’re required to keep up to date on a variety of different areas within the larger tech industry. Can you quickly let us know what you’re excited about in software and electronics? Pay TV? And Internet of Things?

The most exciting things for me are around cloud computing, big data aggregation and management, and the use of mixed media, including video, on interactive platforms that utilize the Internet and broadband communications. I think hardware is getting more commoditized, but there will be tons of growth in software and services in the next decade for emerging growth companies.  It is a very exciting time.

It seems that you would need to have been a CEO before in order to run QuestFusion, how often do you draw on specific experiences from your time at Entropic while working at QuestFusion, and if so, what lessons or moments do you keep coming back to?

It would not be possible to run QF without having been a serial entrepreneur and CEO of multiple companies.  I draw upon my knowledge every day.  The lessons that are most important to me are to:

  • Be a leader
  • Be patient and persistent
  • Focus on the customers
  • Set goals and measure results
  • Hire well
  • Stay calm in the storm

Let’s shift the focus of this interview and really get to know you a little bit better as an individual rather than your day to day job as CEO.

What do you do for fun or how do you relax after work?

Lately I’ve been doing yoga, playing golf, travelling, blogging, and spending time with my fiancée and our kids.

Do you have a favorite book? It doesn’t have to do with being a CEO, but if there’s anything you’ve read that’s helped you in your career please do share.

I don’t know if I have one favorite book.  Some of my all-time favorite books are:

  • How to Win Friends and Influence People by Dale Carnagie
  • The Seven Habits of Highly Effective People by Steven Covey
  • Competitive Strategy and Competitive Advantage by Michael Porter
  • Crossing the Chasm by Geoffrey Moore
  • What they Don’t Teach You at Harvard Business School by Mark McCormack
  • Good to Great by Jim Collins
  • Accidental Empires by Robert Cringley
  • The Godfather by Mario Puzzo
  • The Carpetbaggers by Harold Robbins
  • Whispers by Dean Koontz
  • Red Dragon by Thomas Harris
  • The Firm by John Grisham
  • The Bible

Tell us something about Patrick Henry that will surprise people?

I went helicopter skiing in the Bugaboos in British Columbia, Canada.  Have you ever seen a 30-foot tree well?

Do you play sports now and did you growing up?

Growing up I was not a great athlete until I got into high school.  I played football, wrestled, ran track and swam.  After college I ran triathlons.  Now I snow ski, play tennis and golf, workout at the gym and do yoga.  Namaste.

Do you have a favorite vacation spot, and is there anywhere you’re dying to visit?

If you look at it by the number of times I’ve gone, I love Las Vegas and Maui.  I really want to go to Australia, and I’d like to spend more time in Eastern Europe.

What are your favorite movies and TV shows?

My favorite movies are:

  • The Ten Commandments
  • Ben Hur
  • The Good, the Bad, and the Ugly
  • Unforgiven
  • The Godfather Part I and II
  • The Terminator
  • The Wizard of Oz
  • The full Star Wars series
  • Tombstone
  • The Wedding Crashers
  • The Hangover
  • My favorite TV shows, including when I was a kid:
  • Romper Room
  • Kangaroo
  • The Brady Bunch
  • Bewitched
  • Bonanza
  • Seinfeld
  • Married with Children
  • Melrose Place
  • Survivor
  • American Ninja Warrior
  • The League
  • The Sopranos
  • Sports Center
  • 60 Minutes

What is your favorite food, and do you cook?

I have very eclectic tastes in food.  I grew up in the Midwest on comfort food.  I have travelled a lot, so I like most ethnic foods.  I do cook, but not that often.  It is always pretty easy to find great receipts on the Internet, and I can follow directions.

How about your favorite bands? On a related note, do you work with music playing?

Some of my top favorite bands in no particular order are:

  • The Beatles
  • Led Zeppelin
  • The Cure
  • Nirvana
  • Elton John
  • Garth Brooks
  • The Dixie Chicks
  • The Eurythmics
  • Fleetwood Mac
  • Jackson Brown
  • James Taylor
  • Bruce Springsteen
  • Cheryl Crow
  • Sarah McLachlan
  • Maroon 5
  • The Counting Crows
  • Blue October
  • Switchfoot

Who is the best James Bond?

Sean Connery, hands down.  If you have ever read the actual books by Ian Fleming, you will understand why I say that.

If you could have any superpower what would it be?

The ability to fly.  I dreamt about it all the time as a kid.

Is there a piece of technology you can’t live without?

The Internet.  It is a blessing and a curse for the world.  Actually, the Internet is not the blessing or the curse; it is how people use it that is the blessing or the curse.  I also love my iPod for music.  However, I just updated the iOS on my iPhone5 and the new version of iTunes is a complete clusterfuck.  The new iOS also makes my phone very slow, and this is exactly what OS suppliers did in the PC industry for years to get you to upgrade your phone.  These are the first indications that I have seen that we are now in the post-Steve Jobs era of Apple.

Is there a piece of tech or particular service you find consistently frustrating? Or something people would expect you to use that you don’t?

I think most car GPS systems are horrible.  I think there are massive opportunities for innovation around user interface and services that involve GPS.

I don’t play video games.

Are there any public figures you admire?  Why?

I admire all presidents of the United States, even if I don’t agree with their politics.  It is the most difficult job in the world.  The POTUS even gets more criticism than a public company CEO.  I also admire Taylor Swift, Sarah McLachlan, Paul McCartney, Mick Jagger, and Colin Powell.  I have great respect for our founding fathers and recently watched the Sons of Liberty mini-series, which was awesome.  I wrote a blog about it.

Is there any advice you would give to someone looking to one day become a CEO in the tech industry?

When people ask me how to become a CEO, I say that you either have to get hired as a CEO, promoted into a CEO role, or start your own company.  I think more people should start their own companies.  I know it’s hard.  I’m here to help.

What was the proudest moment of your career?

Two moments:  Taking Entropic public in the midst of the sub-prime debt issue that was the precursor to the Great Recession.  Second, winning the E&Y Entrepreneur of the Year Award my third year of being nominated.  It was as much a testament to all the great work by all the employees, customers, partners and investor of Entropic, in addition to my own resilience and accomplishment.