Q&A: Diebold's New CEO Andy Mattes Shares Day-One Plans

On Thursday, ATM manufacturer Diebold announced its hire of former HP executive Andy Mattes as its new president and CEO. North Canton, Ohio-based Diebold agreed to a ten minute interview on his first day, in which Mattes outlined opportunities he sees for the company in selling new branch technology in the U.S. and electronic security in Turkey and Asia. Mattes most recently served as senior vice president of global strategic partnerships at data storage company Violin Memory. He was previously a senior vice president of HP and CEO of Siemens Information Systems Ltd.

BTN: Is "turnaround expert" a fair way to describe you, at least for the latter part of your career?

Mattes: I like to grow companies, I like to grow value for customers and shareholders. In the process of all that, I hope to do well by the employees that work for the company. You've got to do well for all three constituencies to be successful in the long run.

BTN: In April, Diebold announced a plan to save $100-$150 million by 2015. Part of that plan includes about 700 job eliminations, mostly in North American manufacturing and service. These layoffs are mostly completed, according to a company spokesman. Are more job cuts planned?

Mattes: Until yesterday, I was looking at the tent from outside. It's my first day in the tent, give me a chance to look around, see what there is. I do believe the company has a lot of upside. It's fair to say the company has not been humming on all cylinders. We have our work cut out to make sure we fine tune the engine and increase performance. There's no question that we have to increase performance. What are the right tools? What's the right strategy? Please give me the next 100 days to work through that with the team. We've had a very intense first day. I've met a lot of very bright folks already, so that's very encouraging. We've got a lot of work ahead of us.

BTN: You told the Wall Street Journal that you want to expand Diebold's electronics-security business [which accounted for about $300 million of the company's roughly $3 billion in revenue last year]. How would you go about building that business?

Mattes: I do believe we have a huge opportunity in the global market. We've got a great footprint in Latin America and Brazil that we can, should and will lever for future growth. We've made some interesting moves, the company has acquired a small company in Turkey. In the greater EMEA, Turkey is a hot market, not just in the banking industry. How can we leverage that beyond the boundaries of one nation? We have a business growing in Asia, we have upside in India and China, which is a good springboard to look at growth initiatives. So first and foremost, we're going to grow in the global economy and global markets.

Second, we're going to look at market niches and opportunities. The thing I like about the electronic security market is it's so fragmented, there's no leader in that space. There's an opportunity for someone who has a brand, who has IP, who can carve out a solution, an application that meets the market.

I've spent the morning with the development team here at Diebold. I saw some really cool stuff. We're going to spend the summer doing workshops with the engineering teams on how we can monetize some of those cool innovations sooner and faster and use that as fuel for our growth. But there's no question, this company needs to grow and I'm going to work the hardest to get it back on the road to growth.

BTN: Can you hint at what some of those innovations are?

Mattes: I would love to hint, but now you're overstating my capacity of digesting everything in 24 hours. May I ask for a rain check on that question?

BTN: OK. What do you see as the future of ATMs? Some people are moving toward videoconferencing and video kiosks. We're also seeing more use of touch screens in branches.

Mattes: Yes and yes. The future is different depending on the type of market you're in. Looking at the Americas, video is clearly something you want to add, it helps the whole bank transformation process. We've got great technology around that.

There are 1,200 ATMs per million folks in the U.S. There's 50 per million people in India, and that's a society that's more cash centric than ours. That would indicate market, opportunity and growth in that space. Talk about tablets, the whole idea of taking the user interface to a new level while balancing security and ease of use is going to be another interesting topic to address. It's definitely not a boring market.

BTN: How is your managed ATM services business going, and is that something you might expand?

Mattes: I can't tell you how it's going, but I can tell you it's one thing that attracted me to the company. One client Diebold has in managed services is TD Bank, which used to be a client of mine when I ran outsourcing for HP and Diebold was a sub of mine. Now Diebold has taken over that relationship directly. I believe it's a huge opportunity. As you dial forward, there will be more banks going down a managed services approach. It's a fascinating market.

BTN: Any other plans for the company we haven't covered?

Mattes: First, we're going to make sure we have a good cost position that will enable us to drive growth. We'll make sure we have great cash management and increase the cash position of the company, which will help us secure dividends going forward and enable us to finance the growth scenarios we envision. And we're going to make sure we have the best people we can get to drive the initiatives in the company, the right talent at every level of the organization.