The CEO of F5 Networks is taking his $8 billion company through a tough transition by using lessons he learned growing up under a dictatorship
- Francois Locoh-Donou, the CEO of F5 Networks, is leading the company through a tough transition from a hardware-centric to a software-focused enterprise tech powerhouse.
- To do this job, he says he is drawing from lessons from his years living under dictatorship in the west African nation of Togo.
- Locoh-Donou says he has little tolerance for leaders and executives who rule based on their title or rank. "I have a strong aversion to people who rule by formal authority."
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Founded in 1996, F5 Networks was named after the most powerful storm category in "Twister," the disaster film which came out the same year.
The movie's about people who loved to chase tornadoes, which was what the F5 founders were essentially doing then, riding the wave of the newly-unleashed World Wide Web by selling data center appliances to help businesses manage their Internet traffic. Nowadays, it's a publicly-traded company valued at some $8 billion.
F5 still helps businesses manage their networks today, though it's wrestling with a changing market: the appetite for hardware is fast diminishing, as enterprises increasingly outsource their IT infrastructure to the cloud - and those that remain on their own servers are often using software to get more efficient use from their existing gear.
That's the evolving market that Francois Locoh-Donou, who took over as F5 CEO two years ago, is navigating. An important part of his role is leading a global workforce of about 5,100 through the rapid market changes. It's a tough job, and Locoh-Donou likes to talk about the importance of listening to his people on the ground to make sure "their voices, their ideas get turned very quickly into action."
"If you create an environment where these voices are suppressed, you will fail," he told Business Insider.
That may sound like the kind of executive-speak one might overhear at the Stanford Graduate School of Business, where Locoh-Donou got his MBA. With Locoh-Donou, however, it is rooted in something deeper, in another kind of storm that he went through personally.
Growing up under a dictatorship
His notions about leadership were formed in the west African nation of Togo, where Locoh-Donou spent his youth living under a dictatorship.
"In a dictatorship, there is rule by fear and rule by force," he said. "It doesn't matter who has the best idea. It matters who has the strongest stick or gun or authority. Everything in Togo was like that … I grew up with the absurdity of ruling by force, and by authority, with the stupid things that happen when the only thing that matters is I have a gun and you don't, and therefore you will do this."
Locoh-Donou lived in Togo in the 70s and early 80s when the country was ruled by Gnassingbe Eyadema. "He basically owned the country," Locoh-Donou said. He ran the country with an iron hand, backed by a powerful military that was loyal to him, and any form of opposition or dissent was repressed "very seriously," he said. A 1993 Amnesty International report pointed to human rights violations by Togo's security forces, "including extrajudicial execution, torture, arbitrary arrest and detention without charge or trial of suspected government opponents."
People lived in fear, distrusting even friends, Locoh-Donou said. "You knew there were certain things you could not say. Even between friends, there's always this worry, this lack of trust. You can come to my dinner table, but I wouldn't say anything to you because I'd be afraid who you might repeat it to," he said.
In public, the dictator was glorified, and people would sing songs about how great he was, he said.
"You feel like you're living in a fake world," Locoh-Donou said.
'A very strong aversion to leaders who rule by formal authority'
Memories of life under dictatorship still have a strong influence on Locoh-Donou. They come back, he says, when he encounters organizations where people "feel that they just have to flatter the leader" or in "an environment where it is not okay to challenge the leader."
"In tech companies, the best ideas have to win, not the best titles, not the hierarchy, so I have a very strong aversion to leaders who rule by formal authority," he said.
Having more open-minded, engaged leaders, who do not say, "do this because I said so" is also good for business, he said. "If you as a leader are not capable of explaining to your team that this is the strategic rationale for why you need to do this, because you don't have enough industry context or knowledge of our business, or knowledge of the customers, and you just say 'I want 'yes' people around me - then for me you are not a leader. You are a task master."
Such a leadership style also stifles creativity within a company, he said: "Great leaps happen in organizations when the voices of the people who know are empowered to create the next idea," he said.
Family of François Locoh-DonouFrançois Locoh-Donou meeting with the at Cajou Espoir, a cashew nut processing factory he co-founded in Togo. in Togo.
Little tolerance for rule by force
Growing up under authoritarian rule "has affected me in a way that I have very little tolerance for when I see people rule that way," Locoh-Donou said. "I just have this allergy toward ruling by force because of what I have experienced."
This point is critical as F5 goes through a difficult transition from a hardware-centric company to one increasingly focused on software. F5 helps companies monitor their applications and other software, making sure they are secure and working properly.
But the company is trying to grow at a time when more businesses are embracing the cloud, setting up and running their networks on web-based platforms, and abandoning on-premise data centers which dramatically cuts their IT costs. For F5, this means the steady decline of its hardware business, and the growth of revenue from software.
"The challenge for us is how to manage and navigate that transition as our hardware continues to slow and our software accelerates," Locoh-Donou said. "You want to make sure the software accelerates faster than the hardware."
F5 hopes to do that with Nginx, the cloud based applications services company which had been F5's rival, and which the company bought in March for $670 million. Nginx is one of the startups that power the Internet, its web server software one of the most widely used in the world.
In a note to clients, Oppenheimer analyst George Iwanyc affirmed that there's "value behind the Nginx acquisition," but pointed to "trade-offs in faster than expected hardware sales declines," adding that the "transition could continue to add volatility to near-term results."
Locoh-Donou himself knows about difficult transitions. He was 14 when his parents divorced and his mother, who is French, announced that he and his two siblings were moving to France. He refused to leave Togo. "I was crying for many nights in a row," he said. "There were all these things that I knew I was going to lose."
These included his cousins and close friends, and the passion he embraced as a teenager: chickens. He owned 50 of them in their backyard and had big plans for them: "I thought I was going to take over the world with my chicken farm."
Leaving Togo
Eventually, he agreed to move to France on two conditions: that his mother would let him breed chickens in their new home, and that he would be allowed to play soccer professionally with the prestigious Paris St Germain. His mother agreed.
Locoh-Donou laughed as he recalled what happened next. He didn't get to resume his chicken breeding in their new home in a Paris suburb, although his mother bought him two mandarin birds. She also signed him up with a local soccer club, and told him: "You go play there and when you're good enough, the Paris St. Germain [soccer team] will find you.'"
"They never found me," Locoh-Donou said.
But he found a way to return to and stay connected with his homeland. In fact, Locoh-Donou returns regularly to Togo where he co-founded Cajou Espoir, a cashew nut processing factory. While he never made it as a professional soccer player, he's had a long, impressive career in tech at a time when big changes were taking place. Locoh-Donou worked 15 years for the networking giant Ciena, before he was tapped to lead F5.
His dream of a chicken farm with global reach has long been forgotten. But Locoh-Donou has high hopes for F5 even as the 23-year old company rides yet another storm.
"Every company that has a history of being in data centers with hardware is going through that transition," he said of F5's push toward a software-focused future. But "we have a very strong opportunity in front of us. The number of applications is exploding. So the companies that provide the tools to make apps work and secure are going to to be a lot more valuable in the future."
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