Customers should expect no disruption in their relationship with Avaya, including product roadmap, sales relationships, or service. What remains to be seen is how Avaya will stick to its execution of its ambitious turnaround plan.
Last week, Avaya announced that its president and chief executive officer, Alan Masarek, will retire at the end of the calendar year (2024). His successor, Patrick Dennis, will take the helm and steer Avaya in its next phase. Mr. Dennis is an accomplished CEO with experience in enterprise software, SaaS, cybersecurity, and communications. He is currently the CEO of Venafi, a security vendor being acquired by CyberArk.
This transition ends Masarek’s short but impactful tenure as CEO, who had taken the job about two years ago. Given his short term as head of the company, many questions came to my mind when I heard the news. To get answers, I spoke with several Avaya leaders, including Masarek, Dennis, and CMO Josh Mueller. Below are my top-of-mind questions that were answered satisfactorily.
Was Masarek pushed out, or did he leave on his own?
Whenever a CEO transition is announced, one wonders if it was voluntary or driven by a restless board. When a C-Level executive is typically pushed out, the transition is relatively short, often with an interim CEO announced. Also, the board isn’t likely to appoint a person whose goal is maintaining continuity. If things are not going well, changes would likely be made. That isn’t the case here.
When Dennis takes the reins on September 1, it’s permanent, and he’ll work with Alan over the next several months to ensure a smooth transition, continuing to execute the vision already laid out. In fact, Masarek and Dennis both stated that Dennis has been actively involved in company operations and execution since he joined the board as Chair in May 2023. So the timeline, success, eight quarters, and the continuity choice all point to a voluntary departure which indicates this will be as seamless a transition as there can be in tech.
Why is Masarek leaving now, and why is Dennis his replacement?
When he took the job, Masarek laid out an eight-quarter, five-point transition plan. In every conversation I’ve had with him since he has updated the plan and reiterated eight quarters. At the most recent Avaya Engage, he shifted the narrative from “Avaya is roaring back” to “Avaya is roaring forward,” alluding to the fact the transition is complete and now it’s more about ongoing execution.
In my discussion with Masarek, he confessed that the messy transformation work is his passion. Now that most of that work is done, it comes down to execution; he felt that Dennis’ skill set was better aligned. This isn’t to indicate that Dennis can’t do transformation work and Masarek isn’t good at the X’s and O’s, but it’s more about having the right leaders at the right time. In the world of sports you see this all-time where one general manager comes in and rebuilds a team, and then another is brought in to win a championship.
As for the timing, several things had to fall into place to have this transition happen. Masarek had to complete most of the transformation work, and Dennis had to be available. The latter is only true because Dennis is in the final stages of selling his company. I asked Masarek if the Venifi-CyberArk deal wasn’t underway would he still be retiring. He thought about it and answered with, “Probably not.” It seems like for Avaya, the timing, people and skill sets all fell into place.
Will there be executive turnover after Masarek leaves?
To change the culture at Avaya, Masarek retooled all his direct reports and then two levels below the executive staff. Several new hires, including CTO Soren Abildgaard, CRO ML Maco, CMO Josh Mueller, and CPO Omar Javaid, joined Avaya because of their relationship with Masarek. Given that he is now leaving, one would speculate that some of these people would also move on.
On the call with Avaya, I specifically asked Mueller this, and he told me that Dennis has been very active with the company vision and operations and as head of the Compensation Committee as part of the Board of Directors. He was also part of the process when he and all the other members of the executive leadership team were hired. He stated that he feels very comfortable with the leadership transition and is steadfast in his commitment to Avaya. While I haven’t talked with the others about this, I know all of them; while Masarek was a key component to the decision to join, they have all stated their excitement over Avaya’s opportunity.
Keeping stability in the executive ranks is critical for Avaya. Before Masarek, the company shed executive after executive, and it was hard to build any strategy when the leaders were churning. I’m not expecting any churn based on the shift from Masarek to Dennis.
What will Patrick Dennis focus on?
As mentioned above, the transformation work is done and the ongoing execution work is the focus. The company now needs more customer wins to validate that the strategy is the correct one and that it’s working. This means Dennis needs to be the Xs and Os person and operationalize the vision.
When I asked Dennis about this he stated, “Alan is a great transformational leader, and we (the board) are happy with the strategy. What we have to do now is take the approach and operate at a higher level. This would have been difficult to do while you were rebuilding the company, but the timing is now right. The next part of the Avaya journey is making sure we put up wins but along the way, continuing to tweak things and putting up more wins.”
On future calls with the Avaya’s new leader, I’ll look for continued success with retention and customer wins as a measuring stick of Dennis’s success.
What does this mean for Avaya’s customers?
This is the ultimate question. The company can talk about vision, transformation, leadership, or whatever it wants, but the big thing customers want to know is what this means to them. From a customer perspective, if a transition at the CEO level was to happen, this is the right time.
After the pandemic, communications spending pulled back as companies overspent to enable remote work. It appears the purse strings are loosening a bit, and I’m expecting businesses to invest in communications, particularly in the contact center, in the next 12 months, as CX initiatives are now front and center.
Dennis is also seeing this, and he is excited to help Avaya’s enterprise customers navigate the messy waters of hybrid cloud deployments. He told me, “Looking ahead, I believe we will enjoy a bit of a tailwind in spending, and we are ready to go. We have a world-class team in place; we are focused on our large global enterprise customers. Avaya has a uniquely different value proposition, which caters to gigantic, risk-averse companies and we will be an active, strategic partner to them to help them transition their communications platforms.”
Customers should expect to see no disruption in their relationship with Avaya, including product roadmap, sales relationships, or service. Dennis was heavily involved in putting the current plan in place and is being brought in to ensure continuity.
Want to know more?
Editor’s Note: Check out No Jitter’s Avaya news coverage over the last year.
- Avaya News from Avaya Engage 2024: Avaya unveiled multiple partnerships, integrations and product updates that further deliver on its promise to innovate without disrupting.
- Avaya and RingCentral Expand Partnership: This expanded integration with RingCentral, along with others, gives Avaya customers full control over how they modernize communications.
- Avaya Acquires Edify: The buy, which would bolster Avaya Experience Platform, signals a consolidation in the contact center market.
- Five Thoughts From Avaya’s 2024 Analyst Summit: Now it’s time for Masarek and the team to execute consistently and turn their strategy roadmap into sales success.
- New Avaya Executive Hires: Since August 2022, Avaya has experienced tremendous change but is likely past the worst of it. What’s emerging now is an implausibly different company.
- 5 Avaya Takeaways from Gitex Global: The company’s restructuring has not affected its customer base strength.
- Avaya Highlights AI in CX: Avaya recently hosted a webinar showcasing capabilities for the banking and travel sectors. Here are some of the key takeaways.
- Avaya is Back: In some of the latest Avaya news, the company’s post-bankruptcy strategy has a laser focus on CX while deprecating PBX and UCaaS.
- Avaya Partners Cognigy and Journey: offer Avaya’s contact center customers the opportunity to reimagine their customer experiences, with the latest AI and smartphone technologies.
- Avaya Emerges from Chapter 11: With its new capital structure, the company can pursue new market opportunities while enhancing its customer service and support capabilities.
