BROOKFIELD, Wis. - There is a change coming in the corner office at Fiserv, and it's coming in about a year and a half. Fiserv President/CEO Les Muma, 60, announced that he plans to retire in June of 2006. Announcing the change so far in advance is virtually unheard of in Corporate America, but Muma said it's indicative of how he and the company operate. "It's something I've been playing with. I've always run this company with honesty. We wanted to be honest with the constituents, the clients, employees and the Street," said Muma. Muma and his wife have a home in the Clearwater, Florida area and plan to move there. They have strong ties to Southwest Florida, having grown up there and met there. This lead time gives Fiserv plenty of opportunity to find a successor, who will likely come from within. Other than CUNA Mutual, Fiserv has probably the deepest vendor reach into the credit union industry, so credit unions have a vested interest in who fills Muma's place. "We have a committee of the board that will initially look inside in hopes we can find the right person inside. If it feels there are not enough good candidates, it will look outside, but we have a lot of talent here," said Muma, who will be 62 when he retires. One person who definitely won't succeed Muma is Norm Balthasar, Fiserv's SVP and COO. Balthasar said he does not want to be considered given his plans to retire in 2008. Balthasar, like Muma, has been with Fiserv from the very beginning. Muma said credit unions can be assured his successor will be a leader that will be committed to quality services for clients and values employees. Muma is one of Fiserv's co-founders (along with former CEO George Dalton) and is only one of two CEOs Fiserv has ever had - Dalton being the other. The story of how the two founded the company goes like this: Muma was leading Sunshine State Systems in Tampa, Florida and Dalton was doing the same for First Data Processing in Milwaukee. Each did a leveraged buy-out of the companies, merged them, and created Fiserv in 1984. In its first year Fiserv brought in approximately $22 million in revenue, and Muma wasn't sure where the company would go. "I'd like to act real bright and say yes I knew it would grow like this, but the honest answer is no. To say we'd be $3.5 billion in revenues, I couldn't have imagined. I believe if we concentrate on the client, this can be a $7 billion or $10 billion business." Fiserv has an interesting business philosophy. It essentially acquires its way into business sectors. Muma says this is a sound, but delicate strategy to follow. Muma emphasized that though Fiserv has done over 100 acquisitions, it does not have a "buy anything" approach. "We've very selective with our acquisitions and very disciplined on how we price them and what we buy them for. That discipline will stay. It is part of us," he said. Not only does Fiserv acquire a lot of companies, in most cases it leaves them virtually untouched to run as if they were still independent. That may sound dangerous to many big companies, but not Fiserv. "The best way to describe us is we are a large, publicly traded company with a small company culture. We operate as a single unit, but we give autonomy to the operating units. When you give a lot of autonomy, it's a balancing act trying to leverage the strengths of one across the other. That's a skill set we've built over the years." Muma said while Fiserv is well-known for its acquisition strategy, if it modeled it after any company it would be payroll processor ADP. "Even though in the early days everyone thought ADP had one payroll system, they really had like 15 or 20. We said if they can do it, we can do it," he said. A vital aspect of this process is knowing when a operating unit is no longer worth keeping. Fiserv has consolidated a number of its units in its history and Muma says the best way to know when it's time to pull the plug is to listen to the clients, not the business people running the units. "It's about knowing when they are getting into trouble and when they need to be consolidated. We've stuck steadfastly to that. We consolidate when the time is right. The good products will stay, the weaker products will fold in eventually," he said, and who better to know what's working than the clients. Fiserv is of course a major player in the credit union data processing space, having seven subsidiaries - IntegraSys (the former EDS CU processing unit), USERS, Galaxy, Summit, XP Systems, CUSA Technologies and AFTECH. Together they have approximately 2,936 credit union core processing clients. There was speculation that the FTC would seek to block the EDS deal because it gave Fiserv such a dominance in credit union data processing, but the FTC decided the market was still very competitive. "The credit union piece is a very important part of the company. We've done some great acquisitions there. Everyone frowned when we bought the EDS business. They've done a tremendous job with customer retention and software development. What they needed was resources," he said. Muma is referring to IntegraSys, the former credit union unit of EDS. For years there was talk that EDS was no longer committed to serving the credit union market and it wasn't investing enough in that business. When Fiserv took over, the dollars started flowing and IntegraSys has revamped its product line and managed to keep almost all of its credit union clients. Muma said credit unions are still one of its best growth areas and Fiserv will continue to invest in its credit union companies. "If you look, we have some leading credit union products. A few are being re-tooled. It's no secret both Summit and XP (Systems) are working on new releases. What we have as a company is multiple products. We walk into the credit union, and match the one that best fits them," he said. While no one has matched what Fiserv has done on the acquisition front in the credit union market, other large, public companies are using the acquisition approach. Jack Henry, Fidelity National and even Open Solutions have been gaining market share through acquisitions. Today's Fiserv focuses on six industries: financial institutions, health plan administration, insurance, lending, trust services, and securities. Muma said the financial institutions segment accounts for 65% of Fiserv's revenue and 85% of its profits. "The financial institutions part, which is banks, thrifts and credit unions, is still our biggest piece of business. The fastest growing piece would be health care," he said. Despite serving banks and credit unions, Fiserv has managed to stay out of the bank vs. credit union battles. "We've been careful to separate them in part to please the clients. Credit unions still think different than bankers in many ways." He said credit unions also tend to be more innovative from a technology standpoint than banks. Muma plans to relinquish his seat on the Fiserv board in order to let the new CEO run the ship without any distractions. "It's always been my philosophy to let the new guy run it." He does plan to remain on some other industry boards he serves on. Muma said he will never completely forget about Milwaukee, but he's anxious to relocate to Florida. He's active with his college alma mater, the University of South Florida, and said don't be surprised if he winds up teaching there. "I've always had a hidden passion for that," he said. -firstname.lastname@example.org
Fiserv's Muma Gives Plenty of Notice on his Retirement; With Almost 3,000 CU Clients, All Eyes on Replacement
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