BROOKFIELD, Wis. - There is a change coming in the corner officeat Fiserv, and it's coming in about a year and a half. FiservPresident/CEO Les Muma, 60, announced that he plans to retire inJune of 2006. Announcing the change so far in advance is virtuallyunheard of in Corporate America, but Muma said it's indicative ofhow he and the company operate. "It's something I've been playingwith. I've always run this company with honesty. We wanted to behonest with the constituents, the clients, employees and theStreet," said Muma. Muma and his wife have a home in theClearwater, Florida area and plan to move there. They have strongties to Southwest Florida, having grown up there and met there.This lead time gives Fiserv plenty of opportunity to find asuccessor, who will likely come from within. Other than CUNAMutual, Fiserv has probably the deepest vendor reach into thecredit union industry, so credit unions have a vested interest inwho fills Muma's place. "We have a committee of the board that willinitially look inside in hopes we can find the right person inside.If it feels there are not enough good candidates, it will lookoutside, but we have a lot of talent here," said Muma, who will be62 when he retires. One person who definitely won't succeed Muma isNorm Balthasar, Fiserv's SVP and COO. Balthasar said he does notwant to be considered given his plans to retire in 2008. Balthasar,like Muma, has been with Fiserv from the very beginning. Muma saidcredit unions can be assured his successor will be a leader thatwill be committed to quality services for clients and valuesemployees. Muma is one of Fiserv's co-founders (along with formerCEO George Dalton) and is only one of two CEOs Fiserv has ever had- Dalton being the other. The story of how the two founded thecompany goes like this: Muma was leading Sunshine State Systems inTampa, Florida and Dalton was doing the same for First DataProcessing in Milwaukee. Each did a leveraged buy-out of thecompanies, merged them, and created Fiserv in 1984. In its firstyear Fiserv brought in approximately $22 million in revenue, andMuma wasn't sure where the company would go. "I'd like to act realbright and say yes I knew it would grow like this, but the honestanswer is no. To say we'd be $3.5 billion in revenues, I couldn'thave imagined. I believe if we concentrate on the client, this canbe a $7 billion or $10 billion business." Fiserv has an interestingbusiness philosophy. It essentially acquires its way into businesssectors. Muma says this is a sound, but delicate strategy tofollow. Muma emphasized that though Fiserv has done over 100acquisitions, it does not have a "buy anything" approach. "We'vevery selective with our acquisitions and very disciplined on how weprice them and what we buy them for. That discipline will stay. Itis part of us," he said. Not only does Fiserv acquire a lot ofcompanies, in most cases it leaves them virtually untouched to runas if they were still independent. That may sound dangerous to manybig companies, but not Fiserv. "The best way to describe us is weare a large, publicly traded company with a small company culture.We operate as a single unit, but we give autonomy to the operatingunits. When you give a lot of autonomy, it's a balancing act tryingto leverage the strengths of one across the other. That's a skillset we've built over the years." Muma said while Fiserv iswell-known for its acquisition strategy, if it modeled it after anycompany it would be payroll processor ADP. "Even though in theearly days everyone thought ADP had one payroll system, they reallyhad like 15 or 20. We said if they can do it, we can do it," hesaid. A vital aspect of this process is knowing when a operatingunit is no longer worth keeping. Fiserv has consolidated a numberof its units in its history and Muma says the best way to know whenit's time to pull the plug is to listen to the clients, not thebusiness people running the units. "It's about knowing when theyare getting into trouble and when they need to be consolidated.We've stuck steadfastly to that. We consolidate when the time isright. The good products will stay, the weaker products will foldin eventually," he said, and who better to know what's working thanthe clients. Fiserv is of course a major player in the credit uniondata processing space, having seven subsidiaries - IntegraSys (theformer EDS CU processing unit), USERS, Galaxy, Summit, XP Systems,CUSA Technologies and AFTECH. Together they have approximately2,936 credit union core processing clients. There was speculationthat the FTC would seek to block the EDS deal because it gaveFiserv such a dominance in credit union data processing, but theFTC decided the market was still very competitive. "The creditunion piece is a very important part of the company. We've donesome great acquisitions there. Everyone frowned when we bought theEDS business. They've done a tremendous job with customer retentionand software development. What they needed was resources," he said.Muma is referring to IntegraSys, the former credit union unit ofEDS. For years there was talk that EDS was no longer committed toserving the credit union market and it wasn't investing enough inthat business. When Fiserv took over, the dollars started flowingand IntegraSys has revamped its product line and managed to keepalmost all of its credit union clients. Muma said credit unions arestill one of its best growth areas and Fiserv will continue toinvest in its credit union companies. "If you look, we have someleading credit union products. A few are being re-tooled. It's nosecret both Summit and XP (Systems) are working on new releases.What we have as a company is multiple products. We walk into thecredit union, and match the one that best fits them," he said.While no one has matched what Fiserv has done on the acquisitionfront in the credit union market, other large, public companies areusing the acquisition approach. Jack Henry, Fidelity National andeven Open Solutions have been gaining market share throughacquisitions. Today's Fiserv focuses on six industries: financialinstitutions, health plan administration, insurance, lending, trustservices, and securities. Muma said the financial institutionssegment accounts for 65% of Fiserv's revenue and 85% of itsprofits. "The financial institutions part, which is banks, thriftsand credit unions, is still our biggest piece of business. Thefastest growing piece would be health care," he said. Despiteserving banks and credit unions, Fiserv has managed to stay out ofthe bank vs. credit union battles. "We've been careful to separatethem in part to please the clients. Credit unions still thinkdifferent than bankers in many ways." He said credit unions alsotend to be more innovative from a technology standpoint than banks.Muma plans to relinquish his seat on the Fiserv board in order tolet the new CEO run the ship without any distractions. "It's alwaysbeen my philosophy to let the new guy run it." He does plan toremain on some other industry boards he serves on. Muma said hewill never completely forget about Milwaukee, but he's anxious torelocate to Florida. He's active with his college alma mater, theUniversity of South Florida, and said don't be surprised if hewinds up teaching there. "I've always had a hidden passion forthat," he said. [email protected]