The 3D printing industry veteran company 3D Systems was founded back in 1986, a time when additive manufacturing was almost unheard of. Since then, the South Carolina-based company (and the industry itself) has changed quite a bit, slowly turning from an industry powerhouse to a faltering company. For those of you who closely follow the industry, you may have noticed the 3D printing manufacturer’s name in the news quite often, and not always in the most positive light. But, there might just be some good news underneath all of the recent resignations and changes in objective, as 3D Systems has been implementing a uniquely experienced team to steer the ship straight.
The upper management shake-up began in October 2015, as their stock continued to plummet, 3D Systems announced that after his 12 years leading the company, former president and CEO Avi Reichental would be resigning from his position. It’s still unclear whether Reichental actually resigned himself or was fired by the Board of Directors, but the two parties were publicly cordial towards one another. But still, there’s no denying the clear-cut disappointment that there was with their continuously free-falling market value, several legal battles, and the failure of their desktop 3D printer line.
Avi Reichental – former 3D Systems CEO
Initially, Andrew Johnson, the current Chief Legal Officer, assumed the role of intern president and CEO. Surprisingly enough, their fourth quarter financial numbers, which were unveiled on the cusp of Reichental’s departure the company, were surprisingly optimistic. Not long after, 3D Systems decided to bring in Vyomesh Joshi, the former Hewlett Packard (HP) VP of Imaging and Printing. Right off the bat, Joshi wanted to key in on the 3D Systems portfolio to see where they have the largest profit pools, and with that information, create sustainable comparative advantage for the company with their technology. That essentially meant eliminating their desktop 3D printer market, which included the objectively failing Cube 3D printer line. Another key target for the new CEO was to reduce operational costs, which have bore a heavy burden on 3D Systems for the last few years.
Vyomesh Joshi – new CEO of 3D Systems
According to their Q1 2016 Earnings Call, which was transcribed by the financial market news site Seeking Alpha, Joshi said the following:
First and foremost, we will focus on improving quality, reliability and our supply chain to drive operational excellence. Second, we will define a market-based strategy to identify areas where our industry-leading technology can deliver a sustained advantage for our customers. We will organize the company and define our operating model around this strategy. Finally, we will develop and strengthen our culture to unify the organization and provide leadership for 3D Systems to become a truly phenomenal company. Again, I’m excited and believe we have a tremendous opportunity ahead of us.
Vyomesh Joshi – CEO of 3D Systems
Alas, 3D Systems seemed to have a sustainable direction to head towards, but that seems to have meant more changes in the upper management were inevitable. Not too long after Joshi shared his new vision during the earnings call, 3D Systems disclosed in a SEC filing that their Chief Operating Officer (COO), Mark Wright, and Chief Marketing Officer (CMO), Cathy Lewis, from the company. Recently, just two weeks after this news, the company announced that their Chief Financial Officer, David Styka, would be stepping down as well (although he will remain on board in some capacity to provide financial and operational support), and would replaced by former Kodak CFO John N. McMullen
Thus far, with both Joshi and McMullen being the fresh faces on the upper management roster, there seems to be an underlying theme with the direction that the company seems to be heading in. Prior to his time at Kodak, McMullen spent 32 years working a variety of respectable positions at HP, which is the same company that Joshi had departed from to become the CEO of 3D Systems. When Joshi announced the addition of McMullen as CFO, with whom he worked with during his tenure at HP, he cited his “ability to deliver an appropriate cost structure, scalable processes and an effective business model at global technology companies” as reasons for why McMullen could lead the company towards prosperity.
When you look at what was said by Joshi in both the Q1 Earnings Call and the announcement of McMullen’s hiring, it’s evident that he intends to completely overhaul the company’s operating model. Thus far, it’s clear that the Joshi-led 3D Systems will put all of their attention towards the areas that the company has shown proven success in. The goal is to zero in on the industrial niches that the company can provide a sustainable advantage to their customers, such as various health care uses for example.
To me, all of these sudden changes essentially means two things. First, is that 3D Systems won’t be too adventurous in the near future, as ‘sustainable’ and ‘appropriate cost’ have been among Joshi’s buzzwords. Second, is that the new CEO is out to bring 3D Systems out of the financial gutter by transforming it into a more cost-effective operation. It may not be the future the Chuck Hull, the founder and current CTO of 3D Systems, may have envisioned when he invented stereolithography in 1986. But at the end of the day, Joshi has in charge of keeping this company alive, and the best way to do that, at least to him, is for the company to concern itself only with what it’s good at.
