James E. Heppelmann
[Year-to-date Japan bookings are down $20 million versus last year.] If you go back more than seven years, PTC was struggling on and off with Japan. The main problem we had is that we always relied on an expat, partly because we never had a local Japanese leader with good enough English skills whom we trusted, who trusted us, who could communicate effectively with us. So the easy answer was send an expat over there.
Now Japanese culture and Japanese business culture is very different than anywhere else in the world, and Japanese companies and executives only do business with people they deeply trust. They do not trust expats. They see them as temporary solutions, they can't build a relationship with, because in two years this person won't be here anyway.
So the guy we hired seven years ago was a Japanese national. We poached him out of Oracle at the time; he was the #2 person from Oracle. He has decent English skills. He quickly built a good strong relationship with the PTC management team here in Boston and quickly built good strong relationships with the customers in Japan. And we then had a period of pretty decent stable consistent growth in Japan, at which point, we more or less promoted the guy.
He wanted and we wanted to give him an international experience and so forth for career development reasons. And he backfilled with a person that we didn't know as well, because we always had this great executive standing between us and this person. And we collectively missed an understanding of what was happening and didn't catch it until it had bit us. But now we've got it, and again reverted back to the previously successful configuration. We think that's a winning recipe, proven recipe, we should be able to fix it.
We have a problem we have to go fix. We do think it's a very fixable problem. We don't have to find some saviors from the outside. We just have to reinstall the proven savior we have, and we think we're going to fix this problem. If we fix this problem, then we're right back where we were kind of in the first half of the year.