Paying It Forward
Gary Butler, CEO of employer services giant ADP, crosses borders
to build business
The streak had ended. In 2002, after a remarkable 41 years of double-digit growth in earnings per share, Roseland, N.J.based Automatic Data Processing Inc. (ADP) was caught in a wave of challenges that hit the economy: a 40-year low in interest rates, the collapse of the brokerage industry, a minor recession, and a dip in employment. “The combination of those things caused us to break our string,” says president and CEO Gary Butler, “and our share price suffered accordingly.”
When Butler, 61, who joined ADP in 1975 as “a street-level salesperson,” became CEO in August 2006, he decided to refocus on the company’s traditional core mission of providing employer and dealer services. That was a change from the strategy of Butler’s predecessor, who sought to grow the company by adding human resources service offerings and entering other data-processing-intensive industries.
After a two-year period of modest growth, ADP returned todouble-digit growth in 2008. “One of the tough things about a service business is that you add customers kind of one at a time,” Butler says. “It’s not like selling widgets or iPods, where all of a sudden they’re selling millions of them. In a service business, you’re selling to one client at a time, and you layer the revenue in.”
Butler has proven through his success that he bears the CEO title well. But he’s still a sales guy at heart. “I love to talk with people,” he says. “You don’t run your business from the fourth-floor corner office.”
So after he took over, Butler talked, making the rounds in person and communicating via streaming video on the company’s intranet to get his employees on board with his plan. He talked about increasing the company’s international business; about selling products related to ADP’s core services, like workers’ compensation insurance, to the client base; and about improving margins.
“The single most important thing is to establish a strategy that’s clear, succinct, and relatively short and easily understood, and then communicate that to the people who work for you,” Butler says. “It’s something that I talk about everywhere I go, no matter whether it’s with first-line service people or my senior executive team. Most everybody at ADP could recite the plan back to you.”
While he’s still deeply entrenched in driving ADP’s U.S. business forward, Butler is clearly excited about expanding overseas. Through a partnership with SAP AG, ADP is offering payroll and human resources outsourcing in more than 50 countries. Launched three years ago, the partnership marks ADP’s latest push outside the United States. The company now has offices in Beijing and Shanghai, and by year’s end, a Moscow dealer services office will be up and running.
“The first time I went to China, I started thinking, “What the heck have you been doing? You should have been here five years earlier,” Butler says. “It was a real cold-water-in-the-face kind of experience. It certainly was motivation for me.”
Although he’s got 33 years under his belt at ADP, Butler makes it clear that even in the role of CEO, he’s still in touch with his roots as a salesperson. “I learn the most when I’m out in the market,” he says.
So, if you go looking for him, don’t be surprised if he doesn’t answer the door of his corner office.
Jenna Schnuer