Every morning he walks down the hallway to his office CEO Robert Nygren is reminded of how close his company came to folding and how remarkable the turnaround has been. Many of the glass offices he passes at Fincentric's Richmond, B.C. headquarters are empty, as are the cubicles that face them the result of three rounds of layoffs that saw his company's workforce cut from 280 employees three years ago, to 110 now.
“It was not a pleasant place trying to survive and find business,” says Nygren, who came to Fincentric as its senior lawyer in the spring of 2001, just two years before the layoffs started in 2003. Fincentric was struggling to find new customers for its specialized financial software for large credit unions.
Although the government- and VC-backed company had serviced nearly half of the country's heavyweight credit unions, newer, smaller credit unions were instead buying off-the-shelf software. At the same time, Fincentric's international business had dried up. Between 2002-2005, the company hemorrhaged people and money. (In a good year, it would have rung in profits of up to $16 million.)
But it all started to change early in 2004 and Nygren gives much of the credit to Glenn Schaffrick, Fincentric's director of sales. He says Schaffrick's radical and risky shift in strategy turned the company around.
“Retail I looked outside and knew this is where we had to go,” Schaffrick says.
Instead of the traditional banking industry, the 45-year-old saw a future with retail stores looking to provide financial services to their customers. In Canada, many retailers were already offering credit cards, but few had gone further into traditional banking services such as mortgages.
Schaffrick targeted Canadian Tire, which had indicated it wanted to move in that direction and had applied for a banking license. Schaffrick saw Canadian Tire's ready-made client base and huge potential. Then he had to convince the rest of the company to go there with him.
“There was push-back,” he says with a laugh. “You bring these ideas on and just because it didn't fit into the mold we had before there's resistance.”
Canadian Tire represented not only a huge cultural shift but a huge financial risk: Without a signed contract, Fincentric agreed to create specially tailored software worth hundreds of thousands of dollars.
Nygren says for some, mainly ex-bankers, the new focus was just too different and the stakes too high. Some people left the company. But one year later Schaffrick's innovation and relentless persistence paid off. Canadian Tire signed a multi-million-dollar deal with Fincentric (several more deals with other clients have since been signed) and in October 2006 the retailer began offering financial services in two Ontario test cities.
Last year the company celebrated its first profit $1 million since 2001.
“[The Canadian Tire deal] changed everything we did,” Nygren says, adding, “You have to have results. We're convinced the rest of the retailers out there will pay attention to Canadian Tire's choice.”