Why does Mendix promote the CFO to CEO?

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Derek Roos, the founder and CEO of Mendix, has decided to pass the baton and stop at Mendix. Three years ago, Roos and his co-founders sold the company to Siemens. Now the moment has come for Roos to leave the company. The CFO of Mendix, Tim Srock, will take over the CEO role, which owes his career almost entirely to Siemens and then to Mendix. The question is, of course: is this a good move?

Our editors do not often cover management changes because there is usually not a story behind them. It’s just people moving around. We have been following Mendix closely for several years, know the company well and have spoken to Roos several times. Yet we didn’t see a story here either at first when we were asked to interview Roos and successor Srock. After looking at Srock’s profile, however, that changed.

Since the acquisition of Mendix by Siemens, Srock has been CFO at Mendix for almost three years. He was put forward by Siemens immediately after the acquisition to strengthen the financial position of Mendix. He will be promoted to CEO on January 1st when he will be CFO for three years. We find that very special.

A CFO in a CEO role

We are not big fans of CFOs in a CEO role. We will not argue that it can never work because there are undoubtedly examples where it turned out well. Think of companies in bad financial shape and where the margins have become too small. In any case, a situation where the economic balance must be restored. However, this is not the case with Mendix. In the past six months, the company has seen a growth of more than 70 percent. Financially, Mendix is doing very well.

In the end, a CFO thinks primarily in terms of analytics and numbers. How can margins be increased, costs reduced and can the same work be done with fewer people? Do we need to do so much marketing? And we could go on like this for a while. If we look at Mendix, we see an innovative company that is partly responsible for defining low-code. In the meantime, many companies have jumped on that low-code train, and the competition is getting bigger and bigger. Companies like Google, Microsoft, ServiceNow, Salesforce are all working on low-code.

The answer of Mendix in recent years was to keep innovating, ensuring that Mendix stays ahead and offers an all-in-one low-code platform that works everywhere and is usable in every situation. Then Mendix followed with a specialisation in specific industries. In our opinion, this is an excellent strategy to ensure that you continue to innovate and stay ahead. Unfortunately, there are many examples where companies saw innovation disappear with a CFO in charge. A creative tech CEO wants to innovate quickly. A CFO, in turn, is more calculated and thinks longer about acquisitions and strategic choices. The result: decisions are made too late.

The question is whether this fate also awaits Mendix.

We decided to ask the gentlemen in charge, as we had an interview with both of them. We explained our vision of CFOs becoming CEOs and asked how they see this. Roos says he understands our point of view but thinks the situation with Mendix is really different.

He doesn’t see himself as a creative technical CEO which you often see at tech companies. The Mendix founder sees himself primarily as a customer-oriented CEO. Roos says: “I’m not a developer. I had Johan den Haan, CTO at Mendix, and Roald Kruijt, co-founder at Mendix, for the technical stuff.”

Furthermore, Roos says that he does not see Srock as a CFO who will run Mendix. Roos does not see Srock as a typical CFO either. Srock has also been jointly responsible for strategy and acquisitions for the last three years. The Mendix founder especially sees someone in Srock who has the vision and ambition to turn Mendix into a billion-dollar company. Srock will also be able to fall back on Johan den Haan for technical matters in the future.

“I am not a developer. I had Johan den Haan, CTO at Mendix, and Roald Kruijt, co-founder at Mendix, for the technical matters.”

Srock says that he has done more than hold the CFO role in recent years. He is responsible for finance, IT, legal and the overall strategy of Mendix. Srock also states that he made three to four important strategic decisions. The acquisition of Timeseries earlier this year, the expansion of the marketplace, the creation of the ecosystem with partners, the international growth of Mendix and improving revenue sources. Furthermore, Srock confirms what Roos said: his goal is to achieve a turnover of one billion with Mendix. He also says that he has confidence in the team that is responsible for the technical part.

The appointment of Srock as CEO by Siemens

Srock seems to have already played a significant role within Mendix in the past three years. For that, he now gets the role of CEO. One of the other things we couldn’t leave out is the appointment of Srock as CEO. If we look at Srock’s CV, we see that he has more or less worked his whole life at Siemens. Was he put forward by Siemens?

Roos says that technically Srock is appointed by the Head of Software of Siemens. However, Roos also reveals that it was his advice to Siemens to make Srock the CEO. He has been involved with Mendix for three years, has seen the company grow from 500 to over 1400 employees, knows the culture, the ambition and the people. According to Roos, Srock is the ideal candidate to succeed him and let Mendix grow.

Roos states that he has enjoyed bringing Mendix to where it is today, but it may require a different skill set to enter the next growth phase. Roos does not know if he is qualified for that. In addition, he states that Mendix is his baby and that he does not want to leave it to someone he does not trust. He also pointed out that it was his personal choice to stop as CEO of Mendix. It was not a corporate mandate by Siemens or anything like that. Roos also likes to point out that Siemens gives Mendix all the freedom it needs to operate independently. Siemens has supported the company with specific industry knowledge and financial resources to let Mendix grow. Siemens, in turn, wants to learn from Mendix how it can operate more like a tech company and apply innovation faster.

The future will tell what kind of CEO Srock is

In the end, we can do no more than ask the obvious questions that will be on the minds of every customer and partner of Mendix after looking at Srock’s profile. It may be clear that Roos and Srock believe that Mendix will continue to grow and innovate at the current rate. If all goes well, there won’t be a standard CFO profile at the helm who will cut back on innovation, marketing, and employees or try to increase margins by raising prices or changing the revenue share with partners. There will be a CEO that turns Mendix into a billion-dollar company.

These answers will also encourage employees working at Mendix, although they already know Srock and should know better. In the coming years, we’ll see how Mendix develops and whether Srock knows how to develop into an excellent full-fledged tech CEO because, after all, it’s his first CEO position.

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