Conspiracy of Change

September 1996: The Assignment

It was one of those don't-pinch-me-I-might-wake-up moments that people move to Silicon Valley to write home about. Alison Berkley, then a freshly minted MBA from the Harvard Business School, had been working for Intuit Inc., headquartered in Mountain View, California and one of the world's leading software companies, for just six weeks. She'd been summoned to a conference room adjacent the office of Scott Cook, Intuit's legendary cofounder. Just outside the room, Berkley met Carl Reese, a vice president from Intuit's tax group. Reese had joined Intuit four years earlier, a few months before Intuit bought the company where he worked, ChipSoft Inc., creator of TurboTax, the best-selling tax-preparation program.

Reese had a perplexed look on his face. Berkley was equally puzzled. Why had they been summoned? She'd been a Baker Scholar at HBS; she'd worked in mergers and acquisitions for Morgan Stanley; she'd spent a summer at Microsoft. She signed on with Intuit because recruiters persuaded her that she could blend her interests in finance and software, and that she could look forward to becoming a product manager.

But when she arrived at the company, Berkley found herself assigned to work as an associate product manager with Quicken, Intuit's oldest, and in her view, stodgiest product. "It was not the premise under which I took the job,'' she says. "Immediately, I was frustrated.'' She expressed her frustration to coworkers, to supervisors, and to former colleagues at Microsoft. One day, a colleague, Lisa Jean Borden, dropped by Berkley's cubicle to say that she was about to leave Intuit to join a startup. Borden had heard that Berkley wanted a different project, Borden decided to hand off an idea that she'd begun investigating with Reese. She dropped three files on Berkley's lap - sketchy data on the nascent world of online mortgages.

That brief encounter was a precursor to this session. The meeting began in a low-key tone, as did most meetings chaired by Cook, Intuit's soft-spoken, deliberate visionary. But there was no mistaking his sense of urgency. The market for Quicken, Intuit's wildly popular personal-finance software, with 10.6 million users, was flattening out. Intuit's stock, which had hit an all-time high in November 1995, was dropping fast. No one was questioning the company's survival. But there were doubts, inside and outside Intuit, about its future as a leader and innovator.

Cook wanted Berkley and Reese to do something about those doubts. He challenged them to build a business from scratch - and not just any business. Creating a Web-based service to help customers compare and apply for home mortgages - analyze their financing needs, evaluate terms from lenders, get prequalified online - would be a crucial test of Intuit's capacity to reinvent itself in the Internet era. "The Net was forcing us to learn fast, change fast, even fail fast,'' says Cook. "The only thing wrong with making mistakes would be not learning from them.''

The company's unwavering commitment to product quality, its keen understanding of consumer brands, its dominance of retail channels, its deliberate style of decision making - these skills had worked wonders in the market for shrink-wrapped software. But they were less relevant - sometimes even counterproductive - in the fast-paced, freewheeling, make-it-up-as-you-go-along world of the Net. QuickenMortgage would be a test of whether one of the defining software companies of the 1980s could handle the new competitive realities of the 21st century.

To be sure, Cook's actual invitation was more subdued than all that. "Is there a business here?'' he asked. "Could you guys spend some time on this - on your own?" Reese hesitated. He was still running an important arm of Intuit's business. Berkley was more outwardly enthusiastic. "For me it was a big WOW!'' she says. "Here we were being asked by Scott Cook to galvanize our thinking about the Net and explore a completely new venture.''

She looked imploringly at Reese. He agreed to go along. On the way out, they bumped into Bill Harris, then the executive vice president for Intuit's consumer and tax divisions. The encounter was not coincidental. Harris, Reese's former boss, had been evangelizing for Intuit to develop its Web presence. Harris had become the company's point man for the Net, its most senior change agent. "At this point, we had no real models, only muddles,'' Harris admits. "But you have to test the company's willingness to try new things, to break its own mold, to reevaluate its traditions. You have to test its willingness to fail."

Over the next four months, Berkley and Reese worked to create QuickenMortgage as part of a conspiracy of change - sanctioned from the top and drawing on more than 70 people from a variety of functions and ranks - to reinvent one of the world's most successful software companies. The conclusion to this story has yet to be written: No one knows if Intuit will be as prosperous on the Web as it's been on retail shelves. But no one doubts that Intuit is a real player again. "Isn't it amazing," asks Harris, now Intuit's president and CEO, "how quickly you can become a company of the past - or a company of the future?"