There is a scribble on the whiteboard over Charles Morgan’s left shoulder, a green box with some squiggles of a sort. The faint lines suggest a dry-erase marker that was indeed running dry or an idea that was never fully erased. There is no telling what the box represents, but knowing Morgan, it probably charted a way through a complicated problem most people could not see.
It is a knack he has, this ability to take the universe and make it fit into a fading box on a whiteboard, a quirk of his psyche that has allowed him to see clearly what others could not imagine. By this has he become extraordinarily successful, building two of the state’s most foundational technology companies –Acxiom, which he led for more than 35 years, and First Orion, which launched 15 years ago – and landing in the Arkansas Business Hall of Fame in 2004.
“I am what I’ll call a very, very good systems designer architect,” Morgan said. “I’m just one of these people that got lucky. I can see really complicated things, and I can dissect them into manageable components. I’m really good at that and concepting the overall scheme of that and trying to figure out how to do it.”
Morgan’s description of himself is similarly reductive – a simple geek, he said – born to take things apart and put them back together. In fact, the reality of Charles Morgan is as complicated as anything his companies ever built. Brash and brilliant, profound and profane, his leadership philosophy is simple and direct, offering piercing insight wrapped in raw, unbending truth.
“When people go off to do something, I say, ‘Don’t [expletive] it up,’” he said. “In all honesty though, you’ve got to let people fail some and not say, ‘You screwed up, you’re out of here.’ Gosh, everyone screws up sometimes, especially me.”
Morgan grew up in Fort Smith between the two worlds his parents represented. His mother, Betty, came from money earned through her family’s Speer Hardware Co. and went to great lengths to polish the grease off her firstborn.
“My mother, as I grew up, was worried about me,” Morgan said with a half-cocked grin. “She wouldn’t call it a geek back in those days, but I was not well-balanced socially. She said, ‘Charles, you can’t just work on your motorcycle or mess with that old car you bought,’ so she made me do cotillion and all these things.”
His father, Don Morgan, was not much help in the effort to gentrify his junior. A consummate dreamer and serial entrepreneur, he swam against the tide of convention in ways his son would later emulate.
“My dad was an outcast in the family because he was a traveling salesman from the North, and he was not popular among my mother’s family except for old man Speer,” Morgan said. “He really liked him and appreciated him, but a lot of the rest of the family didn’t.
“My dad was an entrepreneur’s entrepreneur. He always had another idea of something that he was going to do. He had all kinds of little projects. The first one was building a motel out on Arkansas Highway 22, which we lived on. Had a tiny two-bedroom house at the back.”
Whether it was his humble home life, the more grandiose stature of the Speers or a likely combination of the two, Morgan learned early to set high goals and work backward from there by forming a plan to achieve them. He soon learned that even the best plans required adjustments as he went along.
“I found my first Road & Track magazine when I was about ninth grade, and I saw these little British sports cars racing on tracks,” he said. “I said, ‘That’s what I want to be.’ I wanted to be a racing engineer until I figured out back in those days, racing didn’t hire engineers; they hired mechanics. But still, I knew I wanted to be a mechanical engineer probably from the time I was in tenth grade. It was no question in my mind.”
On his mother’s insistence, Morgan started his journey at Sewanee, a small liberal arts college in Tennessee. The original plan called for two years there, after which he would finish his engineering degree at Georgia Tech. When that did not work as planned, he finished his degree at the University of Arkansas in Fayetteville. Engineers were in high demand in the mid-1960s, and he had no end of offers from Exxon Mobil, Texaco and Texas Instruments, among others, none of which grabbed his attention.
“IBM said, ‘We’re going to teach you how to use these new things. You heard of them? Computers?’ I said, ‘Yeah, I’ve heard of them,’” he said. “That’s how long ago that was.”
Morgan was intrigued but pragmatic about entering the buttoned-down IBM environment. He delayed reporting for work for 90 days while he helped his father, who, by that time, had opened a successful building-supply business, fill a major order. At the same time, he picked up a handy fallback skill if Big Blue did not fit his style.
“My father had sold a hollow metal frame job, which means all the windows and doorframes for the new Fayetteville High School,” he said. “It was a big project, and he said, ‘I don’t have any way to do it unless you’ll do it after you graduate.’ So I delayed IBM, and I was a welder and fabricator for three months. After that, I always knew I had a job somewhere if IBM fired me because I was a pretty good TIG and stick welder.”
Morgan never had to use his fallback plan and found himself in the exhilarating early days of computers applied to business applications. He and his colleagues were writing the book of the future and doing so for the biggest name in the industry.
“I absolutely loved it,” he said. “I quickly found out nobody knew anything back then. The customers you called on, you could go into any bank or distributor or anything, and I was as likely going to be dealing with the chief executives in the business as anybody else. They didn’t have programmers. They didn’t have computers. We would be in there telling them how to do it.”
The job put him in the orbit of some heavy hitters in Arkansas, including his alma mater, which installed the biggest computer in the state at that time, and a promising retailer named Sam Walton. Watching and interacting with the Walmart founder helped define Morgan’s leadership philosophy, behind which he would accomplish much in the years to come.
“Sam taught me my first big lessons in business: demonstrate strong leadership with strong vision, hire good people and stay engaged in the business at a very operational level,” he said. “It taught me that leadership matters a lot, and also the value of hiring good people. Sam went around and figured out who in the industry was doing the best at financial management, for instance, and he went out and hired that person, offered him whatever he needed to get him. He was not shy about going after the best of the best people among his competitors.”
After five and half fulfilling years with IBM, Morgan accepted a job with Demographics, a fledgling 25-person data-processing company in Conway. At a time when few people even knew what data processing was, the little company that would become Acxiom had already seen the future, and before long, Morgan would be at the front of the column.
“You know how Winthrop Rockefeller became governor of Arkansas? History lesson for you,” Morgan said. “He decided that he would send a personal letter to every voter in the state. No telling how much he spent. He put data on punch cards, and in those days, they still had tape, and he ended up building a file of every voter in Arkansas. Then he wrote a personal letter on computers to every voter.
“These country folks said, ‘Anybody that’s going to write me a letter, I’m going to vote for him.’ Against every odd on the planet, this Republican guy from New York won the governorship of Arkansas.”
Morgan did not have a taste for the political applications of the technology, but he immediately saw the potential for business. With Morgan in the role of chief salesman, programmer and systems designer, the company landed its first big account in New York in 1975 and never looked back. Having achieved proof of concept before there was such a term, there was no hurdle too high, no goal too lofty.
“We were entrepreneurial. We built the first marketing database in the world and the first big data solution ever at Acxiom,” he said. “We had incredible technology that we deployed on mainframe computers and, later, big servers.
“We built the first cloud ever. We built it using PC chassis, and at the end, we had 40,000 PCs all tied together. You know how much noise 40,000 PC chassis make? The heat is incredible, but the noise is deafening with 40,000 little fans running.”
What set Morgan apart from his contemporaries was his master’s touch when it came to the ongoing chess match with potential clients, especially those on the coasts who underestimated him.
“You should have seen me in New York,” he said. “I could always get an appointment. Somebody would say, ‘Hey, we’ve got this goon from Arkansas who says he has a good solution for our list management.’ After laughing, they’d say, ‘I gotta see this. Bring that sumbitch in.’
“One time, I was at a meeting where we’d already proven ourselves to a great extent. I was called into the CEO’s office, and he’s there with his four partners. They decided that they liked what we did, but the CEO was going to tell me I had to get out of all my other client relationships. I mean, he was jerking me around big time. I said, ‘Well, I am just a poor dumb [expletive] from Arkansas. You scare me to death. I don’t know what to do next. I am so confused by this.’ The partners started laughing, and the CEO was like, well maybe that’s the wrong approach.”
For as good as he was on the road, Morgan and his crew were even better on their home field. Of the executives they flew down to Arkansas, 95 percent signed on the dotted line. Each account landed seemed to beget three more, and during the 1990s, Acxiom’s revenue grew eightfold in about seven years, Morgan said. It was during this time that he began to see the perils that came on the other side of success.
“Around 2004, things were really starting to go well. We were over a billion in revenue by then, and we were really successful,” he said. “The banks came in and said, ‘Charles, you guys are really killing it. We want to give you a guaranteed $2 billion loan facility to the corporation for anything you want to do.’
“Now, how easy is it to get in trouble with that? You’ve got $2 billion and no restrictions on it. You just go do what you want to. The problem is what happens when you get where we are right now? Interest rates go up, the deal turns south, and guess what? We wouldn’t have had any good way out if we’d borrowed $2 billion, and our stock had gone to [expletive], and all of a sudden, our cost of interest went 5X. We’re screwed. I always said I need to have two or three ways out if things don’t go right for me. I need to be able to cut back. I need to be able to know I’ve got resources to not get killed by making any decision. That’s the lesson there: you’ve got to plan for the worst.”
Morgan’s current venture, First Orion, was launched as PRIVACYSTAR in 2008. Recently retired from Acxiom, Morgan was not initially day-to-day with the firm and was content to bankroll it and offer advice. After some early successes with a call-blocking app, the company hit choppy waters in 2013, losing between $600,000 and $700,000 in the first five months of the year. Morgan had a decision to make.
“One, I could just shut it down and walk away and take some tax losses. The other choice I had was to take the whole thing over, run it myself and try to turn it profitable,” he said. “My decision at that point was, ‘Is it worth it?’ I did a lot of soul searching, and in the final analysis, I said mobile technology is going to change the world, and we’re right in the middle of it. I didn’t know exactly how this thing’s going to play out, but I knew there were going to be massive business opportunities with mobile technology, with blocking, with other application solutions. I decided I’m going to go back to work for a little while.”
Morgan led the company that year to finish with a small profit, and while ensuing years have not been easy, the company is still here, home to nearly 400 employees, and has offices in London and Dubai, United Arab Emirates. The sacrifices and spending control of recent years have done nothing to dampen workers’ enthusiasm either, as one glance at the First Orion trophy case stuffed with “best place to work” kudos attests.
When asked how he did it, the 80-year-old again demonstrated his gift for extracting simple strategies from complex problems.
“You’ve got to be steady. You’ve got to get people with you. You’ve got to be trusted. In the end, you have to have good ideas and point people in the right direction,” he said. “You can’t be just, ‘Hey, let’s go be good together!’ You’ve got to provide good leadership of where you’re going and how you’re going to get there and be able to keep on that path or change that path as the situation dictates. You’ve got to roll with the punches, and you’ve got to be adaptive to the circumstances. Getting to success is a very zigzag route.”
CHARLES MORGAN ON TALENT
Leaders are all about getting talent around them. That’s what I learned from Sam Walton first was he had all these really good people around him. He hired these guys and paid them a lot of money he probably didn’t even have at the time. It’s also about getting people that you can meld into building a cohesive team. When you get strong personalities, you’ve got to be careful they don’t go off in all different directions. Every once in a while, I have to corral everybody around here.
CHARLES MORGAN ON SELLING NEW IDEAS
My time at IBM taught me when you’ve got something brand new that nobody knows anything about, it gives you amazing access. Something like branded communication where banks don’t know how to use it, you can get access to much more senior level people and become much more strategic much quicker. IBM was really good at that because they had all these education programs for their young employees. They developed not only great computers, but a great process to develop their people and in turn their customers. As a result, IBM was a spectacular success from the 1960s, really up through 2000.
CHARLES MORGAN ON DEVELOPING EXCELLENCE
You have to give room for people to fail. You can’t say, ‘I’m with you win or tie,’ because you’ve got to let people fail. You’ve got to have them feel like they can take some risks and take some chances and one failure isn’t their end. That’s really important. A colleague of mine, Alex Dietz, who passed away, said to me one time, ‘Charles, I’ve never known anybody to fail at as many things as you have. Your good ideas and your leadership have far outweighed your failures. That tells me you’ve tried a lot of stuff, but you haven’t done anything that killed you.’
CHARLES MORGAN ON HANDLING SUCCESS
It’s easy to get out of control. When you think everything is going right, it’s real easy to get too far over your skis, borrow too much money, take too many risks or get to where you think everything’s just automatically going to keep running right. You’ve got to continue to manage your risk decisioning and your risk strategy. You can bankrupt yourself chasing a great opportunity.
CHARLES MORGAN ON HUMAN NATURE
Every person, given the right situation, wants to do good. Therefore, you have an opportunity to get the best out of a person if you can find that spot where they can succeed. If you train your talent, and if you treat them right and give them opportunities, they’ll stay with you. Nobody wants to be a failure, and as a leader, you’ve just got to remember that. They’re not trying to screw up. They’re not trying to be a goofball. It seems pretty obvious, but it’s not.
Photo by Jason Burt
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