Bob Lokken: ProClarity chief finds ways to challenge much bigger companies (IBR Executive Profile)

By Lora Volkert

IDAHO BUSINESS REVIEW

As head of a small technology company, Bob Lokken knows what it’s like to be an underdog.

“You can’t just be a little bit better,” says Lokken, CEO of ProClarity Corp., Boise. “If our product is not substantially better, then our customer is going to go with the better-known company.”

ProClarity, a Boise software company with 105 employees in Boise and 150 worldwide, competes with companies 10 to 20 times its size, Lokken said. Consequently, “we’re not going to outmuscle or outspend anybody,” he said.

Lokken, who grew up near Missoula, Mont., earned a degree in engineering from Montana State University in Bozeman in 1986. He went to graduate school at Boise State University, and left in 1986 to work at Extended Systems, Boise.

At Extended, Lokken was involved in managing research and development, information systems, and the company’s software division – back when Extended was primarily a hardware company. He and four other Extended employees left in 1995 to form Knosys, renamed ProClarity in 2001.

One of Lokken’s jobs as CEO of ProClarity is to determine the direction of the technology – “what the product’s going to do, how it’s going to work, what problems it’s going to solve.” At a larger company, “I might be the chief technology officer or director of product development, but in a small company you wear a lot of hats.”

And he wears those hats a lot.

“Working would be my No. 1 hobby,” Lokken, 43, said. “Turning it on’s not the issue, but shutting it off.”

It was an uncle who inadvertently suggested to Lokken the importance of making technology accessible, which he says is the guiding principle behind ProClarity’s products. Most executives don’t know how to access the data in their databases and therefore can’t use it to inform their business decisions, he said.

When he was in high school, Lokken overheard his uncle, who worked for a power company, talking about the computer the company had just purchased.

Apparently, Lokken said, the only person who knew how to operate the computer was the new employee the power company hired to run it.

“My uncle said, ‘This guy’s going to end up running the company, because he’s the only one who can get anything out of the box.'”

That comment planted in his head the idea to “marry how business is run and how computers and databases work.”

“There were guys who knew business and guys who knew computers, but they were rarely the same people,” said Lokken, who himself owns four patents.

Lokken studied both business and engineering in college, but he credited the founders of Extended Systems with teaching him a lot about running a business.

His biggest lessons from them: “Financial discipline. And that it’s about hiring the right people.”

ProClarity, which has grown tenfold over five years in terms of revenue, plans to do more hiring – about 10 to 15 percent of the workforce this year, and 50 percent next year, “if we execute correctly,” Lokken said in an interview.

The company deals in “decision-support software” that helps organizations analyze data. The amount of data in corporate databases typically doubles every 14 months, according to Lokken.

“The market we focus on is very crowded and competitive, and getting more so,” Lokken said. “It’s a reasonably fast-growing market, so it’s attracting a lot of competitors and they’re making a lot of noise.”

But ProClarity, a $15 million company, has won over such clients as Hewlett-Packard, AT&T, Pfizer, Nabisco, Nordstrom and Time Inc., and in Idaho, Healthwise, United Heritage Life Insurance Co. and Jacksons Food Stores – plus “lots of customers” overseas.

What makes a small company in Boise “substantially better” for these customers?

It’s a function of understanding the way people make decisions, Lokken said.

Entrepreneurs are “drowning in data,” he said. Most of ProClarity’s competitors make software that publishes the data “in thousands of reports to hundreds of thousands of people. But it does little to help them understand the data,” he said. The reports often end up being just more data.

ProClarity’s products help pinpoint trends and patterns in data that managers use as a basis for decisions, Lokken said.

For example, a store could track how often customers bought Pepsi products and Pringles versus Coke products and Pringles in order to determine the best way to shelve its products.

Similarly, a clinician who collects years of data on the effects of a variety of drugs and forms of therapy can use the software to determine what combination of treatments tends to produce the best results.

Word got out about this aspect of ProClarity’s products, helping the company to make headway against big competitors, Lokken said. But being a small technology company still creates challenges.

“When you’re doing innovative technology, it’s hard to explain how you’re different,” said Lokken. “Everyone uses the same buzzwords. If big companies see small companies gaining traction with a certain area, they’ll issue a press release saying, ‘We do that too,’ even though they do it in a completely different way.”

And it’s still a challenge to figure out how to “produce a better product with 40 engineers than they can with 400 or 800 engineers,” Lokken said. “We have to be more creative.”

“The key is to hire really smart people and then get their head in the game. Challenge them to produce exceptional results &#133 (let) them run while at the same time keeping them focused on the core objective.”

It’s getting harder to find the right people, though. “I think at the stage the company’s at now, one of our biggest issues is recruiting.”

Idaho doesn’t have a large software industry, so if the company needs someone with a strong background in that area, it often has to ask someone from out of state to relocate. That can be hard because Idaho’s image isn’t that of a high-tech state.

“When it’s all about potatoes and skinheads, it doesn’t help if you’re trying to attract high-tech talent,” he said. “Some people know there’s some tech here; some people don’t know we have any.”

One of his goals is to help build “a cluster of software companies” in Boise.

It’s hard to recruit software engineers from Silicon Valley because there are few opportunities for career development for them in Idaho. It makes it difficult for them to pack up and move their families if they’re worried that the job might not work out and there aren’t any options.

Meanwhile, Lokken is involved with efforts to improve the educational qualifications of Idaho’s workforce. He’s a member of the Idaho Business Coalition for Education Excellence, a group of CEOs committed to improving the state’s education system.

Golf is one of the few things that gets Lokken’s mind off work, he said.

He also spends time with his wife, Tena Lokken, who is a marketing manager for Hewlett-Packard he met through work, and their children, Amanda and Cooper, who are studying nursing and business at BSU, respectively. Together they ski, golf and argue about politics.

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