Papows Ending Lotus Career at High Point

The resignation today of Lotus Development Corp. chief Jeffrey Papows comes as the company continues riding a growth wave, and isn't likely related to any ongoing turmoil over critical newspaper accounts about the popular executive that were published last year, according to an analyst who spoke with Papows soon after he announced he was stepping down.

Papows will turn over the reins of Lotus on Feb. 1 to Al Zollar, general manager of the IBM Corp. network computing software division. IBM Corp. bought Lotus, based in Cambridge, Massachusetts, in 1995. Papows will stay with Lotus until some unspecified time in the second quarter of this year to assist with the transition.

"I think that the customers are going to see a relatively smooth transition," said Ian Campbell, vice president of collaborative applications research at International Data Corp. (IDC) in Framingham, Massachusetts. "I don't think we're going to see any (other) changes in the Lotus management team."

Those currently in management positions understand that IBM is the boss, Campbell noted. He thinks that the Lotus Notes groupware product line has reached a competitive point against Microsoft Corp.'s Exchange software where the muscle of IBM can be especially helpful. Campbell expects to see "tighter connections" between Lotus and IBM, particularly in terms of utilizing IBM's pervasive global sales force.

In the conversation Campbell had with Papows, the Lotus president and chief executive officer indicated that he is ready for new career challenges and that he might be contemplating an Internet startup for his next job move.

Papows was upbeat and optimistic, Campbell said, adding, "this is not someone who is depressed" about his resignation.

"Anybody VP (vice president) and above always leaves to pursue other activities, and that's just the way it works whether they are fired or not," Campbell said. "I think in this case, it's more true than not."

Still, not even a year ago there was a lot of industry talk about whether Papows would be fired or forced by IBM to resign from Lotus after highly critical investigative stories about him were published in the influential Wall Street Journal. In April of last year, the Journal reported that Papows repeatedly lied about his personal history. The newspaper alleged, quoting multiple named and unnamed sources, that Papows padded his resume, embellished his military rank, concocted tales about daring feats when he was in the U.S.

Marine Corps and on reserve duty, and lied about his personal history.

Lotus officials and Papows denied the claims, saying some stories of his daring adventures were the outcome of "water-cooler legend" concocted by employees who idolized Papows, who was interviewed for the Journal article. He further denied the allegations in interviews with other media outlets, including IDG News Service.

But a month later, it was clear that not all employees held Papows in such exalted status. In May, the Massachusetts Commission Against Discrimination (MCAD) confirmed that Lotus was the target of several discrimination complaints, some of which specifically named Papows. One case that named him was a gender-bias claim alleging that Papows and his executive assistant Sharon Ricci singled out female employees and treated them poorly.

Arlene Greene, who had been a Lotus general manager, reportedly filed the claim. She was fired in October of 1998 after working at Lotus for 11 years and was told that her termination was part of company-wide job cuts, the Journal reported. Greene contended that she was dismissed after she complained about gender and age bias at the company.

Lotus officials countered that the complaint was "without merit" and contained "reckless and unfounded allegations."

Papows had been Lotus chief operating officer in October 1996 when he was named sole president. For almost a year, he shared that title with Michael Zisman, who stepped down in October 1996 for personal reasons. The co-presidents took over the company after the resignation of Jim Manzi. Before joining Lotus in 1993, Papows was president and COO of Cognos Corp.

Campbell said that looking back at Papows' history at Cognos and at Lotus, it's clear that he thrives on bringing companies through growth periods. He turned Lotus into a profitable company and it is expected that at the annual U.S.

Lotusphere user's conference starting Jan. 16 the software maker will announce it reached an installed base of about 50 million Notes users globally in 1999.

"They've certainly had a fantastic year," Campbell said. "He's grown the installed base clearly by an order of magnitude. He's taken it from an interesting product to a core product."

It's not likely that Lotus officials are scrambling to change the schedule for Lotusphere, which features an annual keynote talk by Papows to kick off the show, and which this year is in Orlando, Florida.

"I'm going to bet that they've been working on this (resignation) for a month at least," Campbell said, adding that he didn't have any sense Lotus officials were scrambling to deal with the news that Papows is stepping down.

Lotus, in Cambridge, can be reached at +1-617-577-8500 or at http://www.lotus.com.

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