Driving force in disk
Arif Shakeel is leading Western Digital when the biggest
challenge may be to motivate people during successful times.
By TAMARA CHUANG
The Orange County Register
FOREST - For one simple reason, Arif Shakeel agreed to become
the chief executive officer of Western Digital Corp., the
world's second largest computer hard-drive maker.
"I did it because the company asked me to," said
Shakeel, 51, who joined the company 21 years ago as a product-marketing
manager for controller boards. He started his new job in
October. "I owe a lot to the company."
Not so simple is the road ahead, Shakeel said. That's because
Western Digital is doing fantastic. Its stock is trading
near its 52-week high, closing at $21.97 on Tuesday. Revenue
has nearly doubled in five years, while profit continues
to grow. And the company's two largest rivals are in the
process of merging - always a good sign for remaining competitors.
Shakeel replaces longtime colleague and friend Matt Massengill,
who joined the company within months of Shakeel. The two
have looked out for one another as they worked their way
up in a company that promotes from within. When Massengill
got promoted, he brought Shakeel with him through the executive
Massengill, seen as the guy who rescued Western Digital
from the brink, is now executive chairman. But the way Shakeel
sees it, Massengill had a much easier task. The company
was doing poorly when Massengill took over as CEO six years
ago, losing $492.7 million the prior year. His job was to
"Good news is scary. It's a tough job to motivate people
in successful times," said Shakeel, who has been president
since 2002 and retains that title. "It's difficult
to motivate people who know they are doing well."
Shakeel, a family man whose teenage daughter likes to offer
advice after listening to company conference calls, is personable
and has a competitive spirit. He calls many employees and
customers by their first names. A framed jersey of Detroit
Pistons basketball star Ben Wallace hanging on a wall in
his office is the result of a basketball rivalry with Dell
executives, who sent him a jersey after Shakeel's favorite
team, the Los Angeles Lakers, lost.
But it has been a tough road to get to where he is now.
In the late 1990s, Western Digital frenetically trimmed
staff to abate financial losses, which ballooned to $492.7
million in 1999. Massengill became president in January
2000 and sped up the effort by closing facilities and getting
out of businesses, such as its business computer servers
and an attempt at a personal video recorder. The company
went from 16,000 employees in its 1997 heyday to 10,000
Part of the problem then was a serious price war, and hard-drive
makers were losing money in order to grab market share.
It backfired, and several exited the business. Western Digital
decided not to play the game, and, along with Shakeel, Massengill
concentrated on cutting expenses and operating the company
Now it is Shakeel's turn.
Since he was a curious 10-year-old growing up in Pakistan,
Shakeel knew he wanted to be an engineer.
"I remember asking my dad, 'Who are the people who
design airplanes?' And he said, 'mechanical engineers.'
That's what I wanted to do. I never changed my mind,"
said Shakeel, who moved to Memphis, Tenn., for college,
earning a bachelor of science degree in mechanical engineering
from Memphis State University and later an MBA from Pepperdine
But CEO? He'd never dreamed of that specifically.
"I've never had title goals. I just wanted to be really
good at what I do. I'm driven a little bit by the money
for family obligations, but really I didn't want to be known
as doing an 'OK' job. I wanted people to say, 'He did an
unbelievable job,'" said Shakeel, who counts former
company president Kathy Braun and CEO Chuck Haggerty as
Shakeel, who left the company in 1997 and rejoined it in
1999 as head of operations, said his strength is operations.
He has helped the company figure out when a customer needs
more product before the customer even knows it.
"I know every morning how many drives were sold and
our market position. In the past, we didn't have that crisp
data," Shakeel said.
It is now Shakeel's job to make quality drives that do the
job and remain affordable. If drive prices are too high,
they make iPods, Xboxes and TiVo DVRs too expensive for
consumers. If they are too low, hard-drive makers lose money.
Western Digital has found a good balance, said John Rydning,
research manager for hard disk drives at International Data
Corp., a market research firm.
"They've been executing their strategy very well, and
it's been evident in their profitability," Rydning
Last year, about 17.5 percent of all hard drives sold worldwide
had Western Digital's name on it. Seagate Technology led
the market with 28 percent, with Hitachi at 15.5 percent
and Maxtor Corp. at 14 percent, according to IDC.
Shakeel faces growth - and potential growing pains. Through
various acquisitions, the company has doubled its employee
count in two years and now has 24,000 worldwide, including
990 in Lake Forest. It has expanded beyond the typical 3.5-inch
desktop hard drive and added drives to fit notebook computers,
consumer electronics and most recently, tiny 1-inch drives
for MP3 players, cell phones and GPS navigation gadgets.
Another reason for anticipated growth is the looming Seagate
and Maxtor combination, Rydning said.
"(Mergers are) good for the industry. Just the fact
that there are fewer companies in the industry should help
stabilize pricing in the long term," Rydning said.
"In the near term, there could be some benefit to Western
Digital. There probably will be some merger-related losses.
Western Digital is in a good position to pick up share."
Shakeel plans to keep fine-tuning operations, as he has
done for the past six years working alongside Massengill.
"If we can execute the way we have in the past couple
of years, the sky is the limit. Between MP3 and the DVR
market, the growth of the laptop market, if we just keep
our head down, we can be very successful," he said.
"The entire industry has an opportunity. And with less
players, it's like the perfect storm."
Job: CEO of Western Digital
Biggest passion: His family. Lives with wife and two children
in Laguna Niguel.
Hobbies: Golf and music. Favorite bands are the Rolling
Stones and the Eagles; also appreciates jazz and has a few
iPods to prove it.
Book he's reading: "Endangered Values" by Jimmy
Western Digital Corp.
Headquarters: Lake Forest
Employees: 24,000, including 990 in Orange County
Fiscal 2005 revenue/income: $3.6 billion/$198.4 million
2004 revenue/income: $3 billion/$151.3 million
Business: Develops and makes hard drives for computers,
game consoles, personal video recorders.