To say that Tom Adams is fearless would be understating it. He has braved Atlantic storms in a small sailboat and watched a civil war from his window. Also, he started at Enron the day everything went bust—something that might have dissuaded another man from taking up the keys to the corner office. But not Tom Adams. He rebounded and joined Rosetta Stone, the language instruction company where, as its CEO, he took the company public this past April. He says, “Even though I had been advised that this was not the ideal time [during the recent recession] … you should go public when you are ready, not when the markets are ready.” His boldness paid off. The Rosetta Stone IPO became the best performing IPO in the U.S. in Q1 2009, raising $129 million.
Executives know what a barrier the lack of a foreign language can be in a global market. Poor language skills in a foreign country can result in costly errors and ruin credibility and trust. The Rosetta Stone software aims to be a resource for companies that, among other things, need to address the differences that arise in a global workforce when multiple cultures meet.
Rosetta Stone sells software that teaches foreign languages by pairing words with images and using voice-recognition to help with pronunciation and accent. The company, whose yellow kiosks are ubiquitous in airports and malls, was founded on two core beliefs: that the natural way people learn languages as children remains the most successful way to learn a language, and that interactive CD-ROM and online technology powerfully replicates the immersion method for learners of any age. This approach is a cornerstone of the culture at Rosetta Stone that, according to Adams, “… is a labor of love and … something that everyone who joins the company starts to feel.”
When asked about the success of the company Adams explained that it’s an organization “of people who care deeply about what we are trying to accomplish and who are committed to changing how people learn a language.”
Believing in the business and the value of learning languages, Tom Adams joined the company in 2003 following the death of the CEO Allen Stoltzfus, whom he met during a brief consulting project. Adams is fluent in three languages: Swedish, French and English. And, while in China on business, he used the Rosetta Stone platform to learn basic Chinese. “I don't think if I only spoke English I would have had the depth of enrichment, insight, and engagement in China that I achieved because I spoke Chinese” he says.
Under Adams’ leadership, Rosetta Stone has revolutionized language-learning across the globe. Through its unique approach, it teaches 31 languages to millions of people in more than 150 countries. Adams says, “[My vision is that] we are going to … make it possible for anyone, anywhere, to learn a language naturally and successfully, whether [that person is] an Egyptian kid or a baby boomer.”
Rosetta Stone has sold its software to more than 10,000 schools and universities. Also, it has contracts with the US Military Academy at West Point, the Army and the State Department. They also work with corporations such as Whole Foods and Pitney Bowes who use the software to train employees. According to Adams, there are several companies on the New York Stock Exchange that have reached out to Rosetta in the midst of mergers that involve multiple cultures. For example, when IBM was selling their computer division to Lenovo they had a need for executives to speak Chinese, and the Chinese executives wanted to speak English so their executives were more international and multi-cultural. This sentiment is echoed by Trevor Baillie of Pitney Bowes, PSI. "In today's diverse market, reducing language barriers is key to any business' future. We are pleased to utilize Rosetta Stone as it effectively promotes language skills while encouraging employee engagement."
Rosetta Stone’s newest venture is TOTALe (pronounced tow-TALLY), an online language-learning solution that builds on the effectiveness of the previous offerings by seamlessly integrating them with coach-led practice sessions, fun and engaging language games, and access to native speakers—all live and online. Adams says that “TOTALe is the biggest milestone in our history [in which] the first one was the insight that we could teach interactively without translation and without explanation, and the next one was that you can leverage that learning into a social interaction which completes the cycle of learning.” Further this approach prepares the learner for Rosetta World, an online community where people engage with other learners (and native speakers of the language) to participate in a variety of language games.
Languages a CEO should learn
On the importance of language learning in the global business environment, Adams says there is little doubt that English is the lingua franca of business around the world. All of China is trying to learn English, as is Japan and Korea. However, Adams feels anyone who has traveled widely also knows how limiting it is to converse in English only. Obviously, a person can’t learn every language but most people travel on business to only one or a few countries, so it is possible to learn the select language that will enable a person to experience the kind of engagement that is only possible through fluency. Because of this, and given trends in the global marketplace, many people have become interested in Chinese, Japanese and Arabic, languages that are increasingly important in some companies for people who are trying to climb the corporate ladder.
Adams says, “I always presume that people know that learning a language is life-changing, so they understand that if they want to have more success when they are traveling in China or when they are working with a Hispanic work-force in the U.S., or doing business in Germany, they know that it makes a huge difference if they can speak the language… If you are showing respect for another culture, and are feeling at home and confident, you are able to connect with people in ways that allow you to work better together.
Going Public
When taking the company public Adams followed what he always believed: that truth is best. “People,” he says, “often feel they need to spin. But if you have a good company and stick to the truth, you gain credibility. Investors will feel your sincerity if you tell them your weaknesses as well as your strengths.” Asked what advice he has for other companies considering going public, Adams explained, “You should look closely at your business before looking at the outside world. You can go public at the right time economically, when markets are paying top dollar, but if your company’s not ready it can be disaster.” You have to be ready for it and you need to have faith that you have the right controls over your systems and that you have a business model that works and generates cash flow hea adds. You also have to have confidence that your product team can execute and that your service team is good. It comes down to this: if the business is great, people want to invest and the IPO is a great way for acquiring the funds needed for growth. Like Adams, that sounds fearless.
Quick Facts:
Rosetta Stone
CEO: Tom Adams
Employees: 1500
2008 Revenue: $209 million
Founded: 1992
Address: 1919 N. Lynn St, Arlington, VA 2220
