Interview with Damien Atkins, Panasonic Corporation of North America
Rapid turnover in the C-suite, full-blown proxy fights, merging business cultures – Panasonic’s GC Damien Atkins has borne witness to it all. He discusses his M&A successes, and one pivotal failure, along with his plans for Panasonic’s in-house operations and how to face global compliance concerns. His remarks have been edited for length and style.
MCC: Congratulations on being included in the list of the “Top 100 Most Influential Blacks in Corporate America” by “Savoy.” I understand the magazine received over 500 nominations.
Atkins: Thank you. It was particularly gratifying because it recognizes African-Americans who not only have made an impact on corporate America but who have also contributed to the betterment of their communities.
MCC: Tell us a little about yourself and your background.
Atkins: I’m originally from Oakland, California. My father joined the Foreign Service when I was young, so a lot of my boyhood years were spent in Ecuador, Panama and a number of other countries. After graduating from Banneker High School in Washington, D.C., I received a B.A. from Stanford, then moved back east to attend NYU law school.
Upon graduation, I joined the corporate department of Chadbourne & Parke, left it to join an Internet startup, govWorks, then returned when, nine months later, the dot-com filed for bankruptcy. Sometime in my seventh year, I left again, this time for good, to join the legal department of AOL as a junior member of its M&A team, eventually becoming vice president, responsible for M&A, corporate governance and real estate matters. I stayed with AOL through its spin-off by Time Warner and the relocation of its headquarters from Northern Virginia to New York City. About a year ago I joined Panasonic USA.
MCC: That must have been an interesting time to be at AOL.
Atkins: Absolutely. I think we cycled through three CEOs and as many general counsel during my time there. But I would not trade that experience for anything. I got to meet some really top-notch people who showed me what it means to be an excellent general counsel – and, quite frankly, an excellent leader. Folks like Julie Jacobs, the current general counsel, who’s been with AOL since at least 2000; her predecessor as GC, Ira Parker, with whom I still communicate on a fairly regular basis for insight; and Tim Armstrong, AOL’s current CEO and a former president of Google America’s operations. Great people, great industry, just an all-around great experience.
MCC: Can you talk about some of the changes you’ve brought to Panasonic and its in-house legal operations?
Atkins: I would have to start with the compliance program. Compliance in North America is very, very decentralized, and Panasonic felt that it was time for someone to take a fresh look at it. What are we doing right? What are we doing wrong? How can we make this a best-in-class program? We’ve already changed our messaging and training. Ling-Ling Nie, Senior Counsel and Director of Compliance and Ethics, has been leading the charge. She’s done some pretty out-of-the-box things, like having a former convict come in and speak to Panasonic employees about what can go wrong when you don’t have a culture of compliance. Our focus now is on how to measure the effectiveness and impact of these changes.
In terms of how the legal department functions, we’ve implemented some changes that may sound small but have had a very large impact on how our team performs. One involves recruiting and hiring. Unlike the usual law firm or legal department interview process where you meet someone, you talk for 30 minutes, you check a box and, voilà, they’re hired, we’ve started using DiSC personality assessments and skills tests that go to core competencies. For example, a day before the final interview, we might dump a lot of data or a contract on a candidate’s desk and ask him or her to create a five-page PowerPoint, present it to a group of executives and be prepared to answer questions.
We’re also about to roll out a new electronic billing system, we’ve beefed up our in-house M&A capability and, I know this doesn’t sound sexy, but we’re undertaking some organizational changes, chiefly in terms of scalability, to ensure that the department will be a better fit for where Panasonic sees itself in two or three years.
MCC: Have you considered bringing in non-lawyers, such as MBAs or procurement specialists?
Atkins: There are certain critical skills that, if you look at where the business is today and where it’s going, we lacked when I got here. We’re a player in solar power generation. But while the firm has solar project finance teams, we didn’t have the in-house legal capability to support them, so we brought someone in to take care of that.
The challenge is figuring out what is our baseline level of performance from an operational perspective. What are the key processes and procedures that we do on a day-to-day basis, and how can we do them better? You start off by mapping those processes. For example, what is our process for responding to subpoenas, and is it the best way? Our deep dive into process includes looking at outside counsel spend. How many attorneys at how many law firms are we working
with, and are we working with them effectively? E-billing will allow us to have a baseline and to make year-over-year and even quarter-over-quarter comparisons.
MCC: Are there any personal accomplishments that you’d like to highlight?
Atkins: It’s not really my own personal accomplishments, but I do
take great pride in watching people who are given authority and space within which to work and grow, exceeding expectations.
We had a very flat structure when I joined. Everyone reported to the general counsel for the most part. There was no leadership team so to speak. I’ve put certain people in key leadership roles. For a lot of them, it’s been their first time as a leader, and seeing them develop as leaders has been a very pleasant experience for me. At the end of the day, the goal of any leader is, or should be, to find one’s own replacement. Seeing how the organization has grown stronger simply from the unleashing of people’s talents has been very, very gratifying.
MCC: What have been some of your greatest challenges and how have you overcome them?
Atkins: Panasonic is a 100-year-old company, which has been in the United States since 1959. For most of its history, its primary focus was on shipping products made in Japan for sale to U.S. consumers (or sometimes B2B, in the case of its industrial products). As a result, the entire organization’s processes, as well as the mind-set of its people, have evolved to optimize the achievement of those goals. So the biggest challenge has been working with folks who have done the same thing for an extended period of time, who know the world has changed and the company is changing but don’t know (and fear finding out) the impact of these changes on their own roles. Making the change-management process as smooth as possible has required a lot of over-communicating, a lot of saying over and over again, “We have to be open to change. Some hard choices may have to be made. But at the end of the day, we’ll all be better and stronger for it.”
It’s also required a lot of humility on my part because while I have a good sense of where our department needs to go, I also know that I don’t have all the right answers, and that my way may not necessarily be the best way. As long as things are headed in the right general direction, I have to be open to making adjustments and to remember that the more employees who are involved in the change process, the more they will have a stake in its success. So I encourage them to speak up if they see me veering off the path or a boulder ahead that isn’t on my radar.
MCC: You’re very well-known for your expertise in leading mergers and acquisitions, and for managing corporate governance. Can you share some of your experiences in these areas?
Atkins: I’ve handled both big and small M&A deals, but curiously, it’s usually the smaller transactions that end up resonating the most. One major deal that comes to mind is actually one that didn’t work out well. It was 2007 or 2008, and I was at AOL. We were trying to buy a Swedish online advertising firm. We were offering almost $1 billion for it, but at the end of the day, it was rejected. My sense was that the rejection was not for purely business reasons; there were also some political and nationalistic reasons involved. Being over in Stockholm in January, working through the peculiarities of Swedish anti-takeover law and various other cultural issues and then, after all that, the deal not going through…that more deals fall apart than actually get done is a humbling lesson that all M&A practitioners eventually learn. That was my rite of passage. All that time in Europe, all those complex issues, and then one day, seemingly out of nowhere, it all gets blown to pieces.
In the corporate governance area, I recall while at AOL winning, against all odds, a full-blown proxy fight. I think it was the first time this particular activist investor had ever lost a proxy fight. Living through that experience, which went on for seven or eight months, was really transformative for me because of how closely I was working with the board of directors, as well as with outside counsel, proxy solicitors, communications professionals – all these cross-functional teams toward the same goal. And you don’t know if you’re going to win or lose until the day of the annual meeting.
Another corporate governance highlight was working with so many top-notch, high-intelligence, highly driven, extremely experienced AOL board members, such as Jim Stengel (a former global marketing officer for Procter & Gamble), Hugh Johnston (executive vice president and chief financial officer at PepsiCo), Eve Burton (the GC of Hearst), Alberto Ibargüen and Fredric Reynolds (a former CFO of CBS), among many others. Being there at the beginning and seeing these individuals with their unique skill sets, outlooks and experiences come together to form what, in my view, was one of the best-functioning boards in the country was quite an education and something I still think about frequently.
MCC: How do you go about ensuring legal and regulatory compliance across Panasonic and all of its affiliates?
Atkins: Unlike AOL, which was smaller and much more centralized – while it had subcultures, like the Huffington Post, you could still have a unified and strong compliance program – Panasonic USA is very decentralized, very siloed, and the nature of the businesses it is engaged in are radically different. Consequently, ensuring compliance does not lend itself to a “one size fits all” approach.
Panasonic Avionics Corp, for example, has a singular focus – customized in-flight entertainment and communications solutions – and operations in 30 countries. Panasonic Enterprise Solutions Co., on the other hand, is a conglomeration of disparate businesses, ranging from a unit that develops large-scale solar energy systems to one that installs large video screens and scoreboards at sporting and entertainment venues. It operates primarily in North America. Panasonic Avionics has its own compliance officer with global responsibility – Rob Lindquist – who, being so close to the business, has done a fantastic job of tailoring a compliance program that works really well for it.
Add to that the fact that we are also a subsidiary of a Japanese corporation. If you look at Panasonic as a whole, there are certain global compliance concerns that have to be integrated to each one of these different businesses. So whether it’s antitrust, anti-bribery, those kinds of things, those have to be another one of the cornerstones around which you design the program. And they might not necessarily be priority number one at some of these smaller businesses, but you have to do it because we are a part of that global company.
Being a subsidiary of a Japanese company, the approach to compliance varies considerably geographically and culturally on a global basis. So in North America, the change has been more on business ethics, creating a culture of compliance, messaging, ethical awareness. Whereas in a lot of places, in Japan, Europe and elsewhere, it tends to be much more based on training, which is equally important. It’s harmonizing the two approaches for something that makes sense, not only just for the U.S. businesses but also as part of an integrated multinational Japanese corporation.
MCC: What advice would you give to new general counsel looking to improve their in-house legal department?
Atkins: First, your success is dependent upon your best people and your worst people, your high performers and your low performers. You’re only as good as your people, so make sure that you have your best people in the highest impact, most critical roles, and deal with your lower performers as quickly as possible.
Second would be understanding what the value equation is for an in-house lawyer. What I mean by that is lawyers are trained to believe that I’m adding value because I am satisfying or finishing or completing a set number of stated legal tasks or functions. “Draft me this complaint, file this lawsuit, manage costs,” and so on. But the true measure of value is what I call third-eye skills, or taking care of the unstated or unknown needs of clients. The only way to really do that is to know the business as well, if not better than, your client.
Be humble and understand that you don’t know everything, so you have to approach everything with a child’s mind and be willing to learn as much as possible and listen. It’s amazing how much you can learn and find out about your clients and what their issues are that they might not even be aware of just by sitting back and listening. It’s understanding that how you add value has very little to do with how busy you are. It’s really what impact you are having on the business. Are you increasing revenue? Are you increasing profitability by cutting costs? Are you bringing new business to your clients? Otherwise, they can just put anyone in the chair to do legal work. Understanding that to truly, truly add value and understanding how the value equation works would be my biggest set of advice.
MCC: Are there any individuals or books that have inspired you and helped you develop personally or professionally?
Atkins: Wow, funny you say that. Aside from my parents, one individual is probably my grandmother. She’s been a great inspiration to me. She passed away a couple of years ago, but she started off her career as a librarian. Somehow, some way, she decided to enter politics in Oklahoma back in the 1960s and became secretary of state and held various other positions. She was very active politically in Oklahoma in the ’80s.
In terms of books, one that I’m reading now that is extraordinarily helpful is “You Gotta Have Wa,” by Robert Whiting, which examines the differences between American and Japanese culture through the prism of baseball – I have not been able to put it down. Another book would be “The Truth About Dishonesty” by Dan Ariely. If you’re looking at changing a compliance program, anything written by Dan Ariely is very, very helpful.