New IGT boss has plenty on to-do list

Overseeing the day-to-day operations of slot machine manufacturer International Game Technology was not on Patti Hart’s to-do list.

Four years earlier, Hart had left her chief executive officer duties with technology company Pinnacle Systems and was elected to the boards of four public companies, including IGT.

She wasn’t looking for anything permanent.

“I convinced myself I wasn’t going to work full time again,” Hart said.

Until last spring.

Following an IGT board of directors meeting and dinner, Hart was approached about becoming the company’s CEO.

Now, more than eight months into the job, Hart has gained a handle on the gaming industry’s largest slot machine manufacturer, which has gone through financial woes and a major management and employee shake-up in the past year-and-a-half.

Along the way, she picked up an education on the gaming industry.

“Given the transition of where the slot machine industry is going, I thought this would be an appropriate position for me,” Hart said. “We’re moving away from being hardwarecentric. There is a concentration on software, application and content distribution. There is a collision between entertainment and technology, and I have great passions about both.”

Hart had a long career in the technology field when she joined IGT’s board in June 2006. Before the appointment, she had been to Las Vegas only one time — for a convention.

During her nine months as CEO, Hart has logged more airline miles than travel expert Peter Greenberg. She’s ventured across the United States, into Canada, and around the world to meet with some of IGT’s 5,800 employees and many of slot machine maker’s casino customers.

She said it was mostly a listening tour, but she quickly learned gaming is not confined to the Strip.

“It gave me a better understanding of our different business models,” Hart said. “The fixed odds wagering business in the United Kingdom is different from the lottery situation in China, which is different from the Las Vegas Strip, which is different from public gaming in Canada.”

Hart also reacquainted herself with Wall Street. She found quickly that many of the same institutional and individual stockholders that invested in the technology firms she managed are now finding their way into the slot machine business.

The analyst community seems willing to give her an extended honeymoon period as she works her way through the first year. Hart said she plans to present a definitive strategic plan for IGT’s future to the company’s board by her anniversary in April.

“Management made it clear that IGT will be a leaner and meaner organization going forward,” Macquarie Securities gaming analyst Joel Simkins told investors. “Management emphasized that it is ruthlessly measuring the company and staff members through key performance indicators.”

Hart replaced TJ Matthews as CEO after the bulk of the company’s cost-cutting efforts had been implemented. More than 700 jobs were eliminated, along with the positions of several high-level corporate executives.

Cost cutting measures amounted to nearly $200 million in annual reductions. Hart had to implement several additional cost-cutting moves, including some layoffs, this summer.

After meeting with Hart, JP Morgan gaming analyst Joe Greff told investors he was impressed with her leadership style.

“She is implementing the right cost-cutting measures and methodically evaluating every initiative with return on investment in mind,” Greff said. “She possesses a renewed, hyper focus on delivering improving game content and is prudently sprinkling her management team with talent from outside the industry to complement existing IGT management.”

Hart, who retained her position on the company’s board, said the transition to the CEO position was an easy one. She considered herself an active board member with an extreme interest in the business.

But overseeing things from the CEO’s chair is much different from a part-time board member’s role.

“I’m more of a transformational leader than an incremental leader,” Hart said. “That said, IGT needs some re-energizing. We realize the competition is nipping at our heels and we can’t rest on our laurels. It’s time to double-down and get going again.”

She views not having a background in gaming as a plus because she can look at IGT’s future with an unbiased opinion. Hart can also draw support from IGT’s new chairman, Phil Satre, the former head of Harrah’s Entertainment.

“I’m a fan of splitting the chairman and CEO duties,” Hart said. “Two heads are better than one for a company in transition. I’m a better CEO when I have a partner, and Phil is a terrific partner.”

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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