Leadership Issues: The new CRO openly referred to K1 as our "masters." This disturbing language raises concerns about how employees are perceived and valued within the organization.
High Employee Turnover: Top-performing salespeople are leaving for competitors and organizations that actually care, and they will likely eat Onit's lunch for years to come.
Poor Strategic Decisions: At his last company E2Open, Farlekas's replacement attributed poor earnings after Michael’s departure to "new and amateur sellers handling huge accounts they weren’t prepared to handle." That was a cause of Michael's poor decision-making and the environment he creates around him as a leader. Unfortunately, Michael has repeated this mistake at Onit, resulting in unprecedented churn specifically in the sales org.
Lack of Strategic Direction: There is no clear plan for integrating, cross-selling, and selling outside of the US, largely because the various products overlap significantly, offering little differentiation. Not to mention, other competitors such as Ironclad, Docusign, and Brightflag offer superior products with a much more innovative team that ACTUALLY make progress with their product suite. Michael doesn’t even know which products have a sales team, and what the products even do, he simply entered the building and flipped every desk upside down without any care of the impact.
Out of Touch Leadership: While Farlekas claims to empathize with those he laid off, his 2023 total compensation exceeding $7 million (google his salary in 2023 to find this info) suggests a significant disconnect between leadership and the realities faced by employees. While it’s not Onit’s responsibility to manage finances of its employees, many of them have gone 3 + years without even a 3% raise in the midst of the highest inflation we’ve seen in 40 years. Why? Because Onit doesn’t care if its employees leave, as it translates into a higher EBITDA margin.
K1 investment Management is the Worst investment firm I’ve ever had the misfortune of working for in my career, and my time at Onit has confirmed I will NEVER work for a K1 portfolio company again - I would strongly advise potential job applicants to do the same.
Takeaway: Onit is a pig of a company, and K1 is going to continue to put lipstick on it to make it look good via EBITDA margin, but under the hood, it’s an absolute trainwreck. The only reason they are now profitable is because they have acquired profitable companies, and all of the employees from those companies have left Onit after seeing the trainwreck that it is.
