high performance culture

Could a New Channel Model Lead to Sales Amplification?

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Over the years, I have helped successful companies and start-ups improve and strengthen their Channel and Strategic Alliances programs. The results have been good, but could they have been better? Keep reading to learn about the benefits of enhanced business ecosystems.

Word cloud for strategic thinking.

Most traditional channel models support Distributors, Resellers, OEMs, and ISVs. The business mainly flows upwards to the main vendor. If that vendor has popular, widely used products (think Microsoft and Oracle), partner business can be good because the demand stays consistent. But sales pipelines suffer when that is not the case.

Sales Channel business is not the main source of revenue for most companies, but it can become the largest and most scalable revenue source for nearly any business. Just think about the money left on the table by not adopting a growth mindset and executing a new and better strategy.

In the summer of 2016, I attended the “Sage Summit” in Chicago. It was impressive to see the Sage Group’s efforts to build, strengthen, and protect their Customers and Channel Partners community. They tried to foster higher levels of collaboration between the various types of partners – implementation services, consulting, staff augmentation services, complementary product vendors, etc. They had created their own highly successful Business Ecosystem, which is an excellent proof point.

When designing a channel partner program, my focus has always been on balancing promoting and protecting partners’ business with ensuring end customers have the best possible experience (and some recourse when things do not work out as expected). I have used a variety of methods to accomplish those goals, including creating a systematic approach to seeding relationships between partners’ complementary offerings and facilitating even greater business activity.

Nearly a year ago, I began working with a management consultancy run by Robert Kim Wilson, whose business vision is based on his book, “They Will Be Giants.” Links for this book and other relevant resources are provided at the bottom of the post. Kim asserts that Entrepreneurs with a Purpose-Driven Business Ecosystem (PDBE) are more successful than those without one, and he provides examples to support his point. Having experienced Kim’s PDBE, I see how purpose fosters trust and collaboration.

As I did more research, I found that thought leaders in this space have increasingly focused on Business Ecosystems and Business Ecosystem Organizers (such as Sage in the earlier example). Those findings reinforced the PDBE approach, and external validation like this is always good.

From my perspective, it was just as important that this concept apply to businesses of any size – especially for small to midsize businesses. The fun part for me is exploring a specific business, analyzing what they do today, and quantifying the potential benefits of adopting this new strategy.

So, how does this new type of Business Ecosystem work?

  • The Business Ecosystem Organizer expands the overall network, vets new “Business Ecopartners,” and provides a framework or infrastructure for the various Business Ecopartners to get to know one another, exchange ideas, and discuss opportunities.
    • This can become an incredibly sustainable revenue source for companies willing to invest time to collaborate and share ideas in order to grow and support the Business Ecosystem.
  • Business Ecopartners will have access to trusted resources to augment existing business and take on new, bigger projects by leveraging the available expertise.
    • Suppose that you have products or services that work with commercial CRM (Customer Relationship Management), ERP (Enterprise Resource Planning), or SCM (Supply Chain Management), and have seen a growing demand for functionality that relies on highly specialized technologies like:
      • Cryptocurrency support.
      • Blockchain for financial transactions and things like traceability in your supply chain or IoT data.
      • AI (artificial intelligence) and ML (machine learning) to detect patterns and anomalies – such as fraud detection, Deep Learning/Neural Networks for image recognition or other complex pattern recognition.
      • Graph databases to better understand a business and infer new ways to improve it.
      • Knowledge Graph/Semantic databases to create deeper meaning and understanding with data from multiple sources – assisting in deeper understanding and Transfer Learning (which also has an AI tie-in).
    • Building these practices in-house would not be practical or cost-effective for most businesses, so partnering becomes very attractive.
      • This type of business relationship can also be very attractive to a Business Ecopartner because someone else handles prospecting, sales, billing, account management, etc.
  • Other Business Ecopartners can leverage your products or services for their projects and engagements, expanding their addressable market and creating additional revenue sources for the other ecopartners.
  • By actively participating in this network, any business can now compete on imagination and innovation – providing a more comprehensive solution that could become a major source of differentiation from their competitors.

Value realized from this New Business Ecosystem model:

  1. These new sources of business and talent can become a real competitive advantage for your business.
  2. This becomes the source for Sales Amplification because each business is, directly and indirectly, expanding its reach and growth potential.
  3. The weighted (based on capabilities, capacity, responsiveness, and Ecopartner feedback) Business Ecopartner network model could lead to exponential business growth – a winning strategy for any business.

Next Steps

If this sounds interesting and you would like to discuss how it could look for your business, contact me to schedule an exploration call.

References:

This entry was posted in Business Ownership and Management, Consulting, innovation, leadership, Selling, strategy and tagged , , , , , , , , , , , , , , , , .

The Value Created by a Strong Team

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I participated in an amazing team-building exercise as a Board Member for the Children’s Hospital Foundation of Wisconsin. We were heading down a path that would lead to a decision on whether to invest $150M in a new addition. The CEO at the time, Jon Vice, wisely determined that each committee needed strong teams to thoroughly vet the idea from every possible perspective.

Canada Geese flying in a V formation with a brightly colored but dark sky background
Purpose-driven teamwork. An amazing photo by Joe Daniel Price found on TheWallpaper.co

The process started with being given a book to read (“Now, Discover Your Strengths” by Marcus Buckingham & Donald O. Clifton, Ph.D.) and then completing the “StrengthsFinder” assessment using a code provided in the book. The goal was to understand gaps in perception (how you view yourself vs. how others view you) so you could better understand your strengths and weaknesses. Then, teams were created with people having complementary skills to help eliminate weaknesses from the overall team perspective. The results were impressive.

Over my career, I have been involved in many team-building exercises and events – some of which provided useful insights. However, most failed to combine the findings meaningfully, provide useful context, or offer actionable recommendations. Key areas that were consistently omitted were Organizational Culture, Organizational Politics, and Leadership. Those three areas significantly impact value creation vis-à-vis team effectiveness and commitment.

When I ran my consulting company, we had a small core team of business and technology consultants and leveraged subcontractors and an outsourcing company to take on more concurrent projects, as well as larger, more complex ones. This approach worked for three reasons:

  1. We had developed a High-Performance Culture that was based on:
    • Purpose: A common vision of success, understanding why that mattered, and understanding how that was defined and measured.
    • Ownership: Taking responsibility for something and being accountable for the outcome. This included responsibility for the extended team of contractors. Standardized procedures helped ensure consistency and make it easier for each person to accept responsibility for “their team.”
    • Trust: Everyone understood that to be effective and responsive, they needed to trust and support each other and trust each other’s judgment. If there was a concern, we focused on context and process improvements to understand what happened and implement changes based on lessons learned. We avoided personal attacks for the good of the entire team.
  2. Empowerment: Everyone understood that decision-making involves risk, while also recognizing that delaying an important decision could be costly and create more risk. Therefore, each member was responsible for making good decisions as needed and communicating changes to the rest of the team.
  3. Clear and Open Communication: The team was very transparent and honest. When an issue came up, they tried to resolve it with that person first, then escalated if they couldn’t reach an agreement and decided to seek the team’s consensus. Everything was out in the open and done in a constructive, collaborative spirit.

People who were not a good fit would quickly wash out, so our core team consisted of trusted experts. A friendly competition helped raise the bar for the entire team, but when needed, the other team members became a safety net for each other.

We were all focused on the same goal, and everyone realized the only way to succeed was to work together. Win or lose, we did it together. The strength of our team created tremendous value – internally and for our customers that we sustained for several years. That value included innovation, higher levels of productivity and profitability, and an extremely high success rate.

This approach can work at any level but is most effective when it starts at the top. When employees see their company leaders behaving this way, it provides a model and sets expectations for everyone under them. If there is dysfunction within an organization, it often starts at the top – by promoting or accepting behaviors that do not benefit the whole of the organization. With a strong and positive organizational culture, the value of strong teams is multiplied and becomes an incredible competitive advantage.

This entry was posted in Business Ownership and Management, Career, leadership, Life and tagged , , , , , , , , , .

One Successful Approach for Managing Innovation

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When I owned a consulting company, we viewed innovation as an imperative. It was the main driver of differentiation, credibility, and opportunity. We had an innovation budget, solicited ideas from the team, and evaluated those ideas quarterly.

Almost as important to me was that this was fun. It allowed everyone on the team to suggest ideas and participate in the process. That was meaningful and supported the collaborative, high-performance culture that had developed. The team was inspired and empowered to make a difference, and that led to an ever-increasing sense of ownership for each employee.

The team also had a vested interest in having the process work, as quarterly bonuses were paid based on their contributions to the company’s profitability. There was a direct cause-and-effect correlation with tangible benefits for every team member.

We developed the following 10 questions to qualify & quantify the potential of new ideas:

  1. What will this new thing do?
    • Be very detailed, as this was used to create a shared vision of success based on the presented idea.
  2. What problem(s) does this solve, and how so?
    • This seems obvious, but selling this new product will be an uphill challenge if you are not solving a problem (such as “lack of organic expansion”) or addressing an immediate pain point.
  3. What type of organizations have those problems and why?
    • This was fundamental to understanding whether a fix was possible from a practical perspective, what value that fix might have for the target buyer, and how much market potential existed to scale this new offering.
  4. What other companies have created solutions or are working on solutions to this problem?
    • The lack of competition today does not mean you are the first to attack this problem. Due diligence can help you avoid repeating others’ failures by learning from their lessons and avoiding similar pitfalls.
  5. Will this expand our existing business, or does it have the potential to open up a new market for us?
    • Each answer has upsides and downsides, but breaking into a new market can take more time and be more difficult, time-consuming, and expensive.
  6. Is this Strategic, Tactical, or Opportunistic?
    SOX Brochure Cover
    • An idea may fall into multiple categories. When the Sarbanes-Oxley (SOX) Act became law, we viewed a new service offering as a tactical means to protect our managed services business and an opportunistic means to acquire new customers and grow the business. While this is not true innovation, it was an offering that flowed from this defined process.
  7. What are the Cost, Time, and Skill estimates for developing a Minimally Viable Product (MVP) or Service?
  8. What are the Financial Projections for the first year?
    • Cost to develop and go to market.
    • Target selling price, factoring in early adopter discounts.
    • Estimated Contribution Margin Ratio (for comparison with other ideas being considered).
    • Break-even point.
  9. Would we be able to get an existing customer to pre-purchase this?
    • A company willing to provide a PO committing to purchasing the MVP within a specific timeframe increased our confidence in the idea’s viability.
  10. What are the specific Critical Success Factors to be used for evaluation purposes?
    • This lesson learned over time helped minimize emotional attachment to the idea or project and provided objective milestones for critical go/no-go decision-making.

This process was purposeful, agile, lean, and fairly aggressive. We believed it gave our company a competitive advantage over larger companies that tended to respond more slowly to new opportunities and smaller competitors that did not want to venture outside their wheelhouse.

With each project, we learned, became more efficient and effective, and made better investment decisions that positively impacted our success. We monitored progress on an ongoing basis relative to our defined success criteria and adjusted or sunset an offering if it stopped providing the required value.

The process was not perfect…

For example, we passed on some leading-edge ideas, such as a “Support Robot” in 2003, an interactive program that used a pseudo machine-learning algorithm. It would be trained using historical log files, tested quickly and safely in a representative pre-production environment, refined as needed, and ultimately validated and rolled out.

This automation could have been used with our existing managed services and Remote DBA customers to further mitigate the risk of unplanned outages. Most importantly, it would have provided leverage to take on new business without jeopardizing quality or adding staff – thereby increasing revenue and profit margin.

At the time, we believed this would be too difficult to sell to prospective customers (“pipe dream” and “snake oil” were some of the adjectives we envisioned), so it appeared to lack a few items required by the process. Live and learn.

In summary, a defined approach to something as important as business needs innovation to grow and prosper, as best demonstrated by market leaders like Amazon and Google (read the 10-K Annual Reports to better understand their competitive growth strategies, which are largely based on innovation).

Implementing this approach within a larger organization requires additional steps, such as securing buy-in from a variety of stakeholders and aligning with existing product roadmaps, but it remains key to scalable growth for most businesses.

This entry was posted in innovation, leadership, strategy, Technology and tagged , , , , , , , , , , .

Good Article on Being an Entrepreneur

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Nearly every morning, I start the day by reviewing news on business, technology, and finance/markets. Occasionally there is a general interest article that I stumble across. Today it was a short article about Curt Culver, Co-Founder of Culver’s Restaurants.

Several great points seem like common sense in hindsight but are often well out of focus during the “heat of the battle” as you build your business. Mr. Culver touches several of them:

  1. The Importance of having the proper Work / Life Balance
    • For me personally, this was one of the toughest aspects of growing my business. I worked 100+ hours a week, traveled at least 50% of the time, and was often “not there,” even when spending time with my family.
      • My habits also set expectations for others on the team, and I later realized this also created strife at home.
    • The turning point for me was when my youngest daughter, then 4 years old, told her twin brother and older sister, “Daddy really does love us; he just works all the time so that we can live here and have all of this stuff.” It was painful enough to hear that, but it was a wake-up call about what is really important in life – people (especially family and friends), not “stuff.”
  2. The Need to Develop others on your Team
    • From past experiences, I understood the need to hire the best people you could afford – people with complementary skills (not just clones of yourself) and who were better than you in at least one aspect. That diversity added value, while the similarities made it easier to “get on the same page” quickly. From there, it was important to understand their goals and work together on career planning early – something that adds value to both parties.
    • One of my goals in developing my team was to have everyone understand the big picture and empower them to make good decisions for the business. 
      • While most of this happened, my goal was for each and every person to think and act like an owner of the business. That level of engagement and accountability only happened with my most senior person, who was also my first hire and owned a small part of the company.
    • The moment when I recognized success was during a mission-critical ERP system upgrade for our largest customer – a multi-billion-dollar semiconductor reseller. I sat in on project and team meetings, reviewed reports, and asked a few questions, but that was it. It was a very proud and empowering moment for me.
      • The weekend of the pre-migration test, I received a call telling me that everything had been successful and that the migration was going forward the next weekend.
      • The following weekend I received a nightly summary email, and on Sunday afternoon received a call telling me that the new system was operational and supporting production with ease.
  3. Culture
    • Mr. Culver states, “Culture is all about people.” From my perspective, that is mostly true, but my experiences show other important dimensions of culture.
    • To me, your company’s cultural identity starts as something aspirational and later grows into the glue that bonds every member of your team. It helps bring out the best in everyone, including camaraderie and support that come from working with people you like and trust.
      • There were two unexpected consequences of actively focusing on culture, which were:
        1. We quickly transformed into a High-Performance Organization. Everyone pushed to continuously “raise the bar.” There was healthy competition, but each team member was a “safety net” for others. Winning as a team mattered far more than winning as an individual.
        2. New hires who were not a good fit were recognized quickly and usually quit within the first 2-3 weeks. I only had to terminate one person who wasn’t a good fit during the probationary period.
  4. Having a Support System
    • Mr. Culver addresses failure and the importance of family in supporting you in times of need.
    • One of the biggest lessons I learned was that nothing that I did or accomplished with my company would have been possible without the support of my wife, children, parents, and in-laws (the latter two providing financial support during the early years in times of need).
      • With understanding comes humility.

These are lessons learned that can be applied to any size organization and, in my opinion, are a great investment in your company’s future growth, value, and longevity.

Here is the link to the article referenced

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Non-Linear Thought Process and a Message for my Children

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I have recently been investigating and visiting universities with my eldest daughter, a Senior in High School. Last week we visited Stanford University (an amazing experience) and spent a week in Northern California on vacation. After being home for a day and a half, I am in Texas for a week of team meetings and training.

On the first night of a trip, I seldom sleep, so I listened to the song “Don’t Let It Bring You Down” by Annie Lennox, a cover of a Neil Young song. That led to a YouTube search for the original Neil Young version, which led to me listening to “Old Man” – a favorite song of mine for over 30 years. That led to some reflection, which ultimately led to this post.

I mention this because it is an example of the nonlinear or divergent thought process (generally viewed as a negative trait) that occurs naturally for me. It helps me “connect the dots” faster and more naturally. It is a manner of thinking associated with ADHD (again, something generally viewed as negative). The interesting thing is that to fit in and succeed with ADHD, you tend to develop logical systems for focus and consistency. That has many positive benefits for me – such as systemic thinking, creating repeatable processes, and automation.

Photo by Cu00e9sar Gaviria on Pexels.com

The combination of linear and non-linear thinking can really fuel creativity. The downside is that it can take quite a while for others to see the potential of your ideas, which can be extremely frustrating. But you learn to communicate better out of necessity. The upside is that you tend to create relationships with other innovators because they think like you, making you relatable and interesting to them. The world is a strange place.

It is funny how there are several points in your life when you have an epiphany, and things suddenly make complete sense. That makes you realize how much time and effort you could have saved if you’d figured something out sooner. As a parent, I always try to identify and create learning shortcuts for my children so they reach those points much sooner than I did.

I started this post thinking that I would document as many of those lessons as possible to serve as a future reminder and possibly help others. Instead, I decided to post a few things I view as foundational truisms in life that could help foster that personal growth process. So, here goes…

  1. Always work hard to be the best, but never let yourself believe you are the best. Even if you truly are, it will be short-lived, as there are always people doing everything they can to be the best. Ultimately, that is a good thing. You need to have enough of an ego to test the limits and capabilities of things, but not one that is so big that it alienates or marginalizes those around you.
  2. Learn from everything you do – good and bad. Continuous improvement is so important. By focusing on this, you constantly challenge yourself to try new things and find better (i.e., more effective, more efficient, and more consistent) ways to do things.
  3. Realize that the difference between a brilliant and a stupid idea is often perspective. Years ago, I taught technical courses, and occasionally someone would describe something they did that seemed strange or wrong. But if you asked questions and tried to understand why they did what they did, you would often identify the brilliance in that approach. It is both exciting and humbling.
  4. Incorporating new approaches or the best practices of others into your own proven methods and processes is part of continuous improvement, but it only works if you can set aside your ego and keep an open mind.
  5. Believe in yourself, even when others don’t share that belief. Remain open to feedback and constructive criticism as a way to learn and improve, but never give up on yourself. There is a huge but sometimes subtle difference between confidence and arrogance, and that line is often drawn at the point where you can accept that you might be wrong or that there might be a better way to do something. Become the person people like working with and not the person they avoid or want to see fail.
  6. Surround yourself with the best people that you can find. Look for people with diverse backgrounds and complementary skills. The best teams I have ever been involved with consisted of high achievers who constantly raised the bar for each other while simultaneously creating a safety net for their teammates. Those teams grew and did amazing things because everyone was very competitive and supportive of each other.
  7. Keep notes or a journal because good ideas are often fleeting and hard to recall. Remember, good ideas can come from anywhere, so keep track of others’ suggestions and make sure you attribute them to the proper source.
  8. Try to make a difference in the world. Try to leave everything you “touch” (job, relationship, project, whatever) in a better state than before you were there. Helping others improve and leading by example are two simple ways of making a difference.
  9. Accept that failure is a natural obstacle on your path to success. You are not trying hard enough if you never fail. But you are also not trying hard enough if you fail too often. That is very subjective, and honest introspection is your best gauge. Be accountable, accept responsibility, document the lessons learned, and move on.
  10. Dream big, and use that as motivation to learn new things. While I funded medical research, I learned about genetics, genomics, and biology. That expanded into interests in nanotechnology, artificial intelligence, machine learning, neural networks, and interfaces such as natural language and non-verbal/emotional communication. Someday I hope to tie these together to help cure a disease (Arthritis) and improve the quality of life for millions of people. Will that ever happen? I don’t know, but I do know that if I don’t try, it will never happen because of anything I did.
  11. Focus on the positive, not the negative. Creativity is stifled in environments where fear and blame rule.
  12. Never hesitate to apologize when you are wrong. This is a sign of strength, not weakness.
  13. And above all else, honesty and integrity should be the foundation for everything you do and are.

Hopefully, this will help my children become the best people possible, ideally early on in their lives. I was 30 years old before I had a clue about many of these things. Until that point, I was somewhat self-centered and focused on winning. Winning and success are good things, but are better when accomplished the right way.

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