Interview with Anju Bajaj, CEO, Zuna Infotech, Inc.
Situation: The US economy is slowly trying to get back on its feet, but many potential obstacles remain. In the mid-west, there is good talent with deep enterprise-level IT experience, and lots of new young talent looking for positions. How can private business help to retool the workforce and boost employment?
Advice from Anju Bajaj:
Working in IT services to provide end-to-end technology solutions, we have found highly skilled talent in the American Midwest. In recent years, many seasoned IT professionals have lost their jobs as Midwestern companies downsized. These individuals have deep enterprise level IT skills, but may not be up to speed with the latest technologies. There are also many brilliant young people available who have good web-based technology skills, but no experience in legacy systems or the working of complex enterprises. Our focus is on cross-training both groups as they collaborate to build IT solutions for our customers.
We have found that by organizing these two groups into small teams, guided by a lead who knows both web-based and legacy systems, we can leverage their individual strengths to cross-train each other. It turns out that both sets of workers are smart, capable and, in live project settings, collaborate and acquire technical skills and domain knowledge relatively quickly.
The bigger and more subtle challenge is teaching younger workers about business processes. Each process must fit the workflow so that a process change in one area doesn’t produce difficulties in other areas. For this, you need to have people with deep expertise in functional and domain disciplines as well as technical experts. By teaming talent, we can produce functional experts who understand all areas. We have found that in three to six months of working together, about 25% of team members reach almost guru status; while the remaining 75% have become quite skilled.
Like most leading service providers, we at Zuna Infotech also build capability through our Centers of Excellence. We focus on developing practices within different industry verticals. With this comes knowledge and structure which we can then pass on through train-the-trainer programs.
We have been inspired by the desire to help keep US workers working while retooling their skills. The results that we’ve found to date have been very encouraging. We hope that this can provide a model for other companies.
Situation: Most CEOs manage multi-generational staffs. While there are differences between baby-boomers and younger generations, it remains important to give younger workers meaningful guidance. What have you done to successfully mentor younger workers? If you are one of the younger workers, how have you been effectively mentored at work?
Advice from the CEOs:
Many have noted that, compared with baby-boomers, younger workers have higher levels of self-confidence. This enables them to be more accepting of constructive criticism and guidance. One company establishes individualized performance metrics to help younger employees monitor their progress. This helps them to chart and see their progress. Along the way, managers meet with them frequently to answer their questions about company processes and the rationale behind them.
In some cases, CEOs have found some younger workers have a tendency to short from the hip. They mentored them to communicate more thoughtfully and carefully using a team approach because they found younger workers to be more team-oriented than older workers.
Many forward thinking companies involve individuals from all levels of the organization in their planning processes. This addresses the desire of younger staff members to be included in high level decisions. Younger workers prefer this to being told to wait until they have more experience.
To help younger employees grow, one company breaks down job tiers into more levels or sub-levels, and offers incentives for reaching the next level of skills more rapidly. They also reset expectations more frequently.
Particularly in Silicon Valley many younger employees are swimming in debt. Some purchased houses on adjustable-rate interest-only loans and other creative financing solutions. As interest rates rise some will encounter difficulties. In anticipation of this, one company brings in external resources to offer counseling in personal finance. Some of the local financial services companies offer this as a benefit to company’s employees at no cost to the company.
Key Words: Multi-generational, Baby-boomer, Gen X, Gen Y, Millennial, Echo-boomer, Mentor, Coach, Self-confidence, Processes, Communication, Team approach, Involvement, Listening, Financial counseling, Patience
Situation: A company has a long standing relationship providing an exclusive product to a major customer and has a negotiated price and volume contract for this product. The customer changes product design every few years, and the company is the favored supplier of certain components. The customer’s purchasing agent has asked to renegotiate price on the current contract. The company wants to maintain a good supplier relationship with the company, but doesn’t want to lower the price on its product. How should the CEO work with the purchasing agent?
Advice from the CEOs:
There are two distinct opinions from the group:
You have a contract in place for volume and price. If you yield on price now just to assure the remaining business on the current contract you are saying, in essence, that future pricing contracts are also negotiable even after the contract is negotiated and signed.
On the other hand, if you know that there is a model design change in process and want to assure a good ongoing relationship with the company you may choose to yield a bit on price for the remainder of the current contract.
The choice between these two will be a gut choice based on your relationship with the customer as well as your past history with the purchasing agent.
You might want to try a creative alternative. Check with your own component vendor and inquire about pricing if you place orders for your own remaining components on the current product today versus in several weeks. If there is a discount for placing the order today, call the purchasing agent and tell him that if he orders the remaining product on the current contract today, you will pass on the discount that you receive from your vendor. If you don’t get the order today, then you will lose the discount, and there may be a delay on your being able to deliver the remaining parts under the current contract.
Situation: A company wants to grow by acquiring companies in similar verticals that have different but complimentary offerings. The targets will most likely be boutique operations. How should they target and prospect candidates?
Advice from the CEOs:
Before you think about either targeting or prospecting an acquisition do your internal homework. Establish your strategic plan, including strategic capabilities that you want to develop. Look for synergies within your plan, and assure that any new capabilities complement these synergies.
Will current customers be interested in the new strategic capabilities, or will you have to build or buy access to new customer segments?
Determine the leveraging factors. How much incremental business can you expect to gain compared to current business? Look at both top and bottom line impact.
Do a build/buy analysis to determine whether the capability is more effectively built using your own resources or purchased.
Leverage both internal and external resources to develop a target list. Ask what current employees may be knowledgeable of potential candidates.
Use your industry network to identify and gather information about candidates.
Retain a firm to assist you in identifying candidates. They can approach candidates from a neutral position to assess interest in acquisition.
It is critical to negotiate a deal that retains key talent. Founders and key staff of the acquired company must see the combination as a means to facilitate and expand their own vision. In many successful acquisitions you will see the following traits.
The acquiring company did not change management, accounting methods, or operational procedures of the acquired company.
They acted as a bank to facilitate pursuit of the acquired company’s dreams and already successful strategies.
They took a “hands-off” approach with the acquired company and did not try to force cultural change.
Interview with Henry Chen, PhD, Founder & CEO, Cynovo
Situation: A company in a maturing market needs to gain customer feedback to guide product development. They want to optimize Alpha testing prior to investing in tooling. How do you assess product viability on a limited budget?
Advice from Henry Chen:
As the market for tablet devices matures, it is increasingly important to test mass market response to new product design prior to freezing product specs and investing in tooling. Our approach to vertically designed enterprise solutions focuses on four areas: going to the experts for guidance; monitoring the competition and market direction, investing heavily in prototypes, and leveraging speed to market.
Go to the experts; leverage their knowledge and understanding of the market to speed your own development efforts.
Get to know the market gurus who stay on top of the market and are knowledgeable about market direction. These are the influencers who blog, write and publicize new market innovations.
As a smaller company, the route to market in often through alliances. Senior staff at large companies are a valuable resource. One option is to work through large companies’ sales teams to identify senior product people and connect with them.
A good place to monitor market developments is at major trade shows. Events like the Consumer Electronics Show allow you to interact with a large number of experts and to monitor both what the large companies are introducing and their product direction.
Trade shows are unique situations because many experts attend. Some are speakers, and others simply attend to keep up to date with latest developments.
Use trade shows as an opportunity to gather a panel of experts to give you feedback on your design concepts. Experts like to be on top of the market and new developments and appreciate the opportunity to provide input on new products.
Leverage the opinion of younger leaders and experts. In the US and in China, the average entrepreneurial founder is young – often in their low 20s. They are not as cautious as older people who worry about failure. Successful young entrepreneurs are also potential investors.
Give experts time to think about your product. It may take a few hours or even days for them to “get” your new concept.
Invest in prototypes which have a similar look and feel as actual products, though they may lack full functionality. People like to hold a product, gauge the weight, look and feel of the controls, and to contrast different model options.
Large companies are often hindered by internal confidentiality rules. Smaller, more nimble companies may rely on speed to market to allay confidentiality concerns. This gives them the ability to gather more feedback prior to finalizing product design.
Situation: A company is bringing in new business, but used up its cash reserves to stay afloat during the downturn. As it increases payroll and orders for components to meet production deadlines, it struggles to meet cash flow needs while waiting for customer payments. How can you increase cash flow to fund growth?
Advice from the CEOs:
Your customers need your product to meet their own deadlines. Have you talked to them about your needs and seen what they can offer? Offering modest early pay discounts on amounts due may help to ease your cash flow challenges.
Among discounts offered by other businesses is, for example 2% if they pay in 10 days.
Another option is to offer 5% off if they pay for new orders in advance.
As you bring in new business or projects, negotiate early pay options in your contracts. For example, offer the option to prepay on milestones in exchange for discounts on the final payment.
Factoring receivables is an option, but can be expensive. On the other hand with investors looking for good returns, it makes sense to check out options that are available on the web.
There are now web services which combine small contributions from a large number of investors into funds which can help you to finance short-term cash needs. There are also options which may provide lines of credit which are easier to secure than bank lines.
Look at local redevelopment options or funds which are targeted at local businesses. For example, in the San Francisco Bay area there is a organization called Working Resources which provides low interest loans local businesses to meet cash flow needs.
Situation: A company, noting that business conditions have improved, is planning for growth. This means keeping current customers and taking on the next tier of customers. They are also focused on improving customer service and the customer service experience. All of this costs money. How do you control expenses as you grow?
Advice from Andy Wallace:
As a small business, you can’t spend more than you have. You need to focus on all expenses from supplies to workers compensation. Major expenses are inventory and payroll. You need to focus on the line items, control the little things and control the big things.
There are three areas that we monitor frequently: inventory control systems, overtime, and assuring that safety is first to reduce accidents and control workers compensation costs.
Employees respect employers who respect them and their families. Recently we had an employee who was called by school because their child was sick. We told the employee to take the rest of the day off to take care of the child. The employee was back in an hour, having made other arrangements for the child’s care.
As you grow your payroll, hire the right folks with the right skills. Take time and don’t rush – you need to fill the position with the right person. As a small company having the right skills is important and reduces the costs for training and on-boarding new employees.
Important skills for us vary by position but include solid computer and technology skills; attention to detail, as well as writing, communication and math skills; the ability to multitask and respond positively to interruptions.
The culture of our company is extremely important. It’s the foundation of the company and we want to perpetuate it. Culture starts at the top with the leadership as examples for the employees to follow. It can’t be “do as I say, not what I do.” Employees know who arrives early and stays late, who is attentive to details. If we don’t set the right tone as leaders of the company, we can’t expect them to follow.
Situation: As a company has grown to multiple sites around the world they have lost some of the culture that originally bound the company together. Many new hires are hired locally by regional managers and don’t have a strong bond to headquarters or the broader company culture. How do you build a unified culture in a company with many geographically diverse sites?
Advice from the CEOs:
Company culture starts with a common set of values. These values should drive everything, from hiring, through on-boarding and training, to performance measurement and evaluations. In a strong company, these values should be reinforced regularly and expressed in the day-to-day behavior and decisions of the company.
Look at how you hire new personnel. Is alignment with company values part of the selection process?
Next, look at your on-boarding and training process. Company values and culture should be thoroughly expressed and reinforced in the training process.
There is no substitute to face-to-face meetings to build shared company values and culture. At least once or twice a year you should host national meetings that bring the regions together. At these meetings company values should be reinforced, there should be business content, and there should also be recreational bonding component to help employees get to know one-another.
Consider an annual reward or recognition trip or special event, and include spouses at company expense. This creates a completely different level of bonding, and spouse involvement communicates a company commitment to the families of the employees.
If you have a large number of locations, you should also have a human resources department. Among the important responsibilities of the HR department will be developing uniform selection criteria, uniform training which includes emphasis on company culture and values, and assistance in planning national or multi-regional meetings.
Situation: While women comprise the majority of US society and business customers, they continue to be underrepresented in business and government. For girls growing up, it’s hard to be what you can’t see, so girls and young women don’t see the opportunities that business offers them. What can SMBs do to empower women?
Advice from Linda Gold:
Women contribute greatly to the business community, particularly in small and medium-sized businesses which are the principal job creators in the US. For example, in tough times, smart companies and CEOs face outward rather than retreat inward. Women are naturally more collaborative and can be better at networking and building communities of interest that can open up new opportunities. Smart CEOs will leverage this talent.
Dr. John Gray (“Men Are from Mars, Women Are from Venus”) points out that business is like a football game—it’s about getting the ball and running with it. While women know we should be given more credit for our contributions, we need to learn how to take more credit. We need to accept the credit and accolades we receive and deserve. And if a male team member takes “our ball” and runs with it, defense needs to “kick in” and recover the ball. You can only score if the ball is in your possession.
Dee Dee Myers, President Clinton’s former Press Secretary gives an example of how to gracefully take credit. When a colleague told her she had done a great job, instead of deflecting the credit, Myers simply and elegantly replied “Thank-you.”
Small and medium-sized businesses employ a significant population of women. This gives them the opportunity to raise the profile of their women employees both in the local press, at local social business events, and through social media.
The YWCA TWIN Awards – Tribute to Women and Industry – recognize women for excellence in their area of expertise, and for giving back to the community. In Silicon Valley, CEOs nominate their high-achieving executive women for this prestigious TWIN award each year.
Girls For A Change (GFC) is a national organization that empowers girls to create social change. GFC encourages young women to design, lead, fund and implement social change projects that tackle issues girls face in their own neighborhoods. The program depends on volunteer coaches – local business, professional and career women – who receive coach training and meet with girls for a 12-week period after school. By publicizing this opportunity within your company or sponsoring a GFC team, SMBs can make a significant contribution.
SMBs have a vested interest in encouraging public education to adopt more relevant curriculum and teaching methods. We are in the information age, not the industrial age. We can learn more about opportunities to offer services to and partner with local schools and educational foundations like the Silicon Valley Educational Foundation. We can also lobby for more H-1B visas.