Category Archives: Strategy

How Can Private Business Help Retool the Workforce? Three Methods

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.

You can contact Anju Bajaj at anju@zunainfotech.com;

Key Words: Workforce, Retool, Talent, Legacy, Web, Cross-train, Project, Business Process, Workflow, Functional, Domain, Technical, Agile

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How Do You Work with Purchasing Agents? Three Approaches

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.

Key Words: Component, Supplier, Vendor, Purchasing Agent, Contract, Relationship, Discount, Delivery, Negotiate

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How Do You Target and Prospect Acquisition Candidates? Three Guidelines

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.

Key Words: Acquisition, Candidate, Plan, Capability, Market, Customers, Leverage, Build-Buy Analysis, Target List, Talent, Retain, Culture, Compatible, Due Diligence

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How Do You Cost-Effectively Assess Product Viability? Four Foci

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.

You can contact Henry Chen at hankbybay@yahoo.com

Key Words: Customer, Feedback, Market, Maturing, R&D, Tablet, Budget, Experts, Trade Show, Panel, Young, Leaders, Investor, Prototype, Confidentiality, Speed

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How Do You Unify Culture in a Geographically Diverse Company? Six Ideas

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.

Key Words: Culture, Regions, Multi-site, Diverse, Values, Hiring, On-boarding, Training, Company, Meetings, Bonding, Award, Trip, Spouses, HR, Human Resource

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Do You Expand Domestically or Off-Shore? Four Thoughts

Situation: A company is rapidly expanding and is considering the pros and cons of domestic versus off-shore expansion. One of the appeals of off-shore expansion is the availability of good talent at lower costs overseas. However there are appealing counterarguments for domestic expansion. What is your experience, and how would you advise this CEO?

Advice from the CEOs:

  • This is a challenging question. Based on others’ experience, success off-shoring depends on your ability to be disciplined and rigid in your design specs. If this is the case, then off-shoring can work. However, if either you or the partner changes the spec then delays and difficulties result. You have to make sure that the off-shore labor force possesses the skills that you require to successfully complete your projects and that your specs are sufficiently detailed to overcome challenges of language and understanding of usability.
    • Tightly specify each job that you want to have done off-shore, and develop performance metrics so that shortfalls will become obvious quickly.
    • Some large technology companies operate off-shore centers not to save costs, but because they actually find better talent overseas. India and China are producing excellent engineers, and given the size of the populations, the top percentile of talent can product a large number of talented people.
  • Some companies contract through off-shore entities, and tightly integrate the work of off-shore and domestic engineers. This is a perk for the off-shore engineers and helps to produce value.
    • One large company sends US Indian employees to India for 2-years stints to oversee their Indian operations.
  • Maintain strict hiring policies for your off-shore operations. Some companies have encountered difficulties when the managers of off-shore entities hired relatives because of family ties as opposed to talent or qualifications.
  • Over the past five years, the differential in pay for off-shore and domestic talent has shrunk. A large number of companies have found that domestic talent is easier to manage and in many cases is more productive. Further, there are no language challenges and time zone differences make working with domestic talent easier.

Key Words: Expansion, Domestic, Off-shore, Talent, Cost, Design, Spec, Skills, Integration, Hiring, Policy, Language, Time Zone

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How Can a Small Company Compete Against Bigs? Four Strategies

Interview with Sai Gundavelli, CEO, Solix Technologies

Situation: A company has top talent and a better technology solution. However their large competitors continue to compete by discrediting them – “nobody was every fired for choosing IBM!” How do you compete effectively against large incumbents?

Advice from Sai Gundavelli:

  • Invest in your product.
    • Work to attain best-of-breed status in your industry with a constant focus on and investment in building a great technology. Solix’s constant goal is to be the technology leader in information lifecycle management and Data Privacy.
    • Be organic and focus on integration, smooth operation and scalability. Build your system from the ground up. An organically designed solution where the pieces work seamlessly offers higher and more efficient performance.
  • Invest in alliances.
    • Solix continually invests in our partnerships, including our OEM relationship with Oracle Financial Services, and we have more such partnerships in the works that will help us expand our presence in the market. Partnerships increase your presence and visibility as you scale your own organization.
  • Focus your efforts.
    • We at Solix are 100% focused on our product, whereas our large competitors are juggling multiple priorities, like a juggler trying to keep a large number of balls in the air. While we are smaller, this allows us to more effectively focus our efforts without lots of conflicting priorities. We focus exclusively on information life cycle management and Data Privacy.
  •  Have others talk about you.
    • Solix’s answer to our competition is let our customers speak for us. We have many happy customers such as Honeywell, Duke Energy, American Tires, who are happy to participate in joint webinars and customer case studies. We work closely with them on the latest developments and direction and use their feedback to guide future product direction.

Key Words: Technology, Solution, SMB, Competition, Multinational, Incumbent, Product, Scalability, Flexibility, Alliance, Partnership, Focus, Specialize, Detail, Reference, Credibility

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What Are Best Practices For Managing a Due Diligence Process? Six Suggestions

Situation: A family-owned business received an unsolicited letter of intent to purchase the company. The Board is split on sale of the company, but has agreed to allow due diligence. Only a few key employees are aware of the LOI. What are best practices for managing a due diligence process?

Advice from the CEOs:

  • A due diligence process can be a major distraction. Put as short a fuse as you can on the due diligence process; insist that the information requested be limited in scope to essential materials to minimize distraction; and that the process not interfere with scheduled company commitments.
  • It is exceedingly difficult to hide reality from the troops. Good due diligence is incompatible with secrecy. Absent communication about the situation, if rumors develop at least a segment of employees will assume the worst leading to possible employee loss and erosion of leadership credibility.
  • It is better to explain the situation and put it in the best light. Here’s an example:
    • The company is not for sale but has received an unsolicited inquiry.
    • This is happening because the company is successful, is producing consistent value, and others appreciate our success.
    • Whatever happens, the company will continue as a going concern and if the company is sold, all efforts will be made to assure the retention and security of the employees.
  • Ideally, communicate this through a company-wide announcement, with video link to remote sites, and with the opportunity for employees to ask questions.
    • Brief all key managers in advance, with Q&A scripts to deliver a consistent message and address individual questions.
  • Strictly control the due diligence process.
    • Restrict direct contact with employees and, to the extent possible, with key customers.
    • Maintain your focus on the business – there is no guarantee of a sale.
    • Put retention packages in place for all key employees.
  • If the deal does not go through, assume that it will negatively impact company results for at least one quarter. Adjust your forecasts and incentive programs accordingly.

Key Words: Due Diligence, Purchase, Time Line, Distraction, Communication, Message, Coordinate, Q&A, Limit, Incentive, Retention Package

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How Can You Use Web and Mobile Tech to Bridge Different Worlds?

Interview with Jason Langheier, MD, MPH, Founder and CEO, Zipongo

Situation: The Internet and social media provide opportunities to bridge seemingly distinct worlds through common interests. For example, grocery chains that sell healthy foods and health insurance companies might be brought together through a common interest in healthy eating habits. How can you use web and mobile technology to bridge these two worlds?

Advice from Jason Langheier:

  • Interests and industries which are at first glance distinct can be brought together using the power of the Internet and social media. For example, Let’s Move and the Partnership for a Healthy America have nudged national food retailers and grocers to improve the health of their offerings in an effort to fight childhood obesity. Success here can benefit health insurers because obesity leads to increased healthcare costs through its link to diabetes and other complications. The potential of subsidies from health insurers to promote and generate healthy food choices is interesting to food retailers, but requires new incentive and recommendation systems.
  • We want to help people harness their motivation to build lasting new eating and activity routines. We do this through rewards based commerce, supported by social networks and gamification to help reach one’s health goals. We focus on choices that people make in daily living like grocery and restaurant choices and physical activities. We highlight alternatives, create simple recommendations, and make it easy to act on those recommendations. We encourage repetition of positive choices through a feedback loop which is tailored to the individual.
  • Commitments made within a social network are more likely to stick than promises to self. We leverage existing social media networks and offer incentives for referring friends. Friends help friends make better choices by encouraging them to read labels and buy healthier foods at the moment of purchase.
  • It is important to keep the user interface simple, especially at first. Many of the most successful applications initially present simple yes-no choices. From a tracking standpoint, this also minimizes variables and improves data measurement. Featuring high contrast action buttons on our site also helps prompt decisions.  There is a sweet spot on a commerce site between presenting an overwhelming array of options, and too few choices – which we assess through A-B testing.  By starting simply and building complexity slowly we build a baseline control scenario, then vary choices simply off the baseline to improve results.
  • The entrepreneur seeking to truly achieve a social mission must plan for both the short and long-term. In the short-term, it is critical to build milestones which will demonstrate financial feasibility and sustainability for potential investors. However a long-term perspective is also essential, particularly when one is interested in long term behavioral and economic impact.

You can contact Jason Langheier at j@zipongo.com

Key Words: Internet, Social Media, Food, Insurance, Health, Common, Interest, Software, Bridge, Entrepreneur, Partnership for a Healthy America, Incentive, Tracking, Reward, Commitment, Behavior, Change, Friend, Simple

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How Do You Build Consistency and Reliability as You Scale Up? Three Keys

Interview with Greg Hartwell, CEO and Managing Director, Homecare California, Inc.

Situation: Fast growing companies find it difficult to manage consistency and reliability of service as they scale to their next level of growth. They need to systematize what works and leverage technology to enjoy the benefits of scale. How do you build consistency and reliability as you scale up?

Advice from Greg Hartwell:

  • Invest time and effort to build an experienced management team. As a small company building a new service delivery model, it is helpful for the founders to know all roles so that you have a sense of what’s needed for each role.
    • Be open to hiring people from other industries. This brings a fresh perspective and broadens the pool of talent. There’s value in industry experience, but attitude and cultural fit are key.
    • The split between tactical and strategic skills is 80 / 20. Basic skills are necessary, but specialized knowledge can be learned.
  • Institutionalize how you recruit, screen, hire, train and retain. How do you do it like Disney – attracting and hiring the best of the best?
    • Know your market and the personality of those who will excel. This greatly simplifies the screening process.
    • Work hard on training. Our customer-focus starts with our employees. We complement natural talent with training that focuses on soft skills, and on consistency and reliability of service.
    • Find great advisors who can help build a training and retention system that works for you.
    • Minimize turnover by compensating people well, and treating them even better. Build a culture of recognition and shared experience that emphasizes the importance of the team and its members.
  • Embrace technology which enhances your ability to scale.
    • Don’t wait for something bad to happen and then rush to fix it. Anticipate and prevent mishaps.
    • Leverage communication technologies to tighten the bond between client and provider agency. Provide added services that are valuable and affordable.
    • Hand-held device technology is developing rapidly. Leverage this to increase consistency and reliability of service, enhance case reporting, reduce human error, reduce the ratio of supervisors to caregivers, and increase productivity. Be at the head of your industry class!

You can contact Greg Hartwell at greg@homecarecal.com, www.homecare-california.com

Key Words: Fast, Growth, Consistency, Reliability, System, Technology, Benefit, Management, Requirement, Talent, Recruit, Hire, Train

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