Some staff have an unfortunate sense of what’s appropriate. How you react will set the tone of your organisation. Your people will watch you closely to pick up that tone.
A customer mailing list file called “ratbags” (or somesuch). As soon as I saw it, I insisted the name be changed. There was some shame-faced bluster about it just being someone’s silly sense of humour, but a glowering look stopped that. The word went out - always treat customers respectfully.
Walking past some staff drinking wine at their desks in the middle of the afternoon, I came back. simply said “That’s not appropriate” and walked off. The wine was gone in a minute and the staff later apologised.
On hearing that I wanted a more effective approach to late payment for electricity supply rather than simply cutting off customers’ power, the team leader responsible for credit control and payments proclaimed that “they’re all liars, and it’s the only thing that works”. I said I doubted that, and asked him to produce an analysis of the past year’s late payers and their frequency. Out of 40,00 customers, approximately 10% had been referred for late payment - most only once, and only 200 were chronic bad payers. He acknowledged he was wrong, but didn’t change his approach. He didn’t stay long and we made credit control part of a new customer service approach under a team leader who saw her job very differently, looking for ways to help customers not fall behind.
On hearing a product manager suggest that we make unsubstantiated claims in our product specifications, I respond “We don’t lie to customers.” On hearing the justification that “everyone else does it,” I reply “I doubt that, and in any case I don’t care. We don’t lie to customers.” That product manager didn’t last long either.
A product development team, given the challenge of designing a new antenna product platform at half the cost of the existing platform, started calling itself the CNA team which, on hearing for the first time, I learnt stood for “Cheap and Nasty Antenna”. My instant reaction: “You will drop that name immediately. I never want to hear it again. From now on, you are the EYE team - Elegant Yet Economic”. It not only set a different expectation for the new product platform; that name became a badge of honour and they still called themselves the EYE team years after that particular project had successfully finished.
You don’t always have to be quick on your feet; sometimes, a measured reaction is appropriate. Sometimes you’ll want to take a more consultative approach; asking people to think about the matter and decide what’s appropriate. But an instant reaction sends a very powerful message, as does a direct order, especially if you don’t usually act that way. Importantly, be consistent. And always remember, who you hire or fire, who you give an important project, who gets promoted, rewarded or praised - these all send important and closely-watched signals. What you do sets the tone.
I was at a breakfast function this morning to witness the induction into the NZ Hi-Tech Industry Hall of Fame (aka. The Flying Kiwis) of two of this country’s leading technology entrepreneurs - Rod Drury (whom I first knew 20 years ago as a junior consultant who could build clever spreadsheets) and Selwyn Pellett, (whom I first met 12 years ago when he sold us some components). Both thoroughly deserve their admission to the Hall of Fame. There’ll no doubt be plenty elsewhere on their careers, but it was interesting to hear them talk about dark moments. Rod was fortunate in not having any serious business disasters, but acknowledged the terrible loneliness of being away from home for long periods, staying in yet another hotel. Anyone who thinks business travel is glamorous clearly doesn’t do it much! Selwyn talked about launching his company on the London AIM share-market when there was an unexpected last-minute problem; the gap between what the new investors would pay and what the existing shareholders would accept had suddenly widened to what seemed like an unbridgeable gulf. It looked like the listing would be cancelled and with it all the plans which depended on the new capital. Fortunately a deal was done and the listing went ahead, albeit a day late.
I remember a particularly dark moment at Deltec. The global market for cellular network antennas had virtually dried up very suddenly. I’m talking about a 90% drop in the space of a month. Fortunately we’d built up a cash reserve and rode it out for a while, but after the 3rd straight month of no orders, we held a secret board meeting off-site in a private room at the Wellington Club. We’d asked the receivership partners at PwC to come in later and advise us on the actions we were taking as directors, since we didn’t want to be personally sued for trading while insolvent. After an hour of doom, gloom and tough decision-making, one of the independent directors suddenly said “**** this! It’s my 60th birthday today and we’re going to celebrate!“ He ordered champagne for us, served just as the the PwC receivership guys walked in. The look on their faces was priceless; a brilliantly funny moment in an otherwise awful day. On the positive side, PwC told us we were doing all the right things, and we survived the downturn, which was (inevitably) followed by a boom.
You rarely hear about the dark moments, but for most entrepreneurs and business owners, dark moments come along more often than most other people realise.
I was sorry to hear that listed NZ technology business Provenco Cadmus has called in the receivers. On a positive note, the receivers think that the underlying operating businesses (none of which are in receivership) can keep going under new or restructured ownership.
By sheer chance, after Peter Maire sold Navman and we’d sold Deltec, he and I found ourselves both at the same time getting excited about the payments industry. My move was to support the creation of Fronde Anywhere (mobile banking, ID authentication and payments). Peter had a much bigger game to play, building stakes in two major NZ payment hardware businesses and promoting their consolidation to create a globally competitive firm. Timing was an issue - the merger took far too long to win approval, and then the global banking system went into meltdown. Peter’s naturally disappointed about how it’s all turned out; presumably his 6% stake is not worth much now. But life goes on.
“I’ll be helping out the receiver any way I can. It’s still a good business, and I expect there will be a lot of interested parties. Then I’ll be moving on. There’s never a shortage of things to turn my time to.”
That’s the thing. As Fred Astaire and Ginger Rogers sang, “Pick yourself up, dust yourself off, start all over again“.
Over at The Technium, Kevin Kelly asks “Was Moore’s Law Inevitable?” You’ll recall that Moore’s Law predicts a doubling of transistor numbers in an integrated circuit chip every two years, and it has held astonishing true for nearly 50 years. Fulfilling this “law” has been a key driver in the astonishing growth of computer power accompanied by falls in the cost of that power. Kelly explores whether Moore’s Law simply sets a target which engineers strive to achieve (2 years does match neatly with typical product development cycles), or if there is some other deeper factor, and extrapolates this to a variety of technologies.
I was struck by Kelly’s observation that most current new technologies have gained momentum from smallness:
The first thing to notice is that all these examples demonstrate the effects of scaling down, or working with the small. In this microcosmic realm energy is not very important. We don’t see exponential improvement in efforts to scale up, to keep getting bigger, skyscrapers and space stations. Airplanes aren’t getting bigger, flying faster, and more fuel efficient at an exponential rate. Gordon Moore jokes that if the technology of air travel experienced the same kind of progress as Intel chips, a modern day commercial aircraft would cost $500, circle the earth in 20 minutes, and only use five gallons of fuel for the trip. However, the plane would only be the size of a shoebox! We don’t see a Moore’s Law-type of progress at work while scaling up because energy needs scale up just as fast, and energy is a major limited constraint, unlike information. So our entire new economy is built around technologies that scale down well — photons, electrons, bits, pixels, frequencies, and genes. As these inventions miniaturize, they reach closer to bare atoms, raw bits, and the essence of matter and information. And so the fixed and inevitable path of their progress derives from this elemental essence.
At antenna manufacturer Deltec, we were frequently asked why our unit costs didn’t fall as fast as the electronic subsystems in mobile communications infrastructure. While we did achieve cost savings from smarter design, leaner manufacturing and experience/scale effects, the laws of physics imposed limits on what could be achieved in a shaped piece of metal whose minimum size was determined by the frequency/wavelength and performance requirements of the network design and cellsite coverage. Smallness only came from shorter wavelengths/higher frequencies or lower range/coverage (increasing the number of cellsites).
Kelly also unearthed this old chart from the US Air Force. Impulse power, Mr Sulu! You’re due about now.
I held off saying anything about the 40th anniversary of the first moon-walk because I had nothing to add beyond the usual awestruck adolescent wonderment of the time (which hasn’t diminished, by the way). Fortunately, UK IT commentator Richard Holway reminded me of something that is very relevant in my own career track:
The computer in Apollo 11 had just 64K of RAM. It seems amazing when we’ve now even stopped talking about megabytes in favour of gigabytes. In 1969 though, much of my programming was still in assembler code and I was expert in reading the holes in punched cards. I worried constantly about saving a bit here and a bit there. This was when dumping the ‘19’ bit from ddmmyy was common - and thus was born the Y2K bug!
My thoughts today are not about ‘Wow, look how far we have progressed in 40 years’ . It is more a wonderment that mankind could achieve a mission to the moon armed with such seemingly archaic tools. Truly incredible.
Indeed!
Just 3 years after the 1st moon landing, I wrote a complete business application - orders, inventory, billing, accounting, etc. - to run on an ICL 1901A with 8kb of RAM and 2×4Mb of exchangeable disk drive storage, written in NICOL (ICL’s version of RPG1, taught to me by David Nicholson, one of my oldest friends, who by happenstance ended up in Wellington NZ a few months before me and is still here). I was a dab hand with the old 3-finger card punch too!
I thought the debate about open-plan offices was long over (if you’re going open-plan, you’d have done it by now), but apparently not. Thanks to Bernard Hickey, I read that the CEO of National Australia Bank is advocating it, and suggesting that other banks which have yet to move to open-plan are probably hide-bound in other ways.
I’m a big fan of open-plan, with executives in amongst everyone else. Obviously you have to get the house rules right, and provide private space for private conversations and thinking, but the increase in information flow, collegiality, unity of purpose and general buzz is very palpable. When we were planning the radical transformation of Electra from stuffy, hierarchical power board to dynamic, lean, efficient and empowered customer service organisation, we discussed what changes we needed in culture and operating style. I then went away to the beach for a holiday, only to return and find that the staff had literally torn down all the internal walls one weekend. It was a spur-of-the-moment unauthorised initiative, and afterwards there was high trepidation concerning my reaction. There was only one thing I could say when I walked into the building and saw all these worried faces looking at me: “Brilliant! Where do I sit?” Anything else would have destroyed the very changes I wanted to bring about. That wall demolition weekend was the start of a truly amazing transformation.
Getting product engineers to move into an open plan environment at Deltec proved more tricky, with great protestations about dedicated personal offices for deep thought. Moving buildings was the catalyst this time, with the engineers going into a new, high-vaulted, attractive and airy space. There was still the odd gripe about needing personal offices from one or two designers, but inter-team interaction lifted noticeably, and led to some great cross-product innovation.
Conversely, in Fronde’s already existent open-plan environment, it eventually proved necessary for me to move into an office. I was doing a lot of confidential business, but having an adjacent meeting room would have sufficed for that. However, and more importantly, I wanted to strengthen the position of the local leaders, to be seen to run their business units. That’s possibly more an argument for keeping head office out of a branch location.
Open-plan is a tool of organisational ethos and culture; it may not suit every situation. However, any reason to not go open-plan needs to be very profound to make up for the lost benefits.
Which renowned retailer once had the following mission statement?
“The subversion of the class structure of … England by making available to the working and lower-middle classes, upper-class quality at prices the working and lower-middle classes could well afford.”
Mission statements can be the most dreary and uninspiring committee compromise. Some leaders (and not a few employees) think they are meaningless window-dressing, not worth the effort, insincere, hypocritical and sometimes downright lying. Others think that their business is too lowly or mundane - a mission statement would be putting lipstick on a pig. However, we all know that people do respond to inspiring leadership rhetoric.
Sometimes mission statements talk about a result: “Achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.” (NASA, hence the term ‘mission statement’). Sometimes they talk of a way of doing things, like Johnson & Johnson’s Credo. Sometimes they are unabashedly about making money; DuPont considered itself successful “only if we return to our shareholders a long-term financial reward comparable to the better performing large industrial companies”. Some mission statements spell out what a field a company is in (and what it is not). Deltec’s was “Helping people to communicate, by taking Teletilt to the world“. Societal good, industry, product field, and global ambition all expressed in ten words. You’d be amazed at how we could apply them - business processes, design, quality, product range management, people development, culture, shareholder value - you name it, we could use our mission statement to lift our game.
A powerful mission statement encapsulates the aims and modus operandi of an organisation, lived and breathed by its leaders and staff. It can be short or long. It needs to avoid compromise, timidity and insincerity. Above all, it must be believable, not only in its aim, but also its execution.
The Economist has a short web-only article on mission statements (from which I borrowed these ones) and suggestions for further reading. And the retailer? That epitome of the middle class establishment, Britain’s Marks & Spencer!
For my non-NZ readers, New Zealand’s two major mobile telecommunications operators have been involved in a PR and courtroom stoush over the alleged interference of Telecom’s new XT network with Vodafone’s network, with Vodafone seeking an a court injunction to stop Telecom launching its network because Vodafone’s customers are experiencing major service failures. Few commentators have been scrupulously neutral, assuming either that Telecom is incompetent and arrogant, or that Vodafone cunningly mounted its court action just days out from the network switch-on as a PR stunt to put Telecom in the wrong.
I used to run Deltec, a company which made filter and antenna systems for mobile telecommunication networks. We sold 95% of our production offshore in all the major telecommunications markets, especially in large urban centres with multiple operators in very adjacent frequencies using identical technology prototocols. The numbers of cellsites, operators and customers are usually 2 or 3 times that of the NZ situation. Signal interference is normal during the early days of a new cellsite (even more so for an entire new network) when there is already an incumbent in the area. The fault may lie with the newcomer, but it is just as likely to lie with the existing operator’s cellsite receiving or transmitting signals outside its allocated frequencies. The general practice is that each instance is taken on its merits, both sides’ engineers work it out, and take appropriate action quickly. All very low key, routine, professional and civilized.
Deltec was the dominant antenna supplier to both Telecom and Vodafone until we sold our business in 2001. What’s different about the NZ situation? Telecom has (at long last) joined the same technology family as Vodafone and much of the world. But for 20 years, we’ve only had two operators, operating in widely different frequency bands with completely different technology protocols. Vodafone and Telecom engineers and management are not used to having another major wireless network in such close technical proximity. Both are likely to have had sloppy frequency management (it wasn’t an issue), but rarely been pulled up on it before. More relevantly, neither company is used to dealing with the other on technical issues where collaboration rather than confrontation is the norm.
As for the court action being a stunt, who knows?
PS: Interestingly, whenever we hosted people from Telecom and Vodafone together in technical or social contexts, it was always very friendly, with both sides getting on well.
PPS: I forgot to mention that my family trust owns Telecom securities.
Last week, The Economist published its latest Big Mac Index. Briefly, it compares the prices of the ubiquitous McDonalds menu item in a broad cross-section of economies, and adjusts those prices for relative purchasing power (a standard economic normalisation). The adjusted prices are then compared to the US price for a Big Mac. The percentage difference indicates how much the currency is under- or over-valued.
As at 30 January 2009, the EBMI calculated that, relative to the US dollar:
I often teased my fellow directors at Deltec with the Big Mac Index; 95% of our revenues were international. However, the EBMI has proven over the years to work as a rough and ready indicator of a currency’s long-run relative value. Use this information at your peril.
Having had a year off, I’ve been working recently on a portfolio of projects to get going in 2009. However, this week I’ve decided to kill off 3 of the 4 projects (and it’s nothing to do with global financial turmoil):
A software-as-a-service idea which links the sales cycle, the fulfilment cycle, capacity planning, and the financial cycle - dozens of competitors (albeit with 70% solutions), and a market already served. The unfulfilled need for a better solution is still there, but I’m not going to pursue it.
A top-end “interim executive” agency, effectively CxOs for rent - not enough demand to support a viable stable of talent in the city where I live;
One I can’t talk about, but let’s just say my view of the strategic imperatives and that of the other party were at odds.
I’m still working on a 4th project, helping a friend to get his business to the next level, but that’s not likely to keep me busy full time. So it’s back to the drawing board. Know any decent businesses that could do with a new owner or at least a new perspective around the board table?
I used to lead a company that made and sold mobile phone infrastructure - advanced base station antennas in our case - and the developing nations were a key target market for us. Extending mobile phone usage throughout developing nations has been proven in many studies to be one of the best investments they can make, along with education. Simple example - a smallholding farmer typically sells his produce to a multi-tiered, inefficient wholesale system, from whom the small retailers in the area buy all their produce. Why? The wholesalers control the information, the trucks and the relationships. Mobile phones enable the grower and the retailer to deal direct on a daily basis, at better prices for both, and they can pool with others to make their own transport arrangements. The economy is thereby more efficient. There are myriad other examples.
Mobile phones are not luxury goods in countries with few landlines - they are essential for transforming the economy. The more people with them, the better the economy can perform; the network effect made real. Mobile broadband will have an even bigger impact in these countries - way beyond what we’ll see in the developed world. The more phones, the better.
Congratulations to my old chum Rob Steele, who’s just been named as the new Secretary-General of the International Standards Organisation, based in Geneva. Rob headed Standards NZ for a number of years, and has played an international leadership role almost from Day One. SNZ boxes well above its weight in the global standards arena, and Rob helped make that so.
I first met Rob in late 1992, when I interviewed him for the role of CFO at power company Electra. Rob helped me take Electra through corporatisation and industry reform, whilst also sorting out the finance function. With that done, he and I drove a major restructuring and performance improvement programme, which led to Electra becoming not only the lowest “operating cost per customer” electricity business in the country, but also the recipient of several commendations and awards for its customer service and fair contracts. The customer service group we put in place is now the hub for the country’s largest electricity generator/retailer. I was delighted when Rob succeeded me as CEO, and took the company on to new heights.
I fondly remember the day that some of the Electra team came to see me with an idea for a company catch-cry to set the standard for everything we aimed to do: “Bloody Amazing!” If it wasn’t bloody amazing, it wasn’t good enough. We adopted it with enthusiasm, and it’s great to see Rob still living up to that standard. Bloody Amazing, Rob!
Contacting the potential buyers, often with a teaser (written or verbal) which doesn’t identify the company or give too much away, just enough to get them to sign a confidentiality and good behaviour agreement in order to get the next level of information.
Sending out a brief 2-4 page overview of the business, to get expressions of interest in bidding and, sometimes, proof of substance that they have the wherewithal to buy the business.
Sending out a detailed information memorandum describing the business, with ample details to enable an indicative bid to be made.
Selecting a short-list of bidders to enter negotiations. This is where things can get tricky, because indicative bids are non-binding, and some competitors can make high bids just to get into the next stage.
The next stages can go in various orders: site visits, executive presentations, due diligence (thoroughly going over all your records and learning all your secrets), preparation of final binding bids, negotiation of sale agreements. Some buyers like to get a deal done, subject to due diligence not showing anything untoward, others want to do due diligence before committing to a price. Some do it all at the same time. Although it’s your process, it’s here you might need to be flexible.
Most executives and owners have limited experience of business sale. By now, if you’ve followed this series from the beginning, you’ll have realized that planning, preparation, execution and coordination form a huge task. We’ve already looked at selling the business yourself or using an agent. You should most definitely involve your accountant and your lawyer early in the process. (By the way, a great deal lawyer costs big bucks, but can really make you money). However, they can’t do all that other stuff we’ve been talking about throughout this series, and your executive team is busy running the business, remember. So that means it’s probably down to you. However, you can bring in help, to advice you and to manage the process. Just watch out, though - there are a lot of wannabees out there. Ask - and check - about experience, reputation and integrity.
Advertisements and disclosure: This is a free plug for Peter Castle, who’s been my big-hitter lawyer on several major projects over the years, and who fits into that rare category of “expensive, but worth it”. My company Isambard provides strategic advice and interim executive resources before, during, and after the sale/acquisition - on either the buy or sell side. I like to think we’re expensive, but worth it, too!
The big news of the moment is that New Zealand and China have signed a free trade agreement. The NZ market would be lost in the roundings of most Chinese exports, and NZ is already tariff-free for most Chinese goods, so what’s in it for China? A huge precedent, that’s what. This is China’s first FTA with a developed nation and will attract world-wide attention. It proves to the rest of the world that China can and will cut a fair deal if the circumstances are right. China cuts out a lot of noise in future negotiations. The deal with New Zealand will act as a clean template for future deals with more powerful nations, which might otherwise become entangled by petty domestic politics, tortuous negotiations, delays, and “special arrangements” - the bane of such deals. China can now point to its NZ agreement and say “that’s the model we’re happy to accept, so let’s get on with it”.
A few Kiwi naysayers are predicting NZ job losses. They’re missing the point. Notwithstanding that NZ has a labour shortage and needs to free up scarce labour for more valuable activities, most Chinese goods already have tariff-free access, and most import-driven restructuring has already happened.
New Zealand gains tariff-free access for most goods and service categories (except forest products and professional services, which leaves something on the table for future developments). That’s good news for NZ commodities, food, beverages, and high value specialist manufactures. And for a while, New Zealand will enjoy a window of opportunity while it is a star international trading partner, which should enable a lot of Chinese doors to be opened and friendly deals to be done, before the bigger players get their FTA deals in place.
Some people mistakenly think China buys cheap. My experience is different. Chinese customers buy the best when they understand and want the value proposition (be it a hard-nosed business case, or an emotional one such as status). My old firm Deltec did a lot of business in China, thanks to a great product, smart marketing, and a savvy local distributor (an ex-employee). We held our price for 3 years, while competitors without our Teletilt technology fought fierce price wars. We’d probably have done even more business if an FTA deal was in place then.
This agreement is a good one for both countries - clean, tidy, fair and both sides get what they really want out of it. Everyone else will be rushing for a deal with China now. Kiwis would be advised to make hay while the sun shines.
Spend months and months (perhaps longer?) trying to make the site perfect before letting it see the light of day.
Throw it out there, and follow quickly with a huge marketing campaign hoping that people won’t notice that the site itself isn’t all that you’re cracking it up to be.
Launch quietly, get a few users, watch closely to see how they are using the site and how you can make it better for them, be patient, continuously improve the site, and focus on making sure that those people who discover the site have a good experience and tell their friends.
He argues that, while each option has flaws, option 3 worked for the web’s big successes (Google, Yahoo, Facebook, You Tube, Amazon, eBay, My Space, etc, etc).
Rowan’s article reminded me of our incremental development approach at Deltec (now part of Commscope). Deltec’s first Teltilt cellular base station antennas were clunky, requiring skilled soldering of complex components and precise lengths of coaxial cable. The unique actuator mechanism to vary the length of the signal pathway and change the beam pattern was a large, clumsy, brass trombone structure, adjusted manually or by an electrically driven screw drive, with an inflexible, hardwired user control unit. It was difficult and costly to make - just as well we only made 10 a day. Three years later, the antennas comprised enormous (1m long) printed circuits with almost no cabling, snap and fit assembly, a tiny precision actuator mechanism, a PDA control unit, and we were shipping hundreds a day - with a similar workforce. Today, the Teletilt technology is licensed to most of the leading antenna makers. If we’d waited to get everything perfect, we’d have not created the market we did, and missed the window of opportunity that enabled us to compete successfully with companies 50 times our size.
One instance of not getting trapped by perfection was dual band antennas (a 900MHz antenna and an 1800MHz one mounted in the same enclosure). Everyone said that these had to be no bigger than the existing 900MHz antennas (lower frequency = bigger antenna) to minimise visual impact and cell tower loading. That would mean fitting the 1800 MHz elements in the gaps between the 900 MHz elements. We could have done it, but it would have taken us another year or more to develop and redesign. Instead, despite the sales team’s objections, we focused on the primary need - antennas with both frequencies. We just mounted a 900MHz antenna alongside an 1800MHz antenna inside a 50% wider enclosure, and launched it within a few months. For a long time, we had the only dual band adjustable beam antenna on the market, which helped reinforce our place as the leader in our niche.
And guess what? No-one was worried about the 50% bigger size, and we never did develop an interleaved version. There’s another lesson there - the customer might tell you something’s important, but it ain’t necessarily so!
When I was in France in early October, I decided that the time had come for me to leave Fronde.
As usual (my blog title means Get Going), once I’d made my decision, I immediately put it into action. I resigned the first day back in the office, but we didn’t announce it so I could help with some important changes. Now that those changes are largely underway, and should produce great long term results next year.
A CEO who hangs around after he’s told his team he’s decided to leave them can be like a bad smell in the room - everybody feels slightly uncomfortable, but is too polite to say something! I put this to the chairman, along the lines that the team has a plan, they know what to do, and I’m only likely to get in their way. So (at my suggestion) I’m on “gardening leave” from here on until the end of my notice, although I’ll still sit on some Fronde subsidiary boards for a while.
I do want to say thank you to the Fronde team for their support and commitment – we’ve achieved some important changes. I’m honoured to have been part of the Fronde team, and I’m privileged to have worked with everyone there. I’m a Fronde shareholder, so I’ll still have a keen interest in Fronde’s future results - I’m expecting great things from them. I’m not leaving because of any doubts about the Fronde team’s talent and potential.
Update: I couldn’t say so at the time - the half year result wasn’t published, but it is now - that, although the result was a huge disappointment and lousy timing, it wasn’t the reason I resigned. It’s just that I have other things I need/want to do. But don’t expect any big project. This is a lifestyle change.
One of the most frustrating things about succeeding in the professional services business (or rather, our place in it) is that you can’t tell anyone very much about your wins. Your client hardly ever wants to announce the project, let alone your involvement, when you win the project. Typically they’ll only agree to announcing your involvement after the project goes live, if it’s a huge success, and only in a supporting role (and sometimes. not even then). If the project fails, you and your clients are doubly damned - not only for a failed project, but for hiring you too! Guess who’s the scapegoat! And it’s even worse when you win the project, but it gets cancelled before it finishes (or even starts). By implication, it must be your fault.
We have two high points - winning the job and delivering the project. We celebrate the first internally in a low key, discreet way, but, thank goodness, our people are so good that we can almost always celebrate the second, albeit modestly. But in our unassuming way, it doesn’t do justice to the huge effort and achievement of our pre- and post-sale teams. So without revealing who the clients are and what the projects are, I want to say “Great job, thank you and congratulations” to the Fronde team for delivering some big jobs in the last few weeks and winning some huge new ones, and to those clients who’ve given us those opportunities. I know who you are, guys, even if I can’t tell anyone else, and I’m proud of you, and grateful.
Last night, I was at a dinner attended by a a number of the NZ technology industry’s leading lights. I fell into conversation with the CEO of a large and successful competitor. He asked me how the market saw our two companies. My response was “You’re a supermarket chain and we’re a speciality store chain.” Seeing his eyebrows raise, I explained what I meant. Supermarkets can offer goods that are available in specialty stores (and often do), but their market offer is based on their range and price point, rather than their specialisation. Our ~200 people have a reputation for satisfying a particular set of IT service needs with a particular suite of capabilities and modus operandi. Within his many times larger business, there are almost certainly 200 people who could do what we do, but that’s not what their company is primarily known for. His business has a much broader market offer and a different value proposition. It’s not that one is better than the other. We’re just different.
Earlier that day, I’d met another competitor CEO - another “specialty store chain” if you like. His company’s challenge is to decide what it’s not, as much as what it is. That’s a critical decision for any business, but especially important if you’re in the specialty store game. Many businesses think they are spreading their risk if they have lots of irons in the fire. I’d argue that’s absolutely the riskiest strategy. Strategic thinking is about making choices and meaning it. You concentrate your resources on your unique strengths, and you avoid attacking your competitor where it is strongest.
Incidentally, it’s my experience that CEOs of competing companies can enjoy a good relationship, united as we are by the common challenges we face as CEOs. We compete hard, but we usually respect each other as individuals and get along fine at a personal level. Chewing over these kind of ideas is part of that.
Keith Turner, the founding CEO of Meridian Energy, has just announced that he plans to depart from the company in March 2008. I’ve known Keith since the early ’90s, when I was CEO of local electricity company Electra, and he was a senior executive with the Electricity Corporation of NZ. Keith was given the job of setting up what was to become Contact Energy, the privatised power generator, and did it well. After completing that job, he returned to Electricorp, where they then made him redundant - which didn’t go down well with many people. When Electricorp was itself split into 3 more companies, there was a rich irony in seeing Keith get the leadership of one of them.
At Meridian, Keith has led the company’s expansion of renewable energy generation in a very substantial way, as well as making his shareholder a tonne of money from Meridian’s foray into Australia. He’s regarded as one of NZ’s most influential people, and he’s also a nice bloke. He’ll be a hard act to follow.
Disclosure: I have investment interests in Contact, and most of the major players in the electricty sector are clients of Fronde.
It was a great party at the NZ 2007 HiTech Awards tonight, made even greater by the awarding of the Enatel Innovation Award to Fronde Anywhere and its TwoSecure product. This comes just 3 weeks after Anywhere’s Kiwibank mobile banking solution was named by TUANZ as the mobile application of the year. Congratulations to the Anywhere business, especially Caroline Dewe and her product marketing and development team, who kept the flame alive over 7 years while the world decided if it really wanted mobile applications.
I was part of the award-winning Deltec team in 2000. That was an awesome experience. To be part of another award-winning team, albeit in a very small way as chairman, is very fulfilling. Thank you, team; and congratulations to all the other award winners and finalists - a truly impressive field.
I used to lead a company that made and sold mobile phone infrastructure - advanced base station antennas in our case - and the developing nations were a key target market for us. Extending mobile phone usage throughout developing nations has been proven in many studies to be one of the best investments they can make, along with education. Simple example - a smallholding farmer typically sells his produce to a multi-tiered, inefficient wholesale system, from whom the small retailers in the area buy all their produce. Why? The wholesalers control the information, the trucks and the relationships. Mobile phones enable the grower and the retailer to deal direct on a daily basis, at better prices for both, and 
Congratulations to my old chum Rob Steele, who’s just been 
One of the most frustrating things about succeeding in the professional services business (or rather, our place in it) is that you can’t tell anyone very much about your wins. Your client hardly ever wants to announce the project, let alone your involvement, when you win the project. Typically they’ll only agree to announcing your involvement after the project goes live, if it’s a huge success, and only in a supporting role (and sometimes. not even then). If the project fails, you and your clients are doubly damned - not only for a failed project, but for hiring you too! Guess who’s the scapegoat! And it’s even worse when you win the project, but it gets cancelled before it finishes (or even starts). By implication, it must be your fault.
Keith Turner, the founding CEO of