Category Archives: Long Term

Old Technology

The phrase “old technology” should send shivers down just about everyone’s collective spine. If you have anything prior to an iPhone X you have old technology and are therefore not cool. If you have anything other than an i9 Core PC, with all the associated bells and whistles you are obviously riding jockey on a dinosaur of a computer. Golf clubs are now touting their technological advantages associated with adjustable club weighting and aerodynamics which are designed to improve everybody’s game, even though average golf handicaps have remained relatively level over the last decade.

This is all only sort of interesting until you start looking at what may best be described as “old technology” companies. Then it starts to hit much closer to home.

Companies that have been recognized as technology leaders and driving forces are now racing as fast as they can to try and out run the old technology moniker. Networking carrier giants such as Verizon and AT&T in this country as well as their foreign counterpart’s British Telecom, Deutsche Telecom and many others have all either announced or already enacted layoffs in the multi-thousands of people, each, in 2018. The same goes for big iron providers such as IBM and Hewlett-Packard. The same goes for networking equipment suppliers such as Ericsson, Nokia, Siemens and Cisco. Going further upstream, there have also been significant layoffs recorded across the entire semiconductor industry. The total number of technology and large company layoffs in 2018 is more than five hundred thousand people.
https://www.gadgetsnow.com/slideshows/18-technology-companies-that-announced-job-cuts-in-2018/photolist/65031261.cms

https://www.cnbc.com/2018/12/07/how-to-spot-job-layoffs-coming-even-in-a-good-economy.html

Yesterday’s technology leaders must now deal with all that old technology that they now have. Yesterday’s technology suppliers must now deal with supporting all that old technology. And they must all do it while continuing on the treadmill that brings forth the latest and greatest new technology. It appears to be an unsupportable model.

Just as 3G cellular was replaced by 4G which now faces the dawning reality of 5G, and PC cores became dual cores, which became quad cores, technology always marches on. It becomes faster. It becomes smaller. It becomes more efficient. Then it becomes a commodity.

This begs the question, can people become “old technology”? Technology companies of all types now find themselves in a race to divest themselves of their old technology as quickly as they can, in order to stay relevant in the new technology environment. With this shedding of old technology also comes the shedding of those workers and employees associated with that old technology.

As the Chinese curse states, we probably do live in interesting times. What was once the vanguard of new technology companies are furiously trying to reinvent themselves as they try to avoid becoming the old guard of old technology. What was once viewed as a competitive advantage in having technology savvy people is now becoming a burden as technology life spans and cycle times continue to become shorter and shorter.

Moore’s Law states that we should see a doubling of the number of transistors on a dense circuit board (re. processing power) every 2 years, and sure enough this has been very close to the case. The first cellular network was put into service about thirty-five years ago (1983) and today (2018) we are seeing the fifth generation of mobile communications make its appearance. If my math is correct, that equates to a new mobile network build out about every seven years. The same sort of progression in capabilities can be seen in just about every technology platform in existence. https://en.wikipedia.org/wiki/4G
https://en.wikipedia.org/wiki/Moore%27s_law

So, what does this all mean.

I think to start, that it means if you are tied in some way to a specific technology, any technology, you risk becoming so associated with that technology that you as an employee in turn risk becoming considered outdated and past your usefulness when that technology hits its “old technology” finish line.

Now this is not a hard and fast rule. Those radio engineers that understood the 4G cellular network are probably your best bet for resources to understand the new 5G network engineering requirements. Probably. But as the lessons learned in the previous generations of mobile communications are applied to the next generations, are all of those resources going to be required? I point you back to the list of resource shedding companies that I noted earlier.

Supporting previous generations of technology continues to decline in importance as the next thing is now the best and most important thing. And the next thing is usually more efficient than the previous one.

And just as off-shoring and automation permanently changed the employment landscape for the manufacturing industries, so it is now coming to pass for the technology industries. As the relative cost of technology comes down (its price is actually remaining relatively level as its capabilities and speed expand), so the relative cost of the people required to implement and support that technology continues to rise.

I think the technology labor market is changing. It was not so long ago that business careers spanned one or possibly two iterations of a specific technology. Now with the two to seven-year generational technology horizons, a career should anticipate covering at least five and as many as ten or more technology shifts.

Being associated with a specific technology is no longer going to be good enough. It will more and more come down to which generation of that technology you are associated with, not just the type of technology itself. As businesses come to grips with the significant costs associated with supporting any technology other than the most recent iteration, the chance to be considered “old technology” will continue to grow.

It will no longer be good enough to be considered a subject matter or technology expert, because the subject matter and the technology will continue to change, and so will its strategic importance. And, if you are too closely tied to that technology, so will your strategic importance.

Customers too are facing this new market with increased issues. As they try to stay technologically current and relevant, they too will need to redirect resources away from the support of previous generations of technology. That doesn’t mean that the technology will be removed by the customer. It just means that the resources associated with sustaining it will by necessity be reduced. These limited resources will need to be continuously redirected toward the next generation of technology.

The old generation, both the technology and the associated people will continue to exist for some time. However, the market for them will change considerably. We have already started to see this market evolution in action. The cost associated with companies supporting old technology is starting to force them to sell off their outdated or older product lines to third party companies for continued support. These are companies that are making a business out of supporting old technology.

This is however, a double-edged sword. It is true that new technology companies will no longer face the cost and resource drain of supporting their old technology products, nor have to pay their old technology people, but they will now have to compete directly with their own old technology for the customer’s order. If the old technology can continue to be supported, will it be possible for the customer to delay the new technology purchase?

Buy selling off their old technology lines to other companies, they will in effect extend the life cycle of the old technology, otherwise no one would buy them. Customers could effectively delay buying decisions until prices, applications and values are more in line with their economic means.

So, what does this mean for the half million technology and large company employees that have been shed this year?

I think it means that there are probably more to follow in the coming near future as the new (and old) technology models and markets start to take hold. New technology companies cannot support their old technology businesses and structures. Old technology companies will have to become more efficient at support in order to make their business models work. They both will continue to drive all aspects of their business that do not directly interface with the customer i.e., Sales and Installation / Operations, to lower cost labor sources as the drive to reduce costs continues to intensify.

It used to be in the technology industries, that if you were a technology subject matter expert, you were in a relatively desirable position. Now, being too closely associated with a specific technology should at best be considered a short-term advantage as that technology will invariably age out rather quickly and receive the old technology tag. Technology careers and opportunities will not so much be about the depth of knowledge one has or accumulates about a specific technology, but the capability to move to and learn the latest technology quickly, before they get classified as old technology.

Responsibility and Execution

As we move up through management it is our expectation that our responsibilities will increase. We have demonstrated that we can not only handle the responsibilities of our current assignments, but that we can actually handle more. There is also a second axis that is applied along with the responsibility axis when it comes time for personal analysis: the execution axis. Being able to handle increased responsibility, but not being able to execute those responsibilities at an equally high level, or being able to execute at a high level, but not being able to handle the increased responsibilities, will provide you the opportunity to remain where you are and address those aspects of your performance that need work. It is only when both Responsibility and Execution are present at high levels that you get to move on.

I talked last time about Adversity and how my son has dealt with and overcame his Type 1 Diabetes diagnosis a year ago. Now I’m going to look at how he has done it, and what I have learned from watching him.

Most of us get to grow into our responsibilities and learn how to properly execute on them. Admittedly, some are faster learners than others. My son didn’t get the benefit of a learning curve. He didn’t get to grow into his Diabetic responsibilities. One day he is a normal eighteen year old, finishing his last year in high school. The next he is a Type 1 Diabetic, with a daily set of responsibilities, the execution of which affect both his quality of life, as well as his life expectancy.

Talk about having to grow into your responsibilities and learning to execute fast.

Prior to his diagnosis, Diabetes was sort of an abstract concept to me. I knew about it. I even knew a few people that lived with it. When it became real in a personal way, I too had to learn about it.

In business, few of us get to start at the top, with all the responsibilities and the requirement for continuous high quality execution. I suppose there are a few, particularly in privately held organizations, but I think even these have a sort of apprenticeship that comes from being “in the family” and growing up with the transition to be expected.

For most of us we start at relatively junior levels, learn, grow and prove ourselves over time. Situations, environments and even a certain amount of luck come into play. You may be highly skilled but in a mature to stagnant organization or industry that provides a relatively limited number of advancement opportunities. On the other hand, you may be in a growing industry where the opportunities are plentiful.

Good performance and learning the desired behaviors and execution can provide the opportunity for increased responsibility. This increased responsibility is usually built on, or an expansion of the previous role’s responsibilities. This means that you at least usually have a pretty good idea of how to execute on a portion of your new responsibilities.

This is the usual progression. In a new role, build on what you know and have already learned, and leverage it for the new responsibilities and execution of them. If you show the desire, willingness and ability to do this within reasonable time frames and expectations, then future expanded responsibility roles can be available.

Jesse Owens, the four-time Olympic Gold Medalist in the 1936 Olympic Games in Berlin Germany, said:

“We all have dreams. But in order to make dreams come into reality, it takes an awful lot of determination, dedication, self-discipline, and effort.”

I think it is safe to say that those games were not his first competition. He trained for a long time. There is no question that he worked hard. He learned and worked his way up through many smaller, and then increasing larger competitions, before achieving his most notable success.

I don’t think there are any smaller competitions, or learning opportunities for my son, or other Diabetics for that matter. One day you are fine. The next you have Diabetes and now are responsible for potentially life altering decisions, usually multiple times a day. There is no previous assignment to lean on or utilize as a jumping off point for your new role in life. It truly is a sink or swim moment.

If you provide your body too much insulin, it can result in Hypoglycemia (low blood sugar).

“Low blood sugar levels can cause a variety of problems within your central nervous system. Early symptoms include weakness, lightheadedness, and dizziness. … Severe low blood sugar is sometimes called insulin shock. Untreated, it can be very dangerous, resulting in seizures, loss of consciousness, or death” https://www.healthline.com/health/low-blood-sugar-effects-on-body

If you don’t provide your body with enough insulin, it can result in Hyperglycemia (high blood sugar).

“Hyperglycemia is a defining characteristic of diabetes—when the blood glucose level is too high because the body isn’t properly using or doesn’t make the hormone insulin….You get glucose from the foods you eat. Carbohydrates, such as fruit, milk, potatoes, bread, and rice, are the biggest source of glucose in a typical diet….If you have type 1 diabetes, it is important to recognize and treat hyperglycemia because if left untreated it can lead to ketoacidosis. This happens because without glucose, the body’s cells must use ketones (toxic acids) as a source of energy. Ketoacidosis develops when ketones build up in the blood. It can become serious and lead to diabetic coma or even death.”

In business if we do not live up to and execute on our responsibilities, we may end up having some of them taken away from us. If my son provided too much or too little insulin as part of his responsibilities, he could die.

Talk about a negatively reinforced incentive plan.

Normally incentive plans are structured to inspire better performance. To strive. To achieve. We focus on the upside and the opportunity.

His incentive plan has no upside. He will always have Diabetes, regardless of how well he manages it. Or at least he will have it if and until ever a cure is found. On the downside, as I just noted, failure to either execute or accept this responsibility, has a significantly more impactful, and detrimental result.

I have commented on the fact that matrix organizations can have a separation of responsibility, accountability and authority. Accountability and authority reside with the person that is answerable to the task in question. Responsibility resides with the person that must actually accomplish the task. A very simple example of this structure would be when Captain Kirk on Star Trek decides on a course for the Enterprise to take (the accountable authority), and then assigns plotting, navigation and implementation of the course to the navigator (usually Mr. Zulu – the responsible party).

I am not sure of who the appropriate parties would be in this example with Star Trek: The Next Generation, or Star Trek: Deep Space Nine, or any of the other spin-offs. I don’t think I ever really watched them.

In dealing with his Diabetes, my son is responsible, accountable and the authority. He decides what he eats. He tests his blood glucose levels. He decides on and administers the appropriate amount of insulin.

There is no question. He has the responsibility, and must execute at a high level, for the rest of his life. He started in the role, and will remain with it.

Fortunately, he has accepted the responsibility. He doesn’t complain about others with less, or different responsibilities. He knows what he has to do, and isn’t shying away from it. It comes with his new role in life.

He is also executing, continuously at a very high level. His blood tests and doctor’s visits all indicate he has his disease well under control. He is healthy and continues to thrive, much like any other nineteen year old without diabetes. He doesn’t use it as an excuse, or ask for any special treatment (although he is entitled to under the American Disabilities Act).

He just works hard at the tasks he has in front of him and adds the responsibility and execution of his diabetic requirements to his daily agenda.

He has accepted these new responsibilities (even though he definitely did not ask for them), and he is executing on them to the best of his ability. I think his best has far exceeded our hopes and expectations. I am confident that he has learned how to cope with this and any potential future increases in responsibility, and that he will execute on them with the same focus and high levels that he has handled these.

I am immensely proud of the way he has handled it. I don’t know if I could do as well at his age, or any age for that matter.

I continue to watch and learn from him.

Adversity

There are very few among us who get to go through their professional careers without having to deal with some sort of adversity. I think this is pretty much a given. To be trite to the point that it almost pains me to type it, it is how we deal with this adversity that separates the truly top end from the rest of us. Sometimes dealing with this adversity has the added benefit of providing us with something called perspective.

This one is already becoming difficult for me. I think you will understand when I get into why in a little while.

When we think of adversity we normally can think about things such as difficult market conditions. Especially if you are associated with any sort of equipment or infrastructure sales in today’s capital constricted markets. Adversity can take the form of a difficult boss. I like to think about the pointy-haired fellow in the Dilbert comics by Scott Adams. Adversity can take the form of a difficult assignment, or the requirement to find your next assignment or even the next job. Obviously, adversity comes in many forms.

To one extent or another I think we have all been there. All of these examples (and many others) constitute difficult environments and situations to either find yourself in, or experience. They require a certain amount of fortitude and focus to get through. But that is just the point. They are situations to get through. With work, focus, effort and the proper attitude they can be traversed.

I think that deep down we all understand that, even when we find ourselves in those uncomfortable places. We should focus on the resolution, and finding our way to it. It is only when we take our eyes, and minds off of this goal that we run the risk of a longer-term failure as opposed to a shorter-term set-back. Still, I think we have all seen it happen.

I might get into mind-sets and methods of dealing with this type of adversity at another time as well.

I’m going to talk about a different type of adversity.

One year ago, today, my eighteen year old son was diagnosed with Type-1 diabetes.

Now we are talking adversity.

Admittedly it is not as much as many face and endure, but it also has added a great deal of perspective for me when it comes to talking about and dealing with things in the professional world.

Most of the time I talk about issues, topics and observations in the first person, and what I have done, either correctly or incorrectly in dealing with them. However, this is one where I can’t. It didn’t happen to me. It happened to him. For whatever reason, his pancreas stopped creating insulin. Mine still does. His doesn’t.

I like to think of myself as a leader. Someone who solves problems. But this was one issue that I couldn’t find a resolution for.

“Type 1 diabetes, once known as juvenile diabetes or insulin-dependent diabetes, is a chronic condition in which the pancreas produces little or no insulin. Insulin is a hormone needed to allow sugar (glucose) to enter cells to produce energy. The exact cause of type 1 diabetes is unknown. Usually, the body’s own immune system — which normally fights harmful bacteria and viruses — mistakenly destroys the insulin-producing (islet, or islets of Langerhans) cells in the pancreas.” https://www.mayoclinic.org/diseases-conditions/type-1-diabetes/symptoms-causes/syc-20353011

Every time we eat our bodies break down the consumed food into components that are used to sustain our bodies. One of the key ones, as noted above, is sugar to produce energy. Diabetes inhibits this process.

A little more than a year ago, we noticed that our son was losing weight, was getting lethargic and was drinking a ton of water. I credit my wife with spotting the symptoms first. At this point he was almost six feet tall, and weighed close to one hundred and twenty-five pounds. We got him into the doctor, and then we got the diagnosis.

After two nights in the emergency room on an insulin drip to get his blood-sugar down to an acceptable number, he was discharged and set out to deal with the adversity of being a diabetic – for the rest of his life.

This was not a temporary set-back. This is forever, for him. I had broken bones, dealt with various sicknesses, had bad bosses, and looked for new jobs, and all other sorts of set-backs. I think as I said, deep down I knew these adversities would pass.

He was dealing with his first real adversity, and it wasn’t going to pass.

As a parent, and the nominal leader in our house (Make no mistakes here. I like to think of myself as the leader, someone who solves issues, however my wife is the “boss”. I refer to her as “The most powerful woman in the universe”. At least in my universe.) this was something that I could not fix or resolve. I had to recalibrate how I dealt with this since it was by no means going to be temporary.

But I am a reasonably experienced individual. I’ve been around. I’ve gone through a lot.

My son was just eighteen. He was finishing his senior year of high school. He was already accepted into a good university. This was supposed to be a great time in someone’s life. The rites of passage. The beginning of the transition to adulthood. The last of the truly carefree times in life.

I don’t quite know what he thought, but I thought it was unfair.

I watched for any telltale signs on how he was taking this. He had gone from being able to eat, drink and do anything, like any other teenager, to having to be totally aware of what he was eating, drinking and doing, in order to maintain a healthy blood-sugar level.

What I watched as time passed, both astounded me, and made me proud.

It astounded me in that I didn’t see any changes in my kid. I was angry at the randomness and injustice of this, but he wasn’t. He was the same laid-back and happy guy that I have always known. He was facing adversity and not letting it change who he was, and is.

I was proud in that when I asked him about it, he was philosophical about it, and it seemed to be way beyond his years to me. He said he decided he wasn’t going to change because he now had diabetes. He would still eat, drink and do what he wanted, but he would now just add monitoring his blood sugar to the process.

I was proud of him in the way he was dealing with it. He said that at first, he was angry, but then he realized that being angry wasn’t going to change his situation. It was something that happened. He realized he couldn’t change it. So, he had quickly come to terms with it. And besides, he really wasn’t the angry type.

I was still angry. I probably still am, to some extent, even a year later.

Here was an eighteen year old who had never faced any adversity to speak of, let alone adversity of this type, basically schooling me on how to handle it. Here I was, someone who had gone through the highs and lows of business, the lay-offs and the promotions, pretty much all of it, and I was learning from him a perspective that in retrospect I probably should have had, to one level or another from the beginning.

He is now nineteen years old, and has finished his first year of college. He is still a diabetic, but he has put the weight back on and is now a healthy, but slender six feet tall and one hundred and sixty pounds. It is still an adversity that he has to face that will never go away, unless a cure is one day found.

We have tried to automate and simplify his regimens with the addition of Constant Glucose Monitors (CGM) and Insulin Pumps that are attached to him so that he no longer has to prick his finger to test his blood, nor use a syringe to inject the required doses of insulin.

Adversity comes in many forms. I don’t want to try and equate the adversity that occurs in business with real adversity. I learned this through watching someone I really cared for come to grips with and deal with the adversity that he faced. I also saw that although I thought what he faced was great, there were those that faced even greater adversities, many of which might not be able to be dealt with, and in many instances despite all efforts might have to be accepted on an even more painful level.

I was going to end this with some nice quote about adversity. None of them felt right, when looking at the adversity that is faced in business when compared to my son. I think this has to do with my perspective that has been gained relative to adversity. I’ll go in a little bit different, but not entirely unrelated direction here. Charles Swindoll said:

“Life is 10% what happens, and 90% how you react to it.”

If that’s the case I think my son is going to do pretty well in business, as well as in life. And I think I have learned a lot about how to deal with adversity from him.

The Short Horizon

As the pace of business continues to accelerate, there seems to be one aspect of the business process model that is struggling to keep up: The Business Case. There was a time where capital expenditures were looked upon as long term investments by the business. The life-cycle and pay-back processes, as well as the accounting amortization of these investments, were expected to last years, and in some instances, even decades. The average business case became attuned to these norms.

But those days are long gone. As the speed with which technology has changed has continued, by necessity the business case used to justify the new or incremental investment has needed to become shorter. If Moore’s law of eighteen-month capability doubling (it was actually Intel executive David House, who predicted that chip performance would double every 18 months. Gordon Moore, for whom the law is named, was the co-founder of Fairchild Semiconductor and Intel, and whose 1965 paper described a doubling every two years in the number of transistors per integrated circuit was the basis for the coining of the “law”) is to be believed, then the asymptote for the length of an acceptable business case should approach that eighteen month to two year limit as well.

That doesn’t mean that a product’s useful life is only limited to eighteen months. I think quite the contrary. There are aspects of the Public Switched Telephone Network (PSTN) that have been in place for more than fifty years, and are still providing beneficial service to the communications carriers and their subscribers alike.

On the other hand, people are known to line up and over-night camp out every eighteen to twenty-four months in order to be the first to get the next generation of the Apple iPhone.

It appears that customers who are being asked for either capital or operational expenditures associated with technology oriented products, are driving their partners and their vendors to ever more rigorous and aggressive value propositions and rates of return. This is the genesis of the short horizon business case.

The simplest definition of value is how much money is made or saved over what period of time. The more you make, or the more you save over a given period, the better the value. In the past it was acceptable for a business case to extend out over a long enough time period as to show an acceptable return. If the initial business case for the sale didn’t make sense for one period of time, it was easy just to lengthen out the time frame until it did.

What appears to be happening is that as the rate of technological based product change has continued at the speed of Moore’s Law, the period that a customer is willing to measure value has shrunk. Business cases still need to show the customer value, they now must do it in far less time. The tried and true form of extending the business case period to make the value and pay back equations work is now gone. Customers will no longer accept it, and are driving for shorter and shorter review periods.

I think there are several factors in addition to technical obsolescence that are helping to drive a short horizon on the business case:

As each new generation of technology arrives it almost exponentially drives down the (residual) value of previous generations. I think it is no secret that one generation old technology is viewed as old and disadvantaged, and that two-generation old technology is probably approaching the zero value state. We have all seen this in our consumer based technology purchases as well. Products get old so quickly that we have developed a disposable attitude toward them. With Personal computers now going for a few hundred dollars, what is the value of a two-generation old computer? What was once repaired and retained is now simply expected to be replaced.

How would consumers (and manufacturers) react if the same logic was applied to say, automobiles and two to three model year old car was considered almost valueless?

We also see (comparatively) decreasing operational returns as each new technology generation is introduced. This means that as each new product gets smaller and more efficient the value of generating operational savings associated with the previous generation of product also tends to get devalued.

The idea of saving something with what you have is not as attractive as the possibility of saving more with something new. I guess this is what they call “Marketing”.

I think one of the final evolution’s of the short horizon business case is the “Cloud”. I am sure everyone has heard of this thing. It’s in all the magazines.

One of the many ways that manufacturers and vendors have adapted to the evolving business case rules is to try and remove both the obsolescence associated with technology and to more closely align the delivered solution with the customer’s need. The idea being that if a customer only needs a four-unit solution but the technology only comes in six or eight unit increments, there is a delivered solution miss-match.

By delivering a function from the cloud as opposed to a product based solution, the vendor has effectively removed technology obsolescence from the customer’s decision process, as well as matched the required amount of solution with the required amount of need.

The net result is a much shorter period needed to achieve the required business case. Customer purchases can be made in smaller increments, which in turn only require smaller pay-backs. Future product purchases and existing product obsolescence are removed from the customer’s decision criteria as the customer is now only purchasing the product’s function, not the product itself. The obsolescence issue, and all the other costs associated with operation of the product are now retained by the vendor (and should be built into their business case).

The continued drive for more value has driven customers and business cases to the short horizon. Capital for technology can no longer be viewed as a long-term investment. It must be judged and justified by how quickly it can pay back on its cost and the relative business value it generates. It is this drive for better business returns that continues to reduce the time scale associated with the business case.

This trend would appear to potentially be a seed cause for future changes to the way business is conducted. On one hand it will continue to make the sale of capital based technology products more difficult. By demanding shorter pay-back and business case periods, customers are in essence expecting lower prices for products, and higher value delivered. That is a demanding and difficult environment for any supplier.

It should also continue to drive product virtualization and the Cloud as ways for suppliers to retain costs and risks, and hence remove them from the customer’s business case. This will continue to be an interesting market, but not all technologies and products may be potential candidates for the cloud.

It could also be argued that a potentially unexpected result of the drive to align business cases with product life cycles could be the reversal of Moore’s Law. It has long been expected that there is some sort of limit to the capacity doubling process. It has been going on for over fifty years. There are recent articles in no less than the MIT Technology Review, Ars Technica, and The Economist (to name just a few) that are now stating that Moore’s Law have in fact run its course.

And this may also be of benefit to business. If customers want to align their capital business case length with the product’s life cycle, and the current eighteen to twenty-four month life cycle of the product makes this increasingly difficult, then one of the solutions may be to lengthen the product life cycle to more than twenty-four months. If there truly is a link between business case length and product life cycle, then this could be a possible solution.

This will be an interesting cause and effect discussion. Is the potential slowing of Moore’s Law going to cause the reversing of the short horizon trend associated with customer’s business cases, or is the demand for short horizon business cases going to accelerate the slowing of Moore’s Law due to business necessities? Either way, customers are requiring businesses to change the way they put together the business case for capital technology sales, and that is having a significant effect on how business can successfully get done.

From Anything to Something Specific

I really tried to take a break from putting out anything this week. The problem was that the closer I got to the end of the week the guiltier I began to feel at not writing anything. I tried to convince myself that my public would be disappointed at missing their weekly fix of my views on business and sales, and indeed I actually did get a question from a reader as to where was my post. However, the truth be told, it seems I am a creature of habit, and I am in the habit of providing my views on things, regardless of whether they are appreciated, or even requested, or not.

Oh well.

It was interesting that I wrote about golf last week, and then Tiger Woods announced his return from injury to play in this week’s tournament. This is a little bit interesting on several levels. First it is always interesting to have Tiger Woods in the field at a golf tournament. Love him or hate him he does draw interest. For me it’s a little bit more than that. Tiger Woods has always had a game plan whenever and wherever he plays. His preparation is the stuff of legend. In essence he plans his work and then works his plan. And he seems to do it better than just about anyone else. He has set the standard, whether it is on his recoveries or in standard execution.

Except this time. He acknowledged that he was not in optimal playing condition and has not prepared and practiced as he has before on previous recoveries, and that he was going to “play himself into shape”.

Many attribute this decision to the proximity of the next major golf tournament and Tiger’s pursuit of the record for the most major wins in a career. If this is truly the case then his latest move in returning to golf in a relatively unprepared state has a certain air of desperation around it and desperation in any endeavor, be it golf or business, is a cause for some amount of speculation and concern.

The same type of speculation and concern applies for businesses that are attempting a comeback from issues of their own. Businesses very seldom find themselves in any sort of difficulty as the result of a single event. Tiger hurt his back and had surgery. I am hard pressed to mention a similar type of singular event where as the result of it a business finds its ability to perform to be fully in question. Businesses don’t hurt their backs and have surgery which then require them to execute an immediate comeback plan.

The more usual reason that businesses find themselves in trouble is due to an inattention to the fundamentals of the business or the trends in the market. These types of issues tend to compound themselves over time and culminate with a “sudden” realization that there is a problem. With the realization that there is an issue comes the first reaction to desperately seek a quick solution.

I think it is fair to say that since most business issues did not result from an abrupt sort of event, quick solutions to the problem are not going to be easily implemented or particularly successful in resolving the issue. But that doesn’t seem to stop many businesses from at least trying them.

The two quickest solutions to business issues normally boil down to two simple approaches: Sell more, and Cut costs. Sometimes both solutions are attempted at the same time. Surprisingly enough, I think that these are probably the correct approaches, but that trying to apply them too quickly may only make the problems worse.

Just as many people are concerned that Tiger Woods’ trying to make a comeback from surgery so quickly might cause further injury to his back, making things worse.

There is an old saying in business: “You cannot cut your way to prosperity”. I think this is true. You may have to cut your way to survival, but you can’t cut your way to growth. With that in mind I am going to focus more on the “Sell more” aspect of businesses’ desperate responses to issues.

Too many times a business that finds itself in a recovery mode institutes a “Sell more” sales drive in order to drive incremental revenue, and hopefully incremental margin from it. Unfortunately under these types of circumstances “sell more” many times gets translated into “sell anything”. This usually results in the acquisition of many sales opportunities that do not adequately fit the proper deal profile for the business.

A proper deal profile for a business includes consistent, attainable deliverables; repeatable business products and functions that do not drain or strain business resources, pricing that enables contributory margins and profitability, and contract conditions that do not present onerous hurdles to the success of the engagement. These are the specifics associated with a healthy approach to sales.

Too often a business can get too anxious to rapidly try and recover from an issue that occurred over time. This can result in the “sell anything” approach to business in an attempt to generate revenue to help turn things around. All too often this approach results in lower margin deals and one-off opportunities that in the end not only do not add to efficiencies, but actually detract from them in the longer run. The sell anything approach is a scatter-shot pursuit of a specific solution, and as with most scatter-shot applications it results in far more “misses” than hits.

When a business is in any sort of difficulty, or is experiencing issues, incrementing in a number (large or small) of sales misses to the solution mix does not help. It only detracts from the situation, both in the resources spent ineffectively and the resulting number of sales deals that do not generate the desired or expected returns.

If it is deemed that the issue is sales or market related, and that a new sales direction or approach is required as part of the overall business recover solution, then a specific strategy and approach to new sales is called for. This will help minimize the number of extraneous or non-contributory deals that will be added to the business mix. When there are business issues, everything must be aligned and additive to the business solution. This includes the types and values of the sales opportunities that are pursued.

A business cannot allow the “Sell More” solution to become the “Sell Anything” solution. It will only  prolong the business’s recovery, or potentially even make things worse.

Will Rogers is quoted as saying “When in a hole, stop digging.” We also have the much older and unattributed quote “Don’t just stand there. Do something.” In business it would seem that the equivalent of the first quote might be “When in a hole, start selling”, with the equivalent rejoinder to the second being “Don’t just sell. Sell something specific.”

The idea of focus and discipline never goes out of style in business, even when times are tough, or recoveries are being attempted. Maintaining a focus on selling something specific and resisting the temptation of selling anything available will result in a better solution and stronger business over the longer run, and that is the focus that business needs to maintain.

Tiger Woods is a unique talent. We shall see if the departure from his proven successful preparation process pays off in his recovery attempt. It might pay off for him, but he did miss the cut in his first tournament back, and that is news in and of itself, since he so rarely fails to make the cut. Most of the time it does not pay off for a business to try for a quick recovery that departs from their specific processes either.

Strategic Business


“Strategic” business is an interesting concept. It is normally used by sales teams to denote business that is believed to be so important as to be opportunities that are categorized as “Must Win” business regardless of the costs. This can be due to the size of the business, the desire to obtain market position or to keep a competitor from obtaining market position, or any number of other good, well meaning reasons. In my experience the one characteristic that all “Strategic” business has in common is that it is unprofitable.



Strategic business is invariably the sales code phrase for “We want a lower price.” There may be competitive reasons for the desired lower price. There may be higher costs associated with the opportunity that customer doesn’t wish to absorb or pay for. There may in fact be increased competition. There may be expectations by the customer for greater savings. The list can go on and on. The point here is that none of these reasons are strategic. They are tactics, either by the sales team or the customer, to get a lower price.




The strategic business approach can also be seen when a large multi-product supplier is dealing with a large multi-product using customer. The idea posited here will be if a lower price is obtained for one product it will be to the benefit of all the other products that are being sold to the same customer.




Wait a minute, how does that go again?




I am of the opinion that all business is important and that all business should be profitable. It would seem in this scenario that some business is less important that other business. In this case it would appear that it is the Profitable business that is less important. After all, it’s not strategic. How do you decide which business is going to sacrifice its profitability for the sake of the other businesses? How do you prove the linkage between the unprofitable strategic business, and the profitable non-strategic business? Does the supplying company recognize that one (or more) of its businesses has been positioned and priced as a strategic business and measure its performance accordingly?




Strategic plans are those business plans where the growth and profitability for the business are mapped out over a longer horizon (usually 3 to 5 years). They provide directions and goals. They focus on the growth of both revenue and profitability of the business as well as the evolution of older products to newer ones. Strategic business, if there truly is such a thing, should also be focused on the long term growth of both the business revenues and profitability. It would seem that strategic business would only be associated with new products, new revenue sources and the new profitability associated with them.




Under these types of definitions for strategic business, it is very hard to justify any type of unprofitable business as strategic, particularly for existing products or services. I have said before that customers associate value with that which they pay for. If you provide goods and services to them at reduced prices then they will assume going forward that those goods and services have a reduced value. If strategic business is based on longer term future growth, do you really want to grow what has now been priced to the customer as an unprofitable business?




If there is value to your customer in the goods or services that you are providing them, then you should be entitled to a profit margin. It is the profit margin that enables you to pay your costs as well as look for new goods and services to supply your customers in the future. This is the basic tenet of business. Customers will continue to apply pressure for lower prices. Competition may also generate downward pressures on prices. As a provider of the goods or services you will continue to try and find new ways to reduce costs and to become more efficient. Downward price pressure and the ability to remove costs and increase efficiencies of the business will eventually hit the point of diminishing returns.




I have talked in the past about the need to prune products and services from the business portfolio when they have reached an end of useful life scenario. Part of that end of life decision is based on the time when either your customer will no longer pay you an appropriate price where you can generate a reasonable margin, or your costs are such that you can no longer reduce them to the point where you can generate a competitive price at a reasonable margin. As I said earlier, if there is value the customer will pay for it. If there is not enough value to the customer for them to pay for it, then the supplier should no longer provide it.




If you have an existing product, service or business where you are having problems generating the prices and margins that are needed for viability going forward, there may be a push to look at the “strategic” importance of the product, service or business for the “greater good” of the company. These types of discussions ring hollow. There is nothing strategic about unprofitable business for existing products and services. Each product, service and business needs to be able to stand on its own and justify its future viability based on its own revenues and profitability. Unprofitable “strategic” business is still unprofitable business.


One way to make sure that strategic business is in reality profitable business is to align the revenue objectives of the sales team with the profitability objectives of the business. Some business opportunities are more valuable (more profitable) than other business opportunities. If the sales team is rewarded for more profitable business, and is not rewarded for less profitable business, the focus will be placed on profitability and the more profitable business. Strategic business will either need to be profitable, or it will no longer be so strategic.

Activity and Progress

Lulls happen in business. It is very rare that there is a prolonged period of non-stop functional engagement. Holidays, vacations, general economic and market changes occur so that sometimes there is just not as much business to conduct as there is at other times.




It is normally at times like these that management comes by to see what you are up to. We’ll talk about this in another article.




What we will talk about here is the difference between doing something and making progress. Remember how your mom would always think of something for you to do if she found you relaxing or watching TV. That was activity. The management equivalent can be the number of reports, plans and strategies that you will be asked for as a result of any changes to the general business, market or economic conditions that may arise.




Progress for your mom was you moving from elementary, to middle, to high school and beyond. Sure there were report cards every quarter, or semester, but the overall progress toward the goal and objective of graduation had a significantly different and longer time line. The current management equivalent for progress is not so easily quantified. We seem to be in a quarter (3 month) over quarter cycle where year to year changes have lost their importance.




The key is to realize that progress takes time. Activity can be immediate, but can the advancements it generates be sustained? Perhaps, but we seem to have become very focused on immediate responses and gratifications. We need to understand that activity is immediate and short term, and to also understand that there may be quarters where the activity may not put us at the levels that we want. We need to keep our focus on the longer term goals and objectives if we are going to really make progress.