Wednesday, December 15, 2010
Saturday, December 4, 2010
Here's another great post with a similar bent to a couple of my past posts:
Entrepreneurial programmers are not a commodity. Their skills require both programming experience and understanding of the entrepreneurial process. While these capabilities (Whether you hire them and use them in-house or hire out to another company for service) are not inexpensive, they are well worth the investment. And be aware that to get GOOD programmers that can understand and manage the process you WILL have to pay for those skills.
Note http://twitter.com/tordf pointed out the post to me - thx for the lead :)_
Monday, November 29, 2010
I hear the words in the above title all the time. We love awesome ideas at OS-Cubed - it drives our (and our client's) passion. But what about all those ideas that you have that never end up getting made, what happens to those? Today the process of getting a patent on something, especially a "business process patent" is fraught with difficulty. You have the burden of proving there is no prior art that shows that your idea hasn't already been thought of by someone else, and of actually prosecuting any perceived infringement on your own nickle.
Truly your best defense against someone else taking your idea and running with it is doing it yourself - sooner rather than later, and better rather than poorer. This is why most venture capital companies won't sign a non-disclosure or a non-compete. They know that there is an unlimited supply of ideas, but a very limited supply of entrepreneurs with both the passion and ability to turn those ideas into cash.
That means really letting your great idea take hold and putting your full passion and energy behind making it happen is the best way to be sure no one steals it. This is not to say you shouldn't pursue a patent if you really believe it's revolutionary enough to get one. Being first to market AND better to market though will make up for a lot of lost revenue fighting over lawsuits. And no - you can't just get someone to send you money if they later "take" one of your ideas and make it happen.
Oh, and as an added aside - be sure to actually CHECK the market to see if there's a competing product already there. I can't tell you the number of times we've been approached to create a reinvented EBay (with no significant difference from the real EBay), a new PowerPoint (with the same features), or a new version of an existing site. These aren't revolutions and they won't capture the hearts and minds of users unless there is truly a pain being serviced, a product being sold or a methodology being used that is new and different from the rest of the marketplace.
Tuesday, November 23, 2010
Wednesday, November 17, 2010
One of the challenges of working with entrepreneurs as clients is that their methodology, purpose and culture for building software are different from your average everyday business or web client. OS-Cubed has built their methodology, culture and tools around being able to service the entrepreneurial client. In our case, since we are a small group - we chose ONE platform to support (DotNetNuke on IIS with a MS SQL Back End). We didn't choose that casually. We wanted to remain in the well supported (from a developer and a client's point of view) paid .NET development arena. We wanted to build on software for the back-end that was scalable and reliable. We wanted to build on software (on the front end) that was open source and optionally free. And we wanted something that wasn't so proprietary that we couldn't hand it off to another team when the time came. We also wanted a platform we were experts in hosting - as well as configuring. We've done things with DNN not even Facebook or Twitter have done - and we did it all on a shoestring budget compared to those sites.
A lot of times our clients end up in our shop because they've gone through one, two - even three or four - developers who have let them down. They tried the cheap route with programmers from India. They tried the expensive route with high end business consultants. They tried hiring "the guy down the street" or the guy from Belarus to build software for them. Frequently these forays are wretched failures - the entrepreneur-developer bond is a very specific one and if either side doesn't understand how the other thinks and works - you can end up with a real disaster.
Recently a customer came to my office (through a local referral) who was a perfect match for us - they had a site that was created by at least 4 different programmers doing different tasks (in this case all badly or with the wrong tools). They were ALREADY ON DNN! Their product was in the educational marketplace - awesome I already have an educational entrepreneurial client so I know the culture and subject matter. We didn't even need to convert them to the platform, just fix what had been done wrong and adapt it.
They had some simple, easy to repair (if you know what you're doing) systemic problems that were bringing their site down and making it unreliable, and they were on GoDaddy for hosting - possibly one of the worst hosts in the world. Amazingly though we were able to take them from a wretchedly unstable DNN install to a stable one in a matter of a couple of days - identifying and either fixing or documenting what needed to be done to get them running and meeting their goals. We unraveled the hosting issues, and the stability issues, got them up and running and all prepared for future growth. Perfect right?
A quote from the customer: "WOW! We love your process. You keep us informed, and almost seem to have a second sense for exactly what we need. You let us know before accruing hours that something might go over an estimate, and you work with us - and our other vendor partners - in a kind and courteous way as you have done this - paying attention to our priorities. You've done more in the last 48 hours for our site than has been done in 2 years of development."
Awesome. Our customers say the best things about us and we love them for it - and when we get a compliment like that it lets us shine up our white armor and say - see we CAN ride that horse! But the customer didn't stop there.
"I'm sorry to inform you however that the board has decided to move from the DNN and MS SQL to a php and mysql platform, because of all the frustrations we've had with DNN. We just want to stabilize the current install while we develop a replacement in another languague."
WHAT!? Hold the horses. The problem isn't the platform - it's the programming teams. It's not whether the platform can do what you want - it's whether the team you had used the platform to it's best advantage, using pre-programmed tools when appropriate and developing custom modules where they are needed. It's whether the team understands your requirements, budgets and goals, and works with you to make all 3 fit into the same project iteration. It's whether the team building your software knows the ins and outs of the platform to really take full advantage of it. And it's whether you trust the people building stuff. It won't matter if you move to a new development platform if your developers don't know, understand and live these precepts.
I haven't closed the loop on this yet - I'm still hoping to convince this client (through references from other clients) that it's the team not the technology. Wish me luck!
So for all of you out there right now cursing your platform (whatever it is) just be sure that the problem is really technical not cultural.
Wednesday, October 27, 2010
Ford went from losing $13B are making $6B this year - the one difference is that the CEO is different. the new CEO knows how to MAKE decision and EXECUTE on them - he knew the how of decision making. The growing complexity of companies have moved companies into poorer decision making ability. An organization is defined as the ability to make and execute decisions.
4 aspects of decision making:
- Quality of decision
- Speed of decision - faster than competitors
- Yield - how often are decisions executed as intended
- Effort - the amount of energy devoted to executing the decision
To gauge quality they asked - what percentage of the time do you choose the right action
To gauge speed they asked - do you make decisions faster or slower than your competitors
To gauge time they asked how often are decisions executed as intended
To gauge effort Do you put the right amount of effort into making and executing decisions
In various objective success measures those with high QSY-E scores were 13-15% better than those with low scores. There was a 96% correlation in the score vs the objective measures. Making small changes in Quality, Speed or Yield = large changes in performance.
10 elements of organizational health:
You must know the following to make a decision:
- What is the decision you are trying to make - is it the root cause decision or something peripheral to the problem.
- Who are the roles in the decision using RAPID
- R - Recommend a decision or action
- A - Agree on what decision is made
- P - perform the decision
- I - who provides input on the decision
- D - who is the decision maker
- determine the decision approach:
- Criteria (what are the criteria that dictate a successful decision)
- Facts (always look at facts not opinions and agree on what facts are needed)
- Alternatives (explicitly look at alternatives)
- Critical meetings/committees
- Closure and commitment
- Feedback loops
- Determine for each decision a specific deadline to decide, and another to deliver
- Create a calendar for each decision and track progress
- Evaluate the calendar of each decision at each decision making event
For more information check out http://www.decide-deliver.com/
Next up was Bill Molloy on "Strategic Speed, mobilizing people, and accelerate execution". Objective was to answer 3 questions:
- Why is speed important?
- How do leaders achieve speed?
- How do we use speed to attract and retain talent?
- H&M stores can take a design to hanger of a fashion design in 20 days - industry average is 200
- Southwest Airlines planes spend an average of 20 minutes on the ground
- ICICI bank in India has the 3rd most active online trading product in the world. They built it in 90 days
Three people factors:
- At Fender Guitars - every person's name badge has the vision statement on the back
- People have a shared understanding of our strategy at a detailed level
- People focus their efforts on a few critical priorities
- Our strategy has been translated into concrete and achievable goals
- At Wells Fargo when they merged w/Wachovia - they spent over a year planning, integrating and choosing the best of both systems to transition to a new system - cross functional collaboration
- We have commitment at all levels to the success of our strategy
- We staff strategic initiatives with team members who are capable and dedicate sufficient time
- A spirit of teamwork and cross boundary collaboration is evident throughout the organization
- People stay open and flexible in the way goals are met
- People maintain a bias for action while correcting course as needed
- People capture and communicate what they learn from initiatives and projects
Our final panel was to discuss the future of finance skills.with Ken Sanginario - manager of corporate finance for Northstar, Arun Dhingra, search consultant for Egon Zehnder International, David Greene Professor of accounting for Indiana University, and Kristi Matus - EVP and CFO for USAA.
The panel started out with a statement that the CFO skills of 10 years ago have become commoditized. CFOs are no longer just bookkeepers, but are now key partners in a companies financial success. CFOs of the future will need to be a generalist and understand more different company roles will be the more flexible and hireable capabilities. David recommended the following books for career advancement: David: In career success skills, he recommends "How to be a star at work" by Robert Kelly & "The Platinum Rule" by Tony Allesandra. Kristi stated that you need to be a lifelong learner to succeed in business. All the panelists agreed that strategic thinking rather than just thinking numbers is the important key to success.
And that wraps up Day 3 of the conference - I will post a summary of learnings and how it all applies to you as an entrepreneur as a separate post.
Breakfast roundtable sessions
My first roundtable session was how to control IT costs. The flavor that I got from my first session is that CFOs repeatedly said they didn't really understand IT guys requests, and didn't feel that IT did a good job of deciding on ROI and considering multiple options when deciding. I got the feeling that those CFOs that didn't "get" the CIO had hired up their CIO from inside, rather than hiring a business person who also understood IT. The presenters assumption was that outsourcing everything will result in the least cost, but in my opinion a blended approach is still justified. Moving to outsource means you can't capitalize the investments, and you don't have control over the back-end data to the extent that you do if you move to an outsourced solution. This was later confirmed by Susan Kamm who said that the very best Smart IT companies insourced everything but commodity products like email.
In our next roundtable we talked about mobile workers - both traveling and from home. The gist of the discussion with the CFOs resolved around the idea that allowing mobile workforces increased flexibility but changed the culture and protecting internal culture and treatment of mobile workers vs in-house workers could represent some risk. There were even stories about workers suing for the "right" to work from home.
Tom Jones of Citibank
First general session speaker is the former CFO of Citibank Tom Jones talking about the new accounting standards and why they are needed. He holds that US GAP accounting standards are the cause of a tremendous amount of additional work, education, and problems because they are not compatible with international standards board accounting practices used by the rest of the world, created by the IASB. Equity markets are now global and international standards are required. GAP accounting is too complex to understand globally (at over 17,000 pages). IASB is only 3000 pages. Another advantage is that the IASB standards have a "smaller" version for privately owned companies - the Small medium Enterprise standard weighs in at only 275 pages.
IASB Rules myths debunked:
- The standards must be worse because they are shorter - actually no - several studies have shown that they are both equally accurate
- The international standards are shorter because they're new - actually in 10 years it hasn't changed at all, and is adopted in over 60 countries
- Many countries don't implement the whole standard, they're picking and choosing the standards they like - not true this rumor came from a set of French banks that didn't like the hedging rules (11 paragraphs out of several thousand pages).
- There is more fraud under IASB than under GAP - untrue, there is actually more fraud in GAP accounting than in IASB
- There are rules for everything (rather than principles as in IASB) so it must be better - actually the more rules there are the more opportunities for loopholes and complexity being limited helps companies comply. Most judges in a principles based lawsuits look at whether the company really did due diligence - even if they were wrong in their final conclusion. Principles based means you have to put information in that you have done due diligence on including outside consultants - not that you can put anything you want in there.
Up next was Kim Wallin, Chief Controller for the state of Nevada to talk about using business process improvements in government. In Nevada they are increasing the state's savings and revenues by applying aggressive accounting practices including putting a property tax cap in place, doing operational audits to identify "supervisor heavy" organizations for cost reduction, Use of data mining to identify overbilling in Medicaid BEFORE paying out claims, moving to better debt collection (they currently have debt that is between 400 and 3000 days old) and they only collect about 20% of the debt owed to them. They've increased that to 28% by checking debtors vs vendors, and hiring competing debt collection agencies to collect the owed debt. Their final goal is over 60%.
Nevada has implemented XBRL to eliminate spreadsheets and to decrease or eliminate data entry errors, eliminate thousands of spreadsheets, and allow them to use data cross-database. The second phase of their project will allow them to import data from their systems directly rather than manual entry into the XBRL database. They are spending only $500,000 for the system, and estimate savings will return quickly based on better debt collection alone. The XBRL system will also allow them to process grant reporting in a day rather than 2 weeks, and be more accurate in the process.
Panel Discussion - Mastering the new fundamentals
The next discussion was a panel discussion with Julia Homer (EVP of CFO magazine), Don Jordan, CFO of Pelican Products and Robert Lloyd (who has the best job in the world) as CFO of Gamestop. The panel discussed Mastering the New Fundamentals to measure and encourage growth. Gamestop challenges recently have included the move to online distribution, entry of other players in the used game market, and competition from non-retail channels. They've responded by moving to more unique content tied to the product distributed through their channel, move into online distribution and a new customer loyalty program.
Pelican products makes ruggedized cases, specialty flashlights, and remote lighting products. They make everything from iPOD cases to cases to carry missiles. Their sales have grown 20% YOY with growing EBITDA over the last few years. But last year in October the bottom dropped out of sales, and they were in the middle of an acquisition that would have doubled them - the banks were pulling out left and right. But they pulled it through with Mezzanine financing - they got debt at 14.5% fixed with pre-payment penalties as the only money the banks would give him - but they did it anyway and it's now economically feasible to spend the debt down. Meanwhile their company has doubled in sales and market share due to the strategic buyout. They hired a consultant to review both companies, and then created a synergistic cost saving of $25,000,000 in cost savings. Pelican is down in revenues 7% but EBITDA is up 15%. They are back to their 2008 levels in sales.
Lloyd says that to convert from a retail only business to a retail plus technology business, they have had a culture clash, and the same with doubling their size when they bought their biggest competitor. Pelican says the labor component of their product is 10-15% and the freight is more than the difference in labor rates so they've retained manufacturing in California. Gamestop has invested a 30% increase in CAPex to their technology initiatives, but cut CAPex on retail stores.
The next panel is Gordon Bodnar, Professor of international finance at John Hopkins, Phung Ngo-Burns VP of Finance and CFO for Expressjet, Rob Schimek CFO of Chartis, and is managed by Scott Leibs editor in chief of CFO Magazine. Since 9/11 companies have created a more rigorous risk planning environment. Rob says that the it's the risks you don't plan for that are most likely to create a "killer" event.
Each company should create a risk appetite profile documenting their willingness to take risk in the following categories:
- Impact on income
- Impact on capital assets
- Impact on need to go to the capital market for funding
- Insolvency risk
Mid-term election update from MSNBC
The next speaker was Joe Scarborough, commentator for MSNBC presented about the effect of mid-term elections on the business climate. Joe predicts that moderation will come to Washington because people are unhappy but the political process will gridlock. Joe predicts that the Republican victory will be so strong that some of the policies passed in the last 2 years will be changed, including increased taxes by at least 5%. Scarborough believes that if we don't find a way for Republicans and Democrats to work together to solve our problems we may be doomed. We have to figure out a plan to go back to a balanced budget, and reform the entitlement programs of social security and medicaid, as they are unsustainable.
Scarborough went on to say that when social security started the average age of death was 62 and you couldn't collect until 65. Right now instead of 10 people per one person on social security, we have 3 people - it's unsustainable. We need to reexamine the idea of resuming capital gains taxes in this environment. If we don't move to the center on business issues we'll be facing 15% unemployment through the next 2 years. He says that the biggest fight over the next 2 years will be the fight over taxes on individuals and corporations. He hopes that Republicans will actually ACT conservatively (rather than what they did during the Bush years). The POTUS doesn't have any close advisers that have ever run a business - and that is a requirement for a president as an advisor. Romney will be against Barack Obama in 2012, Bloomberg may try to get into the race which could change the dynamics if he runs under a 3rd party. If the economy turns around - the money is on Barack Obama. Crazy people get elected in off-year elections because people want change and don't care how they get there. 90% of Americans want the government to back off of our private lives, and the economy and let them be decided at the state level. The 2 party system will blow apart soon because there is no party that is liberal socially and conservative fiscally.
How Microsoft Technology enables Finance reporting
Next up is Chris Suh GM of Finance for small and mid-market solutions and partners discussing how technology empowers finance at Microsoft. Microsoft wants to both be smart and invest in innovation at the same time. The approach Microsoft has is to hire talented employees, balance investments, innovate in the right areas, product flow and their future bet on the cloud. Microsoft Finance strategic performance plan:
- Nov/Dec is strategic planning month
- Jan/Feb is the midyear review
- Mar is target setting
- Apr/Jun is budgeting
Panel - Audits unveiled
Next up is a panel on "Audits Unveiled" talking about audit fees and how to control them, as well as manage your auditor relationship. Due in part to information developed by CFO Magazine to allow businesses to compare audit fees many companies have reduced their audit fees. IDT was paying $4.3M for audit fees in 2008, by shopping their business they moved to a company that charged them a little more than 1/2 that the next year. Turner is concerned that as fees go down, independent audits may become less accurate. Turner says that the CFO should NOT control which audit company to use - the audit committee should be the primary controller of the audit process. Peer review process is not a substitute for a good audit in the first place by an audit company that understands your business. The peer review/PCAOB process only looks at about 3% of audits.
8 reasons we hate IT and how to make IT your partner
Susan Kramm, author of ValueDance spoke about how to make IT a full partner instead of a hated cost center. She insists that IT Smart companies incorporate the specific business impact of a project into all phases of a project form specification to implementation.
IT Smart vs IT Dumb companies:
- In IT dumb companies don't require their business cases to be valued vs the project results
- In IT smart companies companies iterate projects over 3-6 month iterations using a process of Inception -> Elaboration -> Construction -> Transition
Most successful projects come in at $750,000 or less, 3-6 months, and no more than 12 people. The probability of a $5M-$10M project will be completed on time and in budget is zero. However, Plan/Build/Run mentality dies hard. It's more difficult to plan and architect projects in chunks, the process of development projects feels longer when chunked up but with an increased chance of success it's worth it, consultants/vendors like the "big bang" so you may be fighting vendors, technologists are optimists and business users don't believe future phases will be funded. All these need to be combated to change the culture. In addition, IT should concentrate on driving Keep the Lights On savings down by as much as 50%. Finally they should look at the fact that 20-25% of the work IT people do are tasks that the rest of the organization can and should do. The best companies who are IT Smart don't outsource on a wholesale manner, however outsourcing is a wonderful resource and allows you to scale easily for specific projects. Should be sure that if you outsource development that you are working with a partner that allows innovation, and keep that innovative outsource process managed internally.
Social Media for the CFO
The final speaker of the day was Steve Sorbello, the CFO of LinkedIn. He pointed out the difference between the 3 social products. He said that Twitter is a soapbox, LinkedIn is the office and Facebook is the bar. Their primary risk considerations are privacy concerns and scalability concerns. Steve was formerly a CFO at Tivo and AskJeeves, and said that LinkedIn was unique from those in terms of their revenue model. They have an all-company meeting every other week with 900 employees. Steve said he doesn't eat his own dogfood - he drinks his own champagne. He indicated that LinkedIn is about owning your own web identity - and having only a partial profile damages your ability to do that.
And that concludes day 2 - watch for day 3 tomorrow morning.
Tuesday, October 26, 2010
CFOs are becoming overwhelmed by CFO Fatigue - constantly fighting to survive instead of planning to grow. Many CFOs are sitting on large cash reserves in their company, but they don't know how best to spend them or whether to spend them at all and reserve them for future emergencies. More than 2/3 of the CFOs surveyed this quarter said that if there was not a major economic recovery in the next year their companies would be at risk of failure. More than 1/2 said they needed a recovery in the next 3 months.
Rajan Raghuram on the global economy
Rajan Raghuram author of "Fault Lines: How Hidden Fractures Still Threaten the World Economy
" spoke on global economic markets, and why we're in the situation we are in today. Our problem comes down to inequality based on education in income. The less educated population is drifting further and further away from the educated segment in income. The government has tried to overcome this by decreasing the cost of money so that those with less money can spend as if they had more money by borrowing. Other parts of the world are exporting their way to growth instead. The recovery is being held back because of the debt that households and banks have in the US. As a result sovereign debt to GDP in G7 is at almost 1950's level, in 1975 it was 1/3 of that. Serious financial sector problem for small to medium business prevents lending in that area, larger companies can get financing, but smaller companies that fuel growth are probably going to be tight for 3-5 years. The gap in education in a long-term threat because if we cannot bring up our educational level the value added products that we currently create here and provide overseas (making money in emerging markets) will also go overseas and we will lose. We must concentrate on building what consumers in emerging markets need - not having them buy the things we think WE need. For instance in rural India "Frugal" refrigerators that just cool, without making ice, are what they demand because the electricity is unreliable. If you can get rid of the compressor - the refrigerator can run on a fan and a battery. In the end - the medium term outlook is good with emerging markets, but the threat is still there from our economic and educational gap between the haves and the have-nots.
Edgar Ancona on banking issues
HSBC VP and CFO of HSBC, Edgar Ancona, talked about the new regulatory environment for companies both locally and worldwide. He sees that regulators are not only making new requirements, they are also requiring banks to document their compliance as well as comply. HSBC is positioning itself as a bridge between capital and trade-flow between companies in multiple worldwide markets. The new regulations have given banks the message that they need to acquire and retain more capital and liquidity, but instant 24 hour access to bank accounts by both corporations and individuals makes liquidity harder since customers can cash out at any time for any reason. Defined benefits plans are dead or dying in today's economy. On the positive side there are stronger controls, and faster reporting cycles, an increased quality of insight to business needs, better cost efficiency and retention and growth of their global talent pools are all improving. Edgar believes that to remain competitive we must continue to improve educationally our ability to understand and address overseas markets - not just our own.
Aon Hewitt on Cloud computing
Next I attended a session on SaaS finance applications and requirements by Aon Hewitt (the leading HR professional services firm in the world) and Host Analytics. Historically SaaS financial apps have had problems with version control, broken links, reporting deficiencies, variance analysis, ad-hoc reporting, and creating a scenario models. Solving these increase the efficiency of the financial modeling apps. In addition problems with implementing measurements for those plans and making functional decisions based on them have limited their ability to see real improvement due to those models. Aon uses Host Analytics, plus 2 other SaaS products in concert to provide a full life cycle for financial reporting. The basic presentation boiled down to using SaaS tools to create consolidated financial reporting. They key factors include achieving compliance certainty, forecasting and managing the costs of the risk, and then forecasting to allow us to reduce the risk De-Risking happens when you identify and quantify the risk at local and global levels, and then take the information you gathered and globally based investment services. The specific tools that Aon Hewitt uses is Host Analytics for accounting consolidation because it is fast, secure, customizable, and cost efficient. Host Analytics matches the client's accounting cycle, accommodates complex corporate structures, is secure, and uses an excel-like interface for data entry. It has a built in approval process and very sophisticated reporting. De-risking is accomplished using PRisM an internally developed tool that lets them model risks and view both deterministic and stochastic outputs. Greater Insight, another SaaS tool, is used to look at broader view and create a global view of their pension and benefits plans in a true-cost and ROI of pension and benefits plans in a global world-wide viewpoint. The key product - Host Analytics allows the 3 programs to share information so that re-entry isn't necessary, though some data import/export is necessary between tools. Enabling that integration is one of the things that Aon-Hewitt provides.
Negotiating software licensing and development contracts for profitability
Next I heard a presentation from Randy Roth, Partner at Corporate Contracts, a company that specializes in negotiating and managing corporate IT contracts and software procurement for large clients. The #2 concern of CIOs in 2009 was controlling IT costs, and 62% of CIOs have put off important infrastructure or development projects this year due to economic conditions. Not including experienced software negotiators can cost your company big money, since in many cases products are rolled out on an emergency basis because they are so urgent. License models include:
- SaaS - (annual term) Licensing in the cloud, also called hosted, or ASP
- Subscription - (annual term) licensing locally but for a specific time frame
- Term and perpetual are the 2 types of licensing
- With Perpetual licensing you only pay for maintenance if you chose to - and can continue to use the product even if you stop paying
Edward Hess on the DNA of Growth
Next presenter is Edward Hess author of Smart Growth: Building an Enduring Business by Managing the Risks of Growth (Columbia Business School Publishing) and The Road to Organic Growth: How Great Companies Consistently Grow Marketshare from Within, growing an entrepreneur business, the road to organic growth, leading with values, and the search for organic growth, So, You Want to Start a Business?: 8 Steps to Take Before Making the Leap, The Search for Organic Growth, and Leading with Values: Positivity, Virtue and High Performance. He started out by stating that no position other than the CFO is more influential on growth within an organization. Growth is NOT always desired. Edward identified that High Organic Growth (HOG) companies were THOUGHT to have:
- Cost superiority through outsourcing/offshoring
- Sophisticated diversified strategies
- Unique products/services
- Best talent
- Visionary leadership
- Simple focused strategies (an inch wide and a mile deep)
- Humble passionate operators (not necessarily visionary)
- Were execution champions - need to get things done
- Had high employee engagement - employees wanted to improve the company
- Constant improvement was in their DNA
- They were master learners and copiers rather than innovators and leaders
HOGs love their customers more than their products than services. Unsuccessful entrepreneurs love their products or services more than their customers. Growth killers include ROItis, group think, arrogance, legacy models, penalizing mistakes, short-termism, and product centricity. Good HOGs change their strategy daily and have a process for collecting new ideas changing their strategy constantly to add incrementally to the strategy. Try small controlled experiments constantly to see if they work. Good growth companies defer ROI until they've experimented and seen if the idea works using experiments.
Many great growth companies took 2-5 hires PER "C-level" POSITION in each growth company until they got the right team to accomplish constant growth. In many cases outside help would have assisted them in creating the right team from the start, and creating it's culture at the same time.
One precondition for growth in most private growth companies is you need a strong CFO and a strong CEO working together to make the whole thing work since they balance each other.
As before - at the end of the conference. I will publish any books through an Amazon store for the CFO conference so you can buy them directly if you wish to. In the book "Smart Growth" there is a growth audit that will help you measure whether you are growing well or not.
As a venue for a conference I can't really recommend the JW Marriott in Las Vegas despite relatively opulent hotel rooms. I'd rate them a 3 out of 10. The service in the restaurants is pathetic, the food is mediocre both in the buffet and at the sushi restaurant. A collection of attendees waited up to 2 hours to be served even their first portion of sushi at the sushi bar and rather than offer comps or a discount on the ticket the personnel argued over which items had and had not been delivered. The location of the conference center requires a trip through a very smoky casino to arrive. Unlike many casinos on the strip the ventilation doesn't cope with even the minor smoke created during the week by the very small gambling crowd there. Cigarette and cigar smoke creeps into the conference center - causing this attendee at least to sneeze and have a stuffy head and headache throughout the conference.
Day 2 is coming up!
Monday, October 25, 2010
The CFO Core Concerns conference is a fascinating one. CFO's have unique challenges to consider both locally and globally. The CFOs at the conference include a wide variety of industries and fields, so there are many different types of companies here. I met a company who has consolidated over 50 logistics companies under one banner, a company who is investigating new ways to deliver online educational content, a company who manufactures tilling and planting farming equipment, a global securities advisor, and many other companies. Josh Bouk from Veramark in Rochester is also here.
Today's conference topics and sessions I'll be attending include a number of more global concerns:
After the initial welcome message from CFO Magazine we'll be hearing from:
- Professor Raghuram Rajan - former Chief Economist of the Monetary fund on the fault lines and cracks in the world economy that continue to represent a threat to global stability in the financial markets.
- Edgar Ancona CFO of HSBC North America on the changing banking landscape and how that affects the global economy
- The cloud and the CFO - How SaaS can help finance achieve it's highest priority. by Mark Blumenthal CFO of Aon Consulting and Ken Brooks of Host analytics
- Secrets to software procurement - how to master the process and avoid the pitfalls - by Randy Roth of Corporate Contracts
- Smart Growth The keys to managing risk and building an enduring business, by author Edward Hess Professor of business administration at the Darden Grad school of business in Virginia
Tuesday, August 3, 2010
Tuesday, June 29, 2010
Friday, May 14, 2010
Thursday, March 18, 2010
Friday, March 5, 2010