Election Over! Back to Business

	by Jim Garrettson

Now that the election is over, the massive campaign spending will cease and the armies of volunteers will channel their optimism or disappointment energetically back to the business of business. We will also put our distracted eye back on the performance of capital and equity markets that, for a brief time, were suspended in anticipation of the election results. Some great advice would be welcome right about now, and the ExecutiveBiz will be reporting on the advice of noted investment authority Charles Schwab and colleague Alan Weber of US Trust, who are in town for the long-awaited event on November 9th. POC members, register here for the Nov. 9th event.

The event will be held at the Sheraton Tyson's Corner and has been made possible by KPMG, Richelle Burnett and John Mendonca.

This week's issue will bring you:

• How often do our readers Web-Conference? - See last week's poll results
• How long did you have to wait to vote? - Take our survey below!
• Day One for a New CEO – Taking Charge - Charles Terry
• Driving Sales Effectiveness Starts at the Top - Jonathan Sharp
• Custom Coffee Table Books - Gary Arlen
• Lloyd Griffiths, Dean of the School of IT & Engineering at George Mason University in our Executive Spotlight
• Catch the Events Around Town - ExecutiveBiz events listing

Members, click here to register for the next event.

Question: How long did you have to wait to vote?

THANK YOU FOR YOUR OPINION!
Right: Most of our readers web-conference 1-5 times per month.

Day One for a New CEO – Taking Charge

Charles Terry
CWT Group

The board most definitely has its expectations. Your new team and the troops have their careers and mortgages in the forefront of their minds. And, the company has a job to do. What do you do and what do you do first?

I've walked into three different turnaround situations in the software and information services space. All three companies had very different strengths and weaknesses, but at the core, systemic change was required. In this article, I'll share with you what I've learned to be the most important initial steps of taking control and putting your new company on the path to success.

While you must always have strong leadership, supporting a well-communicated vision, execution is ultimately what makes the difference. During my experiences, I've learned that in order to assure successful execution, you need to immediately and systematically focus on three key roles within the executive team:

• an intimately engaged CFO;
• a VP of Sales that manages dispassionately by the numbers and not by the deal; and
• an empowered product management team that connects the entire company to the vision and the market needs.

What are my expectations for an intimately engaged CFO?

To successfully lead the company down a new road, I found it critical to have a CFO who can go beyond the financials and can track vital metrics that provide deep understanding of every nuance of change and iteration in the company's business model. The entire management team must thoroughly understand the impact of any change to pricing, packaging, comp plans, distribution channels, supplier relationships, and etc.. Without this intense understanding and collaboration, dramatic positive change will be difficult to implement.

Sales managers must be revenue production managers.

The VP of Sales must manage almost exclusively by the numbers (number of reps, contacts, leads, prospects, proposals, closes and of course revenue). Too often the VP of Sales continues to think like a sales person: one deal at a time instead of like a revenue production manager. The sales manager's job is to maximize the productivity of the sales organization and to accurately project that productivity. If instead, they manage deals and personalities, they will continually struggle to be in sync with the CFO and the CEO. I want a VP of Sales that continually improves the sales team's productivity and produces forecasts that the CFO and I can trust.

Product management connects the vision to the entire organization.

PM's charter is to orchestrate the implementation of your vision by critically listening to the market, communicating the market's needs to product development, and supporting sales and marketing. Empowerment direct from the CEO of this role is critical. Without empowerment each department will operate in their own silos, the vision will go unseen, sales will sell what the company doesn't or will never have and development will build what moves them. Without effective product management, it doesn't matter if the emperor has clothes or not! I empower this department by being actively involved and at times by being Chief Product Manager.

For a successful breakout or turnaround, all three of these positions must be "A" players and must work collaboratively; otherwise the vision is at risk. While each role is critical, without exception, I establish the CFO role on my team first. It sets the tone for performance and metrics, and gives me a strong partner for managing and implementing change.

Charles Terry of CWT Group (www.cwtgroup.net) offers interim CXO services including: strategic planning, product management and "go to market" design and execution. Most recently Terry was CEO of Comtex News Network, a company he grew from $3 million to $16 million. He can be contacted at CWTerry@comcast.net.

Driving Sales Effectiveness Starts at the Top

Jonathan Sharp
Founder and COO, Talant

A big fear of business leaders is that they will be blindsided by events that negatively impact their business. Ask Tom Siebel how it feels to have his company lose over a half-billion dollars in value overnight when a few forecasted deals don't close. After decades of investment in sales optimization, delivering sales results shouldn't be so unpredictable. Savvy CXOs recognize that they must change how they run and support their sales organizations to avoid being blindsided.

After the markets closed on July 7, 2004, Siebel Systems and BMC Software each announced that 2Q 2004 revenues would miss Wall Street targets. Siebel said: "These disappointing results were primarily due to unexpected delays in purchasing decisions by certain prospects and customers near the end of the quarter." BMC's press release echoed this: "At the end of the quarter, the company experienced delays in customer purchasing decisions among larger accounts ... " In trading the next day, Siebel's stock price dropped 13%, losing $622M in market capitalization. BMC's stock price dropped 15%, losing $560M in market cap.

Two companies lost well over $1B in market value in one day due to "delays in purchasing decisions" ... ? That sounds a lot like spin for "we don't sell effectively." According to CSO Insights' 2004 Sales Effectiveness Survey, only 49% of sales reps met or exceeded their quotas the previous year—the lowest number since 1994. Sales executives are quick to point to the recent drop in corporate spending, particularly on technology, as the culprit. Given that spending has been down consistently since 2000, the shelf life on this excuse is expiring.

So how does a CXO make a company's sales force more effective?

1. Recognize that customers buy differently today
2. Stop accepting excuses for poor performance
3. Be aggressive about quantifying the impact of your products on each customer's bottom line

Recognize the New Buying Paradigm

Sustained economic uncertainty combined with years of lavish spending on over-hyped technology has forced senior executives to challenge proposed projects and weigh them cautiously against the alternatives. Signing authority for VPs and Directors is way down. Purchasing decisions are now evaluated by committee before being elevated to the CEO or CFO. New project funding has become a zero sum game in which executives battle to ensure that their budget isn't cut to support someone else's initiative. Given this new buying paradigm, it should be no surprise that sales cycles are getting longer, that sales reps are struggling, and that "no decision" has become the biggest competitor to a successful sale.

Stop Accepting Excuses

It's common to hear the following reasons given when sales results don't meet expectations:

• Buyers are delaying purchasing decisions
• Products are getting more complex and harder to sell
• Buyers can't differentiate between competitive products and services
• Buyers expect major discounts

These may be valid issues, but they're not the core problem. In reality these are symptoms of a more fundamental internal breakdown that must be addressed to improve performance. CXOs that allow their sales and marketing organizations to explain away poor results without pinpointing the core problem and taking corrective action will continue to get the same results.

Build a Culture of Measuring Impact

Where do CXOs begin if they want to be change agents for improved sales performance? Lead generation? Sales training? Process improvement and automation? Compensation? These are critical components of any functional sales organization, but after optimizing these areas for years, companies still struggle to sell. There is a body of research and experience emerging that indicates that the core challenge facing sales and marketing organizations is the inability to quantify the value of their solutions to customers.

Customers purchase from vendors that are able to clearly quantify how their solutions eliminate waste, inefficiency, and lack of productivity. Lacking these quantified metrics, sales reps typically overwhelm prospects with product collateral, technical features and benefits, and generic case studies—counting on customers to ferret out the value on their own. Is it any wonder that buyers struggle to differentiate competing products and services? Should we be surprised that buyers increasingly make price the deciding factor? Companies that lack a culture of quantifying value and using metrics to support claims made by sales and marketing will continue to under-perform and misdiagnose the source of their problems.

There is an easy way for CXOs to determine how their organization fares with respect to quantifying value. Ask to review the business cases salespeople develop for prospects. Do the business cases accurately reflect the impact of your solution on key client success metrics? Are they supported by verifiable results and realistic assumptions? Do they highlight your product's unique strengths? Next, review your company's collateral, proposals, and messaging and circle each instance in which quantifiable client metrics are referenced. I'm not talking about messages like "we improve ROI ... ". I mean real metrics like, "customers have been able to reduce inventory holding costs an average of 22%..." If you're not impressed by what you see after this exercise, then your customers aren't either.

Jonathan Sharp is Founder and COO of Talant, a marketing and sales effectiveness company based in Bethesda, MD. He can be reached at jonathan.sharp@talant.com.

Picture This: Custom Coffee Table Books

Gary Arlen
Arlen Communications Inc.

As a tech devotee, you're salivating for Apple's new "iPod Photo," which will let you carry up to 25,000 wallet-sized digital images in your pocket. The latest iPod upgrade, which goes on sale this week (priced at $499 and $599 for different models), adds another tool to the exploding digital photo arsenal. Ironically, iPod's arrival comes on the heels of a Kodak decision to close several of its photo processing plants – a move that many see as acknowledging the demise of conventional picture usage.

But for those who still like physical prints of favorite photos, there are actually more choices than ever. And I'm not referring to the plethora of photo printers that can spew out paper copies directly from your cameras or PCs.

A growing roster of specialty publishers prints and packages digital photos. Their offerings now include customized Christmas cards and other greetings that don't have the slick photo-paper look of drugstore reprints with a holiday message appended to the side.

Custom-photo publishers, such as MyPublisher.com and PhotoWorks.com are emphasizing their ability to create personalized coffee table books from your travel photos or special event in the $50 to $140 range. The companies can also turn out small albums (about the width and height of a horizontal paperback book, although not as thick) for about $10. The smaller volumes seem popular as party remembrances or vacation photos.

Most of these services also offer services that compete with digital photo processing and distribution vendors such as oFoto.com (a Kodak subsidiary), which let you share pictures online and order conventional prints.

For example, PhotoWorks.com (a company once known as Seattle FilmWorks) publishes greeting cards (birth announcements, holiday cards) and albums on heavy paper stock that feels like cards you'd buy at a store – not the slick or matte paper that is more familiar for photo printing.

The ordering process is similar for most of the photo publishers. You upload digital pictures to the company's Website, where tools allow you to edit the images, lay out photos in a variety of templates (e.g. one or several pictures per page), write short descriptive text (identify people or places and insert dates) and order copies.

The books come in a variety of bindings: from spiral wire to perfect-bound volumes with leather covers. Pricing depends on the number of photos, binding and cover material (typically $10 for the smallest volumes plus $2 to $3 per extra page). Most of the services store your digital images at no charge – with an inducement to order reprints or to modify and edit your memory books at a later date.

PhotoWorks Inc. President Philippe Sanchez, during a recent spin through Washington (his first visit to the capital region, which he deemed extraordinarily photo-worthy), characterized the custom photo books as a way to "create mementos that are personal, sophisticated and different from anything that exists in the market today."

Of course, he is not alone in that assessment, given the rush to custom publishing. In addition to www.PhotoWorks.com and www.MyPublisher.com, you can check out www.SharedInk.com (which publishes personalized books in the $10 to $50 range) and www.SnapFish.com (which currently only has Windows capabilities).

And even Apple acknowledges some customers want a paper version of their memories instead of or in addition to their iPod Photo collection. The Apple iPhoto album (about $30 for an 8.5 x 11 inch book) is available via www.apple.com/ilife/iphoto.

Gary Arlen is a nationally recognized commentator and advisor on communications, media and digital technology. He heads Arlen Communications Inc., a Bethesda, MD, research and consulting firm. Contact via: GaryArlen@columnist.com

Lloyd Griffiths
Dean
School of IT & Engineering at George Mason University

Recently, ExecutiveBiz and Lloyd Griffiths had a chance to catch up. Here is what Lloyd had to say:

Q. What is a typical day like as Dean of the School of IT & Engineering at GMU?
A. As Dean, I have overall responsibility for the academic structure of our School. With 23 degree programs and over 100 full-time faculty, I keep busy. Much of our work involves meeting the rapidly changing educational needs of our students. Because we are less than 20 years old, and perhaps because we are significantly under funded, we are a highly entrepreneurial School. We have shown that we can quickly adapt our academic courses and programs in response to identified needs.

I also spend significant time working with the corporate world. There is little doubt in my mind that our School has closer relationships with our industry than virtually any other School of Engineering in the country. Our students have jobs here in Northern Virginia while they are getting their degrees. Our faculty consults with local industry and many of them have industry-based research contract support at George Mason. This has led to highly successful joint research projects.. We also use a large number of adjunct faculty from local companies. We get great teachers, and the adjuncts get to stand in front of 30 to 40 students and through their relationship, identify the five to ten that they would like to hire. It is a near ideal recruiting venue.

Another significant portion of my time is spent in fund raising. Since we help our local companies with their workforce needs, we are in a good position to ask them to help us with our needs. Local companies have recognized that investing in George Mason is very much in the best interests of their companies and of the community in which we all live.

Q. How many students are enrolled in your School?
A. At the present time, we have about 4,000 students. Of these, approximately one half are undergraduates, 1,700 or so are working toward their masters degrees and over 300 are enrolled in our Ph.D. program. Today, our graduate enrollments are adversely affected by the challenge for foreign students to get visas. Domestic enrollments in our School, however, remain strong during this period. Overall, our School is continuing to grow but the growth has been slowed. We are becoming quite active in recruiting out-of-state students and local industries have been quite helpful in this process.

Q. What do you think about the events held by the Potomac Officers Club?
A. Club membership includes CEOs and CTOs from local technology companies. They represent the companies that hire our students, provide our adjuncts, and support our School. These individuals are key to the continued success of our School and I am very pleased to interact with them during the meetings.

There's more! Click here to read Lloyd's complete article ...

Thanks, Lloyd! For more information about Lloyd Griffiths and School of IT & Engineering at George Mason University, visit the School of IT & Engineering at George Mason University web site at ite.gmu.edu.

Here, we recap the week's top stories of POC member companies and other notables in the region. Please include ExecutiveBiz on press releases and we will be sure to keep up with your successes. Email us your company's news at info@executivebiz.com.

• Verizon Wireless, Nextel Resolve Legal Disputes
• MCI Surpasses 1,000 Solution Provider Milestone
• Financial Times Ranks Executive MBA Program 33rd in the U.S., 57th Worldwide and Only Top Program in Virginia
• Fairfax-based Xybernaut and TESCO, the largest grocery supermarket company in the United Kingdom and the third largest retail company, Announce Deal
• 40 Local Companies Make Inc 500 List

From the Editor

The newsletter is designed to serve the needs of the local business community. Please contact us with your ideas and advertisements or submit columns to be published and reach our distribution of more than 25,000 area executives.

J.D. Kathuria, ExecutiveBiz Editor

jd.kathuria@executivebiz.com