From the session description:
What are you doing to change your business to adapt and thrive? Do you see opportunity in this new climate of change and uncertainty? Is there one answer or multiple? Join your peers in a panel discussion as they share their thoughts and approach on evolving their business to “survive” or “capitalize”?
As stated in the above description, this session was conducted as a panel consisting of Bryan Wilton (InterDyn), Kevin Cumley (Forepoint) and Doug Deane (DSD Business Systems).
We started with a question about why and what? Why did the panelists choose their path?
Doug started off talking about the indicators starting four years ago that pointed towards small and medium-sized VARs facing pressures to survive and thrive. His route was to create a national presence that maintained nimbleness and strong local autonomy but also deliver a strong core brand. It’s been a challenging road that is proving successful.
Bryan responded with a quote “Safe is death”. He has this quote pop up regularly on his calendar to remind him that change is important. The consulting business is completely different today than it was five years ago, even two years and it appears to be more of the same for the future. We can’t keep doing the same if we want to survive.
Kevin started with the quote (seen here a few times) “If you don’t like change, you will like irrelevance even less” (General Eric Shinseki). Kevin went on to discuss how back in 2006 – 2007, his firm was having challenges with selling their go-to-market product, Sage Accpac. Sales were down, harder to find new markets. Their route was diversification to other products.
The panelists were asked how they came up with a plan and what if any research was conducted?
Doug spoke about reviewing current successes and failures and taking away important lessons to formulate a sound strategy that minimized risk of failure and maximize chance of success. DSD was in a unique position to recruit partners to join the family because they are a widely respected development partner making add-ons for Sage MAS. This allowed them to identify partners that would be a great cultural and ethical fit for the DSD family.
Bad cultural fits are leading problem with mergers and acquisitions. Good pre-nuptial agreements are important for all parties.
Kevin discussed the necessity thrusted upon him to try and sometimes stumble before executing.
Bryan talked about sitting in an airport five years ago and looking forward to how they would achieve their goals for the next ten – twenty years. He planned out how to get from the high teens to the hundred + employee count. Reviewing his business, he determined that he wouldn’t be able to find the people necessary to service the client base that would feed that size of organization. So he came to the conclusion that for his group to be successful, he would have to team up.
This meant through a merger / acquisition or through teaming up with trusted partners to reach their goals. Like Doug, he discussed the importance of cultural fits and trust. It seems that DSD and InterDyn have similar models – rolling up of numbers, loose affiliations, strong central brand. Bryan’s group eventually merged with another InterDyn partner to form a larger group.
Culture! Culture! Culture! – Bryan Wilton
Moving on to How and Who? How and where did the panelists start and why?
Kevin talked about starting this transformation during a slower period in which he had excellent, highly skilled people who were available and interested in picking up new products. His group had opportunities from day one – one in particular that was a large blue bird – that helped force the forward momentum for the team. To meet those goals, they used collaboration to help succeed, increase knowledge transfer and spread risk.
Bryan’s group wanted to make sure their change did not disrupt employees, customers, sales, etc. They wanted to make sure the process was transparent to everyone. Everything they did came back to those two principles. The care given to this has made their transformation take a bit longer than it might have otherwise but Bryan feels that it helped (continues to help) ensure their success.
Bryan went on to talk about their software publisher, Microsoft, wanting to be involved, being inquisitive of their changes and finding the balancing act between collaborating with them and telling them “it’s none of your business”. (I think this is not a phenomenon restricted to Microsoft by the way.)
Doug continued this thought and talked about ensuring his actions and steps were done in concert with Sage. Doug mentioned he is a systems guy and wishes he was more of a people guy. He mentioned that he always has a great time when his wife drags him out to parties but it’s not his thing to do normally. As a systems guy, he has created documents and forms and policies to help define the relationships and ensure the eventual success of the collaboration. He built these out before embarking on his growth plans.
Doug mentioned that his due diligence and company valuation documents are two great resources that partners could benefit from reviewing if they are interested in going down this road. The documents mentioned are available from Doug for everyone to benefit from on the ITA website. [As soon as I get a link, I will update the article.] The valuation document in particular is a great way for the professional service firms to determine where they really stand.
Doug mentioned that it’s easy to demonstrate the benefits of a larger organization to customers in a letter or a phone call. Personally, I’m not a fan of bigger is better and I’m not sure I agree with this blanket statement. DSD is extremely successful and growth has been a successful strategy for them but I believe that as long as you provide consistent, clear value for your customer, you don’t need a 100 person (or even a 20 person) team.
The session goes on from here but at 1100 plus words, I’m figuring that I’m losing people’s attention.
Suffice it to say that the session was interesting. I would have liked to hear more of a theme appear for each of the panelists before launching into the questions. It seems that Bryan and Doug are following a similar path of M&A and affiliation whereas Kevin pursued a path of diversification and verticalization.
I would love to see a repeat of this session in the future with maybe three completely different paths (maybe throw organic growth in there?) and a clearer written description (printed would probably be best) of the different paths, how they are doing, how far along they are, what are the challenges, etc. to supplement the panel discussion.
Overall – a worthwhile session to attend. Huge thanks to all the participants for sharing their stories.