Advisory Boards are not a very common phenomenon that I have come across. However, a well formed Advisory Board can be extremely helpful to most top level executives.

First, I am not talking about Executive Boards – that is pretty much the domain of the CEOs. And I am not talking about Customer Advisory Boards either. If you are a C-level executive (but not CEO), I am talking about forming your own external advisory board formed from luminaries in your industries that you can trust and respect.

Having had twice formed such boards for myself in the past and having been in two such boards myself, here are my observations:

1. As I observed before, this is NOT a common practice. I think that is a pity.

2. Not all executives are equally adept in leveraging such a board.

3. It is a very cheap way of getting access to a lot of talent. You can pretty much get this done by a few flight tickets, hotel bills and lunch/dinner checks. If you are on a shoestring budget, chances are you can pick executives from your local city for this.

4. Such a board gives you the following:

4a. Great access to you and your operating team to a lot of experience and talent from outside. Chances are they have face some of your challenges that you are facing.

4b. It is a great sounding board. Outside of your board meetings, you or your team can feel comfortable getting some quick feedback.

4c. Great networking opportunity. You get access to more people – perhaps some of them can become your customer some day, some may join you in your company some day.

4d. Finally, my experience is that your team will find the whole exercise innovative and highly energized. They would love the exposure.

5. What to sell potential board members on – OR – what the board members get from this:

5a. Networking opportunity. They get a chance to meet perhaps future customers, future employer or future employees.

5b. Great Resume Value – especially if you company has a reasonable brnad name in the market, this would be great to get on their resumes.

The best way to utilize these boards are to pose certain business challenges you have at a reasonable abstract level and see what the various learnings have been.

So far, my experience has been very positive on this.

Have you any history of having tried this or being part of such a board. I would love to hear about your experience.

Rajib

How often has this happened to you? A manager in your group walks in to your office and tells you that a critical resource in her organization has given notice. He is joining this other company because of a substantial jump in compensation. If only you can match that comp, your manager feels confident of arguing him out of his decision. She needs your support to approve this.

I am sure not infrequently. What do you do?

Almost without exception, I have learnt to say No. Fifteen years back I would have thrown more money, fought hard and done whatever to change that person’s mind. I do not advise to do that any more. Hit rate was very low for me. Here is what I have learnt:

Changing a job is a big decision for most human beings. Most people don’t want to look for a job for sheer reasons of inertia, zone of comfort etc. Almost surely nobody starts looking for a job because one is seeking more money. One goes thru a lot of introspection, frustration or whatever reason to convince oneself that one is going to change jobs. Somewhere along the way, he confides and explains his plans to his wife and family too. That is a very big mental jump.

Once the search process and selection process begins, the person is pretty much over the cliff in terms of deciding not to stay back. Most surely, wherever he goes there is a better compensation package – even if slightly. Not because he was getting paid less fairly but most hiring companies know they have to give a sweeter deal to move the person.

When he confronts his manager – better comp is cited as a prime reason – incorrectly – why he she wants to move. It is an easier reason – it is a hard number plus one gets an elated sense of pride by flaunting higher market valuation. It is a more difficult argument to prove which workplace is better, has better opportunities etc for the sheer subjectivity of it.

At this point, throwing more comp has a very little ability to work. Even if one did match and made a compelling point why the current job is better the probability of winning is very low. Because – and here is where the second reality comes in – usually one has already committed to the other job before notifying the manager. Most definitely, one has mentally moved to the excitement of the new place.

Trying to get the person to mentally back off from that is very difficult. It is almost insurmountable to have the person fall on the sword in front of the prospective company as well as the family and explain why it was a bad decision to begin with to leave. There are too many bridges to be burned. And now his current company knows he was on the look out. It is far – and I mean very far – easier to just go with the original decision.

My advise to my managers is usually to not commit to any comp side at all. Work with the employee to convince himself that he actually wants to stay for all the right reasons. Signal that you can work out the comp side as long as all the other things are worked out. But make sure that the employee can undo the decision mentally and in front of others at home and new company first. The comp part is the easiest part. If you increase the comp first, you almost invariably are going to get the same decision – after a couple of days of “careful thinking”.

Comments?

I had originally seen this in a presentation made by a gentleman from CNN.

You can see this and many variations of this on youtube.

While this presentation was about ramifications on our education system, I think it is great also for us in the technology sector in terms of understanding how fast this whole space is moving.

If any one of you have run software companies, you probably have faced this problem at least once in your life. You have a software product that is very successful with the large customers (higher end of the market). But taking it down market – while sounding reasonably simple (after all, it solved more complex problems – right?), was never successful.

And you probably have heard the same “reasons/excuses” – mid-market customers have the same problems as the large customers… the software is too complex / costly for smaller customers, implementation takes too much time etc etc.

And you have wondered why can we not “package” the software up and sell it at a reasonable price point for the lower end market with very quick implementations. Well, you have company, at least – in me. Not once, not twice – but quite a few times, we failed in taking a software product down market. The definition of “failure” is not being able to sell quite a few copies of the “tightly packaged” products – obviously with far shorter sales cycle and implementation cycles than the larger customers. With one exception – only once in my experience, it actually worked. And it is important to understand why.

Here are my learnings:

First, technology is the easiest part. Shrink-wrapping a software – using templates, smaller set of APIs, limit setting – whichever path you take is usually simple and given a little time and money, can be easily accomplished. I need to add here that sometimes if the total cost of ownership dictates that the software be ported to a different platform (third party components, database, OS, J2EE vs .Net), that might take quite some time and money. Still not a difficult task.

Of course, naming your new product “Your Original Product LITE” or “Your Original Product EXPRESS” is the next logical step 🙂

The real challenge comes during the sales process. Your sales organization is acutely aware of the strength of the product (having sold it before to large customers or the internal reputation of the product). And that is where the difficulty starts. Invariably, the sales process goes to a point of feature-functionality war (feedback from the sales person’s contacts that the competitor’s product demo-ed very well or the prospect asked questions about certain features). It is infinitely difficult to stay within the “boundaries” if you know the product can do more and you feel pressure (real or imaginary) that the product needs to come off as the better one. Ask any sales person if you do not believe this. The sales person’s single focus at this point of time is to close the deal.

Even if the sales happened “within the boundaries”, the next challenge comes at the implementation level – maybe not that acute though. When a customer asks for another report or implement a unique business situation/case for them, the service consultant’s first, second and third instinct is to go ahead and implement it. First he/she knows it can be done. Second he/she, as a consultant, wants to come across as “knowledgeable” and “helpful” to somebody who helps pay his paycheck. At that point of time time, most are thinking of the “boundaries”. And thus the project is no more a “quick and simple” one.

So, is this winnable at all?

The only time it worked for me was in a small country in Central Europe where we we able to sell a high-end product that we had packaged down in really short sales cycles and definitely short implementation cycles. It was not about the country or the market – their problems were exactly the problems we had seen in the smaller prospects in US. The big difference was – this was done thru a different channel. We had trained this company on the product (the dumbed down version, of course) for two weeks. After that, they were free to sell and implement the product in the market. We got a cut of the license and maintenance. And it worked great!! Till this day, I am convinced, that the only reason it worked is because the sales persons and the implementors did not know any better. They had very little idea about the true power of the product or what it had done for large customers.

So, faced with requests for more features, they figured out how to work harder to downplay the importance of those features, find alternate ways to getting the value to the customer or possibly sometimes lose deals. (I never got visibility to the deals they lost).

So, my clear learning is, taking a high end software down market is a very difficult proposition (unless you use different channels altogether). On the contrary taking a software up market is far easier (it takes time and money though). If you need to play both the markets, it is my suggestion (somewhat unintuitive to many people) that you might want to think hard about having two different products if you insist on using the same channel to sell and serve.

Comments?
Rajib