Vicky writes <If anyone's been in companies that foundered, what were the main factors you thought crucial?>
I worked for a terrific company in the UK, Database Consultants Europe, that sold to an international organisation, James Martin & Co. The new owners wanted to buy the entrepreneurial verve of DCE but didn't think like an entrepreneur so we all had to swap fun for opportunities and autonomy for peer review. Those that made the transition learnt lots and eventually thrived but several bright sparks became dissolusioned and left (+/-). The Information Engineering Methodology preaches the ethos of 'impersonal software' but innovations all came from quirky individuals. As George Bernard Shaw says "All change is wrought by unreasonable man". Big companies can manage very few 'unreasonable' people! Sue -----Original Message----- From: Vicki Hyde [mailto:[EMAIL PROTECTED]] Sent: 08 January 2003 11:56 To: Canterbury Software Email Forum Subject: Re: [csforum] What's the best way to eat an Elephant? > From Peter Brown, Nightside > At the end of this month we have an opportunity to have our say (as a > Cluster) about the ICT Task force report. ... > So have a skim through the 1st few pages to the end of section 2 You can see the report and some initial comments made on it at: http://www.canterburysoftware.org.nz/ICTTaskforce.htm > My initial reaction to the Goal and Challenge of '100 * $100M companies in > 10 years' was "Awesome" then "so how do I get Nightside there, or part way > there?" Part way is likely to be a realistic goal for many, even if just looking for a modest, yet satisfying increase in sales/turnover. We need to bear in mind that 90% fall into the small category, especially in the software industry. One of the most interesting sections in the report talks about the barrier most companies face in growth when they get to larger levels ($20M, 150+ employees) -- lack of management skills, founder syndrome, need for capital. It would be interesting to figure out why we have so many companies at the very small level in software and what happens to them, and explore ways we can help at that stage too. If anyone's been in companies that foundered, what were the main factors you thought crucial? > school/tertiary system as training people to work for others) if we want to > have a 100 companies at Phase D then it would also be great to have 200 at > C, 500 at B. This would mean that a significantly larger pool in Phase A > in needed - may be 10,000 or more? So where will these companies come > from? And what do we need to do to support them, and at what level? I think there are more than enough basic business for beginners courses out there at the moment, so it would be good to encourage consolidation of the next level of business education. I know SPIS learnt a lot from the Hi- Tech Business Incubator courses (thanks to John Hamilton and the CDC). It would be good to identify where people stumble or fall and see if we can help build steps over such areas. The Cluster identified the three M's initially: money, mentoring and marketing as the main "biggies" we face in growing from small local businesses to larger, more international ones. What others are there -- how do we identify them and what can we do to respond? What about hands-on mentoring/business housecleaning in the sense of a service which could look at a business' operations, assess the weak areas and provide practical responses? This sort of thing is practicsed internally by larger organisations, but many of the smaller ones don't have the budget for such assistance (or aren't aware of the value in putting aside budget for it) or the time/training to undertake it. The focus would have to be on providing practical, useful approaches AND seeing them implemented. I know how easy it is to come back from a workshop or meeting and be all fired up about changing things and then put it on the non-urgent pile for later.... So how can we develop/identify useful tools to manage business improvement? Anyone got any experiences or recommendations in this area? > We are actually going to need to start developing more people to > become entrepreneurs (rather than just letting them pop out of the woodwork > here and there). Should this be a Business / Govt / collaborative effort? Has to be in some way, given government involvement in things like education. I gather there are some tertiary courses in innovation and entrepreneurship -- anyone on the forum know anything about them? > Yes we want to grow - so how do we get there? > Who are the companies in the $20M+ group (a list would be nice), what > can be learnt from them in how they achieved their level of sales, > lessons etc? Don't know about the $20M+ companies, but here's what the Herald had to say about the Phase D $100M lot: Just 16 companies have annual sales exceeding $100 million and half of them are the New Zealand-based arms of multinationals. These include EDS, IBM, Hewlett-Packard, Unisys, TelstraClear, Vodafone, and Ericsson and are responsible for 64 per cent of the sector's contribution to GDP. New Zealand companies in the same category include Fisher & Paykel Healthcare, Solnet, Tait Electronics, Datacom, Gen-i and Renaissance. Telecom is the single largest contributor and accounts for over 2.2 per cent of GDP. http://www.nzherald.co.nz/storydisplay.cfm?thesection=technology&thesubsecti on=&storyID=3005393 So you can see it's very much an electronics/teleco dominated group at that level. Would be interesting to find out who is waiting in the wings, as it were, at Phase C and if any software folk are there -- must be a couple surely? Any candidates? I suspect that software per se would struggle for the most part to reach that sort of level (though I'd be happy to be proved wrong :-). I think there are limitations with the strong service-focus that software has in terms of reaching that level of growth. I figure it's a lot easier to up production of your widgets than it is to shoehorn more hours in the day. Should we be telling the government that lumping software in with this group is not appropriate as the industries have different approaches, problems, concerns? > Perhaps it would be good to look at a finer level of detail in Phase A of > the table e.g. smaller divisions like <$1M, <$3M, etc. and focus on what > can else can be done to help businesses the earlier stages. Building a > larger pool in Phase A should enable more companies to 'break through' Very good point. So what are the crunch points and what can we do about them? Should we be encouraging more smaller groups to merge to make them more robust? How do you do that? Would people be interested in something like an arranged marriage service, or put their hands up to looking for a partner? Or should we look at ways we can operate as virtual joint ventures? > (more ideas + improved support = more chances of success). Also when you're > at this level the achievements of $1M, $3M etc. in revenue are very > significant - could/should these achievements be recognized in some way? Most of the awards out there look at absolute level of turnover as a measure of success, so you see the same faces time after time. It would be good to suggest other measures we can use as an industry to honour achievement -- but what? Percentage growth? Longevity? Employee satisfaction? (There's an award which does recognise the latter but I think you have to have over 100 employees to be able to enter...) > Based on the figures provided in the report most NZ businesses are in > the very front edge (<$5M) so a commitment from the Government to making it > easier to create and run a small business in NZ would be a good start. > Reducing compliance costs (and time) for these smaller businesses would That's common across all industries and there hasn't been a great deal of government movement that I've noticed on helping out here despite repeated calls from the Big Boys such as the Round Table, ManFed, Employers' Assn etc over the years. > they get more time and some spare cash Hmmm. sounds like a good place to > focus the clusters support!) One thing we might want to look at is educating government departments about the IT sector and how it differs from others. I've always enjoyed niggling Cate about TradeNZ's traditional focus on shipping boxes of widgets :-) And the regular Colmar Brunton surveys on their behalf can't cope with the fact that we see the world as our market, not specific countries. (Though maybe that's a pecularity of the way SPIS does business online with a generalised product -- anyone else think that way or do y'all have rigidly defined niches that target 30-somethings in Southern California or the electrical industry in Germany or summat?) Judging from the interminable (routine) audit we (SPIS) are living through, it looks like the IRD needs educating about software and online issues -- and I daresay folk would benefit from seeing what the IRD view is of things too, especially seeing the IRD has got a very thick form they have just developed to quiz IT companies....I think at the very least, a workshop or seminar on IRD/tax issues and implications for IT would be a Good Thing. Maybe once we get our auditor fully up to speed... :-) I certainly think that one thing we have to do is keep pushing for recognition that NZ software can foot it with the best in the world -- we've got more than enough examples of that within the Cluster (though if you haven't featured in a success story yet, do tell :-). CSI has made a move on that with the initial meeting with Trevor Mallard and CIO/IT heads of a number of ministries, but it will need a concerted push to continue. There are good reasons to do this -- after all, if we want our businesses to grow, the first major port of call for product/service clients is our own government. (See the notes appended below for more detail re this which I got out of the original meeting.) Here's an example of why this is a concern. SPIS, had an RFP rejection letter from one ministry in December which said that we were too small (only 7 of us) and too distant from Wellington to do business with them (though we work on a daily basis with clients as far away as Denmark).... Anyone else got that sort of response? If you've done a government RFP/ROI in the past couple of months, ask them for a written response if you missed out -- they are supposed to provide you with feedback and we all can learn about what the assumptions and choke-points are, as individual companies and as a group, if we can identify them -- so go on, ask! It would be great if the Cluster could use a number of such examples to drive home the point that this is a real barrier that needs to be addressed. It's a practical one that could benefit us all, unlike many of the waffly policy statements and visions :-) Enough for now, back to work, Vicki Hyde Utility in Local Purchase Consideration By supporting local supply of software and software services, government has the opportunity to: * be seen to legitimately support local companies which are world-leading in their areas * play an influential role in the broader community by helping to strengthen the local business/IT sectors and recognising that it is capable of supplying competitive products and services * help retain skilled workers by providing a supportive environment where there is a clear local career path for top IT people * boost revenue within New Zealand through the use of locally developed, locally owned software products and services, and the concommitant spread of this throughout the local communities * act to facilitate international opportunities through networking, acting as reference sources etc * effect organisational change more efficiently with companies that share a common culture (and the same timezone!) * demonstrate that they value suppliers who contribute to the development of New Zealand By partnering with government, local companies have the opportunity to: * gain valuable experience in larger-scale projects, as there are releatively few organisations in New Zealand which have 1,000+ people involved and most of these are governmental * gain credible reference sites which can be used in export markets, thus strengthening business operations and opportunities * retain skilled workers who may otherwise seek opportunities overseas * work within a common culture to develop the experience and capabilities that makes export efforts more successful Many of the above points came from comments made by Gil Simpson and Chris O'Brien at the Mallard meeting, Anyone got anything to add to this? ====================================================== SPIS Ltd, Box 19-760, Christchurch, NZ http://.spis.co.nz * FREE TurboNote+ sticky note trial: http://TurboNote.com --> via Canterbury Software email forum: Success through Connections Email your messages to [EMAIL PROTECTED] Searchable list archive: http://www.mail-archive.com/[email protected] Leave or rejoin the list: http://canterburysoftware.org.nz/forum.htm --> via Canterbury Software email forum: Success through Connections Email your messages to [EMAIL PROTECTED] Searchable list archive: http://www.mail-archive.com/[email protected] Leave or rejoin the list: http://canterburysoftware.org.nz/forum.htm
