High Tech Management & Leadership

What makes a great manager or leader in a High Tech company? Is it great technical knowledge or skill? Or is it the ability to be affable and convince people to do what you want by the strength of likeability and personal relationships? Getting people to perform by fear of and grudging respect that comes from being in a position of power? People might answer this question in almost as many ways as there are people to ask.

I’ve had many influences in my career that have shaped my attitude toward management and leadership. I started my career in old-line, traditional, top-down industrial companies in the Midwest. Not knowing any better at the time, I thought that taking orders and doing what you’re told was the normal course of business. Doesn’t lead to much initiative or critical thinking, but I guess there wasn’t much asked for or expected of an entry-level employee in old-line companies. Speak when spoken to—do what you’re told, was the leadership style of the day.

It wasn’t until I moved into High Tech and went to work for Hewlett Packard that a whole new world was opened up to me. You actually care what I think? You want me to take the lead on that issue—and actually make a decision that will very likely be approved—if it’s deemed important enough to even be reviewed? What a revelation that was—the idea of treating employees like valued adults, with spare brainpower that might actually contribute to the company’s success. The HP way opened up my mind to the power of enabling people, and pushing decisions down as far as practical in the organization—where best knowledge about the particular situation often resides. To this day I’m in awe of the effect of a few basic principles at HP—respect for the individual, hire the best you can find in a methodical and comprehensive manner with cultural fit being a major factor, fire slowly, push decisions down in the organization, keep organizations small, and senior executives are “just people too”—no pedestals. People felt like they were working in a small company in which they were important owners because of these policies—and had incredibly loyalty as a result. Even though HP was already an $8B multi-national corporation. Like any company, the HP culture and leadership wasn't perfect, and some of the warts have likely contributed to the recent malaise the company has found itself in in recent years. But the simple policies above elevated HP to incredible success over some 60 years—it’s too bad this great company has strayed and lost its way a bit lately.

Another area that I believe is incredibly important in the management and leadership of software and high tech companies is work ethic. Our business moves too fast to sit still for very long. The top people in the company set the tone here. In my experience, if the top people aren’t obviously sweating to contribute, it is really apparent to the troops. When the CEO is taking home several hundred thousand dollars (or millions) and seems to be doing it by just enjoying the good life, it sends a very chilling message down the ladder—what is valued, what it takes to get ahead, and "get some for yourself" while you can. Not the best way to build a team-oriented, winning culture.

I was struck by a ride that I had from the airport in a taxi this week. The cabbie was an immigrant from Eritrea in east central Africa. His country has been war-torn and plagued by military coups and corruption. He came to the US with little more than the clothes on his back, with a wife and two small children. Spoke no English. He originally worked in a car wash, one of the lowest jobs in the US food chain. Learned English and Spanish at the same time, because he had too. Now he owns his own Cab, and has 4 kids. Still works hard—he picked me up at 11PM and had been working since 7AM that morning. But he doesn’t complain at all. He is appreciative that he was able to come here, and loves this country. His two daughters just got accepted to UCLA. It’s a classic American tale similar to many of our families that immigrated to this country over time. And you know what? To me, that taxi driver is a real leader. I’m sure that his children look up to him, and are appreciative that his hard work has paved the way to a better life for them. I’m certain that they are very loyal and will do whatever they can to gain his approval and fulfill his expectations for them. He has set a tremendous example for the people he is responsible for—one of selflessness, a gritty work ethic and never-say-die attitude. A strong Tech company CEO or senior executive can set a great example with much the same attitudes and qualities.

So to sum it up, what makes great leadership in High Tech? I think it’s someone with great intellectual capacity, but also great empathy for people as well. It’s someone with his ego in check enough to hire good people and let them create—with the ability to push the envelope and fail without getting fired. Someone who sets an example of hard work, intellectual honesty and tireless work ethic. A manager who realizes the power of giving credit to subordinates, rather that taking it for him or herself. One who realizes the short term profits are very important, but that people should not be treated as a simple expense like an office chair—if you want to have long term profits as well. Great leadership builds great companies for the long term. It’s very rare. If you know of one, I’d love to hear about him or her. Let me know what you think.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

High Tech Product Management

Product Management--what does this mean in a High Tech company? What is the function, and where does it belong? I've held permanent positions in a number of high tech concerns, as with PJM Consulting I have worked with many more in a consulting capacity.

Product Management is all over the map in High Tech. Most often it resides in the marketing department. Sometimes, it's in the engineering/product development department. Ocassionally you will see it as it's own function. And again, what does the term mean in a High Tech company? Sometimes it is used interchangeably with the term "Product Marketing". In this case, it means responsibilty from cradle to grave of the product planning and marketing functions for a particular product or product line. In other words, working with the developers to define the product (product planning), as well as driving the other "3Ps" for the product--setting pricing, distribution strategy and promotional strategy.

In larger companies you will often find this function separated into two distinct jobs: Product Management as the Product Planning portion, and Product Marketing as the function that manages the product once it is released into the market--driving pricing, promotion and distribution. In this case both functions may still reside in the marketing department, or the Product Planning portion is sometimes in the engineering department.

The last variance on this theme that is sometimes seen is that the Product Management resides in the engineering department, but it only vaguely resembles the traditional definition of the term. In this case it is "Product Planning", but the job and skill set more closely fit the definition of an engineering project manager, with very little weight put on exploring the market to match marketplace needs with engineering capibilities.

In High Tech, the Product Management function is most typically a "matrix" position: lot's of responsibility for a product's success, with very little actual authority to ensure that success. Normally a Product Manager's success will be decided based upon his/her ability to convince other stakeholders in the organization that the path laid out is the best thing for the company (and the individual stakeholders as well!) People skills are therefore as important as having a technical grasp of the job in a Product Manager's ultimate success.

In consumer markets, the Product Manager typically holds much more direct power--often much like a mini-GM for his product line. Often product development will even work for him. The term Brand Manager is often used in consumer businesses instead of Product Manager. (In a big High Tech company, a Brand Manager will fulfill more of a Marcom role).

So what's the best way to structure the Product Management role in your business? Well there really isn't one best way. It depends upon your business, culture and personnel. But I do have my biases. I believe strongly that most high tech businesses would benefit by structuring the Product Management function to be strong. Tthere is much to gain by putting a strong, experienced Marketer with a strong technical background in a Product Manager role where they are graded and compensated by the results of the P&L of their product line. I wouldn't go so far as to suggest that Product Development should report to the Product Manager in a High Tech company, but I would give them discretionary budgetary authority on at least a portion of the marketing budget for the product line. I would also make sure they sticks and management backing to deal with the developers from at least an equal position of strength. This lack of product managment strength is a huge problem in many High Tech companies, particularly those founded by product developers.

The Product Manager's mentality should be that of a "mini-CEO" with his product line analgous to the overall company for a real CEO. Too often in technology companies the Product Management/Marketing functions do not have the ability to stand up to Engineering. This leads to a culture of building what suits someone's fancy, not building what the market will buy--a very dangerous thing in the long term. A strong Product Management function will lead to an advocate for that product line whose sole business "purpose in life" is for his product to succeed. This outlook ensures that the big picture will always been looked out for, eliminating the potential for a product line's performance to be reduced by turf wars-- or sub-optimal tactical moves due to poor inter-department communication. The Product Manager is there to rationalize and orchestrate to ensure the product line has the best chance of success.

That's my take--what's your's?

Phil Morettini
PJM Consulting
www.pjmconsult.com

International Distribution of Software Products

Have your ever heard (or thought) the following? "We're a startup software company. We'll attack our home market first, then think about international markets."

Wrong answer! (In most cases, anyway). I work with a lot of startups, and I hear the above all too often. Especially when the founder or CEO comes from a technical background. But this attitude is very unfortunate, and in some cases can stunt or kill a company that should have otherwise made it.

That's because there is low-hanging fruit outside of your home markets, my friends. And if you leave it out there long enough, your competitors will grab it instead of you. I've sold an incredible amount of software in secondary markets such as Australia, New Zealand, Norway, Denmark, Finland, Sweden, Switzerland, Netherlands, Belgium and others. In the early 90s, I started up a group marketing a new Systems Management product. By the middle of our second year of operation, over 40% of our revenue was international, all while spending just a fraction of our marketing budget outside of the US. Let's look at the specifics of US-based software startups.

US startups can access this low-hanging fruit relatively easily for a number of reasons. First, in the software business there aren't the risks and costs associated with inventory that you would find in a manufactered goods business. The costs and risks are still there, but they are greatly reduced to the extent they aren't a strategic issue. Next, most of your startup competitors have the attitude of the first paragraph, and are contentedly pounding away at their home markets. Next, it is far easier to adjust prices to local markets and set up segmentation fences through localization in the software business, than it is in a hardware business. In addition, if you are a US-based company, there will be some overflow effect from your US marketing efforts, since the US is the center of the software world. And last (but definitely not least) is the unique attribute of secondary markets: the ability to find good distribution Partners. Partners that have a head start in their markets, existing momentum that you can leverage.

We'll come back to this last point in a minute. But first, let's go back to our typical US-based software startup. This CEO is rather bold compared to his peers. He decides to dip the company's toe into international markets. Where do they go first? Why, the UK, of course! It "feels" the most like home. And indeed, it is. The UK is the SECOND MOST COMPETITIVE and sophisticated market in the world. To add to this misstep, although the UK is officially part of Europe, from a cultural and marketing/distribution perspective, it is quite different. So this initial step doesn't even provide quite the learning experience you'd like when moving on to continental Europe.

Let's get back to that unique attribute of secondary markets, the ability to find good partners. I've highlighted partners because it is so important to find the right partners and treat them well. What you are looking to do is find someone to ACT ON YOUR BEHALF in this local market. Someone who will put out the effort, spend their own capital, and be just as committed to the product's success in this market as you are in your home market. This isn't easy to do, but the payoff is high if you get it right. Find the best potential partner, then structure the deal to get them excited. Give them high discounts, provide extensive sales and technical training. Do give them at least a short term exclusive. Set the deal up so that they aren't competing with other distributors of your product or even you--just your common enemy, the competition. If you do this right, you will have created an order/revenue generation machine that will work for you for years to come--with very little ongoing investment. And might even be humming away while you're still investing and pounding away trying to get established in your home market. This is contrary to what many will tell you, but it is true. I have done it many times across a variety of markets and products. I could write about this topic almost indefinitely, and of course, the devil is always in the details. But I'll stop here. Tell me what YOU think!

Phil Morettini
PJM Consulting
www.pjmconsult.com