A recent study conducted over a four year period by researchers at Harvard University and Dartmouth College provides five conditions that are thought to be needed for a senior management team to succeed:
1. Clear compelling direction established by the CEO
2. Creation and maintenance
of an appropriate organizational structure to achieve the goal
3. Hiring and retaining correct people
4. Emphatic support of the senior team by the CEO
5. Ongoing development championed by the CEO
Let there be no doubt that the CEO of a solution provider and the process he or she defines and drives has a huge impact on the development and success of the organization’s growth plan.
The focus of this article is on the critical events in the development of a successful growth plan.
Critical Events
There are several critical events in the development of the Transformation Plan: Creation of the plan; articulation of the plan to employees and investors; investment, in and modification of the reseller’s functional underpinnings to enable the plan to be successfully executed; and actual execution of critical components of the plan.
Of vital interest to reseller management is how much lead-time is required by companies prior to the actual execution of activities consistent with the Transformation Plan, and how much cash is required.
Three models emerged for the development of Transformation Plans by CEOs:
–CEO as source — sometimes assisted by outside consultants or members of the board, the CEO acts as the architect and author of the Transformation Plan
–CEO as catalyst – the CEO serves as the catalyst for a process which led the senior management to develop a Transformation Plan.
–Crumbling into place – the CEO leads the reseller through some sort of notional planning process that creates a Transformation Plan that fails to adequately address what will be done or what it needed to support the plan in execution.
The first two models of plan development work better than the third model, where the growth plan crumbles into place.
Successful articulation of Transformation Plans to employees and investors seems to be most successful when treated as an “adult education” problem and not simply an internal public relations exercise. In order for employees and investors to commit to the plan, the tactics and the activities in the plan had to seem legitimate. Things have to make sense. Clear and compelling plans are just that — clear and compelling. Dream or fantasy based plans do not work. Employees and investors needed to be educated as to the whys, hows and why nots of a Transformation Plan before they throw their unbridled support behind the plan.
The beginning of the process of investing in, and modifying the Functional Underpinnings of the reseller is an extremely critical event in the development/execution of the Transformation Plan. Regardless of the growth plan drivers, by this point the decision has been made. The parts of the company that are to grow, shrink or disappear have been determined. The “make” or “buy” decisions have been made regarding internal or external growth. The specific target growth business for the internal and/or external growth have been determined. Profiles have been created to drive the alliance/partnership/merger/acquisition program. Fundamental determinations have been made regarding where the Functional Underpinnings need to be shored up or established.
Two models seem to surround this cluster of critical events. Often, the process seems to have been started much too late. We observe resellers where the growth had gone on without adequate Functional Underpinnings, only to have the results of the Transformation Plan collapse on the organization. The second mistake we observe is a systematic underestimation of the amount of investment and/or modification that is actually required for a Transformation Plan to be successful. In short, too little time and too little money is being invested to support the plans that were on the reseller’s books.
The first moves towards actual execution of the Transformation Plan appear to be critical. In the most successful resellers, management told employees/investors what they were going to do (and why they were going to do it), they did it, and then they told employees/investors what they had done and how it had worked. Executed using e-mail and video in large resellers and company meetings in smaller resellers, serves to let all interested parties know that the Transformation Plan that they committed to is going to become a reality.
Changes
The organizational and functional changes driven by the Transformation Plan are critically dependent upon the drivers of the process, the decisions made by the CEOs, and the sequencing of the critical events.
Implications for management
Successful Transformation Planning led by a “real” functioning CEO is critical to successful reseller growth. Unfortunately, inertia is the key driver of many Transformation Plans. Transformation Plans require CEOs to make a number of critical decisions in order to guide the longer term investments and activities of the organization. The CEO is also tasked with driving the process of critical events that need to take place to get the organization into action. The investments that need to be considered are in the service, support, training and consulting business. As a CEO, are you defining and driving a process that will result in a more successful organization?
Bruce R. Stuart is the President of ChannelCorp. He is the author of the recently released books Reseller Management Handbook — 7th edition and Channels Handbook — 2nd edition. Both books can be perused at http:// www.channelcorp.com/products.htm.
Bruce Stuart is one of the world’s foremost experts on solution provider profitability, business model transformation and vendor channel strategy improvement. He has educated and consulted with channel and channel partner executives from more than 40 countries over the last 15 years. He is a frequent speaker at vendor events worldwide. Mr. Stuart can be reached at [email protected]. The corporate Web site is www.channelcorp.com.
