Back in 2006, I was responsible for US Operations for IT Services startup out of India. I was responsible for all major accounts and I noticed that quality was becoming a problem. The root cause seemed to point to excessive attrition rates. This was really surprising for the company was doing well and the projects were seen as interesting and challenging. As attrition spiraled out of control in India, the CEO and I, who were located in the US, decided it was time to take a closer look at the problem.
To give you an idea of the the problem, in 2006, the average turn over rate for an IT Services firm in India was about 20%. The Indian market was hopping and attracting new talent was a real challenge so it was a high priority to retain our staff. We had doubled our revenue over 2005, and given the normal stress associated with rapid growth we expected a modest increase in our average attrition rate, but our monthly rates doubled and warning bells started going off; if we didn't resolve the problem, our rates would greatly impact our ability to deliver quality service.
The office was run by three executives who were conspicuously quite about the turnover ratio. The CEO and I began running our own exit interviews out of the US for some of the staff that we knew personally. What we heard was vastly different from what we read in their exit interview reports. Something was really wrong. We wanted to react but until we had a better handle on the problem we did not want to alienate the executive team in India. After some discussion, the CEO and I decided it would be best if I flew to Hyderabad so that it didn't look like he had lost confidence in the management team.
When I arrived, I called an all-hands meeting and told the staff that I would be interviewing everyone to try to understand what was causing our quality issues and our attrition problems. Given that we had a lot of employees, I blocked off 4 days for the interviews and asked everyone to sign up for a time slot. To make it easier on everyone, I also asked the executive team in India to take the week off. I didn't want any pressure on the staff as they entered or exited my office. I wanted everyone to feel that they could talk to me with anonymity.
At first the staff was very guarded but as word spread that I was there to listen people really opened up. I performed the interviews alone, so that nothing could be repeated. I took notes and after each interview I showed each employee what I had written down. I wanted to reinforce my commitment of transparency. I compiled a list of over 400 complaints and comments. I spent the next day organizing and categorizing the problems, then looked for root causes. It was clear that we had a few fundamental problems that had to be addressed immediately and that we had to change the environment if we were fix the problem. I then created a list of remedies for the most egregious problems and called another all-hands meeting where I announced my overall findings.
Without going into all the details, let me just say that we immediately accepted the resignation of two executives and announced their departure to the staff. With the remaining executive by my side, we immediately enacted changes to address the major concerns. We tried to go a step further and announced a few new policies that would show our conviction to improving the working conditions. For example, we announced a safe-ride-home policy which would pay for cabs for anyone who had to work late and who didn't feel safe driving home as a result. This was intended to improve the conditions and concerns of the female staff but it helped offset commuting expenses for most of the team. We also eliminated a number of policies that could only be categorized as crazy; the worst of which stipulated that if anyone had to work the weekend to get their weeks work done, they would have to do so without air conditioning as punishment for not completing on time. I still can't believe that ever seemed like a good idea. Outside the obvious, summer days in Hyderabad are well over a 100 degrees!
Over the next 3 months we revamped all of the HR policies. We hired a new delivery head who worked hard to change the culture and we maintained oversight out of the US to make sure we followed up on all our promises. In the end we nearly eliminated attrition, reducing turnover rates to 4% for the next 12 months.
When I reflect back on what caused these problems, I can only say that some of these were directly related to stress; the stress that rapid growth can bring. The team's reaction to the stress created so much tension that it escalated to verbal abuse. The remaining issues are harder to categorize. My Western ideals warp my judgment on them. In India things are different. Authority and power create privilege and this sense of privilege led to the inconsistent application of policies (favoritism) which created a lot of resentment. With proper oversight and coaching most of the problems could have been avoided. It just highlights the challenges of trying to run a startup with 95% of the resources on one continent and the majority of the senior executive team on another.
Wednesday, May 27, 2009
Monday, May 25, 2009
A process to align software developers with business users
I broke apart an earlier post into two different posts. If you read the original, A process to test a startup idea please ignore this one. I got a number of offline comments from people who liked the workshop process who wanted to share it but they didn't want to share the original post because it had extraneous info about me in it (nice to know that I'm extraneous), so I've eliminated the extraneous bit...
I've been delivering business transformation workshops at CTE/CellExchange now for 4 years. We use a methodology that was developed by a professor at MIT for helping organizations identify and implement great ideas. There are five steps to the process:
Before the workshop begins we do a preliminary business case analysis on each of the ideas so that we have a starting point for building the business case with the customer in the workshop. The business case is the financial reason (Return on Investment) for implementing an idea. The expected return has to exceed the capital expense, which may be measured in time or money, for the executive team to fund a project. What we like to look for is an optimization (like reducing head count), an enabler (new opportunities created by the idea) or a cost avoidance (eliminating a cost associated with doing nothing) to build the business case. The business case is usually high level and we work to refine the numbers during the workshop. For now, we look for ideas that have large potential returns.
The next step is to create alignment during the workshop. We do this by creating prototypes to highlight what the future would be like if the problem were solved. The value of a prototype is that it allows everyone to see the same picture, and as the saying goes, a picture paints a thousand words. The visualization also allows us to test out the concept. If the problem were solved with this software, what would the future look like? Alignment and visualization are critical elements to a successful execution. We float all of the ideas and we then drive alignment around one of them. With everyone agreeing on one idea, we do a deep dive into the business case and refine the numbers. It is critical to have agreement on the value of the idea. To gain credibility, we leverage the customer's finance team to validate our work.
The last step before pitching is to determine how we can operationalize the idea. We create a road-map that shows the steps needed to test assumptions and execute the work. The road-map is also kept at a high level, so that we don't get mired down, but it has to have enough detail that the customer believes it can work.We don't worry about having all the answers at this point. The road-map should spell out the areas where testing will occur to validate the assumptions. You have to have milestones in the plan to allow a go, no-go decision to give it credibility. We also use the road-map to define the communication plan, i.e. a plan to broadcast successes with the proper frequency to maintain traction (and funding).
Armed with a vision of the future, a business case to show the value to the organization, a prototype to drive visual alignment around the solution and an operational plan to make it happen, we are all set to get executive buy-in, i.e. the financial commitment to begin the project. A technique we rely heavily on here is to start an executive presentation with a role play that highlights the problem. Acting out the problem for the senior team ensures that they really get the issue. We often try to make it humorous or 'over the top' so that we really showcase the problem we are trying to solve. What this does is anchor the audience around the problem. With that we then describe the solution in a second role-play, which leverages the prototype to show how the problem is solved and how much better the world will be with the solution. We follow this up with the business case to show that we can make money doing it, and then we demonstrate the implementation plan, to show we know how to execute. We highlight the fact that the plan shows fiscal constraint by aligning funding with the discovery phases. We wrap up the presentation with impassioned plea which usually goes something like: we have to solve this problem; this is the right thing to do; we can make money doing it; and all we need is a little funding to prove to you that the investment is warranted. When executed properly, this is a thing of beauty; it bring tears to your eyes…
I've been delivering business transformation workshops at CTE/CellExchange now for 4 years. We use a methodology that was developed by a professor at MIT for helping organizations identify and implement great ideas. There are five steps to the process:
- Define the idea
- Determine the business case for doing it
- Create alignment around it
- Define an implementation plan to execute it
- Get executive buy-in to fund it
Before the workshop begins we do a preliminary business case analysis on each of the ideas so that we have a starting point for building the business case with the customer in the workshop. The business case is the financial reason (Return on Investment) for implementing an idea. The expected return has to exceed the capital expense, which may be measured in time or money, for the executive team to fund a project. What we like to look for is an optimization (like reducing head count), an enabler (new opportunities created by the idea) or a cost avoidance (eliminating a cost associated with doing nothing) to build the business case. The business case is usually high level and we work to refine the numbers during the workshop. For now, we look for ideas that have large potential returns.
The next step is to create alignment during the workshop. We do this by creating prototypes to highlight what the future would be like if the problem were solved. The value of a prototype is that it allows everyone to see the same picture, and as the saying goes, a picture paints a thousand words. The visualization also allows us to test out the concept. If the problem were solved with this software, what would the future look like? Alignment and visualization are critical elements to a successful execution. We float all of the ideas and we then drive alignment around one of them. With everyone agreeing on one idea, we do a deep dive into the business case and refine the numbers. It is critical to have agreement on the value of the idea. To gain credibility, we leverage the customer's finance team to validate our work.
The last step before pitching is to determine how we can operationalize the idea. We create a road-map that shows the steps needed to test assumptions and execute the work. The road-map is also kept at a high level, so that we don't get mired down, but it has to have enough detail that the customer believes it can work.We don't worry about having all the answers at this point. The road-map should spell out the areas where testing will occur to validate the assumptions. You have to have milestones in the plan to allow a go, no-go decision to give it credibility. We also use the road-map to define the communication plan, i.e. a plan to broadcast successes with the proper frequency to maintain traction (and funding).
Armed with a vision of the future, a business case to show the value to the organization, a prototype to drive visual alignment around the solution and an operational plan to make it happen, we are all set to get executive buy-in, i.e. the financial commitment to begin the project. A technique we rely heavily on here is to start an executive presentation with a role play that highlights the problem. Acting out the problem for the senior team ensures that they really get the issue. We often try to make it humorous or 'over the top' so that we really showcase the problem we are trying to solve. What this does is anchor the audience around the problem. With that we then describe the solution in a second role-play, which leverages the prototype to show how the problem is solved and how much better the world will be with the solution. We follow this up with the business case to show that we can make money doing it, and then we demonstrate the implementation plan, to show we know how to execute. We highlight the fact that the plan shows fiscal constraint by aligning funding with the discovery phases. We wrap up the presentation with impassioned plea which usually goes something like: we have to solve this problem; this is the right thing to do; we can make money doing it; and all we need is a little funding to prove to you that the investment is warranted. When executed properly, this is a thing of beauty; it bring tears to your eyes…
Thursday, May 21, 2009
A process to test a startup idea
I've redone this post to pull out the workshop methodology from how I hope to use that methodology in figuring out what to do in my next startup. To summarize the workshop process, we use five steps to align business users and software developers:
- Define the idea
- Determine the business case for doing it
- Create alignment around it
- Define an implementation plan to execute it
- Get executive buy-in to fund it
Friday, May 15, 2009
Handling Layoffs
There are many lessons I learned while working at a startup. The most difficult was how to deal with layoffs. This was my first real exposure to a mass layoff and I really wasn't ready for it. In business school, you talk about downsizing in a very detached way; you're simply aligning costs with revenue. People ask you if you think you're ready to make the hard decisions, and sitting in a classroom it is very easy to say yes. In real life, it's a lot harder. It's hard because you know that for a period of time you are going to disrupt the lives of people you care about; your coworkers and your friends. You know that the financial impact will be a burden on them and in some cases you know the timing couldn't be worse. When you let people go unexpectedly you disrupt their lives, you create uncertainty and you create fear. Dealing with the emotional side of layoffs isn't a skill anyone can teach you and it isn't as simple as saying yes in the classroom.
I feel it is important to share what I learned because I think it can help others but it is not meant to be a recipe or a cookie cutter. Everyone has their own style and personality, and what worked for me, may not work for you. I didn't go in to this to figure out how to game the system or how to solve this like a puzzle, I simply found a path that worked for me and the staff and that let me sleep at night.
Days after I took over as GM for CellExchange our customer decided to reduce funding on our major program. They decided to fund one of the 5 projects currently under development. The impact to the organization was dramatic. Two projects were canceled immediately and one was cut in half. Of the remaining two, one was just about done which meant we'd be going from 5 multi-million dollar projects, to one. Needless to say, I went into crisis mode and took immediate action. I tried to cut costs before targeting the staff but quickly realized that given the size of the impact I'd have to let go a large percent of the team.
I had just taken over so I didn't have a worst-case scenario in my financial projections. I quickly created a financial model based on likely end dates for all projects and devised a worst case plan. The contractors were the first to be impacted, and I let 30 go that day. Having been a contractor, I know that you are paid a premium for flexibility so I was less sympathetic when a few were upset about being let go without notice. Most took the news in stride but some got frustrated and unfortunately we had to escort some out of the building. I'm opposed to having to do this for I believe if you treat people with respect, they will return the favor but in the end that wasn't the case.
After we let the contractors go I focused on the staff. The real challenge was that I had to act quickly and I didn't have a ranking of the staff based on skill or seniority. I decided to let people go largely based on project. I say largely because I was hoping that our customer would change their minds and fund some of the projects in the future. I created a small bench for these projects with people capable of restarting quickly. After I created this list I figured out the maximum number of people I could afford to employ with my current revenue. I then created the list of who to let go. I delegated the task of communicating this to the management team along with HR. For whatever reason, the first person to be let go had a mini breakdown. This escalated to the point that we had to have security come in and help out. I wasn't sure how this deteriorated so quickly but I vowed that I would handle the communications from then on. I didn't want the managers to have to experience this, they had enough stress, and I wanted to make sure the message and tone were properly communicated. If something went wrong from that point forward I'd only have myself to blame.
After we made it through the list, I tried to do exit interviews. What I found was that the layoff came as a total surprise to them. They were also surprised that they were the ones chosen to be let go. It was the suddenness and the feeling of being caught off guard that really upset them. I thought they would understand. I thought the financial situation was obvious but I learned that they didn't have enough information to know how the finances translated to their level.
To try to solve this problem, I decided I had to do more planning to identify best case and worst case scenarios. With the models, I communicated to the project teams what variables drove them in order to impress on them how they could influence the outcome. I really tried to get everyone aligned around ownership; one team, one fight. In doing this, I also shared with them what each scenario would mean to them individually. If the worst case scenario hit, the staff knew if I'd let them go or move them to another project.
Well, we hit a worst case scenario about a month later on a project and I had to let the team go. When I did, I didn't know what to expect. I guess I still expected people to be angry with me and the company, but I hoped that they were better prepared. The feedback I got afterward shocked me. People were genuinely thanking me before they left. They were thanking me because they felt that they were treated fairly. They had taken personal ownership for the outcome because they knew what was expected of them and to a person they realized it was a team effort to win or lose. By planning, communicating and getting the teams really involved, we eliminated the surprise factor. They appreciated being treated with respect and they let me know it.
Though the process got better and though the staff understood and accepted the situation, there was one more really hard moment after the completion of the one of the projects. The team had to work nights and weekends to bring the project to a successful close and they did a great job. They did everything I asked of them and more. The problem was that I knew there wasn't another project to put them on so I had to let them go when they finished. Knowing that people were working so hard and that I would have to lay them off anyway was the most dissatisfying thing of my career. I hated the situation but in the end, what else could I do?
There were a couple of other things that I think helped out. Whenever letting someone go I always gave them the option to work through severance to maintain their health benefits. I also offered to use their severance pay to pay them over an extended period of time (part time pay) so that they were still 'employed' in case they wanted continuity on their resume. Most didn't take the options but some did and I believe all were grateful to being able to choose their exit strategy.
So my advice is to always be ready to act, not react, to bad news. Over communicate with the staff and treat them with respect. Let them know what they can do to help avoid bad situations from occurring and make sure they feel a sense of ownership for the outcome. When things do go wrong, make sure you give people options. Let them know that the layoff was a shortcoming in the organization, not the individuals. And help them in their job search with whatever company or personal resources you can.
I feel it is important to share what I learned because I think it can help others but it is not meant to be a recipe or a cookie cutter. Everyone has their own style and personality, and what worked for me, may not work for you. I didn't go in to this to figure out how to game the system or how to solve this like a puzzle, I simply found a path that worked for me and the staff and that let me sleep at night.
Days after I took over as GM for CellExchange our customer decided to reduce funding on our major program. They decided to fund one of the 5 projects currently under development. The impact to the organization was dramatic. Two projects were canceled immediately and one was cut in half. Of the remaining two, one was just about done which meant we'd be going from 5 multi-million dollar projects, to one. Needless to say, I went into crisis mode and took immediate action. I tried to cut costs before targeting the staff but quickly realized that given the size of the impact I'd have to let go a large percent of the team.
I had just taken over so I didn't have a worst-case scenario in my financial projections. I quickly created a financial model based on likely end dates for all projects and devised a worst case plan. The contractors were the first to be impacted, and I let 30 go that day. Having been a contractor, I know that you are paid a premium for flexibility so I was less sympathetic when a few were upset about being let go without notice. Most took the news in stride but some got frustrated and unfortunately we had to escort some out of the building. I'm opposed to having to do this for I believe if you treat people with respect, they will return the favor but in the end that wasn't the case.
After we let the contractors go I focused on the staff. The real challenge was that I had to act quickly and I didn't have a ranking of the staff based on skill or seniority. I decided to let people go largely based on project. I say largely because I was hoping that our customer would change their minds and fund some of the projects in the future. I created a small bench for these projects with people capable of restarting quickly. After I created this list I figured out the maximum number of people I could afford to employ with my current revenue. I then created the list of who to let go. I delegated the task of communicating this to the management team along with HR. For whatever reason, the first person to be let go had a mini breakdown. This escalated to the point that we had to have security come in and help out. I wasn't sure how this deteriorated so quickly but I vowed that I would handle the communications from then on. I didn't want the managers to have to experience this, they had enough stress, and I wanted to make sure the message and tone were properly communicated. If something went wrong from that point forward I'd only have myself to blame.
After we made it through the list, I tried to do exit interviews. What I found was that the layoff came as a total surprise to them. They were also surprised that they were the ones chosen to be let go. It was the suddenness and the feeling of being caught off guard that really upset them. I thought they would understand. I thought the financial situation was obvious but I learned that they didn't have enough information to know how the finances translated to their level.
To try to solve this problem, I decided I had to do more planning to identify best case and worst case scenarios. With the models, I communicated to the project teams what variables drove them in order to impress on them how they could influence the outcome. I really tried to get everyone aligned around ownership; one team, one fight. In doing this, I also shared with them what each scenario would mean to them individually. If the worst case scenario hit, the staff knew if I'd let them go or move them to another project.
Well, we hit a worst case scenario about a month later on a project and I had to let the team go. When I did, I didn't know what to expect. I guess I still expected people to be angry with me and the company, but I hoped that they were better prepared. The feedback I got afterward shocked me. People were genuinely thanking me before they left. They were thanking me because they felt that they were treated fairly. They had taken personal ownership for the outcome because they knew what was expected of them and to a person they realized it was a team effort to win or lose. By planning, communicating and getting the teams really involved, we eliminated the surprise factor. They appreciated being treated with respect and they let me know it.
Though the process got better and though the staff understood and accepted the situation, there was one more really hard moment after the completion of the one of the projects. The team had to work nights and weekends to bring the project to a successful close and they did a great job. They did everything I asked of them and more. The problem was that I knew there wasn't another project to put them on so I had to let them go when they finished. Knowing that people were working so hard and that I would have to lay them off anyway was the most dissatisfying thing of my career. I hated the situation but in the end, what else could I do?
There were a couple of other things that I think helped out. Whenever letting someone go I always gave them the option to work through severance to maintain their health benefits. I also offered to use their severance pay to pay them over an extended period of time (part time pay) so that they were still 'employed' in case they wanted continuity on their resume. Most didn't take the options but some did and I believe all were grateful to being able to choose their exit strategy.
So my advice is to always be ready to act, not react, to bad news. Over communicate with the staff and treat them with respect. Let them know what they can do to help avoid bad situations from occurring and make sure they feel a sense of ownership for the outcome. When things do go wrong, make sure you give people options. Let them know that the layoff was a shortcoming in the organization, not the individuals. And help them in their job search with whatever company or personal resources you can.
Sunday, May 10, 2009
Look outward to see inward
This isn't the first time I've thought about doing something new and different in my career. In fact, I think it is the fourth time. My first ambition was to be a faculty member but consulting wages drew me away from the life of poverty and study when I was a PhD student. I consulted for a few years with the sole focus of making money. A few years later I got an interesting opportunity to start an IT Services company and I did that for a while. I didn't quite know enough at that point in my career to be effective which meant that I worked really hard and lost money. I transitioned back to consulting again but missed the sense of belonging. That’s when I decided to try being an employee. After working for a couple of companies I couldn’t get far enough away from my technology background so I went back to school to get an MBA to try another startup.
During the volatile times in my career, I've found it very useful to look inward, to try to identify my core interests. You see, when I get excited about something new, I can get very passionate about it. But, as my wife once said very eloquently, love isn't in the falling, it's in the staying. Maintaining a passion for something beyond the initial idea is much harder, especially if it doesn't really align with your core. As I look inward though, I find it is equally important to also look outward; to get input from others about what they see as my strengths and weaknesses. I find this helps keep my ego in check.
Let me give you an example. When I worked at PTC I started as a consultant and, after a year, decided to take a full time position. I had set some personal goals and objectives and was aggressively marching toward them. I moved my way into a quasi innovation/strategy role, trying to get support for a new product. I was contributing in unique ways to the company and that was making it hard to really classify my role. When I started, I was reporting to a director but soon I was soon reporting to the CTO. All of his direct reports were Senior VP's and I wasn't even a VP yet and my ego started to get the better of me. I tried to pressure him into promoting me, and though I got the sense he was trying, I got frustrated by the pace and ended up quitting in a huff. After I left I talked with a coworker who commented that the CTO had been trying to get my promotion through but that there was a lot of politics involved with staff that had been there a lot longer than me, like 10+ years longer. He thought the CTO was laying the ground work so that I didn't end up in an untenable position after the promotion. In my egotistical view of the world, I missed this and realized late that leaving was a sign of immaturity. If I had taken the time to talk to others I would have realized that I had support for my ambitions and a title, or a lack of one, didn't affect my ability to achieve these goals. In retrospect this was a blown opportunity and I vowed I wouldn't make that mistake again.
So I believe that soul searching requires input from others to truly get a complete picture. My first stop in exploring others’ input was to talk to a friend who runs a startup. We've been friends since grad school and I have a lot of respect for his opinions. He commented that if I was running the company, I had to own the failure. Being closer to the situation, I thought differently but he pointed out it wasn’t my opinion that mattered. He thought I either needed to take a step back and return to being a technologist/strategist or start my own company. A great suggestion was to look for a company that is known for doing spinoffs - shooting for the best of both worlds. This seemed like great advice and in the end, I left the meeting feeling really fired up.
This left me with 2 very different paths to explore: find a role in a company that would think about spin-offs, or do my own startup in either a products or services space. Though the goals of these are similar, i.e. to get back to running a company, the approach to getting there is very different. One way starts with a paycheck and ends with a little equity, and the other starts without a paycheck, but ends with a lot of equity. It's time to evaluate my finances, talk to my wife and continue the soul searching.
During the volatile times in my career, I've found it very useful to look inward, to try to identify my core interests. You see, when I get excited about something new, I can get very passionate about it. But, as my wife once said very eloquently, love isn't in the falling, it's in the staying. Maintaining a passion for something beyond the initial idea is much harder, especially if it doesn't really align with your core. As I look inward though, I find it is equally important to also look outward; to get input from others about what they see as my strengths and weaknesses. I find this helps keep my ego in check.
Let me give you an example. When I worked at PTC I started as a consultant and, after a year, decided to take a full time position. I had set some personal goals and objectives and was aggressively marching toward them. I moved my way into a quasi innovation/strategy role, trying to get support for a new product. I was contributing in unique ways to the company and that was making it hard to really classify my role. When I started, I was reporting to a director but soon I was soon reporting to the CTO. All of his direct reports were Senior VP's and I wasn't even a VP yet and my ego started to get the better of me. I tried to pressure him into promoting me, and though I got the sense he was trying, I got frustrated by the pace and ended up quitting in a huff. After I left I talked with a coworker who commented that the CTO had been trying to get my promotion through but that there was a lot of politics involved with staff that had been there a lot longer than me, like 10+ years longer. He thought the CTO was laying the ground work so that I didn't end up in an untenable position after the promotion. In my egotistical view of the world, I missed this and realized late that leaving was a sign of immaturity. If I had taken the time to talk to others I would have realized that I had support for my ambitions and a title, or a lack of one, didn't affect my ability to achieve these goals. In retrospect this was a blown opportunity and I vowed I wouldn't make that mistake again.
So I believe that soul searching requires input from others to truly get a complete picture. My first stop in exploring others’ input was to talk to a friend who runs a startup. We've been friends since grad school and I have a lot of respect for his opinions. He commented that if I was running the company, I had to own the failure. Being closer to the situation, I thought differently but he pointed out it wasn’t my opinion that mattered. He thought I either needed to take a step back and return to being a technologist/strategist or start my own company. A great suggestion was to look for a company that is known for doing spinoffs - shooting for the best of both worlds. This seemed like great advice and in the end, I left the meeting feeling really fired up.
This left me with 2 very different paths to explore: find a role in a company that would think about spin-offs, or do my own startup in either a products or services space. Though the goals of these are similar, i.e. to get back to running a company, the approach to getting there is very different. One way starts with a paycheck and ends with a little equity, and the other starts without a paycheck, but ends with a lot of equity. It's time to evaluate my finances, talk to my wife and continue the soul searching.
Wednesday, May 6, 2009
A million little pieces... the whole truth
My son is 8 and I thought that I should explain to him that because I lost my job, we'd have to watch our expenses. The next day he went to Kimballs with his grandmother. She asked him if he wanted an ice cream and he hesitated then said, "usually my Dad pays, but now that he's unemployed, is it OK?" You can image how I felt when that got back to me. I'm very proud him for his willingness to make a personal sacrifice. I have to say though, it hurt my pride when I heard this. I felt like I was letting him down.
Usually you are, or are not employed. I'm actually neither employed or unemployed. That will probably take some explaining. I began running a division about 9 months back which had one major account representing 85% of revenue. The account wasn't doing well, though at the time the customer was talking about increasing the contract ceiling from $43M to $75M. Two days after I took over we got the word that they would only be increasing it to $46M and we were currently at $42M. That meant for the next 9 months I'd be downsizing the company to meet our ever shrinking revenue stream. During this time we laid off 110 employees of our 120. It was the hardest thing I've ever done.
Today the division is limping along. We have some revenue, but not enough to cover all of our expenses and certainly not enough to justify a General Manager so I put myself into the bucket of layoffs. I'm fortunate though that the company asked me to stick around for a few months in a part time capacity to help wind down operations and to try to help close one pending sale that could be rather large. If the latter happens, the CEO has indicated he would do a spin off and asked if I'd be interested in running it. Herein lies the kick. There are a lot of 'ifs' that have to work out for this to happen, and even if it does, I'll be working without pay for an indefinite period of time until the company could support my salary.
So now I'm not really unemployed then but I'm not really employed either. If it sounds like denial it probably is, right? I have to admit, the situation makes me very uncomfortable. There is a stigma you feel when you are unemployed. You wonder if 92% of the population is still employed, does that put you in the bottom 8%? Having laid of 110 people now, I know for a fact that employment does not equate to talent or ability, and yet, being unemployed, makes me feel insecure. It leaves me wondering what other people are thinking about me and that is a very uncomfortable feeling.
I believe there are 2 kinds of people in this world (I can hear my wife groaning already). The first is the kind who wants to have the greenest lawn on the street so he works really hard to constantly improve his lawn. The second is the kind of person who, late at night, pees on his neighbor's lawn figuring as long as his neighbor's looks worse, he is ok.
I'm the first kind of person. I believe in working hard for what you want. I also believe though that options are a good thing so I figure I need to have two plans, plan A is in case things work out at my current company, and plan B in case things do not work out.
So here is to planning plan B and where our journey begins. I really don't know where it will end but along the way if you have any insights, please share them.
Usually you are, or are not employed. I'm actually neither employed or unemployed. That will probably take some explaining. I began running a division about 9 months back which had one major account representing 85% of revenue. The account wasn't doing well, though at the time the customer was talking about increasing the contract ceiling from $43M to $75M. Two days after I took over we got the word that they would only be increasing it to $46M and we were currently at $42M. That meant for the next 9 months I'd be downsizing the company to meet our ever shrinking revenue stream. During this time we laid off 110 employees of our 120. It was the hardest thing I've ever done.
Today the division is limping along. We have some revenue, but not enough to cover all of our expenses and certainly not enough to justify a General Manager so I put myself into the bucket of layoffs. I'm fortunate though that the company asked me to stick around for a few months in a part time capacity to help wind down operations and to try to help close one pending sale that could be rather large. If the latter happens, the CEO has indicated he would do a spin off and asked if I'd be interested in running it. Herein lies the kick. There are a lot of 'ifs' that have to work out for this to happen, and even if it does, I'll be working without pay for an indefinite period of time until the company could support my salary.
So now I'm not really unemployed then but I'm not really employed either. If it sounds like denial it probably is, right? I have to admit, the situation makes me very uncomfortable. There is a stigma you feel when you are unemployed. You wonder if 92% of the population is still employed, does that put you in the bottom 8%? Having laid of 110 people now, I know for a fact that employment does not equate to talent or ability, and yet, being unemployed, makes me feel insecure. It leaves me wondering what other people are thinking about me and that is a very uncomfortable feeling.
I believe there are 2 kinds of people in this world (I can hear my wife groaning already). The first is the kind who wants to have the greenest lawn on the street so he works really hard to constantly improve his lawn. The second is the kind of person who, late at night, pees on his neighbor's lawn figuring as long as his neighbor's looks worse, he is ok.
I'm the first kind of person. I believe in working hard for what you want. I also believe though that options are a good thing so I figure I need to have two plans, plan A is in case things work out at my current company, and plan B in case things do not work out.
So here is to planning plan B and where our journey begins. I really don't know where it will end but along the way if you have any insights, please share them.
Starting Up
My name is Brian. I was the general manager of a division of a publicly traded firm up until Monday. On Monday, I joined the ranks of the unemployed as I closed the division and let myself go. I'm starting a blog that focuses on what I'm going to do next. I joined my last company very early on and helped it grow. Now, I'd like to start my own startup. I haven't decided just yet what that will be but I am working on some ideas. I thought my experiences may be of interest to others as I plot my course. I hope that you may learn from my meanderings, my false starts and my successes. And let's hope there are more successes than false starts.
From time to time I also plan on writing about the important lessons I learned over my career. You see, I started out as a technology guy and went back to business school late in life because I wanted to be something more than a technology guy. Of course, you can run from your past, but you can't hide. Even after an MBA from MIT, my resume screamed technologist and my pocket protector, no matter how shiny, killed me on interviews. When it came time to find a job after MIT, I was at a loss on how to make the transition from technologist to businessman. At school I was lucky enough to meet a very successful entrepreneur. He had started 6 or 7 companies and all but one had gone public. I asked to join his latest startup for I wanted to learn his secrets for starting successful companies. I worked for almost 4 years at this company and I certainly have learned a lot. We went from $80K a month in revenue to $3.3M per month before things started to go wrong. I feel I've learned some of his secrets and being armed, I'm now dangerous, and ready to start my own.
I hope you join me in this new adventure. I'd really like to hear your feedback. For now, let's see how it goes.
From time to time I also plan on writing about the important lessons I learned over my career. You see, I started out as a technology guy and went back to business school late in life because I wanted to be something more than a technology guy. Of course, you can run from your past, but you can't hide. Even after an MBA from MIT, my resume screamed technologist and my pocket protector, no matter how shiny, killed me on interviews. When it came time to find a job after MIT, I was at a loss on how to make the transition from technologist to businessman. At school I was lucky enough to meet a very successful entrepreneur. He had started 6 or 7 companies and all but one had gone public. I asked to join his latest startup for I wanted to learn his secrets for starting successful companies. I worked for almost 4 years at this company and I certainly have learned a lot. We went from $80K a month in revenue to $3.3M per month before things started to go wrong. I feel I've learned some of his secrets and being armed, I'm now dangerous, and ready to start my own.
I hope you join me in this new adventure. I'd really like to hear your feedback. For now, let's see how it goes.
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