ToKillaSoftwareCompany

Refers to: How To Kill A Software Company

Don, this is such a fertile field, I wonder how you can cover it. Maybe just highlighting Best Practices in Company Suicide?

A personal favorite: from 1989 - 1995, I was part of Legent Software which formed in 1989 from the merger of Morino Software and Du Quesne Software. I was part of Business Software Technology, which became the 2nd merger. We were pretty successful and owned about 40-60% of the mainframe operation augmentation tools, monitoring and configuration management. About 50 software products, 3 sales forces. Each sales force was expert in its division's products [each former company was now a mostly independent division.] The mergers gave each former company more financial respectability when selling into a late majority adopter type of customer - these customers wanted to be sure we'd be around to maintain the products they bought. It worked.

Management found nirvana in executing [more] mergers to increase gross revenues --> exec bonuses.

We then merged with Goal Systems out of Cincinati. This added another 50-60 products to the Legent line [even after paring some redundant ones], and gave Legent an effective 75-90% marketshare in most lines of operation automation [tape library management systems, ...] Total Legent product offerings: about 125.

Now we adopt brilliant suicide idea: to cut costs, all 4 sales forces will become homogeneous. [Ex-IBM VP becomes VP of Sales Legent-wide.] Each salesman will sell all 125 products to all customers. Salesmen absolutely hated it!

Before, each salesman was expert in his/her division's offerings: how to adopt, install, start reaping advantages, share tips from other users.

After the homogenization, nobody was expert in all the products, and nobody could really become so. The product families had 4 different historic origins and styles. The best salesmen quit, rather than fight knowing that they could find greener pastures that they could master elsewhere. What remained was no longer cream-of-the-crop. Customers complained that they wanted the experts back, but they were gone.

Within 15 months, in 1995, Legent got swallowed by Computer Associates.

Arrrrghh!

BobLee 2002.06.16

Bob, I have a knack for picking writing topics with many fertile fields and paths to wander down.<grin> I'd guess that we ALL have a story (or two) we could share about how a company committed suicide.

What would the criteria be to make a technique a "best pratice"? I would suggest the "Last Words" test. (What are the last words of a redneck? "Hey Fellas! Hold mah beer an watch this!)

The goal of improving the bottom line by cutting costs is why I'm looking forward to the session. Steering the System: Effective Interventions . Why not generate more revenue while holding costs the same? This uses a positive loop instead of a negative loop. What happens if we do succeed in generating more revenue? What other costs might have been cut (instead of combining the sales force)? Then what interactions come into play, and how do they affect the company? Where are the leverage points?

DonGray 2002.06.18

Bob

I cringed when I read that Computer Asociates bought your company, Have been on this periphery and had too many friends involved in similar deals. One operating belief is that "people can learn to sell what we are doing now" or that whatever people know will translate to what we do now. Does anyone ask? Who does the analyis and what numbers do they use? ... and this fits the corporate goals in what way?

- BeckyWinant 2002.06.18

Becky, too often the effort looks reasonable until thought through by the troops on the front line. I think a lot of corporate suicide comes from "strategic planning" that doesn't include design inspection by those troops. The notion of big change from above affords lots of suicide material. Suicide was the end of the illusion [to twist a favorite SHAPE expression!] --BobLee 2002.06.18

The sales strategy was at least in part a modeling failure. If the sales interaction is pretty much like selling from a catalog, or based on an account control / relationship sell, then the strategy made sense. (Usually the "same guy sells all the product lines" change goes along with a "one guy owns the relationship - that's better" argument. Also the benefits of having a "single point of contact for administrivia" are often rolled into this one. Not that I've ever seen it.)

If the sales cycle involved a pretty fair amount of handholding and education, then the strategy didn't make sense. Of course with more "turnkey" products you don't do so much handholding. And with a large presales technical investment, that investment gets factored into the product price. So depending on the product behavior, the strategy might still have made sense, if detailed support was repositioned into a tech support organization or a consulting arm. The other consideration would be that the customers would want to and be able to pay for suppor that way. Often in budget bingo, tech support bundled in or with a product you can still get, when "consulting" isn't allowed.

Big change from above is often based on flawed models. Sometimes you get the VPFromSomewhereElse who brings his models with him. They worked great at the other place, right?

JimBullock, 2003.04.22

BTW, one definition of a "best practice" includes that it must be portable. Modeling failures count. So does getting so caught up in "best practices" that you forget to be in business and do the work. That happened to a nice copier company from up-state New York.

JimBullock, 2003.04.22

I think I'd be more impressed with "best practices" in killing a software company if they came with countermeasures and mitigations. Otherwise it seems kind of grim and mocking to me. So for the modeling failure best practice, feedback on what's actually happening is one mitigation. Empirically testing the model with a pilot would be a countermeasure, and a HudsonsBayStart would be another.

JimBullock, (It appears I know several things about companies killing themselves. I wonder why that is.) 2003.04.22

Updated: Tuesday, April 22, 2003