01 Mar The Anthropology of Growth
A Revenue Rocket perspective by CEO Mike Harvath
A book came out a little while ago titled How, by Dov Seidman. While I haven’t made much headway into it, I bought it because I was intrigued by its premise, which “is in the twenty-first century, it isn’t what you do that matters most; it’s how you do it.”
He makes the case that “If you make something new (or just better, faster and cheaper), the competition quickly comes up with a way to make it still better and deliver it at the same or an even lower price. Customers instantly compare price, features, quality and service, effectively rendering almost every what a commodity.” This is all so true.
The point he is making is that in our ongoing quest for differentiation, “In a commoditized world, we are running out of areas in which to do so.” He says “The one place we have not yet analyzed, quantified, systematized, or commoditized, one which, in fact, cannot be commoditized or copied: The realm of human behavior—how we do what we do.” In fact, he calls upon companies “to out-behave the competition.”
Skimming through the book, I noticed that he places a great deal of emphasis on the role and value of culture, in creating the “how” factor that companies need to “out-behave the competition,” thereby creating a more relevant differentiation for the company.
Naturally, when I hear behavior and culture, I think of Anthropology, which Webster informs us is “The scientific study of the origin, the behavior, and the physical, social, and cultural development of human beings.”
Historically, when we talk about growth strategies for IT services companies, we talk about the hard stuff; M&A, new geographies, new channels, new products and services, things we can more easily get our brains around. I began to wonder how much of an effort executives place in cultivating a culture that drives the right behavior that ignites growth.
I started this inquiry among some of us at Revenue Rocket by asking, “Of all the companies you have worked for, what was it about the company that allowed you to do your best work, where you made your greatest contribution, the work of which you are most proud?” I started it off:
Mike: “An unwavering commitment to be the best, with a clear mandate of where we need to go, lots of room to work, supportive and mentoring comrades, and staying out of the way.”
Dave: “Everybody working on the same page toward a common goal, with no ambiguity as to what has to be done, and being empowered to get it done.”
Jay: “A clearly-defined expectation set, being surrounded by great people, having the tools and processes that allow you to do what is right, without a burdensome bureaucracy weighing you down.”
Joe: “An infectious, almost reverential belief that the work we do for clients cannot, must not, will not be like any work any of our competitors can do and will do. Everything we do will be better, more innovative and more impactful.”
Ryan: “Being left alone, with the creative freedom and empowerment to explore new ways of doing things, without being micro-managed.”
Jo-Elle: “Having a first-class mentor who allowed us to make mistakes, who invited our participation in business decisions, and who kept us informed of all things all the time.”
What’s interesting about these top-of-mind, visceral reactions is notably absent was anything to do with money, titles, power, perks, prestige, turf, etc. There was an overarching sense of a corporate destiny beyond revenue or profitability, or size. There was a rock-solid belief that with a well-defined goal, the right tools, a nourishing comradeship and empowerment, anything can happen.
What everybody was describing, in their own way, as the most powerful instrument for being the best they could be, was a culture that empowered them to behave in ways that drove excellence.
Every company has a culture, some good, some not so good, some carefully cultivated, some simply left to evolve on their own. In order to get a sense of how IT services companies view corporate culture we interviewed three successful IT services CEO’s to see what role culture plays in their companies. They are:
Founder and CEO of Quilogy
Founder and CEO of Ambassador Solutions
CEO of Digineer
We’d be interested in hearing from others about how their corporate culture is advancing their cause or hindering their development. You can reach me at 952-835-2333 or send an email.
A conversation with Randy Schilling
Randy Schilling is the Founder and CEO of Quilogy, a national IT professional services company with headquarters in St. Charles, Missouri. With 250 employees at 17 locations across the country, Quilogy is a leading Microsoft National Managed Partner—one of a select number in the country. Quilogy is also Oracle’s largest authorized training delivery partner in the United States. More than 5,000 students attend Quilogy technical training every year.
What’s your background, and how did you get started?
I have an electrical engineering degree from the University of Missouri and an MBA from the University of Illinois. Right out of school, I worked for a public utility and was given the task of designing the control systems for a new electrical substation. One of my jobs was researching different pieces of information, such as, manufacturing data, engineering drawings, property accounting, etc., a most tedious task. The personal computer had just come out, and I had one of the few computers in the company so I started aggregating all this information in my new PC.
One day, we lost one of our generators, and the chief engineer spent a day and a half looking for a relay device to get the power station up and running. Finally, he came to me and said, “We know you’re doing this database thing, is there any way you can help us find a replacement relay switch?” I quickly found one, had it installed, and the service area technicians got the power plant up and running, saving a ton of time and money. At that point, he said, “We like what you’re doing, here’s a budget, put a plan in place to put a computer on each engineer’s desk and network them together so they can see the same database.” From that point forward, I became an internal consultant working with the IT department training them on databases, networking, data modeling and other computing technologies.
After five years, I joined Grant Thornton to start an IT practice around Client-Server computing. I became a poster child for Gupta Technologies having worked with the technology for five years and having written a number of technical articles on the topic.
I left Grant Thornton after a few years because the market was quickly changing, and I found myself more interested in emerging technologies. So in 1992, I started Quilogy with a single client, a public utility in New Orleans. Shortly thereafter, I started doing Microsoft training, and was quickly working with leading companies like Southwestern Bell, AG Edwards, Union Pacific and others. With this initial influx of training money, I hired my first consultant, and by the end of 1993, I had eight or nine consultants. We grew from there.
What makes Quilogy successful?
It’s definitely the people, but how do you attract great people in IT? I think part of our success can be found in our business model. Our employees don’t have to live in the big IT centers, like Boston or San Francisco, to work in technology. For us, it’s literally and figuratively about doing cutting-edge technology in your hometown. Our headquarters is located in five historic buildings in St. Charles, a suburb of St. Louis. When we expanded, we followed the Southwest Airlines flight map, which took us to Kansas City, Omaha, Louisville etc., symbolically Main Street, USA. Now we’re able to tap into a supply of extremely talented people who prefer to work in their hometown.
How do you think about the role of culture at Quilogy?
We always use the three-legged stool analogy to describe the company culture. The first leg is what we talked about earlier, and that is our employees and the family-oriented, Midwest ethic that comes from our Main Street sensibilities.
The second leg is our clients. We’re very dependent on client referrals, and our case studies for new business. To keep this resource growing, our philosophy is that at the end of the day, we are not going to be in business very long unless we’re consistently helping our clients improve revenues, business efficiencies, reduce costs or solve a compliance issue.
The third leg is the bottom line, the financial leg, making sure we’re a profitable organization. Whatever we do, we’ve got to be able to make money for long-term survival.
The seat of the stool is integrity. That is, making sure we’re doing what we said we were going to do, even when it’s painful. We’ll take a hit at the bottom line to make it right for clients if we’re in the wrong. We define integrity as standing by our work and our employees.
How does this culture manifest itself in your company?
We want an open, collaborative environment where everything is shared. To that end, we borrowed a concept from Microsoft about managing the company’s calendar to the rhythms of the business. It’s a way of saying here is the calendar for the year around which we plan and collaborate on sales, clients, employees, company events, etc. Every month we produce a video (we have a studio) through which we communicate our results for the month, quarter and year using streaming video. We also have an annual employee summit. It’s like a company shareholder meeting, where we share results, but more importantly, we break into brainstorming sessions to collaborate on ways to improve the business. At our last sales summit, we asked every location to submit videos that describe their office. It’s an excellent way for everyone to see what each other is doing, what’s working, what’s not and how others can pitch in when needed, since compensation is tied to local and company performance.
What are the challenges for managing a culture across 17 locations?
Clearly, one of our challenges is creating a bunch of mini-Quilogys, in which we can profitably use technology to solve client business problems and attract, recruit and train the right kind of talent and keep them motivated. I consistently see evidence that all of our offices follow the company culture, but when we find ourselves getting a little bit sideways, it’s generally right before we do an employee summit. Then when we do the employee summit event, it really brings people together and gets us back on the same page.
What advice would you offer other executives with respect to corporate culture?
I think the biggest thing I’ve learned is that building a company is more about your people skills and dealing with people than it is about technology. I think people getting in the business think it’s all about technology, when it’s more about finding the right people and finding people that have passion. Passion is far more important than finding pure analytic type personalities.
Finding those people with what I call practical IQ is important. There has to be a certain level of knowledge, or IQ, about your industry, technology or business, but you also have to find the person that, beyond that, has the ability to get the job done even when there are a certain amount of challenges.
So, I think the biggest thing I learned about culture is the importance of it to your people and company, and the reinforcement you place on corporate culture, with things like the rhythm of the business, and doing things that take you out of your comfort zone, and as a leader not being afraid to do those things.
The other thing is the ability to let people develop. I let go of the presidency, and I now have a president of the company, Manish Chandak. I did that two years ago and from my perspective and experience, it’s about focusing on the people side, our employees, our customers and our vendors.
A conversation with Brad Lindemann
Brad Lindemann is Founder and CEO of Ambassador Solutions, an Indianapolis, Indiana-based Microsoft consultancy. The company specializes in three areas: Custom Application Development, Information Worker, which is the company’s Sharepoint Practice, and Business Intelligence.
What’s your background, and how did you get started?
I started out with IBM in sales. After five years with IBM, I joined a regional computer leasing and brokerage company in Tennessee. This company was acquired, circa 1987, by a company that expanded into a number of computer-related businesses, including IT consulting, which became my responsibility. Unfortunately, the company folded, and I headed back to Indiana. In 1989, I hooked up with some guys running a small leasing business. I put them in the IT consulting business, and that is how we got started. One of the common pieces of ground I shared with these partners was a commitment to Christian values and how to work these values into the marketplace. I split off from the company 12 years ago to form Ambassador Solutions.
What makes Ambassador Solutions unique?
If we have a “secret sauce,” it’s our culture. I believe our culture has been most important to our long-term success in terms of business model and focus. I’m confident this culture will get us through these current tough times as it did in 2001, when the whole industry was essentially cut in half. At the end of the day, adversity not only builds, but it reveals character. I believe that corporately we have a very strong character here that starts with our core values.
How would you describe the culture of your company and how did it come about?
“Uniquely inspiring” is a phrase that I think fits us very well. At the core of this culture are some deeply-held Christian beliefs shared between me and my partner, Max Frodge. The anchor of our culture is clearly our namesake, which is Ambassador, and which is taken from 2nd Corinthians 5:20, “We are ambassadors for Christ, God making His appeal through us.” What this verse says is that those claiming to follow Jesus Christ are also called to represent Him (as ambassadors) in whatever walk of life they find themselves, including the marketplace.
Now, this specifically applies to Max and me. We can’t go ascribing that label to anybody other than us. That’s who we are, and there’s decades now, of real experience and heartfelt meaning in what that really means on a day-to-day basis to both of us. We believe that we truly do represent the King of Kings here on earth, and that he does live, speak and act through us. We take that responsibility rather seriously, but we don’t go around wearing it on our sleeves.
Ambassador Solutions is simply owned by Christians, but employs people of all faiths. We wouldn’t want it any other way. We want to have a widely diverse workforce: A place in which, anyone, provided they’re honest, ethical and moral people, would feel comfortable working. We believe it’s really all about people, so we adopted what became known as our Basic Beliefs. These beliefs are woven into every fiber of our business, and they are: We believe that people are created in the image of God, we think they have immeasurable worth, and that they last forever.
That’s what we believe as people.
While our namesake and Basic Beliefs are deeply-held personal convictions of the owners, we needed to develop a set of core values, coming out of this Christian belief, that our employees could embrace, which led to our three Core Values.
Dignity—Nurture the dignity of all people
Integrity—Pursue uncompromised integrity
We like to say these are values to “D.I.E.” for. We believe them so fervently, they are carved in Indiana limestone in our corporate lobby. Because these are rather lofty, 50,000-foot or higher kinds of values, it still left a lot to the imagination in terms of how to live those values come Monday morning. So we created twelve Values in Action, essentially four guiding principles for each of the three Core Values.
How does this culture manifest itself in your company?
All our leadership team embraces our Core Values and our Values in Action. They are our marching orders. We use them constantly as a management tool, and they are woven directly into our appraisal and recognition process. If you catch somebody doing something right, it is pretty easily tied back to one of these values in action. And we do that all the time. That is our primary means of recognition. It’s recognizing someone for having consistently demonstrated a given value in action or multiple ones.
I think one of the most profound things I’ve ever learned about human nature is the value of recognizing weaknesses as strengths taken to the extreme. It’s a tremendous resource when you’re trying to do coaching or conflict resolution, because you can always start from a positive point of view. You can start with the biggest, most glaring and most annoying weakness imaginable and coach an employee into better behavior. I mean, you can start at just a miserable point, and if you back up far enough, I’ve never seen a case yet where the genesis of that weakness wasn’t in fact a strength.
How has this culture help you drive your business?
I say this in all humility; we are not a rocket ship business success story. We’ve built a solid company here. We’ve been Clydesdales, not thoroughbreds, as far as getting around the racetrack. I will tell you that everything we’ve talked about, from our namesake, Basic Beliefs, Core Values, and Values in Action, is all real and it is lived out every day. Our clients, prospects, employees and candidates know it. We have a reputation for that being the case. There is a magic place in any new kind of relationship called trust. We’re faster to that point than anybody out there, and this didn’t happen overnight.
What advice would you offer other executives with respect to corporate culture?
There have to be certain things that are inviolable and do not change in any organization. I think there have to be core values that stand the test of time no matter what. These values serve as a touch stone that you always go back to. In our case, that which will never change is our core values of dignity, integrity and excellence. Our culture is the single most important element of our business plan, and I would advise all CEOs everywhere to actively embrace and manage a vibrant culture for their companies.
A conversation with Michael Lacey
Michael Lacey is the CEO of Digineer, Inc. a management and technology consulting firm located in Plymouth, Minnesota. A Microsoft Gold Partner, Digineer specializes in Project Management, Application Development, Business Analysis and Improvement and Enterprise Data Management.
What’s your background, and how did you get started?
I have a bachelor’s degree in business administration and an MBA in finance. I grew up in an entrepreneurial family; my father started and ran three different businesses. When I was a teenager, my father had computers in his business and then at home, and I just fell into the technology stuff.
In the mid-90’s, I joined Blue Cross Blue Shield of Minnesota as Director of Client Server Development, responsible for new technology initiatives. I was recruited by their CIO to be a change-maker and implement a number of new technology initiatives. When I got there, I recognized that the company didn’t have the bandwidth, and in some cases, the expertise to do some of the things we needed to do. So I hired other consulting companies to help us.
What I discovered was that as a buyer, I got to see the business of technology consulting from a totally different perspective. Frankly, I was disappointed with what I saw, about how they sold themselves, and this lesson helped me form the basis of what eventually became Digineer. While there, I met a guy with a small business. He had just won a large contract, and he needed help. I moonlighted with him for about 7 months, building a web-based software services platform.
With this success, I went to him and said I was thinking about starting a consulting company and asked if he would be willing to help. He became our first client; I left Blue Cross Blue Shield, and started Digineer. Within 10 months we had a couple of other clients and a million dollar business. Now, after 11 years of increased revenues, we’re targeting $14-$15million this year.
What makes Digineer unique?
One, our breadth of services. Two, the way we manage our engagements, making sure they are on time and on budget and meet our client’s needs. Three, we developed some intellectual property, a dashboard, scorecard and a metric management toolset, that allows multiple teams, working across the globe, to minimize cost of sales. For large companies implementing change initiatives, we developed some methodology and technology that helps them better implement project and program management offices, giving them greater control over their spending and earlier visibility into projects that risk going over budget or not hitting their goals.
What role does culture play in your company?
First is leadership, which we define as leading the way for others. Whether it’s with clients or employees, we want to be the ones that can give direction and guidance, be kind of a servant leader, a Sherpa, if you will.
Another is teamwork, and by that we mean no one is better or smarter than the rest of us. The reason this is critical is that we talk a lot about raising your hand if you need help. You will never get in trouble for an act of commission, but you will always get in trouble for an act of omission if it impacts the company or the client. Nobody can help you if you don’t raise your hand. Another is making sure you have open lines of communication.
For us, communication is defined as more than just talking, it’s listening as well, so we actively coach people, and measure them, on their listening skills. What I find when I’m in front of clients is if my mouth is shut, good things are happening.
Finally, it’s about having fun. I believe that when people are having fun, enjoying what they do, work becomes easy and effortless. You kind of get into a zone and people’s productivity goes up.
What do you do to keep your culture vibrant?
TWe try hard to empower our people. We have institutionalized certain aspects of our culture with cross-functional teams, such as a company performance team, a customer experience team, and an employee experience team that look at our business for ways to make us better.
We implemented a performance management system in which you define roles not by the responsibilities they have, or by the outcomes they are expected to deliver, but by the competencies needed to be successful. Competencies include listening skills, dealing with conflicts, dealing with ambiguity, prioritization, etc. What this allows you to do is define the specific behaviors you’re looking for within a framework of what is culturally acceptable. It also allows us to review performances along these competencies and course correct as needed.
Years ago, I wanted to do something that would institutionalize the fun stuff we do. So a group of our employees came up with a Hawaiian-themed idea around the name Ohana, which means family. We have an Ohana committee dedicated to making sure we don’t take ourselves too seriously.
How has your culture benefited your company?
I think our business, from an employee perspective, is attracting and retaining the most talented individuals and making sure we hire the people that fit our culture, because we know our culture produces results for our clients. Over the 5-7 years that we’ve institutionalized our culture, we’ve seen a continual improvement in and increase in both the volume and quality of people coming to Digineer.
Like all companies in this economy, we’re trying to figure out how to grow while controlling costs. So I’ve had employees volunteer to stop getting overtime, to give back raises, to not accept the company 401K company match. The way our people respond to these times makes it easier for everyone to be successful, and frankly, it gives the company the kind of lift that you need when you need it most. I can tell you, as a business owner, this kind of thing is very rewarding and very heart-warming.
What lessons have you drawn about culture that you would like to share?
First, culture emanates from the top. If you and your leadership team can’t exemplify your culture, you’re not going to have one. If you see something that you don’t like, look in the mirror, because I’ll tell you, over time, there have been things that I have done with good intentions that ended up with bad outcomes, and I had to realize that I was the problem, not them.
Second, I think culture eats strategy for breakfast. If you want to put dollars to your bottom line, look at using culture as part of your toolkit to implement your strategy and not the other way around.
Third, don’t underestimate the impact your culture has on your employee’s satisfaction with their work and your client’s satisfaction with your business. A lot of times culture is relegated to being an HR department party-planning exercise. The fact of the matter is if that’s all it is to your business, you’re significantly undervaluing it, and you need to take a look at that.