Building Corporate Value: The Five Keys

By Charles J. Curto, Managing Principal of Tech Coast Equity Group.

 

At a meeting of the Technology Council’s Entrepreneur Society, David Knecht, Partner with the CPA and

management value consulting firm of Milam, Knecht & Warner, presented Building Corporate Value:

The Five Keys. Below are take-aways from his presentation.

David began by emphasizing that the basis for increasing company value is increasing transferable EBITDA (Earnings Before Interest Taxes Depreciation and Amortization). Based on his value-building research and experience in with hundreds of clients, the five keys to building company value are:

• Having a written strategic plan,
• Building diversified revenue,
• Having engaged employees,
• Increasing productivity, and
• Employing a performance management system

A written strategic plan

• Helps maintain management focus,
• Establishes direction and provides the basis for filtering opportunities that fit the company’s strategy, and
• Directs marketing toward implementing that strategy.

Research by PriceWaterhouseCoopers indicates that companies with a written strategic plan

have a written strategic plan enjoy a 68.6% greater growth rate than those that don’t.

Revenue diversification results in greater

• Revenue and EBITDA stability and
• Transferability of that EBITDA.

Revenue diversification results from revenue streams from multiple products and customers

with on one or few products or customers being dominant.

Based on research by Gallop, employee engagement results in a workforce that

• Has greater retention,
• Works safer,
• Is more productive,
• Enjoys greater success with customers, and
• Is more profitable.

Although compensation is, of course, an important factor in employee engagement, employees

engaged, other factors may have equal or greater impact for a particular workforce or employee

in creating, increasing and maintaining employee engagement, including

• Recognition,
• Opportunity for advancement,
• Quality of supervisor,
• Flexible hours, and
• Less pressure.

Increasing productivity results from

• Increasing the EBITDA from a dollar of revenue or return on sales, which in turn is
• Strongly influenced by process improvement.

Companies like WalMart and Southwest Airlines have made process improvement and thus

productivity improvement a core value which has been reflected in increases to their company

value.

Based on the research of authors Schiemann and Lingle, “companies with a performance

management system substantially outperformed companies without a system.” Performance

management systems are based on the principle that if you can’t measure it you can’t manage

it. Performance management systems in general and dashboards in particular have the

following characteristics:

• Relevant (linkage to strategy)
• Understandable
• Drillable
• Actionable
• Track key indicators, including growth, profitability, productivity and value.

 

 

This summary is not meant to be a transcript of the session nor a primer on building company value.

Instead, its intent is briefly to share a few of the valuable take-aways from the session, take-aways

which are based on the experience of successful entrepreneurs and professionals who work with

entrepreneurs. Hopefully, these will encourage you to attend future Council programs where you can

meet and learn from the experience and wisdom of other thought-leaders.

David Knecht can be reached at (949) 861-4445 and DKnecht@WeAddValue.com .

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I have the opportunity to work with a large number of sales teams and to see what makes for highly successful ones and ones that struggle.  In my experience the #1 determining factor in sales team success is whether the company has the right sales people on board or not.  There are 10’s, if not 100’s, of different sales jobs in the market and like numbers of different types of sales people fit those jobs.

Clear Deliverables Are Crucial

A key element in getting the right person in the right sales job is getting very clear on what the sales person must deliver in order to be successful.  Most companies have job descriptions in place and may use them as part of their hiring process. The challenge with most job descriptions is that the documents are lengthy and list a large number of “deliverables.”  So, there is a lack of clarity about exactly what the company needs to look for when hiring and evaluating sales people.

Moving Beyond Job Descriptions

I was trained in a different approach termed “Performance Profiles.” A Performance Profiles does not attempt to address all of the HR and legal compliance issues that a full job description should. Rather it is a document that focuses on the top 3 – 5 key deliverables in the job. In other words the 3 ­5 goals a sales person must achieve in the job to meet and exceed target.

An example of the Performance Profile for the sales job at a client follows.

The client is a small company that provides software to school districts to manage the finances of school construction programs. The software sells for $50,000 to $400,000 per instance. The sale requires multiple sales calls on and presentations to key executives and working with committees to make a sale. Being an entrepreneurial company it does not have a lead generation system set up.

Here is what the CEO and I defined the key deliverables of the job to be:

 1) Prospecting: Since the company lacks a consistent lead generation effort the sales person has to prospect for new opportunities. Candidates had to have a track record of successfully cold calling using email, phone calls, etc. to create opportunities.

 2) Successful track record in sales: This should be one of the top two things in any Performance Profile for sales.  In this case candidates needed a track record of closing software sales in $100,000+ range.

3) Deals with complex accounts: As stated before the company is selling to larger school districts. So we were looking for a person that had track record of developing relationships with multiple people in the C­Suite and influencing them to adopt the company’s solution.

4) Team sales: The company’s product deals with a number of complex issues that most sales people are not able to address on their own. During the sales cycle the salesperson has to bring in technical resources at the appropriate time.   A background in team sales was seen as essential. In other words we were seeking someone who had “quarterbacked” deals by enlisting technical resources and orchestrating their efforts to close deals.

 5) Affiliation marketing/networking: The company sells to the K­12 education market.This is a highly interconnected market that expects a salesperson to know about school districts and their overall challenges, not just those challenges related to the product he is selling. This made a background in affiliation marketing and networking skills a key component of the job. The expectation is that the salesperson would join different “industry” associations and get active on the boards to build his knowledge of and connections in the industry.

We used the key points from the Performance Profile to:

• Develop our job ads
• Craft our interview questions to determine relevant experience in each key
• performance metric
• Set our key screening criteria for the search
• Develop our 90 day and 1 year performance expectations for the job</li>

The clarity about what was needed in this sales job proved instrumental in “staying the course” during what proved a challenging, but ultimately successful search.

Brad Leggett is CEO/Founder of The Leggett Group, Inc. His firm focuses on the issues and challenges associated with building, leading and retaining high performance sales teams. Brad speaks on the Keys to High Performance Sales teams and is a business radio show guest on the topic. You can read more of Brad’s writing on The Leggett Group blog or check out the company LinkedIn page.

TONIGHT: “Internet of Things” Hackathon & Accelerator Series, sponsored by AT&T and Intel.

We’d like to invite you to participate in the fourth hackathon of The “Internet of Things” Hackathon and Accelerator Series, sponsored by AT&T and Intel.  This year’s series will focus on gaming and artificial intelligence.

This free LA event will be held on November 15 – 16 at ROC Santa Monica (604 Arizona Ave, Santa Monica, CA 90401).

Developer groups, schools, startups, and individuals are welcome to participate and compete for cash prizes, as well as a trip to CES (Las Vegas) in January to vie for the $20,000 grand prize.

Interested participants can learn more at http://iothackathon.co and register at http://iothacklax-sr.eventbrite.com.  You can also follow them on Twitter: @IoTHackathon.

Gain National Exposure Through the CODiE Awards

By Catrina Luedtke, Executive Director of Technology Council of Southern California

The Technology Council has partnered with the Software and Information Industry Association to help provide our members with greater national and global exposure. Periodically we will share information about opportunities from SIIA that may be of value to you and your company.

During the past 28 years, the SIIA CODiE Awards have recognized excellence and achievement in the software industry. In fact, the CODiE Awards remain our industry’s only peer-recognized awards program, so an award serves as incredible market validation for a product’s innovation, vision, and overall industry impact.

The CODiE Awards is a great opportunity for you to gain national exposure for your company and products. With 28 software categories recognizing applications, products, and services that deliver solutions for use by business, government, consumers, academic, or other organizations you are sure to find a category for you.

For more information visit: http://siia.net/codies/2014/categories.asp#software

After you determine which categories are best for you, please complete the simple nomination process using this Technology Council specific URL.

Visit: http://www.siia.net/codies/2014/nominate/login.asp?zID=4

Keys to Winning Sales Teams

By Charles J. Curto, Managing Principal of Tech Coast Equity Group.

At a meeting of the Technology Council’s Entrepreneur Society, Brad Leggett, CEO of the sales performance consulting firm The Leggett Group, presented Keys to Winning Sales Teams. Below are some of the key take-aways from his presentation.

• Brad advocates viewing the challenge of building and sustaining winning sales teams in terms of people, performance and processes.
• Select your team members carefully with special emphasis on
  • Defining the 3 to 5 key results that must be delivered,
  • Specifying the activities needed to achieve those deliverables
  • Determining the skills and background needed to achieve the desired results, and
  • Being sure the person has the right attitude.
• Keys to selecting new talent include
  • Recruiting is a process, not an event.
  • The recruiting rule of 3:
    • 3+ interviews
    • With 3+ team members
    • At 3 venues, a mix of work and non-work.
  • Focus on past results.
• Implement a 90-day quick-start program to launch the new team member on the path to success including
  • Phased acquisition of key knowledge and skills with someone designated to impart each.
  • 90-day goals with weekly achievements spelled out.
  • Weekly review progress versus goals.
  • Cut if not making it.
• The key to performance management is establishing responsibility by
  • Setting clear goals that are achievable, demanding, permit measuring and controlling results, and are collaborative while making clear who has responsibility for which deliverables.
  • Providing for support activities with their goals.
  • Providing weekly one-to-one feedback on progress versus goals.
• Processes and systems that provide the infrastructure for achieving sales goals include
  • Sales tools, such as collateral, web site and turning tribal knowledge to answer the question “Why your company?”.
  • Rewards and recognition, including compensation, public praise and contests.
  • Team meetings which provide collaborative training as well as solutions to challenges.
  • A collaborative CRM that facilitates the sales person’s goal achievement and delivers progress metrics to the sales person and management.

This summary is not meant to be a transcript of the session nor a comprehensive primmer on developing a high performance sales team. Instead, its intent is briefly to share a few of the valuable take-aways from the session, take-aways which are based on the experience of successful entrepreneurs and professionals who work with entrepreneurs. Hopefully, these will encourage you to attend future Council programs where you can meet and learn from the experience and wisdom of other thought-leaders.

Brad Leggett can be reached at (949) 388-6910 and Brad@LeggettSales.com.

Do You Know Your Professional Brand? How Your Brand Influences Your Success

By Charles J. Curto, Managing Principal of Tech Coast Equity Group

At a meeting of the Technology Council’s Entrepreneur Society, Susan Howington, CEO of the outplacement firm Power Connections, presented Do You Know Your Professional Brand?  How Your Brand Influences Your Success.  Below are key take-aways from her presentation.

• Susan defined your professional brand as the thoughtful and carefully crafted message and image devised to create an image, a reputation and legacy for yourself and that you are committed to support everyday by the way you talk, work, look and live.

• The four keys to developing your unique brand are

  • Brand pillars—the essence of your brand, including your value proposition, skills, business acumen and leadership

  • Brand personality—how you describe your character, attitude and persona

  • Brand voice—how you communicate your brand with words

  • Brand style—how you present yourself visually, especially your appearance, dress and design sensibility

• The components of your brand pillars breakdown as follows:

  • Your value proposition–how you impact an organization to drive success and contribute immediate and continuing market relevance as well as enhance  organization value

  • Your skills—hard skills, soft skills and communications skills

  • Your business acumen—internalized awareness of industry benchmarks and passion for innovation.

  • Your leadership—how you identify, nurture and incentivize individual contributors and teams as well as customers and value chain contributors to reach the organization’s goals

• Susan enumerated brand message boosters based on her work with hundreds of high-performing entrepreneurs, executives and professionals.

  • Make your message all about them by focusing on how you fix their problem, add to their bottom line, give them security, make them happy, give them peace of mind, etc.  

  • Build Your Credibility by being authentic.

  • Show contrast.  Effective advertising shows the before and after pictures.

  • Emotion is paramount.  Know what your audience feels about the topic.

  • Communication styles matter.  Choose the communication channel that is listened to by your audience for your message.  

  • Stories are powerful ways to communicate your message.  Tell good stories and tell them well.

  • Less is more.  If it doesn’t add to the impact, cut it!  DON’T TALK TOO MUCH!

• She also pointed out that based on research done at UCLA, our message is communicated primarily through our body language and voice, at 55% and 38% respectively, with only 7% coming from the words themselves.  It’s not that words are unimportant, but that we should give appropriate emphasis to delivery to assure that the meaning and impact of the message behind our words are fully communicated.

Susan offered each attendee at the presentation a complementary Branding Boot Camp.  This is yet another benefit of attending Technology Council events.

This summary is not meant to be a transcript of the session nor a comprehensive primmer on developing your brand.  Instead, its intent is briefly to share a few of the valuable take-aways from the session, take-aways which are based on the experience of successful entrepreneurs and professionals who work with entrepreneurs.  Hopefully, these will encourage you to attend future Council programs where you can meet and learn from the experience and wisdom of other thought-leaders.

 

The Art of Building and Using an Effective Advisory Board

By Charles J. Curto, Managing Principal of Tech Coast Equity Group

The Technology Council recently presented a panel discussion on advisory boards, The Art of Building and Using an Effective Advisory Board.  The panel was chaired by Feyzi Fatehi, CEO of Corent Technology.  Wayne Pinnell, Managing Partner of Haskell & White, Mark Monaghan, Business Growth Specialist and Managing Principal of the Markus Group, Mark Nielsen, Chairman and Co-CEO of Text Power, and Peter Santora, Managing Director, Korn/Ferry International participated in the panel.  Below are key take-aways from the panel discussion.

2012 Software, Internet & IT Infrastructure M&A Report

By Peachtree Capital Advisors

Economic Backdrop – It was not the best of times, it was not the worst of times…2012. 

Not since the great depression has a sluggish economy and a stubborn unemployment number represented pretty good economic conditions for companies to chart their strategic courses. In 2012, the US economy experienced modest growth with real GDP growing 2.7% in the third‐quarter of 2012 versus 1.3% in the second quarter of 2012. More importantly, the unemployment rate decreased to 7.7% in December 2012. This muddy economic backdrop is the new normal and no one can argue against the fact that the economic scenario is much much better than it was just three years ago.

You can download and read the full Peachtree 2012 Software, Internet & IT Infrastructure M&A Report here.

Infographic: The Rise of Women in tech

By MBAOnline.com

Why SaaS is Exploding: A whitepaper

Dave Key and Technology Council of Southern California

Virtually everyone agrees the SaaS market is growing incredibly quickly; Gartner predicted cloud growth would be 21% in 2011. IDC predicts SaaS growth at 25.3% CAGR through 2014. Forester predicts SaaS will account for 26% of the package software market by 2016, while Deloitte forecasts that only 4.3% of On-Premise software spending will be replaced by SaaS.

This white paper examines the converging forces driving the acceleration of SaaS resulting in an explosion of new SaaS applications and customers that will further accelerate the SaaS market. Nearly every product category will have a SaaS alternative providing heady competition to traditional software products, and those offerings are gaining market share over their on-premise competitors.

Top factors driving SaaS adoption by software vendors:
1) Customers are demanding SaaS applications
2) Client software is moving to a consumerized, HTML5 interface
3) Server software is moving to the Cloud
4) Software vendors are joining the stampede moving to SaaS
5) VARs and System Integrators are getting on board the SaaS movement
6) Most new software venture investments are concentrated in SaaS, mobile, big data, and social – others need not apply…
7) Software M&A is strongest for SaaS companies driving more software companies to become SaaS companies

You can download and view the whole whitepaper here for free: Technology Council – Why SaaS is Exploding