David Cummings on Startups

Category: Operations

  • Quarterly Performance Reviews

    I’m a big proponent of doing 360 degree performance reviews every quarter. Many companies do them annually or twice a year. I feel that is too infrequent and that you spend most of your time talking about the most recent quarter, at best. Another benefit of doing it quarterly is that compensation discussions aren’t tied to every review. This makes it less stressful and more useful.

    We follow the advice of Patrick Lencioni and only have four simple questions on our quarterly performance reviews:

    1. What did you accomplish?
    2. What are you going to do next?
    3. How can you improve?
    4. How are you following the values?

    Every employee answers these question for themselves as well as their direct reports and manager. It is an invaluable tool and I highly recommend it.

  • How consolidated are your systems?

    Do your CRM, CMS, ERP, etc systems “talk” to each other? If a customer calls up do you have one interface to see their entire history? Even with the profiliferation of affordable, high-quality systems like Salesforce.com, Pardot, and Parature, most companies don’t have a way to see the history of interactions with a client from one screen. Typically, companies also have custom spreadsheets or applications where related customer information is kept, in an even more siloed fashion.

    One major benefit typically found in true SaaS systems (not fake ones) is that of an open web services API (typically SOAP or REST). An open API, and a system that isn’t in your own private network (who wants to keep ports open in their Firewall?), is a good recipe for integration. More companies should invest in consolidated systems as part of a larger strategy to divest of non-core IT functions (like CRM and CMS).

  • Attitude + Effort = What Matters

    Attitude and effort is what really matters. Think about it: 99% of the business issues you run into relate to those two items. Pretty simple, isn’t it?

    • Attitude captures the emotion, passion, and genuineness of the interaction.
    • Effort captures the care, fastidiousness, and desire of the situation.

    What matters to you?

  • Adapting > Predicting

    Adapting is a more important skill than predicting when it comes to building companies. Too often entrepreneurs and leaders think they have to decide every little detail in advance and follow the plan. Wrong. It is much more important to adapt and be perceptive of the market around you than it is to stay the course.
    In a similar vein, you have to make decisions with imperfect information. Markets, products, and conditions change too quickly to spend months coming up with a plan. Getting something down on paper and communicating that things are going to change as the plan is executed is the best path to take. There’s a famous quote that summarizes it well:

    A good plan, violently executed now, is better than a perfect plan next week.
    — George S. Patton

  • Atlanta CEO Council Breakfast with the CEO of Red Hat

    The Atlanta CEO Council put on a great event yesterday morning. As part of their guest speaker series, they brought in Jim Whitehurst, the CEO of Red Hat, to share his vision as well as lessons learned being the COO of Delta Airlines. After hanging out with Lance Weatherby of the ATDC and Andy Monin of VendorMate, the presentation began. Here were Jim’s key recommendations for CEOs:

    • Focus, focus, focus – he mentioned three things they focus on for a year and work hard to say no to suggestions that don’t fall in those categories
    • Build repoire in person with all lines of company employees – he talked about meeting with 12,000 flight attendents over a six week period (350 at a time) as a way to help with customer service at Delta

    It was a great event.

  • Complex Sale or Order Taking Sales Organization

    Do you have a direct sales team that works hard selling or do you have an order taking call center and website? That’s an important distinction when building a business. With a direct sales team, you have the following characteristics:

    • Bigger deal sizes
    • Longer sales cycles
    • Complex sales cycle and pricing model
    • More expensive personnel

    When sales come from an order taking call center and website, you see these characteristics:

    • Larger marketing budget as a percentage of revenue
    • Smaller deals
    • Shorter sales cycles
    • Free trials as well as “free” editions

    It is important to consider both of these options when thinking through the possibilities of a new business application.

  • Always People, Process, and Technology

    Whenever an issue is brought up to me, I always like to think of it in terms of people, process, and technology. In the two markets that I’m intimately involved with, web content management and web marketing automation, we try to stress that it isn’t just the software or technology that will result in a successful client.

    • People – are the right people involved?
    • Process – how are things currently being done?
    • Technology – what tools and applications are involved?

    This simple framework goes a long ways.

  • Productizing Services Work

    One of the best moves we’ve made for our consulting and services teams is to “productive” the work. What does that mean? That means that instead of quoting project work as a “bucket of hours” (e.g. 100 hours at $200/hour for $20,000) you have different “products” available like a Professional Quick Start Package that gets a client up and running, or a Newsroom Package that delivers a certain number of templates, pages, workflows, etc.

    Productizing the services work aligns interests from both the client and vendor to focus on the benefit and outcome of the work — not how long it takes. This took a long time to realize, and we’re not completely away from quoting hours of work for certain projects, but the majority of consulting work around a product should be productized.

  • SMART Goals

    I was at TAG’s Georgia Technology Summit last week and enjoyed hearing a variety of presenters (thanks Appcelerator for the ticket!). Don Tapscott, author of Wikinomics (which I just ordered) did a great job talking about mass collaboration. The last speaker of the day, Michael Gelb, outlined a nice approach to innovation including a little method to better achieve goals:

    • Specific
    • Measurable
    • Achievable
    • Relevant
    • Timeline

    Very smart indeed.

  • Company-wide Goals and Tracking

    I’ve been spending a great deal of time lately working on company-wide goals. It is important to keep them simple and memorable. For us, our goals are based on the following items:

    • Customer renewal rate – this reflects how well we’re doing providing on-going value to customers, our support team, product enhancements, and overall community
    • Recognized revenue – this combines new license revenue, maintenance and support fulfilled (recognized monthly), and services delivered (consulting and training)
    • Booked revenue – this reflects how well our sales team is doing, the competitiveness of our software, and the quality of our marketing

    The goals are laid out for the current month, quarter, year, and following year. We don’t go further out than the following year (e.g. five year goals) as we like to focus on the most tangible timeframes where we have control.

    Individual goals, department goals, and leadership goals build up to the company-wide goals. The company-wide goals are always quantitative whereas the individual and department goals are a combination of quantitative and project goals. With this methodology in place, everyone in the company always knows what we’re working towards and our current progress is reiterated on a consistent basis.