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Why do we succeed as individuals yet fail as a team (how to move beyond collaboration … )

December 4, 2011 Leave a comment

This is the time of year when many software companies are getting ready for the new fiscal year.   If you are CEO or COO (or a someone in a senior role in a software company), these questions are already on your mind:

– Will we meet revenue and margin targets?

– Where will the revenue come from:  markets, customers, products?

– Will the Marketing team counter competitor’s messages?

– Will the Product Management team continue to define the product roadmap in “The Three Horizons of Growth”:  now, tomorrow, some time after tomorrow?

– Will the Engineering team deliver the products according to the product roadmap?

– Will the Professional Services team be able to service customers across the globe?

– How do we hire the right people?  Where are they?

Several years ago about the same time in December, I was asked by “Linda”, CEO of a growing software company, to attend an annual operational review.   She simply introduced me as someone who came to listen.   Every executive presented an overview of their organization:  in short – more highlights than lowlights.   Every executive gave themselves a grade between B- and +.

“Linda” patiently listened.  She then picked up 3 software industry trade publications and began to mention …

“On page 20, this customer is expressing a severe disappointment with the installation of our latest release”

“On page 11 of a research article, there are very alarming words that we quickly falling behind the competition in these core areas”

“On page 44 of another magazine, there is a survey which indicates we are dead last when it comes to customer support satisfaction”

“Linda” looked around the room, paused for a moment and then asked, “Why is it you – my executive team – are so successful as individuals yet fail as a team”?

The silence in the room was a sobering experience.

“Linda” and I met the very next day.   She asked me to reflect on what I learned during the operational review.   My perspectives were very similar to what “Linda’ also observed:

– The fabric of collaboration between executives has no teeth.   Every is free to collaborate but no one has a stake – real stake – in the success of their peer.   Peer relationships do not have shared incentives to ensure success.

– Some executives have to change roles to appreciate peer’s pain.  Some will will succeed as soon as the new system of shared incentives is in place.   Others will not succeed because the the new system of shared incentives will quickly expose their shortcomings.

“Linda” agreed that changes were necessary.   The transformation journey was not easy – in some cases very disruptive – but “Linda’ remained committed to the outcome.    This company is now doing very well and in fact purchased one of their competitors.

So what did “Linda” and I change?

– VP of Sales could not make the transition from selling transactions to selling solutions.    He was more interested in the next deal then the total value of the account, which of course depends on the customer satisfaction.   If no one is satisfied, how does one create a reference account?   Without references, the average duration of a sales cycle gets longer and the problem is now a cash flow problem.   After a new VP of Sales was hired, the compensation of the entire sales team was changed.   Part of their commission was now linked to the customer satisfaction during / after deployment cycle.   This is where shared incentives really matter.   Professional Services team is responsible for customer deployment process.  Sales team has to work with Professional Services team to ensure success (and get the rest of their commission).

– VP of Engineering was seemingly in a continuous state of failure:  release were late, constant quality problems.    The reality turned out to be very different.   VP of Professional Services was not interested in sharing customer problems with VP of Product Management.   Installation problems never received attention in the product roadmap and did not result in a new requirement linked to a timely release.   Neither VP of Product Management nor VP of Professional Services spoke on a weekly basis.

– VP of Engineering became CTO (with Product Management and Engineering reporting to one person – complete accountability for the product).   He knew every painful area in the product portfolio and had a better relationship with customers (unfortunately due to so many defects being reported by the customers which were not addressed in the product rodmap).   VP of Product Management became VP of Global Accounts.    His new charter became very simple:  take care of these key customers – make every one of these a reference account, or your bonus and possibly job are at risk.   Shared incentive:  the product has to work in order for VP Global Accounts to be successful.   The new CTO and VP of Global Accounts began to work very closely together.

– VP of Professional Services had to leave, unfortunately.   “H” could not operate in a new system of shared incentives where part of his compensation depended on the quality of customer deployment and support experience.   To succeed, he had to care about customer reported problems and take an active interest in prioritizing these problems in the product management discussions.

“Linda” and I still continue to talk.  The hardest part is making the decision to move beyond simple collaboration to a system of shared incentives where collaboration truly works because the system of rewards and punishments also works.

 

 

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