Breaking the bond of the "Gatekeeper"....

You know who he (or she) is.

That person you have to deal with to get access into a client's organization. Could be the actual buyer, but many times is just someone who is paid to say 'no', and really does not have any power to say 'yes'.

And you are stuck with him...or her.

How do you break the bond?

I worked with a client this spring; providing business development services to access and develop new strategic accounts in the global Engineering & Construction sector. We had one global E&C account with revenues over $6B, but my client (software company) had very little visibility and access into the account. My role: providing company & industry insights, access to key executives, and refine the sales strategy; complementing and assisting the account manager and his team.

And his main contact in this company was simply...a pill. Someone who was almost hostile to the account manager, who in turn was oblivious to the verbal assault. But someone who did have the power to affect the terms of an enterprise level deal.

Ok, we can just go around him, using my relationships (which were at a much higher level in practice management).

Right?

This gatekeeper made it be known that we were NOT to go around him....everything HAD to be coordinated via him.

(Where's Dr. Phil when you really need him?)

Plus, the guy always wanted to meet over lunch.....hmmm; wonder why?

A new strategy was needed. One that minimized the gatekeeper's impact, kept the account manager motivated, and hopefully one that could turn this around.

What was accomplished:

- Killing with kindness (not a great ROI given the level of effort, but there was some minor amount of 'R')

- Me working with my relationships, and providing my account manager with 'plausible deniability':

("Honest, Mr Gatekeeper; I did not know Scott was talking to Ms. SVP of Corp. Dev!!")

- Appealing to the Gatekeeper's primary need: perform less work. We told him we could get other staff within his organization involved, and run all decisions through him. All the power, none of the hassle.

- Finally, working with executives (I was developing some 'benchmarking' for the industry....gave me a reason to reach out) who had a vested interest in our success (the SVP of Process Mfg, and key program managers who wielded enormous influence), and getting them to support our gatekeeper (not that easy to do, given the gatekeeper's internal reputation, as it was).

Rocket science? No.

Lots of lunches? Yes.

Thinly disguised compliments? Sure.

To summarize: taking a chance on alienating the gatekeeper (via my role....note: why do I have to be the bad cop?), getting key influencers involved, allowing the gatekeeper to maintain his position of authority, supporting him via other internal leaders (which made him feel good), and putting him in a position where he had to go forward or would be perceived as truly a gatekeeper.

It's funny, but gatekeepers do not want to be perceived as gatekeepers.

Who knew. Read more!

Business Models for Social Networking Sites

As a follow up to a previous post (here) on the need for social networking in sustainability communities, and the potential of social networking on a personal / individual level (here), there are some business strategies that may be followed for growth in this space.

Companies such as Viridus, Celsias, Ning groups, and others need to leverage their most important attribute: their network of users. The challenge is how to grow the network and retain & engage members; without alienating them. Facebook, for example, has growth exponentially; has attracted demographic groups beyond that of the college crowd, but still had a revolt on their hands when they reduced the (perceived) privacy of their users with new tracking applets. They are big enough, so that this was a minor bump in their growth; for a start up, that error could be disasterous.

How do we leverage the community? Here are some revenue building initiatives that may apply in the sustainability sector:

• Provide market research opportunities to outside corporations (allow corporations to test their brand image; new product releases, or to attract new talent via surveys)
• Allow targeted ads for user pages, profiles, groups, etc
• Design for internal use on a company's intranet
• Set up job posting (similar to E-lance and Guru.com) and job searching service
• Build in knowledge management (i.e. search, knowledge sharing, virtual communities, groups) and license third party access from vendors who may provide specific content and expertise

One area that intrigues me is building an internal site for a corporation; essentially creating a virtual community of sustainability professionals inside the firewall. The social networking company might also provide access to 'federated' data; profiles and groups outside of the firewall, with voluntary 'opt -in' procedures for users. This would minimize / eliminate any privacy concerns, and also motivate specific users groups to join, if they thought there were advantages to do so (job search inside a company, internal networking, specific content they were seeking).

A key challenge for this scenario would be how to integrate into other KM and intranet systems, so that the social networking site was not a siloed application.

Read more!

Building Effective Alliances for Cleantech start ups

Have been working with a wide range of start ups recently (CSR, water treatment, asset management, AEC design services); developing and validating 'go to market' strategies'. In the initial or early phases of maturation (both for the company and most times, the market segment itself), direct sales by the founders and other 'visionary' staff (both internal as well as advisors / directors) is critical to get early successes: pilot projects, demonstrations, regulatory review & approval (if appropriate) and brand awareness.

But as the start up begins to grow, the markets for the technology solution (that is: the product, team expertise, company vision, and solution roadmap) will require that the solution most likely be integrated into a larger business solution (think of a new roadway; wastewater treatment & distribution system, environmental remediation, etc). This is particularly the case for those cleantech start ups that are targeting industrial clients as well as governmental clients. At this stage, start ups need to build partner 'ecosystems" consisting of complimentary technology and services firms; which requires the development of an alliance & partnership strategy.

Some insights are provided here:

Position yourself to allow your partner to lower the cost of their customer acquisition efforts & identify 'up-selling' opportunities
For the larger and global AECs, the real opportunity for growth is to continue to develop their existing accounts and user bases; providing more value to them (such as incorporating energy modeling solutions, or facility management services). Case in point: can your solution allow the AEC firm tap into other technology or operating budgets in the clients' organizations, that the AEC would typically would not be able to access?

Don't be the obnoxious sales guy when representing your company
CEOs of start ups need to focus on the partner's business model; how can they assist in driving more value and solutions of the partner through the partner's channels? (so: don't go in to a discussion with executives at an AEC firm saying: " I would love to get access to your clients so I could sell my stuff to them".......not a good idea)

If you have something special, they will find you...although it may take some time
Most of the global AECs have executives whose roles include responsibilities to constantly survey the cleantech / green landscape: interview companies, and make recommendations on strategic alliances and acquisitions. Chances are, if you are making headway in your market sector and are building brand awareness and a sustainable client base, that the AEC firm already knows about you. Your alliance strategy should take into account how you can leverage these sales channels to build relationships with the AEC practice leaders as well as with the alliance executives at larger complimentary technology companies. In many cases, a great way to begin the development of an alliance is to focus on specific key end - user accounts where both your company and the AEC may provide a joint solution.

If thinking of being acquired, it's better to develop a strong alliance first
Much of the acquisition activity during the IT growth period of the last 10 years has been a result of demonstrated joint customer success, alignment with product strategies, and some synergy between corporate cultures and goals of the start up and acquiring company. I think this trend is quite applicable to cleantech start up growth and maturation. There is no question that building strong relationships within an AEC firm (or larger technology company) allow for increased awareness of the start up company, and allows for constructive M&A dialog at the appropriate time.

Read more!

Conducting business development at that conference you have to attend....

I read the HardingCo blog, which provides some great insights on business development and "rainmaking"; especially as they relate to the consulting profession.

I commented recently on a post: 'Getting a Good Seat at a Conference'; the premise being that you need to be choosy and careful when sitting down for lunch, so that you identify the best attendees to spend time with. So, I thought it might be interesting (amusing, perhaps?) to repost my comments here; some of these ideas are fairly basic....but hey; you need to have good 'blocking and tackling'...

- Review the attendee list as soon as you get it, and identify your top targets; pick a realistic number that you can meet during the conference, and develop a strategy to meet all of them

- Research those targets, particularly as it relates to timely (and positive!) events: alliance signing, big client wins, involvement in associations, etc…execs will probably be involved in some if not all of those issues.

- Seek out the conference organizer or director early in the conference and schmooze him or her….get them to point out (or introduce you to) the key speakers and panelists for you before the conference begins, so you can make a beeline for them during the lunch, or hopefully in the halls during networking periods.

- Notice people who seem to be working on presentations in the halls, at tables, or even in the conference sessions themselves. Pay particular attention just before the keynote session, or when the plenary panel convenes; these speakers (and their peers) are often executives and are hard pressed to fit the conference (and prep for their presentations) into their schedules (I have met a number of keynote speakers this way; just before they were going on stage).

And finally….not a lot of people enjoy the rubber chicken dinners at most conferences, so if you are discouraged, head to the hotel’s restaurant or a well known restaurant nearby and take your chances….there will probably be a like-minded conference attendee and potential contact that will welcome a lunch mate….

. Read more!

"Green is the latest opportunity for consulting firms"

...says CNET recently in their Green Tech Blog

I wrote on this opportunity for consulting firms earlier (link).

The article's focus is on opportunities in the energy efficiency and "green corporate practices" (their terminology). Green IT consulting will grow into a $4.8 billion industry by 2013, according to Forrester Research (CNET).

As I have written before, I think the market opportunity for services providers is much more broad, and transcends just energy efficiency consulting services for IT departments and data centers. So, perhaps that $4.8B is a conservative estimate...

The other "green" opportunities for services / consulting firms? Some areas to consider:

- Global Risk Management, incorporating all facets of regulatory and NGO (Non Governmental Organizations) reporting. (Subsets are: sustainability reporting, "greening" of the supply chain, stakeholder analysis, environmental health & safety, REACH or RoHS - like compliance)

- Engineering Design & Construcion Services: leveraging specific cleantech in water, air, energy efficiency, alternative energy development, and material procurement.

- Operations & Facility Management Services: 'outsourced' services to manage operations; with incentives for optimized energy mgt, and low / zero emissions (GHG, water)

- Integrated Cleantech / Services: Services companies may license clean technologies in energy (modeling, monitoring) as well as in emissions mgt, and integrate with their methodologies; thus licensing integrated 'toolkits' to access the SMB market via smaller, regional services providers



Read more!

Integrated Tech / Services business models

Recent blog postings (link is here) in the greentech media have highlighted the investment opportunities for clean technologies integrated with downstream services. These services may include traditional consulting such as strategic planning and auditing, as well as more engineering design, construction, and especially operations or asset management services.

Discussions with executives at global Engineering & Construction and Environmental Management companies indicate that some firms are now positioning service lines in energy efficiency to take advantage of new technologies, as well as integrating new water treatment technologies into their water treatment and distribution practices.

Licensing relationships are currently being employed with the larger energy mgt and water treatment equipment manufacturers (think GE, Honeywell, Siemens, et al), but the real opportunity is discovering the start up or privately held cleantech companies; those that may not have the brand and marketing horsepower as the larger aforementioned equipment companies, but have innovative clean technologies, and also may be easier to work with (and license technologies from).

Looking at the water market, a good example could be new advances in filtration technology for water treatment. An E&C may position itself in the planning stages of a project to perform technology due diligence, and then also integrate newer technologies into the downstream engineering phases, thus driving additional value from optimizing (and possibly re-engineering) plant & facility design.

These business (and investment) opportunities reminded me of the real estate site evaluation market that was hot in the late 80s and 90s. Service providers (particularly E&Cs) had a great business in providing site evaluations for buyers who needed due diligence and perhaps extra negotiating power for acquiring commercial and industrial properties. The evaluations (or audits) allowed the service providers (engineering & construction, environmental) to then drive follow - on work: HVAC, environmental assessment & remediation, structural engineering, etc. While new and innovative technologies were not necessarily part of this business model, the use of front end audits and due diligence services allowed E&C firms to position themselves for downstream engineering and consulting services / revenues.
Read more!

Scaling Solar tech.....quickly.....

Read an interesting post in Earth2Tech about the challenges in scaling solar technology businesses to a large (and hopefully ready) market; link is here.

Solar is now in a "land grab" mode; with the race to grab as many customers as quickly as possible. Makes me think that if demand is there, then the key to scale is to build out your channels as efficiently and effectively as possible.

The key channel to leverage? Correct: the engineering & construction (E&C) industry.

Many of the solar tech vendors have focused on smaller buyers (i.e. residential owners, smaller real estate companies). While those entities have served as thought leaders, the market itself has moved mainstream. The challenge is to secure larger clients (corporate real estate and facility owners, and builders & owners in heavy industry). I think the key here is to leverage channels that can both sell and help deploy solutions across key verticals; and get your technology out to a large audience as fast as possible.

Clearly, the E&C industry is poised to sell such solutions, although culturally, it is not their mindset to do so; this is a very conservative industry that has traditionally not driven additional revenues from technology sales (unlike the system integrator industry).

But, there is a strong desire on their part to provide thought leadership to their clients around emerging technologies, including those in solar and energy development. E&C's can leverage this knowledge to provide a valuable differentiator for business development purposes in competitive 'bake-offs'. Also, it may provide a mechanism to drive higher margin consulting and engineering design services; which are certainly welcome in what is a low margin services industry. Read more!

E&C Strategic Initiatives: keys to partnering & selling

Have had discussions with strategy executives at two global environmental consulting firms recently, around some of the key initiatives that they are funding:

• Capturing higher margin businesses, from organic growth as well as M&A efforts
• Growth in targeted markets of water (CSO, distribution systems) and energy mgt
• Identifying and investing in emerging business lines of revenue

Of particular interest to both execs was the ability to leverage technology, both information technology as well as 'cleantech', to drive new revenue streams. As with most global engineering & environmental firms, there are 'pockets' of expertise, design centers, or practice groups that take the lead in developing and sharing IP around leveraging technology for new business opportunities. The corporate strategy executive (in itself a relatively new role for the E&C industry) is chartered to leverage that internal expertise and and nurture growth opportunities across the enterprise.

What does this mean for IT and cleantech start ups that wish to sell into and partner with the global E&Cs? I believe business development and strategy at these firms should focus on building a partner ecosystem and driving sales from these channels, especially with larger engineering & construction firms, who serve as the 'trusted advisors' to end user industries (such as gov't, process mfg, and discrete mfg). The sales process will involve roadmap & technology discussions with key practice leaders, as well as development of corporate strategy executives who may provide executive sponsorship.

The cleantech & IT start up business development team should have strong domain experience in core tech areas, but should also possess a very good background in developing a market strategy with a significant channel component; a good rolodex or set of relationships with a broad array of E&C business unit executives; and certainly a strong consultative sales approach. Read more!

Market Drivers in the Engineering & Construction and Environmental Markets

I have been working with a couple of major software vendors who serve the AEC and environmental management market industries; providing market strategy and business development services in the E&C and EHS sector.

(Note: I could write a whole series on business development strategies targeting an industry that traditionally is very conservative, is leery of any expenditure that cannot be passed on to the client, and has executives who are trained geologists and civil engineers…….sub-note: I am an environmental engineer, so I can talk about that last topic…).

I typically work with C-Level or VP – level executives, and have collected a significant amount of feedback on trends and strategic initiatives. These companies can be found on the ENR (Engineering News Record) Top 50 list, and they provide services globally into the infrastructure, transportation, federal / municipal government, and discrete mfg industries. Over the coming weeks (months?) I will provide some interesting anecdotes (well, interesting to me….) regarding technology adoption and business process changes facing the E&C industry.

But to summarize, here are the primary market drivers:

• Abundance of Work
• Scarcity of Talent
• Outsourcing by clients
• Consolidation of the industry
• Risk Management

The combination of an abundance of work worldwide, across all target market sectors, along with the shortage of trained talent (and the forecasted attrition of talent as experienced engineers retire), opens the door to technology- enabled productivity gains. These solutions may include richer, more intelligent toolsets and visualization technology (such as ‘BIM’: Building Information Modeling), as well as re-engineering of work flow across multiple, dispersed teams worldwide; leveraging advances in collaboration, design review, and content management technology.

As an executive from an ENR 25 company told me last week, “Given our dispersed structure of offices, work-sharing and effective file sharing is critical, especially as we adopt BIM”…

Read more!

The Advent of Relationship Ecosystems

Is the tech world moving away from a hierarchial partner relationship model, to a networked relationship system? In discussions with both start up software firms and the larger ISVs, I have seen the evolution of partnerships and alliances moving from '1 - 1' partnerships to 'Many - Many' relationships.....

(this is not "Manny being Manny" as they say in Boston....as in Manny Ramirez, slugger for the BoSox)

Certainly SAP has stepped out in front with the relationship ecosystem concept: "Industry Value Network" refers to the SAP / partner ecosystem designed for complete and integrated solutions into specific vertical markets. How is a industry value network different than a ISV partner program?

Core areas include:

- Strategic Alliances with key platform & technology vendors
- Niche and vertical specific vendors fill in core white spaces
- Go to Market strategy is completely aligned
- Most importantly, there are inter relationships developed among partners, so that the partner ecosystem in networked and not hierarchial

Obviously, the challenges of developing and managing such an ecosystem are higher in the initial recruitment and developmental phases, and do require a more global and inter-networked management model. For smaller ISVs, the key is to identify those specific white spaces in the business solution and what specific tier 'n' partners to develop, and not worry about obtaining a direct relationship with the 'gorilla' . Read more!

Relationships as 'Assets'

On a broad level, relationships are about identifying & articulating common values & goals; allowing for requisite time and 'event' sharing to building trust, and allowing that relationship to evolve over time. Translating this to a business advantage: you can lower sales costs, shorten your sales cycle, and increase partner and channel effectiveness, by building trusted relationships. This follows a basic premise in developing a growth (and exit) strategy: You can't do it alone; you need an ecosystem of relationships (i.e. partners, advisors, potential employees, strategic clients) to acheive your goals.

Mark Granovetter (Stanford University) developed a concept called “The Strength of Weak Ties”: individuals can maintain a finite number of ‘strong’ ties or relationships, but they also have a much larger network of weaker ties with other contacts. In a large organization, the number of weak relationships identified can be substantial, and can yield significant insights into customers, sales, and market trends. These ‘weak’ relationships may include those that are associated with external contacts, such as prospects, influencers, and partners; but also may include internal relationships: a sales person relationship with product manager, or an internal recruiter’s relationship with an employee, for examples.

The organization that can identify and manage these strong and weak relationships may realize those relationships as assets, and leverage them in a way that increase sales and revenues. Therefore, from a revenue perspective, fully leveraging relationship assets over time may also increase company valuation as well. Read more!

The Primary Components of Technology Relationship Building

Many software firms are driven by leaders and entrepreneurs with strong technical expertise, but perhaps not as much expertise or desire in building & leveraging the necessary relationships to drive growth. Viewed collectively, these relationships may encompass:

• Business Development: acquiring key strategic accounts for alpha tests and beta deployments; also acquiring 'lighthouse' or strategic accounts that will provide early referenceability

• Building the Talent Ecosystem: identifying and developing those individuals who will bring insights, more brand awareness, additional referrals, and management expertise to ensure growth. Talent includes: advisors, customer councils, board members, members of the management team, and key consultants (interim executives, for example)

• Alliances / ISV Development: identifying, developing, negotiating with, and enabling key partners to sell solutions / products in the marketplace. Given the abundance of software firms, the consolidation of the major ISVs, and the desire of most corporate accounts to streamline vendor selection towards integrated business solutions, it is imperative that software start ups fully leverage indirect sales models to promote growth

• International Growth: same as the bullets above, but focusing on select international markets (APAC, EMEA). Relationships required include: talent, technology partners, sales partners

• Strategic Growth: those relationships required to position a company for acquisition or merger, or to identify those companies / technologies appropriate for acquisition. This relationship category aligns closely with building strategic alliances (above); identifying and building relationships with key technology partners that may result in an M&A event necessary to ensure continued growth, and allow for a successful exit for investors

Each of these relationship 'building blocks' have their own methodology and attributes (which I will cover in subsequent blog posts), but viewed collectively, this framework allows executives in technology firms to visualize the set of optimized & leveraged resources (internal and external) necessary to acheive key growth milestones.

Read more!