Intelligence for the Technology Industry


Published article in TechIQ Magazine
Spring, 2006

The Leadership Dilemma
Finding the right people to help VARs make the transition to services. BY Colleen Perrone

Everyone in the VAR community has seen margins on cutting-edge products plummet. If you're a VAR or systems integrator, you've understood that diversifying your business model with a greater services emphasis is critical to your long-term prosperity. You've even rethought your sales and marketing practices to support those changes.

But unless you've given long, hard, serious thought to whether you've got the right people in place, all your otherwise smart planning may end up being a waste of time. "Without the right skills and experiences on your team-from support staff up to your senior executive team-it's unlikely you'll ever successfully make that transition to services. You need to be asking yourself some hard and tough questions about everyone in your entire organization, including yourself. For instance:

  • Does your management team truly understand what it means to be a services-oriented business?
  • Do they have the trust of their customers to accept bold new solutions?
  • Do your teams know how to spot opportunities to sell services, and how to support them?
  • Are you absolutely sure you're the right person to lead a services-based organization?

One thing's for sure: You'll need new people with new skill sets to make services second nature to your company. You'll need:

  • Project managers for initiatives that may be more expensive, time consuming and strategic than you've had in the past.
  • Salespeople who know how to talk about business issues, compliance and governance.
  • Leaders who can manage the company's changing focus away from tasks like warehouse management, stock levels and inventory turns to new competencies such as ROI metric development and business consulting.

One of your key questions in transitioning your team is figuring out what to do with the "old guard" executives who know how to wrangle an extra point of margin out of a distributor for printers and monitors, but can't talk about a client's competitive challenges. Those will be difficult, even painful evaluations-but not nearly as painful as what will happen if you don't confront those issues at the early stages of your transition.

One thing to consider: Many of the competencies required as you make the transition are likely to come "on the market" in the near future. There's an army of mature executives looking for new challenges and opportunities-and your company might be a great place for them to recharge their engines, to your benefit. Whether you rely on your existing team or bring in new talent, your entire organization will need certain fundamental competencies, including:

  • The ability to adapt and produce in a changing environment.
  • An openness to learning new ideas and developing new skills.
  • A willingness to attend formal and informal training programs.
  • An understanding of new compensation models, especially for sales teams.

Most of all, making a successful transition to a services-based model requires your team's commitment to fearlessly embrace change, and to own the process of leading that change. That's a tall order for most organizations, because change is scary to lots of people. But without that courage from your team, you'll be hard-pressed to succeed in your new approach.
Colleen Perrone is president of The Caler Group, a Florida-based executive search firm with practices in several industries, including high technology.


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