Dr. Russell F. Henke -- Business Consultant


Case #1 -- Full Time President & COO

A ten year old company offering a small niche programming language product sees its market share dwindling and revenues flattening. Various attempts to create new revenue streams have met with only limited, short-lived success. Legacy product enhancements are painfully slow in being released. The few value-added-resellers signed in the past, are almost all converting to different base programming languages as soon as they can.



Personnel turnover is increasing and several company VPs are trying to do two or three functions at a time. Remaining company personnel are jerked from one project and/or department to the other, trying to do too many things at once. Once mild competition is becoming more aggressive daily. Morale is low. Past attempts at business planning have been disastrous. The CEO is an fine evangelist externally but lacks consistent interest in operating management internally. Meanwhile, after a decade of being private, the Board of Directors yearns for a company liquidity event.

An experienced outside business consultant is asked to help.



The consultant is installed as interim president & COO, so that the necessary changes can be wrought quickly and decisively. Starting in April 1997, he begins by holding company-wide meetings frequently, to restore all-hands confidence and a sense of order and openness. He immediately establishes frequent and regular staff meetings of his direct reports, with agendas, written notes and follow-up action items. He commissions and chairs two interim task forces…one focused on Sales and one on VARs. He resurrects moribund Marketing Communications and hires a new head. He sets up a WEB-based lead qualification process. He hires a new VP Sales and additional telesalespeople and initiates both product & sales training for same. He names a new, separate Director of Marketing. Soon three crisp lines of business are clarified: (1) license sales & renewals, (2) expanded VAR and royalty arrangements, and (3) funded development partnerships. Each gets a new leader. The consultant travels to key VAR headquarters and reinvigorates past VAR relationships and sets up several new ones.

A new royalty pricing strategy for VARs is established. Royalties from renewed VARs and direct revenue from new license sales begin to rise, with several record revenue months. Direct Sales via remote offices is begun. New proposals are written for funded development consistent with the company’s needs, and externally-funded R&D personnel are physically separated from in house development. Several new "killer applications" are identified and development launched.

Internally, new and formal processes of Customer Support and Software Quality Assurance are implemented, using outside software & techniques familiar to the Consultant. Dependence on the UNIX-only market is removed by creating and releasing a Windows NT version of the language at a lower price point, while ensuring that the core software code for both UNIX and the NT are identical. Intensity on the development of the next generation "integer release" is increased, with JAVA and internet-enabled front ends (leverage competition - don’t fight it!).

A new break-even and aggressive Education & Training business is set up and classes begun using outside consultants as instructors. Internal training for all company personnel is started in the programming language which formed the original basis for the company, with which most new company personnel are not acquainted. VoiceMail is installed, desktop computers and back-up systems enhanced, occasional triple occupancy of cubes ended, and past employee time charging & pay practices brought into full compliance with current law. Finally, a framework for future strategic and operating business planning is established, in part by developing a new and custom-tailored Planning Tool Kit for the company officers. A new and permanent COO is identified and hired.

The entirety of all the changes outlined above is made within the original yearly cost budget envelope of the company. Only six new full time slots are created. The above is all accomplished in approximately six months, putting the infrastructure in place for the company to drive toward its elusive liquidity event. Within the next half-year, the company declares a large stock dividend for its current shareholders.



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This page was last updated on December 29, 2008