Dr. Russell F. Henke -- Business Consultant
Case #16 -- Interim Business Development
In early Q1 2002, the consultant received a call from the VP Marketing of a Bay Area venture-backed private company. This individual had worked with the Consultant in 1996-97 when he and the Consultant were both involved in a company in the MCAE industry (Mechanical Computer Aided Engineering).
Despite early initial successes with its new business model in late 2001, the Company's bookings had stalled during Q1 2002. This of course corresponded to the general economic downturn started in March 2001 during Bush 43's first year.
Having changed its business model, the Company's VP Marketing and his CEO began bringing on new members of the Company's Technical Advisory Board. The Consultant agreed to join the Board.
For two months during Q1 2002, the Consultant served on the Board and simultaneously provided pro bono advice and counsel to the Company's sales department regarding how to approach certain major accounts in the EDA industry, since the Consultant had spent the last six and a half years in EDA prior to forming his current consulting practice in 1996.
In April 2002, the Company CEO desired more attention and hands-on business development services from the Consultant, and accordingly a part-time consulting engagement was started. The Company's sales department was under-staffed and youthful, and thus it required experienced day-to-day tactical guidance, as well as strategic direction. Because of the Company's low revenue and relatively high burn status, the Consultant agreed to a low fixed remuneration and an incentive structure based on actual bookings results, along with an appropriate equity stake.
Within two months, the first new order for software and services from a major EDA player was on the table. Over the next two months, the Consultant identified and cultivated over two dozen bona fide opportunities with total revenue potential of over $2 million. In addition, the Consultant quietly helped install enhanced management processes and disciplines inside the Company's operations.
At the appropriate time, the Consultant carefully transferred his accounts over to permanent sales resources of the Company and he returned to the Consultant's previous pro bono role on the Technical Advisory Board, continuing to provide advice and counsel to the permanent staff for several months going forward to ensure the harvesting of the revenue associated with the teed-up accounts.
Prognosis for the Company as of Q4 2002 was very positive indeed.
Some months later, the Company merged with another like-sized local private enterprise. The nature and success potential of the new, merged private entity are now in the hands of new management and a new Board of Directors.
