The Leadership Issue: Managing Your Way To The Top

One year ago, Frank Alfano had a plan, a wad of investment capital and a bet. He figured that the systems-integrator market was ripe for consolidation and that the time had come to buy some companies to combine high-level expertise, customers and vendor relationships. In particular, he and his business partners wanted to put a stake in the ground in the oft-misunderstood midmarket. Those organizations, he concluded, would surely need better IT infrastructures to help them compete with bigger rivals in their own markets.

To pull off the move meant convincing investors, analysts and even VAR businesses alike that the consolidating VAR market was not moribund, but ready for another breakout year. What Alfano, CEO of Stamford, Conn.-based MTM Technologies (No. 330 on the 2005 VARBusiness 500), might have lacked in originality, he made up for in vision. Clearly, he convinced many people that there was room for a play in network infrastructure, particularly in selling VoIP solutions. To prepare for the VoIP boom, which began roughly a year ago, MTM purchased four different solution providers, increasing its head count to 600 and its offices to 22.

"The bet was go raise a bunch of money and try and pull these companies together," Alfano says. "We're starting to feel good traction in our key areas."

What makes MTM's story so fascinating is that other companies had a similar vision about the same time that Alfano did. But they didn't get the same level of funding or commitment from vendor partners or opportunities to buy certain companies. Why? The answer has to do with leadership and the ability to convey that elusive, tough-to-define personal quality.

In this special VARBusiness feature, we showcase some of the best and brightest thinkers from the ranks of the VARBusiness 500, the definitive list of the largest solution providers in the North American market.

Dozens of those executives recently gathered in New York City at our annual VARBusiness 500 Awards for excellence. Their insights on management, decision-making and risk-taking reveal volumes about the state of the IT solution-provider community and what it takes to rise to the top of it.

Also weighing in was an individual who demonstrated leadership excellence in the aftermath of Sept. 11, 2001: former New York City Mayor Rudy Giuliani, who served as the evening's guest speaker. Giuliani shared why being prepared for the unexpected is one of the most important qualities a leader can have (see "Rudy Giuliani Addresses VARBusiness 500 Crowd," page 32).

Steadfast Focus

If your company is staring down a tough decision or contemplating a break-out maneuver, then consider what some of your peers have done when faced with similar challenges.

Govplace, for example. This year represents the second year that the Irvine, Calif.-based solution provider has made the VARBusiness 500 list (No. 474). What sets Govplace apart from others is the company's total focus on the public sector--100 percent of its sales come from public-sector clients. While not unique, Govplace deserves credit for the leadership it demonstrated when its founders, president Sean Burke and CEO Adam Robinson, decided to shut down their commercial operation, which, at the time, was actually growing much like the young company's public-sector business. For Burke and Robinson, the decision proved strategic. But once they made it, they realized their move was the right one.

"At the time, we were just out of school and looking to make a name for ourselves. Doing what we did gave clarity to our brand and a sense of purpose within our company," Burke recalls.

The leadership he and his colleague demonstrated has helped to make Govplace one of the fastest-growing solution providers in North America during the past three years, according to VARBusiness research.

Taking a Stand

Leaders also effectively distinguish their companies from the pack with clever thinking. Take Bob Venero, CEO of Future Tech Enterprise (No. 342 on the VAR500). He decided to stand out by focusing on distinctive solutions, supported with a healthy telemarketing campaign around specific themes and industries. His demonstrated willingness to go after very specific market niches cost the company significant sums to develop and effectively cut the company off from broader parts of the market. Once his company got its message out, however, Venero says it "sparked major interest in a lot of industries because they didn't know about it, and the technology talks to their business needs."

"We're targeting the hedge-fund side of financial services with physical-layer security for data centers, which is going to become regulated very soon," he explains. Of the first 100 hedge funds his company has called, 26 have made appointments. Not bad for an initiative generated by a telemarketing campaign.

Norcross, Ga.-based Optimus Solutions (No. 281 on the VAR500) is demonstrating leadership another way. Its big risk: eschewing the traditional manner of building a sales force by robbing the ranks of a rivals' sales team and instead going with a method that takes far longer to produce results.

"Salespeople have been real hard to hire," laments CEO Mark Metz, "so over the past four years, we have brought in recent college grads into our staff and demand-generation team to serve as telemarketers and place calls to drive attendance at our seminars. Then in the process, we trained them to eventually become full salespeople. Our top salesperson in our company was groomed that way."

Unconventional? Sure. But effective? You be the judge: Optimus Solutions grew last year by nearly 90 percent to $70 million in sales.

In addition to vision and preparedness, VARBusiness leaders often possess another quality: discipline. Jack McDonald, chairman and CEO of Perficient (No. 306 on the VAR500 and the 2005 VARBusiness award winner for Outstanding Revenue Growth by a Small Company), says his company keeps its sales cost in the single digits. No exceptions. That's despite market shifts and economic cycles. As a rule, McDonald says, a sales cost of 6 percent to 7 percent enables a service company to produce operating margins up to 14 percent.

How did he lead his company there? Two ways, McDonald says. One was to drive repeat business in existing accounts where possible. (Perficient's repeat business rate in the past four years is at roughly 85 percent.) The other was to offset operational costs with a shrewd use of vendor marketing dollars and sales funds.

"We have a 25-person sales force who average around $2.5 million each," McDonald says. "But IBM, which is our main partner, gives us a ton of leverage in our marketing efforts. We've found their support to be incredibly important to getting the job done and also keeping costs low."

That may sound wonky, but it's leadership, just the same.

Tweet

   

More Channel Programs