Q And A: Sinneck Sounds Off On New MCS Partnering Initiatives

CRN: What did you see when you came into the job with regard to the amount of partnering that was going on between Microsoft Consulting Services (MCS) and solution providers and what the difference is now?

Sinneck: When I first came into the job it was sort of like stepping into a tornado. Orlando (Ayala, Microsoft's group vice president of worldwide sales, marketing and services group) had just returned from sabbatical and he had been visiting customers and partners around the world and he was really picking up a very significant partner concern about MCS competing with them. I think it was particularly acute in the case of some partners, less so in others. But bottom line was he went back and did a little facts based analysis before I got here and he really did conclude we were in fact competing too broadly with our partners. Literally I got here and his first marching order to me was 'This is an emergency we have got to fix.' This is your top priority. Get closer to this.

What I did was I kind of figured out why the behavior was happening and fundamentally it was largely driven out of two issues: one we had too many people and they were chasing a profit. So we said to them, 'look we are going to change the financial plans you are accountable for and radically reduce your financial plan.' We wanted you to be clear in that this is not about profits. This is about partner satisfaction and customer satisfaction. So we are taking the pressure off the numbers stop competing with partners. Six weeks after I got here I concluded on what the strategy elements ought to be and they are now codified in the financial plan. But at that point in time we said to our MCS people: look bring partners in every engagement. Don't Prime. And just start changing your behavior. Change your approach. It is not about money. It is about satisfaction. And we have been consistent in that message all along.

I am pretty convinced now that we are making progress. The feedback we are getting from partners is actually very favorable. They don't see us as being competitive. Sure there are situations in which we butt heads. But we work those one at a time. By and large I am pretty convinced that we are on the right track. And the partners are starting to tell us that which is good. I am not seeing as many escalations as I did. The pressure has gone out of the system. The pressure back in December-January-February was pretty intense. I know that the work the US subsidiary did to talk about the fact that MCS will work in the global strategic and major accounts. I think that helped a lot.

In the long term I don't believe that is the right strategy dividing and saying we'll work on these customers and you work within those customers. While I think it is a nice short term fix. In the long term it is not the right answer. The right answer is talking about the kinds of work you want to do with your partners and not about where and when you will and won't work. So the entire strategy I have been on is to kind of define those parameters in terms of these are the kinds of assignments where we think we need to be involved, the kind of work where MCS needs to be involved and we will do those things. But again we are not going to do them without you. We are always there to enable you. Our clear mantra is 'No Priming. Always Pull The Partners In.' And I think the rhetoric is starting to stick. It is a lot of behaviors to change though.

CRN: What has been the response of enterprise customers who are getting the message that MCS is pulling back?

Sinneck: You can put skin in the game and be accountable and guarantee service levels and not be prime simultaneously. That is what we have been telling our customers is look we'll be accountable even when we have to hold the contract, but aren't the primary service provider. We'll guarantee service levels. We'll do that whether or not we work under a partner banner or not. We are putting on a new face in the marketplace. What we are going to do is meet the customer the way they want to buy. Now sure some customers insist and there you have a decision you can decide to force the issue and say no we will not prime and we want a partner to prime. That can be a gutsy maneuver. And sometimes it works. And sometimes it doesn't. Or you can agree and still have the partners on your engagement doing about 80 to 90 percent of the work. So when we prime we expect our partners will still do the bulk of the work.

We're a thin organization for goodness sake! 4,500 consultants in a market of what $400 billion. It is immense. We are a pimple. We are nothing. So now our whole model is built upon the concept of leveraging partners. When you get confused about how big you are in the marketplace stuff happens. So what I did this year was I cut the heads. I said to MCS your future lies in being the best first and then getting off the edge quickly and moving the partners into those spaces. And that is the fundamental strategy. But there is always a tension in that strategy because when do you know when the partners are ready to take it to scale is a frontier I don't think anybody has a clean answer to. But this is more about intent and changing people's behavior. And willingness to think of things in a different way.

CRN: Was 150 people how many you cut from MCS?

Sinneck: FY 02 plan to FY 03 plan it is 400 less on a plan to plan base. Actual to plan closing FY 02 going at FY 03 is 140 fewer.

CRN: How many escalation issues (on solution provider MCS conflict) were you dealing with right out of the gate and how many are you dealing with now?

Sinneck: I can tell you what I am seeing now which is one every couple of weeks where someone is upset. Early on in the scenario it seemed like they were coming from everywhere. But I've really got to be honest with you I am not sure if that wasn't just a feeding frenzy.

CRN: You made a dramatic change in the field on how these consultants are going to be compensated. Can you go into more detail on how you are going to be able to execute that?

Sinneck: First we reengineered all of the sales plans for services. There are only three of them now: a plan for people whose primary role is to sell services, a plan whose primary role is to deliver and a plan for people whose primary role is support infrastructure that surrounds the go to market guys. Each of those sales plans have very discreet Management By Objective (MBOs) that we put in place that say we expect to you accomplish the following with respect to partner satisfaction, here is how we are going to measure and here are your goals. Then the last thing that is true it is tied right into the sales plan.

So there is a one to one mapping between most of the MBOs and how people are paid. Clearly partner satisfaction as I mentioned in my remarks on stage is right on the top of the list right after customer satisfaction. So what we have done is we have established the rank order if you will. We said to the field pretty plainly is financials is the least important thing. Customer is the most important thing. Partner right after it. When we say customer satisfaction we say here is how we will measure it. This is where we are going to look to find out. We are establishing some pretty hard core objectives and an ability to track them. So it's an engineered approach.

CRN: Is it kind of subjective. Is it customer, partner, financial 33 percent each? Is it subjective on partner satisfaction? How are you going to measure?

Sinneck: In the end analysis all employee assessments and bonus payments are based on management judgment of the balanced contribution. If I made this a formula we wouldn't be management. So it is judgmental. What we have signaled to the field though is the relative priority scheme and how we view balance. What is a good balanced performance mean?...People who I call one trick ponys, who are financial wizards and manage utilization and kill the number and don't do the rest, they are (going to fail).

CRN: How often right now are MCS and a partner going in on a joint sales call and opportunity and what kind of expectation do you have a year from now?

Sinneck: First of all I don't have good metrics, but my sense is that happens very frequently. Maybe not as much as we'd like but very frequently. We expect and I am pushing for that to happen all the time. Not some of the time. All of the time%85Involve a partner in every engagement as appropriate. That is basically all of them.

CRN: How big a change is that?

Sinneck: Actually I don't think that's as big a change as some people think. I think there is actually a tremendous amount of interaction happening all of the time. But we got sidetracked on this you know make money, make money. Now we are putting it back on track. I think the fundamental underpinnings were there.