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IN THE EYE OF THE CHAOS OF GROWTH ENTREPRENEURSHIPMATTI HEIKKONEN, +47 47 922 170, [email protected], @MHEIKKONEN
Ficta Technology CEO Seminar, 28.11.2014, Kittilä, Finland
Board positions
Other operative positions
Positions of trust
Matti Heikkonen
Areas of expertise: ‐ SaaS / Cloud business models and strategies‐ Sales intensity, sales leadership and growth‐ Execution and scalability‐ Growth entrepreneurship and leadership
Areas of personal interest:‐ triathlon, snow mobiling, piano
Current position:‐ QuestBack AS (since 2010)‐ Senior Executive Vice President, Global
Operations (COO)‐ Global GTM P/L and commercial processes
0 ‐ 1 meur
2 ‐ 5 meur
20 ‐ 50 mUSD
Revenue Valuation
0 ‐ 1 meur
3 ‐ 10 meur
40 ‐ 250 mUSD
Growth entrepreneurships Role
CEO
CEO
COO
Timeframe
1998 ‐ 2000
2007 ‐ 2010
2010 ‐
0 ‐ 2 meur 0 ‐ 3 meur Chairman 2004 ‐ 2007
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
10% investment, chairmanTransition to 100% SaaSFrom entrepreneur centric to entrepreneur led
Decreasing dependency on the entrepreneurCommercial productization and scalability
Start of an end, exit orientation of the entrepreneur
New managing director (other than entrepreneur)
CHAIRMAN’S GUIDELINE IN MANOUVERINGTHROUGH ENTREPRENEUR’S EXIT FEVER
‐ DECIDE OBJECTIVELY WHAT IS BEST FOR THE BUSINESS ‐ ACCOMODATE ENTREPRENEUR’S INTERESTS UP TO WHAT IS A
”FAIR BALANCE” / DOABLE‐ DESCRIBE ALL RELEVANT SCENARIOS INCLUDING THE WORST
CASE(S)‐ FORCE MOVEMENT TO MAKE IT OR BREAK IT
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
10% investment, chairmanTransition to 100% SaaSFrom entrepreneur centric to entrepreneur led
New managing director (other than entrepreneur)Decreasing dependency on entrepreneurCommercial productization and scalability
Start of an end, exit orientation of the entrepreneurFinnish venture capital, Finvera, leverage and new ownership and capital structure
Exit / L(m)BO
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Digium takeover
Clean‐up and professionalization
Cash flow issue
New managing director (who is the entrepreneur again)
3xP (people, planning, process)
Consolidate or become consolidated / Nordics & Finland
CONFIDENTIAL PRODUCTIVE ENTERPRISE FEEDBACK MANAGEMENT
Market Positioning of Digium / Nordics 2009
DISTRIBUTEDCENTRALIZED
TACT
ICAL
STRA
TEG
IC
POSI
TIO
NIN
G O
F U
SAG
E W
ITH
IN T
HE
CUST
OM
ER
DEPLOYMENT MODEL WITHIN THE CUSTOMER
Competition to acquire Digium
CONFIDENTIAL PRODUCTIVE ENTERPRISE FEEDBACK MANAGEMENT
DISTRIBUTEDCENTRALIZED
TACT
ICAL
STRA
TEG
IC
POSI
TIO
NIN
G O
F U
SAG
E W
ITH
IN T
HE
CUST
OM
ER
DEPLOYMENT MODEL WITHIN THE CUSTOMER
Market Positioning of Digium / Nordics 2009Competition possible for Digium to acquire
CONFIDENTIAL PRODUCTIVE ENTERPRISE FEEDBACK MANAGEMENT
2% 1%
36%
4%5%
1%2%2%
7%1%
2%1%
4%1%1%2%
23%
1%5%
Analystica Oy
Digitus Oy
Digium Oy
Eduix Oy
Feedbackdialog Oy
Feelback Oy
Fountain park Oy
Ideakone Oy
Innolink Research Oy
IT Vision Oy
IROResearch Oy
Mcompetence Oy
Promenade Research Oy
Questback Finland Oy
Similan Oy
SPSS Finland Oy
Webropol Oy
Widisys Oy
Zef Solutions Oy
Market Shares, EFM, Finland, 1.1.2009
HOW TO BUY MINORITY OWNERSHIP WITH CONFIDENCEAS THE SOLE VEHICLE ‐ EXAMPLE WEBROPOL
‐ DO YOUR RESEARCH AND USE ALL SOURCES‐ USE OWNER’S REAL‐LIFE SITUATION AS A KEY ELEMENT
IN YOUR TACTICS‐ MONEY ON THE TABLE IS MUCH MORE THAN MONEY
ON THE PAPER‐ PROMISE NOTHING BUT SECURE, CLEAN CUT EXIT
CONFIDENTIAL PRODUCTIVE ENTERPRISE FEEDBACK MANAGEMENT
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
New sales, non-recurring
New sales, recurring
Recurring revenue
EBIT
Revenue by type€
R&D spendbreakdown %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Product gen 3
Product gen 2
Product gen 1
Low end product
ASP platform
Key points in Digium’s evolution up to 2009
1
1 END OF ASP
2
2 SIGNIFICANT INVESTMENTIN PURE-PLAY SAAS PLATFORMDEVELOPMENT
3
3 CUSTOMER-CENTRICOPERATING MODEL
INCREASED R&D PRODUCTIVITYAND SALES EFFICIENCY
KEY TECHNOLOGY AND BUSINESS MODEL CAPABILITIES
MARGINAL CHURN RATE ANDLOW PRICE EROSION
4
4 SCALABILITY DEVELOPMENTACROSS BUSINESS MODEL
CRITICAL MASS OF RECURRING REVENUE BASE
PROFITABILITY ANDCASH FLOW TO INVEST INGROWTH
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Digium takeover
Clean‐up and professionalization
New managing director (who is the entrepreneur again)
3xP (people, planning, process)
Consolidate or become consolidated / Nordics & Finland
1st QuestBack exit discussion
Webropol 45% deal
Various merger discussions
QuestBack merger
Cash flow issue
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
New CEO
Re‐invention of enterprise market strategy
Integration of Digium, EasyResearch and GlobalPark to QuestBack
Decreasing dependency on current CEO
Top mgmt clean‐up, setting up the foundation
GRO program
Acquisition of GlobalPark
Sales intensity to a new level
Vers
ion
Q3
2014
, v2.
3
20
We Have 10 Focus Areas We Need to Work With
Channel Sales
Sales Productivity
Renewals
Enterprise sales
Up-sell
GROWTH
Planning
Processes
People
ONE COMPANY
R&D PlatformsInnovation
Vers
ion
Q3
2014
, v2.
3
AND LUCKILY; OUR COMPETITIONIS NOT THAT MUCH BETTER...
...BUT IS GETTINGMORE AGGRESSIVE
Sales Intensity
29
Vers
ion
Q3
2014
, v2.
3
Salvation Army
Red Cross
Sales Intensity
AND LUCKILY; OUR COMPETITIONIS NOT THAT MUCH BETTER...
...BUT IS GETTINGMORE AGGRESSIVE
30
Vers
ion
Q3
2014
, v2.
3
= POTENTIAL TO MAKE A SIGNIFICANT IMPACT
= POTENTIAL TO MAKE A SIGNIFICANT IMPACT
Sales Intensity
31
Vers
ion
Q3
2014
, v2.
3Where are the areas of improvement
P1 P2 P3 P4 P5 P6 P7 P8
NE
W S
ALE
S
MONTH
TARGET/MONTH
NEW SALES /MONTH
Name: N.N.Employed: 1,5 yearsRole: Account manager
33
Vers
ion
Q3
2014
, v2.
3Where are the areas of improvement
P1 P2 P3 P4 P5 P6 P7 P8
NE
W S
ALE
S
MONTH
TARGET/MONTH
NEW SALES /MONTH
Name: N.N.Employed: 1,5 yearsRole: Account manager
MISSING INGREDIENTS:- SALES PROCESS
- PIPELINE MANAGEMENT ROUTINES- CAPABLE SALES LEADERSHIP
34
Vers
ion
Q3
2014
, v2.
3Where are the areas of improvement
TARGET
NE
W S
ALE
S /
MO
NTH
N.N. N.N. N.N. N.N. N.N. N.N.N.N. N.N.N.N. N.N.
/ QUOTA CARRIER
Country xx
35
Vers
ion
Q3
2014
, v2.
3Where are the areas of improvement
TARGET
MISSING INGREDIENTS:
- SALES INTENSIVE HIGH-PERFORMANCE
CULTURE- RECOGNIZING
AND SETTING UP STAR QUALITY MISSING
INGREDIENTS:- IDENTIFYING AND HIRING THE RIGHT
TALENT- ONBOARDING AND INDUCTION
MISSING INGREDIENTS:- COMPETENCE DEVELOPMENT
- TOOLS AND KNOWLEDGE-
SHARING
NE
W S
ALE
S /
MO
NTH
N.N. N.N. N.N. N.N. N.N. N.N.N.N. N.N.N.N. N.N.
/ QUOTA CARRIER
Country xx
MISSING INGREDIENTS:- CAPABLE SALES LEADERSHIP
36
Vers
ion
Q3
2014
, v2.
3We’re reshaping our performance pyramidS
ALE
S P
ER
FOR
MA
NC
E
IND
UC
TIO
N
UNDERPERFORMERS
STEADY-EDDIES
OVER-ACHIEVERS
STARS
STEADY-EDDIES
OVER-ACHIEVERS
STARS
TARGET
ACCELERATINGSALES
PROGRAM
37
Vers
ion
Q3
2014
, v2.
3Sales support
TOOLS AND TEMPLATES
ENABLEMENT AND
DEVELOPMENT
FORECASTING AND PIPELINE MANAGEMENT
SALES PROCESS
SUCCESS
38
Vers
ion
Q3
2014
, v2.
3Various milestones are supported with tools and templates for better control and efficiency
39
Vers
ion
Q3
2014
, v2.
3Account executive’s effectiveness and control over salesfunnel is supported by Salesforce
40
Vers
ion
Q3
2014
, v2.
3The Account Executive is a part of a global sales community
Sales success
story!Best
practice!
Cross-selling Reference
case!
41
CREATIVITYRESILIENCE
SELF‐STARTER
PEOPLE QUALITIES YOU NEED TO HAVE IN EVERYONE TO DRIVE GROWTH
TOLERANCE FOR PRESSURE
AND THE REST WILL SLOW YOU DOWN
BUILDING A‐TEAM REQUIRES A‐PEOPLE TO ATTRACT AND HIRE THE RIGHT TALENT AROUND THEM (A)
A A
B CAND YOU NEED TO START FROM THE TOP (YOURSELF)
#1 driver of employee engagement: PROGRESS OF MEANINGFUL WORK
How to make leaders tick‐ Responsibility with authority‐ Job with meaning and progress‐ Empowerment with access to resources
How to make employees tick‐ Exposure to leadership that operates through admiration and inspiration
‐ Sense of belonging and acceptance
ENGAGING (RIGHT) PEOPLE WITH THE AMBITIONS IS AFUNDAMENTAL REQUISITE
HIGH AMBITION LEVEL
YES: DEEP ENGAGEMENT
WHY
MOTIVATING PEOPLENO:
EXCUSES
WHAT
FOR MARTYRS TO EXHAUS FOR GUILTY TO EXHAUS
E1 E2MYSELF?
OTH
ERS FO
R ME?
YOU NEED A FINE CONTROL OF DOING THINGS BY ONESELF VS. DELEGATING PEOPLE TO DO THINGS FOR EACHOTHER
KEY IS TO ENSURE THE INDIVIDUALS EXHAUST E1 PRIOR TO GOING E2
MANAGEMENT NEEDS TO BE FULLY CAPABLE OF EXECUTING E1 THEMSELVES TO BE ABLE TO MASTER GROWTH
GATEKEEPER
MENTORLANGUAGE RITHUALSPRINCIPLES NORMSSIGNS DISCIPLINE
TRIBAL CULTURE CAN BECOME A UNIQUE ASSET
COMMONALITIES
EACH EMOTIONAL VAMPIRE IS CAPABLE OF SUCKING LIFE OUT OF 5 COLLEAGUES OF HIS/HER
EXTINCT EMOTIONAL VAMPIRES
THE FASTER YOU GROW, THE MORE IT REQUIRES CAPABILITY OF DOING PLANNING AND FINDING WISDOM THROUGH FAILURE TO SUCCEED
AND THIS IS VERY, VERY
HARD TO MASTER !
WORLD OF GROWTH ENTREPRENEURSHIP IS NON‐LINEAR AND CAN ONLY BE OPERATED THROUGH CHAOS
Fragmentation is the natural state of nature
Lack of predictability and control leads to chaos
Chaos is disoriented, but not random
Survival requires to mastering chaos
CHAOS
3 CARDINAL DIRECTIONSTO NAVIGATE CHAOS
PATIENCE
USING CHAOS TO NAVIGATE AS A LEADER IN THE WORLD OF COMPLETE UNCERTAINTY