I recently had the opportunity to share the stories of six different integration firms that tried hard to succeed, but ultimately failed. Each person shared with me a pivotal moment or series of events that led to their company’s demise. The stories ranged from getting too involved in bid-based business (driving margins down and financing requirements up) to simply ignoring the “business” part of the business and instead being completely entangled in solution development.
The stories, although littered with similar themes, were all quite different; the endings, unfortunately, were all the same.
The information I gathered from these conversations was turned into a blog post featured on the NSCA website. I consider this to be a wonderful opportunity to learn from some once-great companies that experienced firsthand just how quickly things can spiral out of control. While saddened to see these companies fail, I am a true believer that learning from our failures truly helps us come back stronger.
After I wrote the blog that shares these six stories, I received lots of feedback. Several conversations with industry colleagues allowed me to reflect a bit more on the information that was shared with me. The blog offers great insight for other integrators in our space to use as they attempt to thrive in a time where change is the only constant and disruption is an everyday occurrence.
So what can integration firms that truly want to survive and thrive actually do to make sure they don’t end up as prey to changing market conditions (or a jilt of bad luck)?
- Be Comfortable with Change: The first thing that all integrators need to do is get on board with rapid change. I’ve often seen memes floating around the internet, pointing out that the most dangerous words in any business are: “Because we’ve always done it that way.” I’m convinced that this is true, and I’m even more convinced that our industry is extremely guilty of sticking to our guns for too long.
When things feel like they aren’t working, immediately ask yourself if these are internal or external issues. Has the market changed or have you failed to keep up? Constantly keeping up with change means that your company culture has to be open to it, and this always starts with leadership.
- Don’t Forget About the “Business”: The next thing that integrators should be thinking more about is how to handle finances. This isn’t a one-size-fits-all issue by any means, but some owners and leaders are too focused on technology and not focused enough on the business. If 80% or 90% of your business is still one-off revenue, then it’s no longer a luxury to think about recurring revenue.
You can’t afford to hire and train staff if your business is too volatile. If too much of the company comprises one-off sales, it’s too easy for business to yo-yo every year. This makes it difficult to plan and nearly impossible to train staff in a time of rapid change.
- Partner Up with Your Bank: Another financial consideration is making your bank your partner. Banks are not good at business, but they are good at lending money to companies that are clearly fit. If you aren’t fit, then it’s even more important to be communicating about the health and wellness of your business so the bank can understand how it can help and make decisions about how much risk it may want to assume.
- Put People First: The last thing to focus on (but certainly not the least) is your people. Business is still about people. Employees, partners, manufacturers, customers and, of course, trade associations, are all part of the community that integration firms need to build around. Consider it an ecosystem; by making a substantial investment in that ecosystem, you will be better prepared for all the change that is taking place in the market.
Integration is about bringing many solutions together, and your relationship with people is key to making this a success.
I wish that none of the six former business leaders I spoke about earlier had to go through what they did. It’s always sad when I hear about businesses that fail; however, the great opportunity here is to learn from these failures and make sure we build businesses that are ready for change, financially intelligent and people centric. By doing that, the possibility of great success is exponentially higher.
NSCA has tools and resources to help you do all of the things I’ve mentioned here to help you not only survive, but thrive.
Need help dealing with rapid change, whether internal or external? Our Member Advisory Council can offer advice and a plan.
Want to know how to better handle finances and bring in more revenue? Attend our upcoming Pivot to Profit conference, October 25-26 in Dallas, where we focus exclusively on getting started with a recurring revenue model.
Looking for a way to make recruiting, hiring and employee retention more successful? Our Career Center offers solutions to help you do just that, from the Technical Assessment Tool that gauges technical proficiency of potential job candidates to the C-SIP program that onboards new employees quickly while helping them earn a certificate as a systems integration professional.
We’re here to help you be a better business.