On a yearly base I look back what I have achieved, mistakes I’ve made and what I have learned. Of course such reconsideration also finds its way into my mind during the year, on this day I think it’s adequate to make it a part of my blog. Taking the time for it allows me to take energy from my results, criticize myself to make sure that some mistakes will not be made again and to find understanding to improve myself for the year to come. Before going into details of 2008, it´s quite certain that I cannot remember a year with so many controversy in positive and negative perceptions.
A good start
The year 2008 started off great! A combination of a profitable 2007, a new commercial director and a great 3 year forecast allowed me to convince myself to purchase a brand new Audi A5. And as the first quarter past the great growth in our services turnover and our success in setting up the new office in Lviv, Ukraine I allowed myself to take a big step in delegating my operational activities to others. In doing so I started to seriously think of the necessities to make my wedding the best day of my life, just to be followed with an amazing honeymoon that I could just imagine in my dreams.
As positive as I could be
My state of mind at that time had never been better. The wedding preparations were going well, BT got a new job at BCG, our Indian unit was progressing nicely, my operational work was delegated well and I was allowed time to focus on the big picture for Componence. The Web 2.0 trend became reality in Enterprise 2.0 for Componence. And on top of all my vision, my stories allowed me to convince professionals from abroad to help me deliver the next level of our strategy; making our solutions available for so many more people across many more different technologies. Yes, my course was clear, I was making steps to the next level in life and with me Componence.
Ignoring the signs of the start of the crisis
In the positive rush I simply ignored the signs that 2009 would be a turnaround for Componence. It started with the acquisition of BEA Systems by Oracle combined with the absence of any software license deal in the first quarter. My vision and insights were blurred by the trust I had in the results of the work of many fellow team members at Componence. The turnover growth and profit in Q1 didn’t make it easier to uncover the luring financial threats that were upon Componence.
But things turned into worse as the whole world plunged into a credit and financial crisis where trillions of dollars were lost. Banks, the organizations that always are so good in criticizing enterpreneurs at taking too much risks, were now making losses that are unimaginable for any normal human being. And the worst was unevitable, banks went bankrupt and the trust in the financial system was lost. And so the real economy got hit, many say that it will be the biggest crisis all of us have ever seen. Now everyone is trying to survive, the companies who will come through this crisis will probably proof to be strong enough for any crisis. It’s not just any crisis that can take out Lehman brothers and might take out General Motors, Chrysler and Ford.
Drastic actions needed
After my honeymoon, the facts of the crisis piled up and I knew I had to take drastic actions to have a chance to get through this crisis. I knew it was time to take the responsibility as a CEO, starting with myself to propose a cut of 25% of the salary of the board of directors. But that would not be enough, our prospects to grow hard were slashed, more serious costs needed to be cut. A lot of hard talks followed, leading to some lay offs in our Dutch unit, the closure of our unit in Kiev and the departure of the founding directors of Componence. But cutting costs was not enough, more capital was needed and luckily investors were found amongst friends of Componence. Despite of such actions, the crisis still poses a big threat, so costs still need to be tuned where ever possible.
My biggest lessons of 2008
In a year with so much controversy, many lessons can be learned, but here are my top 3:
- Hard work is meaningless without real results.
I have created an environment where my managers easily get opportunities to grow their professional ambition and skills. The opportunities and pre-requisities are given with trust in good results. But somehow when the results clearly lack, my managers have not shown the urgency that is required to get back in control. More concrete metrics and better no-nonsense evaluations are probably tools I should use better to make my managers deliver urgent results.
- Rules help to structurize as long as the necessary endresults are not blurred.
In preparing the organizational improvements I’ve let myself to be advised by many external consultants to deliver many new rules and processes that will help Componence to rise to the next level. In doing so, many colleagues allowed themselves to fill their time to just follow rules and to resolve conflicts with arguments like ‘he should do that, that’s not my responsibility’ or ‘this was the plan / agreement’. I guess the same thing has happened with the bank traders who caused the crisis and created the sub-prime products, they were just working within rules, it’s not their fault that their financial deals did not result into good results in a long term perspective …
- I am the CEO of Componence
As I have easily developed myself in a free environment, I trusted that my managers would do the same. In taking freedom, I have always been result driven and always listened to my former CEO’s. Regretfully 2008 showed me that some team members are not result-oriented enough for the compensations and freedom they have received. In this time of crisis I cannot stand aside and wait for them to see the urgency, I will have to enforce it with more control and consequences.
The lessons above are related to my professional life, but the success of my personal life is intwined with the success of Componence. Without the succes of Componence my family and I will lose so many of the freedom and the possibilities we have now and I would be working for the bank and other creditors until I’m a grandfather. I will do everything to give BT and my coming child the quality of life we want to have. I trust that many fellow colleagues at Componence will help me with it, because in the same way the succes of Componence is also good for their own private and professional possibilities.