Ralph Dexter Waite Jr - my eBook on Management

- fun and frustrations -
a very fast pace active life

These Case Studies in management offer lessons
of success and failure.
 

But most of these cases have allowed a continuity in business growth.
Some Cases did not succeed for the identified reasons.
This is the balance when you study the lessons learned from such cases.

Case Lessons:
1. Growth Environment - people create Marketing
2. Managing Change - thru Marketing then Sales
3. Venture Capital - mistakes consumes founder
4. Entrepreneur - channel mistakes

Lesson learned from these Cases:

1. Reliance Electric Co. Case: Successful program of education by on the job training and fast track managing of young personnel in Sales and Marketing for their own growth and building the company's future managers. Corp use of Case Western University, School of Advanced Management Program AMP MBA level learning. Expanded emphasis, guidance and education on both financial and human relations side of the business broadened the approach to business. It encouraged a direct aggressive style of dealing with situations. 

2. Allen-Bradley Co Case: Successfully brought new people into the environment and managed the organization to quickly accepted new thinking.  Allowed change in the organization from a slow moving company with long product life cycles into a fast pace high technology developer for expanding into new markets. Shortcomings were the sales force. Sales slow acceptance of risk caused them to fight change creating a corporate limitation. Business failures due to no sales support, thus blocking the new product sales because fear of failure. As new businesses recognized the customer needs and it made product changes the results were slowed by the sales force caution.

3. Small Businesses, Venture Capital Case:  The VC require new experienced management be hired to grow the business before they provide funding. The startup company requires funds but does not want restraints imposed by the VC. The business plans have a disconnect because of the expectation from both sides.

Prologue to study:

My large company experience was 19 years with Reliance Electric. This formed the foundation of the my management thinking. They taught me Product Management and Industry Marketing. Today, companies give/have no time to allow such a culture for the evolution of people into business managers. It is a shame.

The next 8 years were spent in a private company Allen-Bradley who after a few years was sold to Rockwell International. 

The next 10 years were spent in Venture Capital funded software startup companies. Be aware the VC want your company and control.

The past 3 years have been spent in Mystic Consulting and managing a software company plus reflecting.

In my Junior year at PENN STATE UNIVERSITY, in the college of Mechanical Engineering, it was suggested by my Dean, that I consider an interview with an Electro-Mechanical company  he suggested Reliance Electric. He knew my skills were not in machine design. After graduation Reliance hired me.

The Reliance Electric Company was about $150 Million in sales, they made AC DC motors, gear motors and variable speed drives. After a six month training class program I was assigned as a salesman in Rochester, NY. This was a great company  work environment since it allowed you to grow. It may never be duplicated. 

Rochester was an established small three man office - all were graduate engineers. The District Manager took me under his wing and gave me accounts like Kodak, Gleason Works, Kordite Mobil Chemical, Xerox, Farrel Machine, John L. Klug and more. I followed a man who was a very creative engineer, he had left a legacy of 100% captive Variable Speed Drives for their poly plastic extrusion lines called Kordite Baggies.

I found that the Kodak Engineers were the best I had ever met. Several took me and trained me on how to succeed at Kodak. The taught me applications and solutions using my own products. I would take what they taught me and then go into R&D Reliance and learn more details. When ready I would use these technical skills in selling to make me different. I could beat my competition by knowing more then they did. It worked and thanks to Kodak projects my sales doubled as well as my income.

I found that my good customer, Kordite, was going to use a new Drive competitor with lower pricing for their Extruder Drives. This would break my 100% share. This is when I began thinking like management. Reliance encouraged the sales force to be more like business men not just salesmen. So I started reading about sales management, when done I went to Cleveland HQ and sold my case to save the Kordite account. I took the order away from the competitor who had already booked it. The competitor then came to hire me. Even though I had doubled my income and was very happy, the lure of his world of flashy cars more money got me. Being young and aggressive and worn finally down, late that night I accepted their offer - at least for awhile. Then my Area Manager Reliance flew me back to Cleveland and I stayed with the VP of Marketing for two days. 

Meeting with the Senior VP at Reliance, with no fear, I began telling him what was wrong with the company. I used my Sales and Marketing Management book learning to make my points.  I told him I viewed my role as President of the company in front of the customer. It was my job to just to get the order but to have the company respond to the market requirements. He said he liked my thinking and talked me into staying with Reliance.

A new Area Manager arrived having all of upstate New York, he assigned me as Sales Leader (or manager in training) and for both the Syracuse and Rochester areas. I found it exciting but I must not have been very good at people management since I was causing waves. I began by concentrating on sales "hero" cold calling and breaking down competition.

The new Area Manager was good for me, because I was sent to a special Hershey Round Table. Little did I know, I was on stage with the rest of the next generation sales managers and Sales top management. 

Within one frustrating year and lots of overnight travel, I was transferred to Cleveland HQ and assigned Project Manager Metals within Application/System Engineering.  I was in training again.  In two years, I was promoted to the position of Industry Marketing Manager for Metals.  I replaced a  65 year old hero, but the job was way over my head. I applied myself with what I knew and began doing Strategic Planning thinking and did research to help the salesmen. I would identify what management needed to do to grow market share. This was the beginning of my strategic newsletters and various writings.

Next came the recession, and I was moved from staff back into a safe known harbor, sales. I joined the Cleveland office which was the largest in size. It was a complexity of people and skills. As Sales Leader in this office I learned now what I missing in the upstate New York assignment. I used the interaction with super salesmen to learn management. I handled some big dollars sales accounts in addition.

I was offered a job as Area Manager, in Milwaukee, but turned it down because I was not ready. Later I was again offered a Area Manager job but in Baltimore. I followed an alcoholic manager with four sales offices in MD, VA and PA.  In this people job I could not fail. They were so much in need of management help that they quickly accepted me.  I put on 50,000 miles on the car in six months.  I found a successor within the offices and he was promoted when I left.

After six months in Baltimore, I was offered the Area Manager Cleveland office. This time, the people accepted me as manager because I was known leader and not a dictator type boss.  Sales grew like crazy. After two years I was offered a job in the home office in a highly visible Strategic Material Manager for operations staff reporting to one of the VPs. I turned it down and probably politically made a mistake since he later became an adversary.  

Then the Marketing VP offered me a position as Product Manager of Standard Drives and Control.  Management gave me several challenges in managing new Control acquisitions and failing businesses to turnaround. Thus I began learning finances and business planning and began being a turnaround specialist. Reliance was a throw you into the water and let you learn how to swim environment. Great for adventures but a lot of trial and error learning - fortunately mostly good.

In two years I was made General Manager of Controls. The Reliance top management team was big time politics. A Management Consulting person was brought in as President. He was surrounded with a staff who wanted his job. He asked me to do a Strategic Plan to grow the Controls Business, both Industrial and Process.  I worked with his staff on acquisition candidates and strategy. We made recommendation for acquisition however, the growth plans were constantly attacked by the older staff.  I was assigned a Cleveland small Programmable Control Business, a Lorain Power UPS  business and the newly acquired Charlotte Textile Dye Batch Process software and hardware computer business plus a Stone Mountain GA plant making Custom Utility Display Panels.   These all had problems in earnings. So I merged Cleveland, Charlotte with to Stone Mountain location.  I sold the Lorain UPS business. We still were below critical mass so my business was merged into Toledo Scale in Columbus, Ohio. This became a week day apartment living for many months. I knew the top management at Toledo Scale and they made great attempts over a year to get me to move. I felt Toledo was going to be sold by Reliance so they set it up as the old folks home of Reliance refuges -  so I declined. Eventually, it was sold and my old Cleveland control group stayed with Reliance. 

The Reliance company had been acquired by Exxon (Enron). The President just prior to this bought Federal Pacific. The Federal Pacific acquisition was not on my list to acquire. The acquisition would later prove to be bad because the company had cheated on the IL label product tests.

I moved into a Regional Sales Manager for the Plains which was located in St Louis.  The Area offices were in Davenport Iowa, Omaha Neb, St Louis Mo and Kansas City.   We had previously merged with Toledo Scale and now added Federal Pacific. The sales office eventually managed all of them. An Allen-Bradley headhunter had called me as my house was being packed for St Louis - I said no way. The family was already spaced out by Toledo talk and now the St Louis move. Two of my kids were still in High School and one was in love and off to Colby. The girls did great on the grades in St Louis but were not happy.

This AB headhunter called again in St Louis and asked me to come to Cleveland to interview Allen-Bradley. They were known to me because it was one of my recommended companies to the President to acquire.  I came and hid in a motel for the interviews, this was Reliance country and I was well known - some Reliance people had already gone to AB. So after a big increase in salary I moved back to Cleveland and Allen-Bradley. The whole family felt better, proving I never should have moved to St Louis but looked for a new job assignment.

At Allen-Bradley, as the Director Commercial Marketing I had a staff that needed leadership. My Reliance training proved to the right background and made it a good experience. Through the use of a creative reorganization, it allowed people to do jobs they could handle. Those who had been held back by old managers were now free to rise to new levels. The marketing department was being beat up by salesmen and their Managers. They were constantly being attacked by competitive tactics.  Since AB never had a true marketing department, it was necessary for Sales to jump over them. Sales was conditioned to go top management to get Product Development Engineering to respond to project closures. This conditioned Engineering to setup a separate information path with sales to anticipate the product needs. They waited for top management pressure so they could demand more and justify adding people. This allowed Engineering to be viewed as the company hero. Marketing would be whipped by management for not anticipating the sales need.

Based on my experience at Reliance, I knew we had to implement both Product Marketing and Industry Marketing. We had to change the way information was brought into the company and use Strategic Planning to justify market reaction. We needed also to put the competition on the defensive. We had to take control of the product definitions and lead customers rather than react. The method I chose was based on my sales experience. The AB sales force sold boxes of things called modules mostly via distributors. So we had to have a simple graphic symbol that they could understand and map their products onto it. Then we had to place on this symbol new unknown products with no present definition. This allowed advanced customers to define - on our symbol - their needs. 

We chose the Pyramid of hierarchy from the IEEE communication definitions within industry. It had the appearance of a management organization chart and was easily drawn and divided into segments of 5 levels . They exploded with this AB Pyramid theme, and top management funded new videos and brochures and lapel pins to help sales begin their campaign to take the market lead. It worked and the rest is history. Market share sales doubled and competition was baffled.

The marketing organization had limited application capability and was unaware of what customers really did with their products, they focused on features not benefits.  We began a competitive analysis down to their organization charts and details on competitors personnel. We brought in people for AB Industry Marketing from sales. They defended marketing because they were part of it. Then we went to the process control and computer market and hired a newly defined Strategic Marketing. These people expanded our understanding of the level below and above our products on the AB Pyramid. From this AB Strategic Marketing we could hire consultants from system integration to help define our forward strategy. We planned and presented new strategic business opportunities to management.

During one of the Strategic Planning sessions with top management, we suggested that a strategic new business be formed to block new competitors such as the computer vendors ala IBM & DEC from invading our turf. They accepted the plans and a new division business was formed called  Industrial Computers and Communications. I was made Vice President of this business. I had to acquire a staff to begin the 6 months run to introduction of new software and hardware. From the start this was a business of partner relationships. We began with a software joint venture in Cambridge Mass. It would have 40 people working on the software.  We moved to new space in Cleveland and we had to acquire marketing engineering and quality assurance people. 

We chose to negotiate for a modest amount to industrialize a UNIX computer design from MassComp a high performance UNIX computer company. We made Communication partnerships with Western Digital, Concord Data Systems and 3M's Ann Arbor Broadband products.  It was a unique time as we were an entrepreneur organization in a large company. From that time forward we had to fight the in house political establishment. It was like fighting a union shop to get things done outside of our direct control. Manufacturing (not under our control) would not accepted the released parts list from engineering which used an outside source to collect and purchase parts to meet out fast track introduction timetables. We had a Commodore computer staff mentality and the system did not want to let us change the methods. Real political lesson learned here. The division local engineers had to interface the software and gain acceptance for testing with the new Cambridge joint venture personnel. Engineering egos prevailed and upper level decisions had to made constantly to keep it on track. 

The Division had been working with sales to define a new Cell Controller product integrating computers, communications and software. This advanced pre selling to General Motors was the way AB sales historically gained a competitive inside advantage and assured AB that an order would come if develop it. They did this by an upper Pyramid level sale and it worked. We had Buick city and Truck and Bus sold on the use of this new product. The stakes were a $25 million order.  We achieved the sale just as Ross Perot EDS was acquired by GM. They took over all the GM computer related purchases. Our product fell into this area. They indicated we were not an approved computer vendor and AB should go back to selling down level Pyramid products and be happy. EDS turned this from the classic GM sales model to anew case of no matter what you do you will lose. GM EDS kept changing the requirements since they wanted us to not comply. We eventually lost the order.

The business had to regroup after the GM situation. The sales force wanted to take on Honeywell with our product. We struggled to meet the lofty plans set after the GM expectation.  Times had changed at GM. Our division had to rethink the formula for success, a decision was made to use DEC as a partner rather then the small MassComp computer vendor implemented. This was a change in hardware not software. It required a deal and new designs to do the same thing we already developed. But you could not argue the strategy because AB top management was trying maintain a block on the computer vendors. In the end DEC did not contribute nor achieve anything new in the market place. This Division would be merged with other products into a new separate Rockwell company called Rockwell Software. They were free to market separately from the AB sales force.

I was assigned to be Vice President Business Development for the company reporting to the President on key projects. This meant Taiwan negotiation and many other business related efforts. A Staff position was not what I wanted to do. The Rockwell company had started the reorganization of AB and the President left.

I chose to leave the company and try my hand at small business while I was still young. A headhunter found me after I left Rockwell AB.  He represented a Houston based software company that was developing software similar to my AB software but focused in the process SCADA market. Several Venture Capital firms were involved with a small software startup in Houston Texas they needed a President to replace the founder. He indicated they needed experienced leadership and were about to be fully funded. I met with the Venture Capital firms and listen and suggested various way to go forward.   The founders business plan was thrown out because it was not believed nor correct. I was brought in as a consultant to write a business plan. They had recruited a past district Sales Manager from AB to join the organization at the same time. We developed a plan and they made me an offer to join. I moved to Houston and began. The founder was clearly not accepting me. This was similar to Reliance and AB experiences. I was getting to think it was me and my style. However, I am convinced when you are trying to change an organization you are the problem to the existing managers.  

Pioneering Controls Technologies Inc, PCT, was a new software firm with a product SCADIX just introduced, they needed VC funding. The VC required new experienced management be hired to grow the business. After the VC  funding began the heavy advertising promotion, trade shows and hiring of new salesmen. It came as a complete surprise when the salesmen found customers indicating the software product was broken. It became apparent I had not done my homework by checking with their customers first. This was my big mistake!  It turned out that portions of the software did not work and was incomplete. We had to built a Quality Assurance team to guide development engineering to achieve a quality software. So proven Quality Assurance people from AB were hired to find the problems and fix them. At that time I should have fired and replaced the Engineering Manager for incompetence. It was complicated since the founder was the lead architect and programmer. The Engineering Manager was just his project manager. The founder, every night would go around to each of the staff and undo all the work we were doing and he said their were no quality issues. He said the problem was not the product but the sales management. Eventually, we had no choice but place a quality hold on product sales

This shut down of sales income with the burn rate of 40 people and $350k per month would kill our startup. We began downsizing to save funds. This caused a board level meeting and showdown with the Founder and I was appointed CEO. Eventually the Sales Manager from AB would panic on his sales requirement and eventually sided with the founder when I confronted the situation. The SCADIX company product was fixed in August 1989. However sales was still concerned and would not commit to results. We found that potential customers still recognized the product, but some left. But we were the only UNIX SCADA product in the market, but sales still could not sell it.  

After six months delay, more funding (or downsizing the operating expenses) was necessary to meet a revised business plan. However, sales management would not commit to results until all customers were satisfied. The founder had a problem accepting the software issues and still felt the salesmen were the problem. The investors with more money decided to force the founder out and reduced his board control role and large share of stock. The AB sales manager was let go.  The founder placed a lawsuit caused the company's sales to drop further and one investor left. The founder  placed a suit on me and the board for fiscal mismanagement. We combined this downsizing with bridge funding. Unfortunately, the lead investor divested after the founder's suit.  We did continue the support of existing customers and integrators and it still amazes me what we survived. After two years the founder lawsuit was proven to be frivolous. The company was downsized by then to only the technology. 

New company name: To launch a restart new funding was necessary. The company product and technology were sound. The named was flawed so a technology merger was made with AccessWare Inc.  In 1994, we began using a dba AccessWare to start selling a new and improve new product for UNIX (not XENIX) called AccessPoint. We had no funds. Eventually the remaining lead VC would find a new partner for funding the AccessWare Inc. based on a merger the of PCT SCADIX technology. The AccessWare case was to restart in the market to sell advanced licenses to OEM partners to assure survival. After all the PCT delays we now found the customers were shifting portions of SCADA from UNIX to Microsoft Windows products.  Our development culture was totally UNIX. 

The first real success was an OEM Control Dynamic, Modcomp, Simpsa in Mexico and integrator Curry Controls. The next OEM partner ABB as Pricom Plus for power sub station automation. They sold 350 units of AccessPoint to a Southern California Edison project. We made revenues of $2 million on this deal. We did a smaller deal with  Modcomp. This was the end of the road. We made a profit that year.  The investors wanted to bring in a President to help grow the business. 

The UNIX market was slowly being consumed by Microsoft Windows NT. The new President believed only in Microsoft. AccessWare's investors choose not to participate in the Windows NT OnCue Alarming business plan. He was taking the resources from the ABB sales for a Windows NT project. This reduced the support of AccessWare products. and caused several UNIX developers to leave.  When ABB saw the UNIX developers leaving they negotiated a one time buy out of licenses and source and began hiring UNIX programmers.  This caused a one time lump income, but a downturn in AccessWare monthly revenue. 

With the reduced UNIX sales, the development of OnCue eventually had to be stopped the personnel let go.  I negotiated with the President a settlement of the OnCue technology for his leaving.  AccessWare still had sales of AccessPoint to companies like Pemex in Mexico. The OEM partner ABB and Modcomp still have been separately funding enhancements to AccessPoint by paying UNIX developers for new capabilities. Now, AccessWare has access to these enhancements and is marketing them for new project in Europe and Asia as AccessPoint 7 for Linux.

When OnCue left AccessWare a new company was formed called OnCuity. This company gained $2 million in funding from FLV, a Belgium VC firm. This new company strategy was to implement sales to the process engineers for remote alarm control.  The product sales decision was made between the plant operating personnel and the Information Technology computers groups.  It used speech technology from L&H and they were part of the FLV deal.

copyright rdwaite 1/25/03 and 04/14/08

ralphwaite@dexnow.com