Consumer Products
Making a dollar
How Michael Fields has brought growth to KANA Software Inc. without sacrificing profitability
By Matt McClellan
Smart Business Northern California | January 2008
People in the technology industry talk
about the “bubble,” and Michael
Fields says he’s been through three of them in his 30 years in the enterprise software industry. During those years, he’s held
executive positions at several large companies, and he is putting his experience to use
as chairman and CEO of KANA Software
Inc., which provides customer service solutions to companies.
By year-end 2006 — Fields’ first year-and-a-half as CEO of KANA Software —
the company had turned a profit for the
first time in its 11-year history, posting
revenue of $54 million.
Smart Business spoke with Fields on
why you should never grow at the cost
of profitability and how to deal with
dissenting opinions.
Q: How do you deal with the challenges of running a growing business?
I call it never forgetting that you
have to earn a dollar. It’s trite but
true. All too often, business, particularly small businesses, believes
that growth has to come at cost of
profitability — that it’s OK to be
unprofitable.
Now, I’m not suggesting it does-n’t happen, and it’s happened to
us, but the focus is how do we
grow, but grow it being profitable?
When you do that, you continue
to think about how to drive your
business more logically rather
than just believing that by growing revenues at any cost will lead to success.
That model works in some things, but
for the most part, it doesn’t work.
That’s a mantra of ours. We’re going to
grow, we’re going to dominate, but we’re
going to make a dollar.
Q: How do you make decisions for your
company?
Clearly, in a leadership role, you’ve got to
make decisions. You have to be the one
who finally decides on a particular strategy. But the acceptance of those strategies is
dependent upon how open the process has
been and how involved multiple levels in
the organization and the customers have
been.
People who have a passion for what
they’re doing and who take an interest in
the success of the company can take being
told the direction the firm will follow. The
project they’re involved in may not be
going the direction they would like it to follow, but they can understand that and get
behind it as long as they understand why
those decisions were made.
Q: How do you get that buy-in?
I believe in that collaborative
approach, but it has to be tied to making
a decision. There are those who will collaborate looking for common ground,
and they end up with the least common
denominator. You have to be careful of
that in collaboration.
You really have to focus on the vision
and look for that collaboration to meet
the vision. If it doesn’t, look to step it up.
Because you don’t want to end up saying, ‘We all agree, and we’re only going
to do a quarter of what we can because
we want to make sure everybody’s on
board.’
Q: How do you deal with dissenting opinions?
The first thing is having the facts. Give
people the opportunity to present their
case, but having the facts on why that decision is being done — that’s different than
their opinion.
For some, they may look at their opinion and say, ‘This is an intractable situation for me.’
I’d much rather know at the beginning
of a major decision for the company.
If someone says, ‘I just can’t get
behind this,’ well, that’s the great thing
about the economy in the United States
— you can go do something else.
Because once the decision is made,
you want everyone behind it. Even if
they didn’t feel initially it was a direction they would have taken, at least
they will understand the reasons why
because they participated in the
process of getting to where we are.
Some may just say they can’t do it, and
you’ve got to move on from that.
Q: How do you communicate your
vision?
First, it starts with articulating one. Our
vision is to dominate the customer service software and services market. That’s a
bold vision; there are a lot of criteria
involved. You have to start with reaching
high, not impractically so. I’m not saying
we’re going to dominate the database
business because that’s been done.
Dominating the customer service software business — nobody has done that
yet. It’s achievable by a company of our
size and stature. Once you’ve articulated
that vision, communication takes place
because you involve everybody in the company toward that vision.
What are the things we all need to do? It’s
management’s job to ensure that every
individual in the company, whether or not
they are writing the next version of our
technology or selling a large account or
answering the phone at the office, everybody understands how the value of what
they’re doing is leading toward that vision.
HOW TO REACH: KANA Software Inc., (650) 614-8300 or
www.kana.com
