Tom Nies

Thursday, 31 March 2011 20:01

Tom Nies on keeping your company private

One of the most celebrated events in American business is the initial public offering or IPO. Many see it as a transforming event that ensures a company’s long-term survival and signifies an arrival into the business big leagues. Currently, in the U.S., there are more than 19,000 public companies. So, why would a company actually choose to remain private?

Believe it or not, there are many good reasons not to go public, and I offer for consideration some insights that may cause one to reconsider why being private can be advantageous.

Many people question whether or not a private company can compete against a public company. We have been doing so for decades.

My company, Cincom Systems, is a privately held software company founded in 1968. It has thousands of customers on six continents and specializes in providing software and services to simplify the management of complex business processes. Cincom regularly competes with mega-companies like Oracle and SAP.

Not accepting financing from venture capitalists can often hurt a private company when competing against well-branded and publicly funded competitors. But, it can help you develop innovative, flexible and adaptive ways of thinking along with well-articulated value propositions. We have continued to pioneer software innovation in a rapidly changing business environment, focusing upon delivering outstanding value and competitive advantages for Cincom customers.

When compiling reasons not to go public, one stands out above all the others: freedom.

Remaining a private company can give you the freedom to make decisions based on the needs of your clients and interests of your staff, rather than upon the demands of shareholders. It helps you make business decisions that best serve the interests of clients, staff and the company itself. Remaining private will keep you free from excessive regulatory burdens and free to adjust to the changes in the business environment as you see fit.

You will have the freedom to run your business without a rigid timetable for an ROI and have more freedom to think long term.

By avoiding public financing, you are freer to control your own destiny. You will never be forced to merge out of existence or acquire other companies at excessive prices just to meet revenue or growth expectations. Because of this, you do not face the issues that mergers and acquisitions create, such as disparate product lines, product and employee redundancies, integration and employee layoffs.

Private companies are also freer to share their success as they choose. Public companies must share their successes with outsiders, whereas private companies are able to invest in R&D, better customer service and job creation.

Another clear advantage of remaining a private company is that it is much easier to create a corporate culture. At Cincom, we have created a unique, family-oriented atmosphere that encourages a sense of participation in the organization. For this reason, we have attracted a loyal and committed team.

Additionally, by being privately held, your customers will remain loyal because you base your decisions on their needs, rather than those of shareholders. Ultimately, what has made Cincom successful is being a customer-driven organization. As a result, we have an extremely high average tenure among our clients, some for more than 35 years.

The flexibility and freedom of remaining a private company is ingrained into a corporate character, culture and commitment. It is seen as a greater benefit for customers, employees and the communities in which they live all around the world.

For more than 42 years, we have shown that it is possible to progress as a private company, and we intend to continue to innovate in the software business for decades to come. For now, it is clear that an IPO is a “no-go” for us.

About: Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, health care and insurance. For more information, visit tomnies.cincom.com/about.

Tuesday, 01 March 2011 11:58

Selling sense and sensibilities

Storytellers create interest in their tales by showing the opportunities and desires of characters set against the conflicts and challenges that confront them. Throughout the course of the story, a character grows to resolve these challenges.

Storytellers and story-selling

The same can be said of the stories of selling value in complex sales cycles.

Jane Austen famously used the phrase “sense and sensibility” to refer to human motivations and behaviors in her novel of the same name. Senses and sensibilities identify and provide information and discernment to people. They shape and form character and predispositions, which are impossible to fully describe.

However, insightful authors, such as Austen, have managed to show how the various human sense and sensibilities influence one’s life and behaviors in unimaginable ways.

Seller sensibilities don’t sell

To effectively sell value, the seller must understand the buyer’s senses. The seller must understand what it is that each person involved in a buying choice explicitly seeks.

To do this, the seller must view things from the personal perspective of the prospective customer. This means that the focus should be on buying motives and preferences, instead of selling.

And yet, most businesses and many sales reps forget that the customer wants to buy — not be sold.

The buyers’ perspective

These differences in perspectives cause difficulties for marketing and selling and some of the largest frustrations for buyers. To allay some of these frustrations, the seller must remember that buying and selling are one process, separated only by a difference in perspective.

Sellers tend to sell features and benefits, but buyers want to buy value. However, their idea of value does not necessarily mean a return on investment.

Value sells emotionally

It is said that value lies in emotions, not economics. Sellers must objectively determine and communicate the economic value being offered, but the subjective motivating reasons for a choice are often found in the emotional or personal benefits to be gained.

These advantages should be called values instead of value.

Values differ from person to person, time to time and situation to situation. That’s why so much of successful selling involves empathetically oriented personal interactions.

These values can be broken down into a more focused list of three behaviors and motivations: a craving for a sense of personal importance, a fear or dread of loss, or a desire for minimal effort or investment for maximum gain or success.

It is important to note that these three sensibilities are not the most attractive in human interactions. However, the objective is to be realistic without becoming cynical. Those engaged directly in selling processes may agree that these motivations often trigger behaviors that are not pleasant in normal human interactions but are typically prominent in buying and selling situations.

These primary motivational influences are like the three primary colors — red, yellow and blue. Just like red and yellow can be combined to get orange and blue and yellow make green, the influences can be combined in different degrees to create a virtually infinite palette of behaviors and motivations.

The combination of these most often encountered in sales and buying situations might best be summed up by the human behavioral principle taught by author Robert McKee: “With very few exceptions, humans seek to realize the maximum gain, or satisfaction, with a minimum of risk and investments of time, effort and energy.”

This means that on the first try, a person will do the minimum necessary to try to achieve a desired goal. This minimal effort hardly ever achieves a goal to its fullest extent, so the person will choose to give up or invest more time, effort, energy and risk in the project.

This cycle repeats itself until the goal is achieved.

Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, health care and insurance. For more information, visit http://tomnies.cincom.com/about/.

Friday, 18 February 2011 15:19

Three traits of success

It is generally agreed that to succeed in business or any other collective pursuit, there must be the ability to attract and retain the “best and brightest” people. But really, this is just the beginning. In my experience, I’ve found that there are three core value traits that can help organizations to optimize the performance of their “best and brightest.”

These same three value traits surface over and over, year after year. They are: character, competence and commitment.

It requires character to act with fidelity on one’s beliefs. It requires competence to achieve goals. It requires commitment to persevere to a successful conclusion. These core values drive productivity and produce profitability and sustainability for one’s company, its staff, its customers and its investors.

How best to describe these core value traits at the corporate level?

Character

One must be able to demonstrate ethical integrity, an emphasis on seeking solutions not casting blame, an open environment where honest communications are encouraged and honest differences of opinion are allowed, and a commitment to managing on the basis of sound principles. Doing the “right thing” in a professional manner is a demand all must make of themselves.

Competence

It is also important that you find people who have an entrepreneurial spirit and relentlessly seek to innovate within bureaucratic structures. You must also find people who have creativity, decisiveness, initiative for self-growth, leadership ability that encourages small work groups and a continuous seeking of the optimal balance between flexibility and control. A truly disciplined organization continues to learn and consistently applies the best methods to achieve goals and the fulfillment of the idea that competency is a key competency.

Commitment

It is also crucial that the people of your company have commitment to one’s group, one’s company and to one’s fellow colleagues. They must have a missionary zeal in representing the company and its products, responsibility and personal empowerment. They must encourage people to grow and empower them to do so. You also want people who promise to do what has been asked, pledge to provide whatever assistance is required to meet a shared commitment and perseverance in one’s beliefs.

Essential minimums

To be successful, people and organizations must act with character, competence and commitment in a harmoniously orchestrated environment that energizes all and synergizes everything. As an employee or employer, these core value traits are essential minimums. But, they are only minimums.

Studies consistently show that among the three most highly regarded leadership traits are those of honesty, integrity and trustworthiness. Leaders who cannot be trusted cannot lead. So, besides the ideals of character, competence and commitment of an organization’s staff and leadership, the firm’s leaders must also be people who are honest, trustworthy and have a sense of integrity.

It is this sense of integrity that integrates all other desirable characteristics into an authentic and harmonious entity, which is a mark of all consistently successful organizations.

Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, health care and insurance. Read more about Nies at http://tomnies.cincom.com/about/.

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