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Guiding growth Featured

11:15am EDT August 18, 2005
In prime time television, there is a growing infatuation with crime investigations and the tools and technologies investigators need. Shows such as “CSI,” “JAG” and “Crossing Jordan” show heavy use of forensic science to solve mysteries. It’s no surprise, then, that forensic technologies are in high demand in real life. John Colbert knows. As an investigator for the Los Angeles County Sheriff’s Commercial Crimes Bureau, Colbert specialized in counterfeit software and hardware recovery, and testified in felony cases. Today, as president and CEO of Pasadena-based Guidance Software, a company dedicated to enterprise investigative infrastructures (programs that perform forensic computer analysis), he has seen increasing demand for his products. From 2001 to 2003, Guidance grew from 70 to 214 employees, and revenue jumped from $5 million to $13.4 million. Smart Business spoke with Colbert about the challenges of doing business internationally, the pain that comes with partnerships and the lessons all business leaders need to learn.

Q. What challenges does fast growth pose?
Obviously, being a fast-growth company, we’ve been able to experience a number of challenges. I think there’s four that stand out. Quality. Obviously, as you’re pushing forward, things have to be accomplished in a short period of time. You have to make sure that you take a step back and ensure that the products that go out the door are products of quality.

Customer service is another area that can become an issue if you don’t have the right things in place in your organization. It gets busy, people get impatient. As a management team, you have to keep a strong focus on customer service. Employee retention and expertise is also an issue. Employees that stick around in fast-growing companies are really cut of a different mold. They’re ready to be flexible, they’re ready to work long hours when long hours are required, and they understand that their role or position within the company may change entirely over a period of six months.

We look for employees that are flexible and able to grow with the company. The expertise of your employees needs to be beyond what they’re hired for. You have to hire a year or two into the future so that you can sustain that growth and continue to scale.

And core values of the company. The question is whether you’re going to be a company where you let your core values just shape themselves or are you going to be a company where your core values are by design.

Designing the core value program inside your company is really essential to fast growth. It helps with the employee retention, it helps with the customer service and satisfaction, and it helps with the quality of your product.

Q. What are the unique challenges to international growth?
The biggest issue is visibility and communication with the corporate office, not as much the language barrier as focusing the energy and drive. When you’re in closer proximity to your corporate office, you’re able to get the information out quicker.

You can get people together at any time during the day and you can roll out programs, you can check on the status of programs, you can check on the status of projects, you can interact.

Internationally, those meetings become challenging. For example, our UK office, if it’s 8 o’clock here in the morning, it’s 4 o’clock there in the afternoon. So we have to get all of our business accomplished with the UK office in the first few hours of the day. Supervision and visibility become an issue there are well, because their offices are obviously open while the corporate office here is closed.

Customer confidence is another issue that we deal with. Customers, when you’re introducing another product or a new concept to a country, they sometimes want to hesitate for a little bit and say, ‘Is this product going to be around? You don’t really have a presence here.’

Customer confidence is something we really focus on, and we spend a lot of time going out and convincing people that we are here, we’re going to stay, you can invest in our products and we’re not going to abandon you.

Q. How do you build that customer confidence?
We try to get the executives of the company to help. Actually going there and visiting with the folks sometimes is all it takes. For example, we have one of our senior vice presidents over in the UK right now visiting with customers, doing this exact thing, helping with the customer confidence.

Other than that, we use our PR, we use our marketing materials and our sales tools so that our sales force out in those countries is able to relay the message from the senior management team.

Q. How do you approach business partnerships?
Sometimes the words partnership and pain can be [interchanged]. Partnerships are not always a good solution to problems.

[They] can divert focus and energy from your organization, they can take a lot of time, they can be a big distraction. We’ve worked with organizations that wanted to partner with us, say, behind services or electronic discovery or some kind of data collection, where there’s not a good fit. And we care to deal with those more in just a business alliance relationship — you scratch my back and I scratch yours — but there’s no need for a formal partnership. Q. What do you look for in a business partnership?
One of the ways we go about identifying whether or not we want to be in a partnership is by looking at, do we have real solutions and do they have real solutions? The next thing we’ll look at is, are we impacting clients of that organization? And are we impacting them in a way that actually influences a cooperative and mutually beneficial partnership between the two of us?

PricewaterhouseCoopers is a good example. We’re impacting a number of their clients, in a very positive way, that causes PricewaterhouseCoopers to kind of take notice of our presence and say, ‘Hey, we could be doing a better job if we were doing this together.’

The combination of their experience and their outreach, coupled with our technology, really makes a good partnership.

Q. How do you manage a business partnership?
I don’t think you can have a partnership where you assign someone the collateral duty of managing that partnership. [You can’t] take somebody from the senior management team and say, ‘OK, you’re going to be vice president of sales and you’re also going to manage this partnership,’ because it takes a lot of work to make a partnership work.

We have a dedicated business development department and they have dedicated resources to handling these partnerships and making sure they work. It reduces the distraction from me and from the other executives trying to carry out our other necessary functions.

There’s one other issue that’s challenging that some folks don’t realize when they’re entering into a partnership. It’s easy for management to get together in a meeting with both organizations, understand the concepts, understand that it’s financially beneficial and buy off on the whole partnership, but at the field level — the field level managers and the field level employees that actually need to cooperate and work together in the partnership — if they don’t buy off on this as something that’s going to benefit them, then it ultimately will fail.

There needs to be a maturity and an effort on both sides to educate and promote the partnership in a way that the employees see that this is beneficial to them.

Q. What key skills do successful business leaders need?
One of the first and foremost qualities that a business leader needs to have is strategy. And I think every business leader needs to take some personal time to just simply look at the long-term vision for their particular impact on the organization.

For the CEO, obviously, it’s the entire organization. But other business leaders — the CFO or the vice president of sales — they need to sit down and look at their long-term goals and strategies for their area. And it’s very difficult to do that in the office with the phone ringing and the e-mail going off and with people knocking on the door and coming in the door all the time. A person really needs to get away for what I call a personal strategy day.

Investing is another quality. A person doesn’t have to be an investor — they don’t have to understand the entire stock market. But a business leader does need to understand revenue and expenses. And they need to understand their budget.

And they need to make sure they can forecast the upcoming quarter or the upcoming year in both expenses and revenue. And they need to be able to figure out those key indicators that suggest more revenue or those key indicators that suggest an increase in expenses.

Q. How do you approach leadership?
As you know, the Peter Principle quite often applies to management, and I think leadership training is a must for folks that don’t have natural leadership abilities or don’t have the background in leadership. Especially if they were promoted because of their capabilities in a particular role rather than because of their management leadership skills.

I think every leader should be a coach. They should spend time coaching other business leaders and employees. I think every business leader should understand completely customer satisfaction, the effect on their organizations, and they should have programs in place behind that. Core values — every business leader should understand the effects of core values on their organization. They should understand that actually being an administrator or carrying out the tasks themselves is a major no-no. That they need to learn to delegate.

And last but not least, every business leader should never stop being a student. When you stop learning, that’s your first step toward failure. Every business leader needs to continue to learn — management, leadership and everything they can to run their business better.

Q. Do you mean as a student of life or as in taking formal classes?
I think both, really, but you can learn from your employees. You can understand that you can call your employees and they can tell you something that you don’t know. You don’t have to be smarter than everybody. You can also understand that you may be a good leader but you can always be a better leader, and it’s a good thing to go and get some outside training on leadership or some outside training on investing, even strategy.

There is always something more to learn. how to reach: Guidance Software, (626) 229-9191 or www.guidancesoftware.com