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