Staying relevant. It’s why companies close old divisions and start new ones, why they introduce new products, make acquisitions, diversify their portfolios and invest in R&D. And for IT companies like Groupware Technology Inc., it’s the reason to complete one transformation, only to pause, and do it all over again.
The need to change was something that IT industry veterans — owners Mike Thompson, Scott Sutter and Anthony Miley — understood well when they acquired Groupware, an IT solutions provider that was on the verge of going belly-up in 2005. They recognized from day one that the company’s survival was dependent upon Groupware’s ability to transition outside its roots of
“systems and storage” and make a name in for itself in IT’s fastest-growing segments: big data, cloud computing, virtualization and data security. It’s a process that’s taken involved two restructurings in seven years.
“It’s a brand-new organization from the company that we acquired,” says Thompson, the company’s president and CEO. “We took a company that was doing at the time of the acquisition $1.7 million, and we turned it into almost $150 million with our company. We injected life into the organization by creating relevancy within the marketplace … and within the customer base.”
Here’s how Thompson and his co-owners have taken Groupware from struggling IT reseller into a leading systems integrator.
Look for an opening
Groupware’s broad customer base includes SMBs all the way to Fortune 500 companies. This means the company’s IT solutions must meet a wide range of technology needs. Delivering solutions that are on the leading edge of today’s systems and storage technology is the only way to stay relevant for customers.
“At the rate that technology is changing — it’s pretty amazing the acceleration that it’s going through — we need to stay in the forefront in regard to what technology is out there,” Thompson says. “It’s having business conversations with our customers to understand what pain points they’re trying to solve for and where they’re trying to take their business.”
Nobody knows the needs of the market better than your customer base. So one of Thompson’s first steps as CEO was to ask customers, “What’s going on in the marketplace?” and “Where do you want to take your business?” to see where Groupware should be investing.
“Understanding what’s going on around cloud computing, big data, next generation data centers and having the expertise to be able to deep dive into those types of opportunities and conversations with customers has allowed us to remain in the forefront,” Thompson says.
“It’s having conversations with our end users in regard to what business issues they are trying to solve and then understanding how we can help them solve those issues, and not just for today.”
What Thompson and his partners realized quickly is that businesses buying IT products also wanted in-depth knowledge and advice from their providers. They began working on a strategy to transform Groupware into a services-led business, which could provide both products and support for its customer’s technical capabilities.
As it turned out, the challenges in the down economy — more companies began seeking IT workarounds to help them manage with more limited resources —gave the company an “in” to present its new solutions and services to the marketplace.
“Customers looked to us to offset some of the reductions that they had in place because business has to go on,” Thompson says. “You still have to solve these business issues. You’ve just got to find new ways to address the business models out there.”
While competitors scaled back, Groupware doubled down on IT investments, including its service segment, which Thompson and his partners believed would propel demand moving forward. The company also invested heavily investments in its labs and engineering capabilities — especially engineering talent.
“Where there is change and uncertainty, there is opportunity,” Thompson says.
“As we went through it, we saw that people were going to pull back. Our opportunity was to go invest heavily to have resources available to [businesses] and to create value out in the marketplace that our customers could leverage from us to continue to be successful in their operation.”
Start tough conversations
By the time the recession began bottoming out in 2010, Groupware had nearly doubled its business, a sign that new investments were paying off. Still, the business transformation also forced Thompson and his executive team to restructure certain areas of the company to make room for those investments.
It was important to engage people in “adult conversations” about why the changes were happening and what they meant.
“I think too often we let niceness get in the way of the truth. You need to have those conversations and not delay the hard conversations, acting decisively based on that and moving forward. I’ve been in situations where the executive team has been slow to make changes and it became irrelevant really quickly by not acting and not executing. It’s critical to have those conversations and then act on them appropriately.”
Groupware has now gone through two restructurings since 2005, a transformation process that’s involved rearranging certain departments, eliminating remote offices and consolidating operations. These strategic moves have helped drive the company’s investment in “rack and roll” solutions — complete technology solutions designed to be rolled into the data center and quickly put into production, generating higher returns for Groupware.
For Thompson, the ability to have honest conversations with team members has helped him keep the company accountable to progress, but also to earn employee respect. People prefer to do business with people that they like, but they’ll also follow a leader who they respect, he says.
“We need to have those hard conversations and get everybody on board with the investments that we want to make as an organization,” Thompson says.
“You can move too quickly, but if you set the goals and hold accountability level, you can make minor changes to that if you need to, or you can pull back.”
That said, building a dialogue with employees is also important in helping you monitor your investments. Strong internal communication gives you a continuous feedback loop to know where your investments stand and what kind of returns they are generating so that you can know when to pull back.
“It goes back to where you place your bets, making bets and then understanding the return, setting expectations associated with those bets and managing toward that,” Thompson says. “If you don’t see the return or you don’t see the return coming, you need to be able to take those resources back and double down where you do see return on those investments coming from or where you believe you can get a greater return.”
Share in excellence
Today, Thompson continues to invest heavily in the company’s core competencies — networking, security and storage — as well as its services practice, its fastest-growing division. Smart investments combined with open and honest communication are two building blocks in a foundation that helps Groupware stay relevant with customers, and the marketplace.
The third is collective ambition, or a shared commitment by employees to the company’s success.
“I’m a firm believer in building winning teams, having the right people in the right positions at the right time,” Thompson says. “Then you’ve got to empower them to go out and execute.
One way Thompson drives collective ambition at Groupware is by creating an environment where employees want to come to work.
“I’ve always felt that it’s our job from a leadership perspective to put our employees in a position to be successful,” Thompson says. “When they drive home that night, we need to give them a reason to come back in the office the next morning.”
What makes a great work environment? At Groupware, it comes down to living the company’s three core values every day.
“The great thing about this transition is that we’ve remained true to our core values of customer service, excellence and fun,” Thompson says. “My belief is that you keep those core values intact and you create an environment where employees can be successful and understand the consistency of the model that you’re bringing to the marketplace.”
An example is the fact that Groupware invites every employee in the company to its national kickoff — an event that many businesses limit to their sales teams.
“It’s customer service,” he says. “It’s the pursuit of excellence and it’s having fun. Those three complement each other.”
Getting employees together for the kickoff is about showcasing the company’s values and vision; but it’s also about “getting everybody to fill part of the success of the company,” Thompson says.
Driving this culture is also why Groupware expanded its focus on collective ambition in 2010, when it rolled out a corporate program around the concept. The goal of the program is to help employees understand their role in serving the purpose of Groupware and better explain to employees how all departments participate and work in harmony to help the company succeed.
“Once you have buy-in and you have collective ambition by multiple individuals in the organization, you can propel the business in the direction that you want to take it,” Thompson says.
How to reach: Groupware Technology Inc., (408) 540-0090 or www.groupwaretechnology.com
The Thompson File
President and CEO
Groupware Technology Inc.
Born: Mountain View, Calif.
Education: USC undergrad; MBA Regis University
Leadership philosophy: I don’t shy away from the fear of failure. That actually makes me work harder, and I take those challenges and adversity head-on. I’m a classic example of ‘productive paranoia.’ I’m always looking over my shoulder, always working hard and always trying to better myself to make sure that I can keep moving in the right direction.
What would you do if you weren’t doing your current job?
In some capacity, creating an environment and opportunities for others to grow. Leadership and mentoring have always been important to me.
What is one part of your daily routine that you wouldn’t change?
When I’m not traveling, taking my kids to school in the morning. Discussing ESPN Radio with my son while my daughter tries to sing over the conversation and dance free of her car seat always starts my day off in perspective.
If you could have dinner with one person you’ve never met, who would it be?
Cassius Clay. I’m a huge boxing fan. The man who became Mohammed Ali was a personal branding genius and his endless confidence and brashness are endlessly fascinating to me.
What do you do to regroup on a tough day?
If I can, go do something with my son, shoot hoops, play catch and so on. It gives me a half hour or so away from my phone. Practice, form and fundamentals messages, repeated to him over and over, are great reminders for me as well.
What do you do for fun?
Get out on the water: wake surfing, boating, being out on the water with friends and family.