I think it's great that you recognize the need to have a sales angle to your business. Many engineering management teams don't think about this until it is too late. What you need though is not just someone that is savvy in sales but also savvy in marketing. I don't know that they need to be the President/COO, but they need to be a manager that is qualified and is given the latitude to do what needs to be done with marketing and sales.

Where you can run into trouble is if you hire someone that is all sales and doesn't grasp the development side. You need an all around person that understands that sales people will say that they can't sell a product without X,Y,Z features and that person is able to determine if those features are the problem, or the sales reps are making excuses. When you get someone all sales and they go along with that you will alienate the developers, which is what I think Dave is trying to say.

Lisa Moody
JewelCode Corporation

So you have a custom application division, and a vertical division? The cultures in each of these divisions are very different. They serve different markets with totally different needs. In Moore's books, he talks about killing off business units when you change markets. That means that to do what you are attempting to do really means having two companies where the executive plays the holding company function.

The culture differences are even more significant when you consider what Christenson talks about in his "Inventor's Dilemma" books. The problem is that the metrics each of these business units operate on are very different. So a stronger central marketing person is the wrong answer for you. What you need to do is build strong marketing and strong sales organizations in both business units. Notice I broke out marketing and sales. And, I did so in both business units. The head of each business unit should be qualified as an operations officer like a COO and/or CEO.

The vertical business unit presents another set of problems as well. Are all the verticals in the same sector? And, given that they shouldn't be in the same industry, there will be cultural differences across sectors and across verticals. This isn't easy. Within sectors the buy shouldn't be that different, but if you sell to for-profit, non-profit, and govermental sectors expect wide differences. These differences can't be managed by the same management, nor sold by the same sales reps. So partition them into separate divisions.

Another problem is that of central services. Central services should be minimal, because they will insist on their own culture, and that will conflict with the other cultures. Don't believe for a moment that corporation has a single culture, particularly holding companies.

Next, you need to address why your custom application division apparently is under performing. You need to organize this division to sell what it sells, consulting services. So look to the big consulting services for an appropriate structure. They usually have practice managers that own a particular methodology vector. They will also have sector and vertical industry managers. A consulting gig is managed via the matrix of these two types of managers: the practice manager, and the vertical manager. Consider the practice manager to own the infrastructure and its development. Every consulting gig should increment the methodology vector. Then, the vertical manager maximizes the PROFIT from their vertical. You have to gate your market cap in terms of customers and dollars to ensure that a vertical is "worth it." Don't do a gig for cash. Do a gig, because it pushes the adoption of your underlying technology. Do a gig to get products built.

Once the technology is productized during a custom gig, you will use the two years, or whatever the exclusive is to get ready to enter the vertical. This is the problem for the vertical management. You may want a launch capability in the vertical division, but again be careful of central service culture wherever they happen.

Don't buy into the myth of a single monolithic corporate culture.

Beyond that if the division sales management isn't selling, fix it! Hire, Fire, change the compensation plan, whatever. Fixing the cultures will take time. Fix the sales situation today. There is no excuse.

And, no the custom app division isn't an engineering component. The enginerring component is R&D and should be creating the technologies that the practice manager pushes into the real world. The custom app programmers and the R&D programmers cannot be the same programmers, because the skills are very different! The latter will tend to be IT types. A programmer is a programer is a programmer, NOT! Culture problems again.

R&D can work for the owning executive. But, their customer is the practice manager, not themselves. R&D will need to be market driven through a product manager from marketing, not a technical product manager. That product manager will probably have to move from division to division with the product. The market transitions means that there would have to be organizational handoffs from one market to the next.

It gets messy. But, you should always have a new technology in the pipeline, so that when you have sold half your market cap, you are ready with a new technology. Selling half your market cap is where most companies miss their target after going public and end up getting punished by the financial markets. That would be the moment when you move from early mainstream to late mainstream markets in the technology adoption lifecycle.

Or, do what the book says and focus only on one market at a time, rather than trying to keep the earlier organizations in place. You do need 8 verticals, so custom app and vertical orgs would have to exist simultanteously unless you sold those custom app gigs closer together like one every six months or better. Then, once you had eight, layoff those folks. They won't be that much help in the vertical. And, no again custom app programmers and vertical app programmers are different programmers.