In the HBR article “Managing the Whitespace” Mark C. Maletz and Nitin Nohria defined the whitespace as
the large but mostly unoccupied territory in every company where rules are vague, authority is fuzzy, budgets are nonexistent, and strategy is unclear — and where, as a consequence, entrepreneurial activity that helps reinvent and renew an organization takes place.
And the blackspace
encompasses all the business opportunities that a company has formally targeted and organized itself to capture.
Taking this whitespace, blackspace, metaphor to our personal life I can think about those short hours sometimes only minutes when we are not focused on our well defined daily tasks and chores. This is the place where we are not our job, dad or mom. It is the place where we take some risk, open new possibilities for growth, and create new social networks. For some of us it is blogging, for others it is developing a second career, maybe experimenting with the stock market, or trying to write a novel. I see friends taking sports coaching training, building a web site, developing expertise in energy efficient home constructions (and blogging about it too).
Similar reasons drives people to operate in the whitespace as in corporates: great uncertainly, can’t take on such projects at work, and when their main career seems going well and there is no justification for making drastic changes.
Although navigating in the whitespace requires a new compass, the rewards from successful voyages can be great
So how to manage your whitespace project?
The authors suggest setting several conditions for successful completion of whitespace projects in the corporate world, most are relevant to individuals as well:
- Establish Legitimacy – we usually get support for our blackspace activities automatically, but when it comes to whitespace project things could be trickier. Legitimacy can be established in multiple ways, the first is by drawing lines connecting skills used in blackspace activities to the ones needed for the whitespace project. The second way is to demonstrate what you are willing to sacrifice in order to meet your new whitespace goals, e.g. sleep, not going out, cutting your spending, and etc. Once legitimacy established, support could come in the forms of getting the free time or motivating at or close to your point of burnout. Since we are talking here about other family members the key elements here are trust and visibility
- Mobilizing Resources – beg, borrow, and steal(time) to get what you need! Taking little time every day adds up, asking for little help from many people becomes a lot – like fund raising – use your social network on Twitter, Facebook, or Google+
- Show Quick Results to build momentum – find the least path of resistance, create prototype, go for the low hanging fruits first. Once you have an accomplishment at your disposal, it is easier to ask for more resources and harder to kill the initiative. It also help to prevent burnout (happens when little or no progress is made despite a lot of effort)
- Have Fun – it does not have to be done for the sake of earning more money or developing a second career. Whitespace projects can be very fulfilling, enhance your social life, and contribute to your personal growth.
In some cases a whitespace project can lead you onto a whole new path and it worth considering moving it to the blackspace.
It does not matter if you work in a company of 5 people or on a team of 10 in a 400k employees corporate, start-up mentality could be created anywhere, and this culture is what differentiate one team from another. In addition to the hard skills I wrote about in How to become an all-round software developer, adopting the right culture is crucial for getting valuable results(or any results).
Here are the 10 core principles of a startup culture wherever exists.
- A Sense of Urgency – the team needs to create value and to deliver it to the market quickly enough in order to stay ahead of the competition
- Risk Aversion- doing something that has never been done before. Something big and meaningful! Not playing it safe. Willingness to try new things.
- Teamwork – dropping everything else and getting up to help a teammate asking for help – including over the weekend.
- Willing to take Extreme measures – Over night delivery – we call it white night:)
- Learning – this is the fun part. In other words, assembling the parachute on the way diving!
- Optimism – it may look and smell like a sausage, but will make it work!
- Volunteering – pull vs. push system.
- Dictatorship of the Mind – The best idea wins regardless who came up with it. The team will rally around the best idea!
- Commitment to the product, the team, the company- Time estimates are always wrong and underestimate the effort. The last reaction to slipping is to move the date and the first one is to stick to one’s commitment.
- Generosity and Serving – reusability, building frameworks, information, tools, and tricks.
- Yea, right- overachieving!!
These principles should be reminded every time a new person join the teams. If there is a mismatch between the team and the new teammate, there is a risk of the entire team loosing the startup mentality. This is the time to bring these principles back to the team’s awareness. This is when the expectation that any team member must have only positive influence on the rest of team should be communicated and set as a goal.
Did I forget a principle?
A sales process does not have a single path. It is not a simple, one time, sequence of events. A sales process from lead to close may go zig zag, back and forth, and in circles. Also, the customer/partner may interact with multiple touch points like, pre sale, tech support, and billing. It is not enough to just develop a single dimension sales funnel with steps going one after another from the wide top opening of the sales funnel to the narrow bottom end. In order to identified who is doing what, and when, where leads may fall between the cracks, and where there are opportunities to up-sale, I recommend mapping the sales process in the following way.
Step 1: Leads generation – the list of marketing activities that will generate leads/contact
Step 2: Referrals - identify where are they coming from
Step 3: Adding to the leads bank – some filtering/de-duping can happen here. The number of active leads is the denominator for the conversion and close rate calculation. This is where Sales and Marketing needs to work together and agree about what counts as a lead. The information needs to be time sliced – usually on a quarterly basis. Some leads that did not progress to the next step in the last quarter, despite multiple follow-ups, can go back to this pool for the next quarter. Others may be stored for a longer term follow-up.
Step 4: The volume of leads to follow-up depends on the amount of leads available and the inside sales capacity. So, here too, some leads need to slip to the next time slice. It is a good practice to keep an eye on the % follow-up = # of leads contacted # of leads available, to see that sale reps keep prospecting. The next step after following up with a lead, is getting the prospect to perform certain activity(e.g. registering to the web-site, downloading a white paper). This step split the process in two: 1. The lead is now qualified, showed interest and maybe other resources from the company to follow-up with her. 2. The lead did not react to the offer and it should be parked in the “to follow’ up pool of leads.
Step 5: Close – the prospect is on-board and productive. Here it is good to calculate the close rate (could be done from the total # of leads or just from the leads that the sales reps contacted). Here again, the prospect can go to the “to follow’ up pool of leads if the deal was not closed. Also, another base practice, and this is crucial for SaaS company, is calculating the renewal rate to monitor retention. Resigning customers should be added to the “to follow’ up pool set with high priority, and should be called as soon as possible. On-boarding is a crucial step so monitor the retention rate relative to new customer in addition to the overall customers base renewal rate.
Step 6: Closing up-sale opportunities. This is where other customer touch points possibly contribute to higher close rate. Calculating the close rate here could be tricky. It is not simply calculated based on the # of leads from step 3, but also taking in consideration the entire customer base. One of the key question that SaaS companies struggle with is how to identify opportunities for up-sale. This is where segmentation becomes crucial, and foresight thinking about what data to collect about the customers is the key.
One more thing to consider, referrals to generic leads are like jet fuel to the gas you fuel your car with. There is no question whether to invest in referral program, but it is hard to know how much. Here too, the data you collect about your referrals can help you to come up with the right answer.
In summary, the sales process looks more like a ping ball machine than a sequence of inputs and exits criteria. If your sales process is even more complicated than my example above then it is even more critical for you to spend the time mapping it.
Mapping the sales process can help with:
- Identifying where leads should be followed-up, and by whom in the organization
- Where leads should go back to the short term or longer term pools
- Where and what data should be collected along the way
- To identify opportunities for up-selling
This exercise can go a long way increasing your you revenue as a result of an increase in your close rate.
If you are looking to learn from the best how to focus your effort in 2013, just google “three words for 2013“.
My three words for 2013 are: connect, story, and service.
Connect: I would like to learn ways to connect better with my family, co-workers, classmate, friends, and prospects.
Story: This goes both ways, to listen openly to other’s stories as well as to invest in developing my storytelling skills. Both can help to support the goals wrapped in the first word(connect).
Service: To be of a service delivering value to the people I connect with.
For me the “soft skills” are the hardest!
On the physical side consider cleansing your body from all the processed food consumed in 2012 – I plan to try this method.
I’m now two and half years into the part-time MBA program with Boston University with a little less than one year to go. One thing that surprises me the most is the lack of Sales Management class in the core program. I was educated about managerial accounting, finance, operation management, organizational behavior, marketing, economics and corporate strategy, but not a word about sales. When I got to the time to select my electives I knew that something was missing, so I found only one class called Entrepreneurial Sales Strategy (that I later heard was offered only every other year) and signed up for it. Only one class in the whole program that talks about sales. When I checked with my friends who went to other universities for their MBAs I was even more surprised to hear that this is the common case. Sales is not part of the MBA program!
The irony is that Sales (as I was reminded by my Sales Management professor during our very first class) is the only activity that contribute to the positive side of the income statement.
I’ve learned a ton about running a business so far, but this class was the most transformative one in the MBA program for me. It does make sense to allocate this class later in the program after understanding key frameworks like DuPont analysis, Five Forces analysis, the time value of money, pricing, marketing positioning, among others, yet sales management can help to tie all these things together in a coherent manner with a very clear goal in mind.
Here are some of the key subjects from the Entrepreneurial Sales Strategy class:
- Business Models and Value Propositions
- Building a sales organization – hiring, compensation, organization, and management
- Direct, Indirect and Channel Sales Strategies
- Importance and development of strategic partners and alliances
- Understanding the Selling Process and Sales Cycles
- Implementing Pipeline Management Principles and Forecasting Techniques
- Repeatable Sales Models – what they are and why they are important
- Keys to successful selling including Solution (consultative) selling vs. product selling
- Sales Management, Positioning a sales force as a barrier to entry - differentiation and competitive advantage
- Major Account Selling, Team Selling, Global Sales Strategies
During the course we participated in two team sales activities:
- Sales Challenge – the objective of this activity was to engage in a complete sales process including building the value proposition and sales funnel, leads generation, leads qualification, cold calling, navigating the target organization, and closing. We had to convince a VP of Sales from a company with over 100MM annual revenue to participate in a panel with more VP of Sales from other industries at the university in one of the class evening.
- Sales Audit – each team was assigned a company(a real one), to execute a complete sales strategy and management auditing consulting project, and to come up with recommendations. We got the chance to meet with the CEO and VP of sales in the assigned company, to hear about the strategy and sales activities, and to gain access to real business data.
- The Sales Audit project was one of the highlight of my MBA program so far, I learned during this activity more than I could ever learn from case studies discussions in class. This company is a young SaaS company (Software as a Service), selling mainly through partners (MSP/VAR) and growing their booking more than 45% in 2012. We mapped their entire sales process, identified areas for improvements, and came up with two major recommendation plus other areas for further research. After delivering the presentation in class we also travel back to the company to report our findings.
The key outcomes from this projects were:
We made a difference – the company is actually revamping it sales process following some of the input from our recommendations.
We build great relationships with the CEO and VP of Sales
One of our team mate who graduated after this class was hired by this company
We earned a real consulting experience and learned how sales works in the real business world
We got an A
I know I did good choosing Boston University for my MBA program!!
In summary, the motivation for writing this post came as a result of a comment I heard during our second visit to the company that we audited, it came from both the CEO and the VP of Sales saying that this material was never taught in their MBA program(one of those was done at Stanford). I believe that Sales Strategy and Management are a core managerial skills, even if you end up working as a general manager, business or financial analyst, in operation, it is important to understand your value proposition to the organization and how your activities contribute to the sales activities. For the ones going for an MBA program with the aim working in Sales, Marketing, Strategy, or to start their own business, learning about sales is a must!!
Google’s search engine is the 21st infrastructure.
Search is infrastructure
When we think about infrastructure on a large scale we think about roads, train tracks, ports, and utilities – all things that are essential to the smooth running of our economy. Online searching has become so essential to our lives today that I think that we should add it to the traditional world infrastructure list.
Building and maintaining a search engine is so expensive and labor intensive that it requires the same kind of planning and upkeep that, say, the Golden Gate Bridge does.
I see two similarities between traditional infrastructure and search engines. The first is that a search engine is a mission critical system. The second is because the cost required for building and maintaining a good search engine is enormous—just as the costs are for ports, railroad tracks, and the electrical grid.
Mission critical system
Can you imagine a week without Google? Think for a moment how many times a day you use a search engine for a task. Life would be much harder without it. We are using a search engine to find a place, a person or a job. It is the same case when looking for information about a disease, a company or a product. Modern search engines also help to find directions, contact info, stock quotes and innumerable other things. I can’t think of a day without using a search engine (mostly Google but others too). Metaphorically search engines take us from one place to another (like planes, trains and boats), and if well designed and maintained they can save us an enormous amount of time and energy. But if that is not the case, they can be a big waste of time!
The mighty task
The web is big and expanding. In February of 2007, the Netcraft Web Server Survey found 108,810,358 distinct websites (not pages). In March of 2009 (only two years later) the number had more than doubled, to 224,749,695. The number of web pages is more accurate than the number of websites but I think that the numbers above tell us enough about the size of the web.
New blogs are popping up every day, and blogs can post in some cases multiple times a day. With the recent introduction of microblogging services like Twitter and other personal life streaming tools, content is growing even more rapidly. The information is also dynamic: websites go down and pages are being constantly modified. Blogs allow people to leave comments over time. Content is much more than text and can include video, audio, and images.
A search consists of many steps. It usually starts with crawling – getting the data. This is a mighty task that requires building an army of web crawlers to spider the web. It requires a crawling plan using sophisticated algorithms looking for new content and also for keeping the stored ones up to date. It necessitates an immense amount of storage space and heavy computation resources.
The other tasks include indexing, lingual processing and ranking (for relevance and popularity). (If you are interested in learning how Google scales this process by breaking down tasks even further, read the following blog post about Google Architecture)
It is impossible to compare entirely, but it seems like building and maintaining a large-scale search engine is as hard as building a new power station and probably costs as much too.
Living with Monopoly
The purpose of this section is to get you thinking about my analogy and what it might mean.
The Monopoly question – do we need more than one search engine?
In some ways, a search engine industry might fit the definition of what’s known as a “Natural monopoly” (wikipedia):
- “…it is the assertion about an industry, that multiple firms providing a good or service is less efficient (more costly to a nation or economy) than would be the case if a single firm provided a good or service.”
- “It is said that this is the result of high fixed costs of entering an industry which causes long run average costs to decline as output expands”
Google could be defined as a natural monopoly. It now has more than a 70% market share.
The first definition raises the question: why do we need to more than one search engine provider? The second could explain why only one provider may survive.
Why we don’t need more than this one?
I’m personally not concerned about Google’s monopoly power to set rates. As a consumer I don’t feel any pricing power:) but maybe the companies that pay for ads do.
I do have a couple of concerns: The first is about the cost to the country and the world of maintaining a search engine or duplicating the effort in a large scale.
The second is that because it is such an important and world critical system, more stakeholders around the globe should be paying attention.
High Energy cost
Here is an excerpt from Data Center Energy Forecast – Executive Summary – July 29, 2008.
“As of 2006, the electricity use attributable to the nation’s servers and data centers is estimated at about 61 billion kilowatt-hours (kWh), or 1.5 percent of total U.S. electricity consumption. Between 2000 and 2006 electricity use more than doubled, amounting to about $4.5 billion in electricity costs. This amount was more than the electricity consumed by color televisions in the U.S. It was equivalent to the electricity consumed by 5.8 million average U.S. households (which represent 5% of the U.S. housing stock). And it was similar to the amount of electricity used by the entire U.S. transportation manufacturing industry (including the manufacture of automobiles, aircraft, trucks, and ships)”
Google is making an effort to reduce the cost of their data centers’ energy bills. My concern is that having multiple Google size search engine companies around seems as wasteful as pooling multiple power lines to every home. I also think that the energy consumption should be distributed across the globe since the search engine serves the entire world and not only one country.
What will happen if Google goes belly up?
I know that this seems radical and almost unimaginable at this point, but what if one day advertisers find another place to buy ad-space other than SERPs? Our lives are so dependent on Internet search technology that if no one can pay for the cost of maintaining one, that would have a direct impact on the world economy.
Maybe we need a different solution?
-Search is a very large task
-Search is costly
-Search has become essential to the modern economy
-Google is effective but it is a monopoly
Yet today it is so mission critical that we need to watch it closely or maybe even break it up.
One way to deal with a mission-critical natural monopoly is to turn it into some sort of government-granted monopoly. In this case it is not the government but some sort of world organization that can enforce regulations and demands like:
- More energy efficient data centers
- Better storage solutions
- Crawl to cover more ground – deep web
- Accounting governance and building cash reserves.
I know that this might sound like a radical idea. Please remember, the purpose of this article is not to support a return to a controlled market but to get us aware of the cost, power and dependencies associated with search engines.
Explore alternative search technologies (similar to exploring alternative energy sources)
In addition to possible regulations, there are other ways to address the functions that a natural monopoly like Google currently serves:
- Split the search task like crawling, storage and indexing and distribute them across multiple venors.
- Create better crawling algorithms – Cuil claimed to find a more efficient and scalable ways to crawl the web (it is not about Cuil it is about the idea).
- Real-time search (conversational search) – If you believe that real-time search is the future than you already know that maybe there is no need for deploying such a huge crawling tasks in order to find great content. Let the crowd do the job.
- p2p - distribute the the crawl, indexing, ranking and storage, across many search users. This technology mitigates the single point of failure risk and leverages existing unused computational resources.
The new president of the United States, Barack Obama, is leading his 21st Century New Deal with the hope that big investment in the country’s infrastructure will spur economic growth and prosperity. Online search has become a mission critical task in our lives. It has an impact on the world economy and energy consumption. I think that it should not be overlooked. To the traditional infrastructure list of transportation, telecommunication and energy we should add the 21st century infrastructure – online search engine.
In the same way that nations monitor the condition of their infrastructure, they should be looking at search engine implementations and technologies.
A few points that I like you to take from this post are:
- A search engine is more than software
- The tasks of building and maintaining new search engine on a large scale have an impact on society
- Search is a global objective
- We are heavily dependent on this technology
- Google is a monopoly – for better or worse.
Do you share my opinion that search engines have an impact on the world economy?
Do you agree with me that Google is a mission critical system today?
Should we be worried if someone might duplicate the task of keeping a large portion of the web crawled, stored and indexed?
**This blog post was published before on AltSearchEngine.com (my guest post) and it is no longer available so I decided to publish it here again.
Picture credit to my favorite artist Ron Shoshani