Monday, December 29, 2008

Stop the Layoffs!!!!

I was the other day at my alma mater's chapel listening to a marvelous Christmas concert that made me think about the situation at Sun and what we should do to reverse it. Well, it was the 11th, but I needed some time to put my ideas in order, and besides that, Ashok is on holidays as all the people at Sun (we decided to stop the engines from the 25th of December to the 2nd of January, everybody deserved a bread, and it is a way
of saving in electricity and other related expenses...), so it took me a little of time to type everything by myself.
First of all, I wish you all a Merry Christmas and a Happy New Year (and that our stocks keeps on rising to where they belong, the $200 reign!!).

Well, those are my ideas. And this time, I'm serious.

First of all, we should stop all the layoffs. You all know that layoffs could kill innovation, and in our case it is quite clear! This seems to be the easy solution, but not always it is the effective one (heck, is this the only thing that is taught at the business schools today?).
But it is also quite clear that our company needs a deep restructuring. What does it mean? Quite simple: we need to change the way we do things. If we lay-off people, we will be able to do less business, so we'll earn less money, and then, what is our 'leader' going to do? Fire more people to lessen the loss of money? This is a way to implode Sun until there is nothing else to sell. And the people remaining at Sun, is frighten with the possibility of being fired, so they think of saving their jobs and not in innovating and making more clever business for Sun.
So, what we need is to put people to do the right things, not to layoff people. Then, summarizing my ideas, I think we have to do the following:

1. 'Dellize' Sun (to some extent!): I've talked about this for a long, long time. We cannot use 6 people to build a $5,000 offer of one or two computers... Dell proved that this can be done via Web. We only need a web to sell 90% of our servers (all except the really big iron). That web application would only have two client interfaces and one maintenance interface (to add new products and change the price of the existing ones). The client interfaces would be just one for our customers, accessible from the Internet, and the other one only for sales representatives, where they can do the same as our external users (it is, customers should be able to buy everything from the web), but they -the sales reps.- could also add discounts for special customers or high volumes, as we usually do to our best customers.

2. Build customers relationships: One of our sales people told me one day: 'Sun doesn't pay us to stablish a long term relationship with our customers'.
This is terribly wrong!!! The only way to win loyal customers and to ensure a continuous volume on sales is to establish those long-term relationships.
This is not happening because of two reasons: Sales people are paid to the short term, so they just concentrate on selling the biggest iron possible in the Fiscal Year, and once done to one company, they go for another 'quick win'. This is the used car strategy, but it only works in the used car business because people buying a used car are not likely to come back in one or two years (or even never!), but our customers need IT infrastructure, software and services forever! If we build a serious relationship, they'll trust us and ask us in the first place when a new investment is needed. So this is key to our long-term success in the industry. And to our survival.
The second reason why this is not happening is lack of resources: we have not enough sales reps. and not enough pre-sales people. Some of our sales reps have 200 or 300 customers... This is nonsense! And the same happens to the pre-sales engineers and the people in the practices. You cannot have just 2 people to cover all the storage pre-sales in an area like California (and much less if they are the software guys). So, instead of firing 6,000 people, we should see where are needed those 6,000 people to boost our business (we could divert people from step 1, 'Dellizing Sun' to do real job). At the end of the day we may be needing people to be hired to cover all our targeted business and not firing them!

3. Simplify the organization: There is too much management in some areas of the company and many of the managers are just redundant. Jonathan, you'd be surprised to see how professional and responsible our people is: most of them need no management (and having an Ikea Human Resources department -you have to do most of the job yourself in behalf of HR- helps a lot in such a culture). So, many managers should be, again, diverted to do real job at the end of the day.

4. Focus on partners, but properly done: Yes, we are not an organization intended to be IBM Global Services where IBM gets most of its benefit (Jonathan, we have to discuss it at the Board, we might change our mind...). So, we have to trust our partners for the business, but we also have to dedicate people to take care of our partners: we cannot have one person per GEM taking care of 50 partners: it means at last that no partner is cared about and they'll end up going to Oracle or HP, because they give that kind of care and personal attention!

5. Focus on innovation: Our R&D department is one of the most admired of the Valley, and our customers appreciate it because they know our technology is superior and give them a competitive advantage. Don't divert money or people from this department, is fundamental for Sun, and most of our field Engineers can also help driving innovation, so help them communicate the voice of the field, and the customers, to our R&D.

6. Focus on CxOs: Most of our customers are geeks, and in some cases they are Chief Technology Officers, but that is all. Ok, we are a company made by engineers for engineers, and that shouldn't change. But our sales people (and then again, see point 2), should focus on the high levels of the companies we are trying to sell our stuff. It is frustrating to win in POCs and demos against HP, IBM, Dell, Oracle, BMC... and then the hard work of 6 months in the customer's CPD is spoiled by a two hours dinner between the CEO of the company we are trying to sell our goods and some Palmisano's emissary.
I said once that the best way for an engineer to get promoted at Sun was playing golf... Now, this phrase stands for our sales reps., but they have to play golf with our customer's CEOs. At last it is all about building relationships with our customers.

7. Advertising: For the shake of God, we need advertising!!!! Yesterday somebody showed me one of those old Darwin ads we broadcasted nationwide in the past, and tears started rolling down my face... Those ads helped us selling a lot of workstations, but most of all, they served us to gain awareness! (By the way, I couln't find the link to that fantastic monkey and Darwin ad, so I enclose a one more recent, but also good).
This is key, we need awareness not only in the engineers or the geek community, we need awareness in the CEO, CFO, CIO and every CxO community because one single reason: they are the ones that have the money! And sometimes they are not biased by the company's geek advice, but because of the awareness of the company they are buying the stuff from: 'I just read that HP Invent advert. I don't know what they invent, but if they spend their money in such cool ads, they must be a rock solid company'. The same applies to Oracle, SAP, Dell...
If you think this is too simplistic, if you want to know the way of thinking of the CxOs of the world, you should read Dilbert. Don't you believe me? Well, I find very simplistic to fire 6,000 people just to balance your win/loss balance when you are loosing some money, thinking this is the way of offering something to your stakeholders, and not going to the root of the problem. So, this is the proof that Dilbert is as good economic reading as a Master in Business Administration in many places.

8. Stop the Layoffs: I said it many times (this is why I stepped down as a CEO, I was against firing anybody), and I'll say it louder if it is necessary, but I cannot say it clearer. Layoffs are not the way to cure Sun, are just a way to make-up a little a short term results, but this will harm our ability to win new businesses. We just need to refocus the people to do the right things, as I explained before.

9. Get Scooter back: Well, I guess I deserve that after offering such a clear analysis on what is happening at Sun and how we can recover the company (MY company, remember that). So, I should be back to tidy up all this mess.

2 comments:

Maurizio said...

As a former Sun employee I have to agree almost 100% with your recipe (well, I'm not so sure about point #9, sorry...).

Seriously, this is the best analysis and recommendation list I have ever read about Sun's troubles, your list of issues and related solutions is IMHO exactly what Sun needs now. Of course, probably they also need to replace old-thinking management with somebody with little more business acumen.

Sun R&D shines. Marketing and customer relationship, that should be the main objectives.

Regards

Fake Scott said...

Dear Maurizio,

What a pity you don't work for Sun anymore, you'd have earned a rise (as soon as I get back to the CEO post, of course).
Keep on with the good job.

Regards.