Can't Miss Events for 2010

We are just about a month from the Microsoft Worldwide Partner Conference, and I thought it would be a good time to remind you why events like this are so important to us as partners. I wrote an original post on this topic in 2009, and have updated my thinking here based on my focused role as CEO now. There are only a few events on my “cannot miss” list any more:
1. Quarterly HTG meetings
2. ConnectWise Partner Summit
3. Microsoft Worldwide Partner Conference
4. CompTIA Breakaway

Certainly there are a number of other quality events that occur in the channel each year, but to be honest, if I don’t pick and choose I will be attending an event or two every week. And as my role has matured, it has become more important to select the events that will make the largest impact on our company from my seat as CEO. There is a real cost, and a significant opportunity cost to be out of the office, on the road attending events. So why are these my picks and what has changed?

First, let’s talk about roles and how that should impact the events we attend. From my perspective – there is a vast difference between the role of CEO and President/GM. I am finally figuring that out. The CEO role should be heavily focused outside the company – on relationships and industry – externally looking. The President or GM is more internally focused and responsible for the day to day management. CEO’s are strategic while President’s are responsible. Those differences should drive the types of events we attend. Another role we have within companies as they grow is managers. These are the folks who carry out the tasks and make sure the work gets done. They own execution and need to be in the weeds figuring out how to make it happen. As a CEO I stay out of the weeds as much as I can. That is not where I belong.

That said I realize that maybe as many as 90% of the people reading this post don’t have the model of CEO and President as roles split between different people. I know that the singled-bodied CEO/President/GM has to serve many masters. As we celebrate our 25th anniversary at HTS, we have finally moved to a place where we have a different person responsible for strategy vs. operations. I remember all too well how it was when I went to events as the lone leader with strategic and operational focus. So understand – my focus is now from the seat of strategy – that of a CEO.

I have really not spent any time attending operational meetings for a while now. It didn’t fit my job role even as President. That is where we need to start as we determine how to make investments in meeting attendance. I may be unpopular with some because of these views. Everyone wants to attend every meeting. Every meeting sponsor wants you at their event. But it just doesn’t make sense to do them all. So what will I be doing for the balance of 2010?

HTG quarterly meetings are the backbone of my community involvement. At those meetings each quarter I get updated on our business. Connie now owns the responsibility to prepare and present as President but I try to sit in and check out the benchmarking numbers that show how we did relative to the group we participate in, HTG as a whole, and the industry. This also gives me a big batch of fresh ideas to evaluate, as well as a quick pulse on the industry and marketplace which is becoming increasingly important for my role of strategic leader. I also am able to bounce ideas off the best and brightest about pending business model hurdles and required changes – like the cloud – a sort of think tank environment to help solidify thoughts and directions because of deep relationships and an environment that is tailored for those kinds of activities. The days spent at HTG are the best investment I can make in terms of working on my business from a strategic vantage point.

One of the new wrinkles for HTG this year has been the CEO Forum where a handful of companies are gathering every 6 months to focus solely on strategy and the role of CEO. Our next meeting is next week in Denver – and we will be diving deep in to strategic planning and preparation for the next big thing in our industry. I find the chance to sit in a room with 18 brilliant other CEO’s as stimulating and valuable as it gets.

Since ConnectWise is the platform we run our business on, attending their partner summit is a no brainer. There is no one single thing that can impact my business as deeply and quickly as tweaks made to the PSA tool we use. So attending their event, rubbing shoulders with the other users there, and learning how to get the most from that product is a great investment of time. But realize that my time is spent primarily in advisory council, presentation, vendor meetings, press and other modes – while we have other members of the HTS team there focusing on the actual utilization of the product. ConnectWise is the operating system of our business, and I need to be close to all aspects of that eco system to assure success in our business. We need to have a strategic relationship with the company on as many levels as possible as no other part of our infrastructure has the impact that ConnectWise has.

Microsoft WPC – the next large scale event I will attend – is all about building relationships broadly across a large organization. It would take weeks of time on campus in Redmond and airplanes flying back and forth across the country to be able to see and meet with the number of people I am able to connect with during 4 days at WPC. There is no other gathering where I can get access to the quantity of a vendor’s staff that Microsoft provides at WPC. Mornings allow access to executive keynotes that provide a roadmap for the future. Afternoons are filled with breakouts, but sprinkled in all of the open spots are one on one’s and small meetings with program managers, product folks, field team and a variety of others from Microsoft. If you just attend WPC for the content delivered from main stage and breakouts, it is a good value. But if you really take advantage of the time to connect with people, it is an unbelievable opportunity to build relationships with key people across that organization that can be fantastic resources for you to leverage and work with to grow your company.

CompTIA is a new focal point for me as I sit in the the role of CEO. CompTIA provides a lot of great content, but the reason I feel strongly the need to connect is all the things they focus on in an advocacy role for our industry. They are working in politics and thought leadership and will be a significant force in defining what the IT industry looks like. I want to be involved and part of that process. I see it as a significant part of strategy.

HP and SonicWALL are also key partners for HTS and thus on my list of must attend events except when they either don’t hold them or lay them over other events that are more strategic. This year SonicWALL has not held an event, and HP held theirs right on top of the HTG Summit so I skipped it in lieu of what I felt was far more important. That is happening more all the time which forces us to make choices and the need to change how we spend our time. And that is really the message of this blog – you have to really think about what you are going to invest your time in and not just attend an event because it is offered.

Distribution affinity groups like VTN are bubble meetings for me as a CEO, but must attend for those in the day to day roles within a company. I attended VTN for many years, but now have passed that torch to my management team in most cases today.

So the real question is – which events are on your “must attend” list? Mine has changed over the years as my company has grown and my role has changed. My advice is to take a hard look at what your job really entails for your company and then be sure to send the right people to the right events to get the information first hand they need to achieve their job success. Sometimes, often in fact, that is not likely you. I realize it is hard for many to send an employee to a conference or training. Who will monitor them and make sure they are actually doing what they are supposed to? How can I be sure they won’t sleep in or make the company look bad? You can’t know, but if you hired the right people that is not an issue.

The Next Three Years For HTG

I was blessed to spend a couple days this week with the HTG team and advisory council in a strategic planning session in Phoenix. Our mission was to step back and take another look at our course and make sure we were on track. It was a great exercise as we turned over every aspect of the HTG program and took a look at where we were, and more importantly, where we were going to be in 3 years.

After all, we continually press our members to do strategic planning. That has to drive every part of our businesses. It comes down to answering the "why" question. Why do we do what we do? What is the driving force - the end game - the desired outcome? Far too many businesses and organizations go through their lifecycle without ever really knowing why. They get up, go to work, take on risk, hire people, go through the motions day after day without ever really answering the question of "why". That is not the case for HTG.

HTG has a very clear answer to that question. It is the same answer we have had for a number of years: "HTG exists to help our members experience business and personal growth driven by execution". That is our mantra - our ONE GOAL - our castle on the hill. We will have succeeded if we are able to get ALL our members into a continual cycle of growth that aligns with their plans. That growth happens in many ways, at different speeds, across many different facets of our members. But the key is to identify where you want to go, to pursue it with passion, and to reach that goal only to set the next one that will define how you live and lead for the next period of time.

HTG identifies the need for that growth to happen in four areas: business, leadership, life and legacy. That is why our FOUR PLANS will continue to be central to helping us achieve our mission. We are not content to help members drive EBITDA alone. We want people to not only succeed in business, but to also have success in their relationships, in their personal lives, and in creating the future impact of their life driven by their legacy. This differentiates us from most other peer programs who focus on driving bottom line income. We don't ignore that need - it is primary in our mission - but to have a fantastic business without a balance - to lose the important relationships in life because of a single focus - well to us that does not define success and certainly will not produce happiness. Without life/work balance the money really is unfulfillng over time.

HTG will continue to drive our groups and members to leverage their peer relationships. The most important part of HTG is the peer group meetings each quarter. The QBR format (quarterly board review) with deep feedback from fellow peers is key to helping our members really grow. It is that accountability that keeps every member on course. We all face plateaus in our growth process. It is a lifecycle when running a successful business and to be able to lay it on the table and allow others to provide their guidance and share their wisdom is very valuable in driving growth. Benchmarking our financials through our partnership with Service Leadership, and building deep profiles and scorecards will take us to the next level in our reporting and feedback focus.

HTG will work more strategically with vendors and our distribution partner (Ingram Micro) to drive business and member success. We have had some great progress with a few of our vendor partners - notably ConnectWise, IBM, Microsoft, SonicWALL and HP - and we will be focusing on finding ways to work hand in hand to build methods to drive business for all. The good news about this environment is that it is very much a shared goal and in everyone's interest to drive more business. This becomes critical as we begin to deal with the transition that cloud computing will bring to our industry. We need deep partnerships and the ability to leverage the intelligence, data and direction of those who define what our industry becomes. Our partnership with Ingram Micro and CompTIA will be a key part of guiding us through the transition ahead.

There are many more details that will be shared in Dallas in April at our HTGALL lunch on Monday, and in the peer group meetings that will happen that week. But the reality is that our direction remains the same. We have more clarity about the details than ever before, and we will review those as we lay the plan out for our members in Dallas. HTG will remain focused on one thing: business and personal growth driven by execution. We are about helping our members go from good to great - to removing the roadblocks to their growth - and providing an environment through our program that allows us to build the premier set of business leaders in this industry. We are well on our way. Our pursuit of that goal will continue and our team is passionate about getting us there. As Edison said, "Vision without execution is hallucination". We are not hallucinating - we are on course and heading for the end zone. We are looking for a few good partners who want to join the journey. Only those with a passion to grow need apply. http://www.htgpeergroups.com/ for the application.

Dealing with Credit – How to Expand your Line

One of the more common requests the past few months has been around being able to expand credit lines with distribution or financial institutions. The frantic calls usually involve a very large sale that exceeds the minimal credit capacity that most partners often have available. The good news is that end customers seem to be spending money again. The bad news is that many partners have done nothing to prepare for the increased demand and credit needs, so now it goes into crisis mode to try and land that big deal that puts one over the top.

Rule #1 – We live in a new world. No matter what your experience has been previously, the rules have changed. There are much tighter views being taken on credit and the requirements are definitely increasing. So expect it to be more difficult and be prepared to share more information.

Rule #2 – Get credit capacity before you need it. This has not changed. Far too many partners are completely undercapitalized as a company and then wonder why everyone is not signing up to give them unlimited capital. Financial institutions loan money based on a few factors. Like being profitable over time. Seems a little unfair doesn’t it? They expect us to make money every year? Yes they do. They also expect you to leave earnings in the business. That is called equity. And it is necessary to grow your credit capacity. If you spend it all or take it out there is no increased value in the company. Banks don’t loan based on your managed service contracts. They loan based on equity and past performance.

Rule #3 – Prepare to provide a lot more documentation. For a long time, many financial institutions loaned money based on character as much as facts. Those days are rapidly leaving us. You need financials and business plans and budgets and projections and a strong reason to convince them that you will pay back any funds you borrow. They will likely require a personal signature to get credit. It is not unfair or unusual.

Rule #4 – Make money. The bottom line is that it is important to run your company profitably. Look in the mirror and ask yourself if you would loan someone else money that has a profit structure like yours. Many partners show a loss or very minor profit each year. That does not lead to a solid loan application. Your EBITDA % is critical – first to know and understand – but then to grow so you are accumulating some profits. That is why benchmarking is so critical to partners to participate in and understand. How can you improve if you are unsure how you are performing compared to others? Analyze your performance and make sure you are profitable.

Rule #5 – Be creative. There are ways to work around most credit situations. HTG is ready to help you if you find yourself in a position of opportunity but struggling with credit. There are many alternative ways to structure deals so you don’t lose the opportunity. Get engaged as soon as you know the need may arise. It is always better to ask before you need it than to be scrambling when you are against a timeline.

HTG has a special arrangement with Ingram Micro to accelerate credit line reviews based on the following guidelines. Please review the guidance below that they have shared to make the process flow more smoothly when you request a review:

It is no secret that today’s financial markets have undergone many changes over the past twelve months. Two notable examples of such changes have occurred in the housing market and the auto finance business and both have resulted in hardships well beyond their respective markets. The recent bankruptcy of CIT Group reflects the latest casualty of a tightening in the credit markets.

The good news that Ingram Micro wants to share with everyone that regardless of the conditions of the financial markets and the downturn of institutional lending that has begun to plague our economy, Ingram Micro has not changed our lending practices. What this means is that we have not modified our lending practices to reflect the tighter credit that exists in the market today.

The basis of being able to support your credit request are grounded on several fundamental lending practices that we adhere to as a means of marginalizing our losses and thereby controlling the cost of doing business and this, in turn, is reflected in our pricing to you.

If you have already established an account with Ingram Micro it may be that we are not current on mandatory information and your credit analyst may request the following:

1. A current set of financial statements (Balance Sheet and Income Statement) for your company and depending on the information we have on file they may also request your last year-end financial statements or tax return.
2. Additional ways to expedite your request include the following;
a. Along with the financial statements, please consider providing us with any relevant information regarding any significant occurrences and their resulting impact to the financial statement as this will help us better understand your company
b. Any pertinent information about the type of year you are having, etc
c. Information regarding your banking arrangements and credit line as applicable.

Additionally, we want you to be aware that Ingram Micro has established several alternatives to help you close opportunities beyond your existing credit line. These programs generally function on the credibility of your client and as such do require a certain degree of paper work but we will be there to explain it and help you through the process. Please feel free to ask your credit analyst about Ingram Micro’s alternative financing programs and they will be more than happy to take you through each program and help align the right program to fit each situation.

HTS Annual Vendor Planning Meeting

Today we held our 5th annual HTS planning meeting. We huddled in the KC Microsoft office with our field reps from Microsoft, SonicWALL, Ingram Micro, HP and Altigen. The goal was to review our performance from 2009, evaluate what we could have done better, and then create a joint plan across all our vendor partners for 2010. When we started doing this 5 years ago, there was a lot of question and concern. "You really expect us to sit in a room with competitive vendors and share our thinking and plans for next year?". I have always had a simple answer. "It is up to you. You only have to participate if you want to do business with us next year." This is not an optional activity. It is about partnering and creating solutions across our vendor partners to drive business. No one has ever failed to show up. And each year it gets better and better and the walls have come down and we are working to build cross vendor solutions we can take to our markets.

We come away with joint training plans, joint sales models, joint marketing programs - just a unified approach to making HTS and our vendor partners successful. We started our event last night with a dinner for all our vendor participants to allow some pre-game activity - tailgating if you will to help warm up the crowd. Had a nice time at On the Border eating and sharing about life. Today we dove in early - reported on our YTD status - and shared specific information with our vendors. In fact, we give them all our data on our customers and sales activity. Many would say we are crazy to trust a vendor with the keys to our kingdom. Our feeling is that it is only when we truly partner and work together that we will succeed. Jane Cage, our COO and pivot table queen, is able to slice and dice our data in dozens of ways. Our vendor partners can see things in that data we would never see because they work with many different partners in many different markets. We look to them for guidance and best practices they learn from watching others. It is a very valuable experience and well worth the risk in our opinion.

Our team left today with a list a mile long for us to consider as we write our 2010 business plan. And our vendors left with a list we had for each of them for commitments we expect them to execute for us next year. It is a two way street. Both of us are accountable in this, and we will review mid year to make sure everyone is executing. If you aren't planning with your vendors and distribution partners, you are really missing something special. It truly can propel your business. It will put you in a very elite class of partners - not many are willing to be transparent and go to the work of pulling together an event like this. But it is well worth the effort and can help you grow in ways you will never be able to do any other way. As I say over and over - the differentiator between partners is not sales or technical skills - it is understanding the power of strategic relationship management. That begins with planning with your vendors and disty partners. If you want to be status quo - try and do it yourself. If you want to be one of the elite partners in the channel - get over yourself - reach out and work with the folks who can propel you to the next level!

Distribution’s Role in Success

This is the third blog post based on the keynote I delivered at the SMB Alliance event hosted by Ingram the end of August in Charlotte. The topic of this post is focused around the importance of distribution in the success of a VAR in the IT channel. This is based on our experiences in growing HTS and watching other successful VARs build their companies.

Distribution Was a Key Factor

At SCCI, my original company and parent organization today, we made a strategic decision to go deep with Ingram. Our purchasing is almost all done through this relationship, and our participation is primarily with their programs and resources. This decision was not about price. While their prices are competitive with the market, they are not necessarily the cheapest place to source products and services. On any given day you can call around and get better prices, that is if time is not of any value. The decision was based on value and the exact same fundamentals we preach to our clients every day. Don’t make decisions on price (if you do you probably won’t buy from us) but make decisions based on the value that we bring to the party. That is how we need to approach our distribution relationship. Focused on value.

So What Value Does a Distributor Bring?

For us it was based around four key areas:
1. Resources available
2. Investments made
3. Programs offered
4. People involved

There is no doubt that our “all in” decision has been a huge success factor. We have grown from less than $500K in 1990 when the relationship began to over $16M today and Ingram has been a key success factor in our growth. There is no doubt that we would be nowhere close to our current situation without that critical decision.

So How Have We Put the Pieces Together

Not only do we consolidate our purchasing, which gives us pricing but more important relationship, we take advantage of as many of the services and resources available to us as possible. Here are some that we leverage and have used to fuel growth:

1. Tech Support – our sales model leverages Ingram tech support to quote all our solutions or complex products. Every quote goes through tech support for solution validation. This gives us the ability to return product if it does not meet the customer needs. RMAs are down over 1.5% which is huge given our volume. No more long nights listing open box products on Ebay.

2. Solution Center – Our sales teams have made over a dozen trips to Buffalo or Santa Ana to leverage this resource. Every visit results in immediate and long term sales that are significant. You have the opportunity to expose your prospect or clients to a vast array of technologies in an offsite and highly focused environment and good things happen there.

3. Technology Assessment Program (TAP) – a mid market assessment tool that helps probe for opportunities. We have used this tool with over 50 of our clients and it always generates a long term strategy that leads to significant opportunities. It is the gift that keeps on giving.

4. IMSN – the Ingram Micro Service Network provides a mechanism to expand our service delivery. Both by receiving service tickets that drive revenue, and leveraging skill sets or engineering talent that we are not able to afford or don’t have available. They handle the transactional activity and we just do the work.

5. Communities – Ingram offers a number of these, most notably VTN and SMBA. Our company has grown significantly because of our involvement in these groups. They provide the opportunity to connect with peers and industry executives.

6. Agency Express and CAP funding – Ingram has great resources to help grow our company leveraging marketing investments made by vendors. These programs allow us to expand marketing resources and they work with us to create our own marketing plan. It is valuable and enables us to reach into the market with quality information and campaigns.

7. People – this is definitely the greatest value Ingram brings to the table. They have great people all over their organization that understand the channel and how to help us succeed. We leverage them for help with strategy and planning, procurement and marketing, sales and technical issues. They help us make things happen every day.

Far too many VARs get stuck on pricing and split their purchasing all over the place based on the deal of the day. My advice is to find a distributor you can partner with and go deep. Go all out. Make them part of your team and include them in your day to day business. They really can help you succeed. HTS and HTG are where we are today because of the deep investment we have made in Ingram Micro, and the equally deep investment they have made in us. We have many relationships that go 10 or more years deep and truly bring value that cannot be measured in dollars. So take a hard look at how you are doing business with your distribution partners. Are you really getting all you can from them? Or do you need to pick one and go deep?

Not all Communities are Created Equal

This is the second blog post based on the content shared with the HTG and Ingram SMBA group last week in Charlotte. Today’s topic is about the need for a variety of community experiences.

Not all Communities are Created Equal

There are many different types of communities that are available for technology companies to participate in today. They serve a variety of purposes and actually are very complimentary in many ways. You can’t select one from each area, but you should likely be involved in several of these if you truly want to grow your company. Here are some of the communities that are available for you to participate in. Try them out, find what works, and then get involved. There are definite values each bring to the table. But thinking about community doesn’t do a thing for you. You have to get involved. And the more you do, the more you give, the more you will receive in return.

Distributor Communities

Organizations like Ingram's VTN or SMBA focus on high level strategy and executive vendor relationships. At these events and meetings you are exposed to great content from the best speakers available. The rooms are often filled with executives from around the industry and it is one of the best places to connect with many vendors at one time. They also bring many exclusive offers to their members and work to connect members to the many resources they provide.

Vendor Communities

Many vendors have communities that are often focused around events. ConnectWise does this really well. These communities are typically a mix of content around the vendor’s products and services with some general industry content sprinkled in as well. These types of communities are valuable in that they allow you to get very specific answers to questions regarding specific items from both the vendor and their partners as well. You are able to rub shoulders with people using the exact products you use and can get specific on how to leverage your investment to the max.

Peer Group Communities

Many peer groups like HTG focus on execution and skill building. These peer communities are often the deepest and require the most openness as financial disclosure and full transparency are often the basis of going deep together. Most peer groups play a “peer board review” type of role where they are working in each other’s businesses and lives. HTG has a very focused mission - to help our members grow by teaching them business skills, driving execution and benchmarking performance.

User Group Communities

User groups are normally focused on specific technologies. These groups are typically laser focused on practice building around that technology and look at all angles related to success. User groups bring big value to members by helping resolve technical issues, giving ideas that are specific to selling or marketing the technology, and bringing together expertise around this technology.

Partnering Communities

Groups like IAMCP or Ingram’s IMSN focus on sharing of business opportunities and sharing work. This type of community attempts to bring together partners that have different specializations so they have the opportunity to pass and receive leads from complimentary partners. As the world shrinks and the economy becomes global, we see more and more partners leveraging others to fulfill work on their behalf both at home and in different geographies.

Summary

So there is an opportunity for partners to participate in many different communities as each has value to add to the mix. Each company needs to evaluate which communities can help move them toward success for their organization’s needs. Pick one or two or more, and then get involved – deeply involved. HTG encourages participation in other groups like outlined above while we fulfill the specific business needs of our members and stay true to our mission. No one community can meet all the needs out there, so find those that fit your company and get started today.

SMBA Keynote - Community is Important

Ingram’s SMB Alliance group just ended their annual event in Charlotte. It was a very well executed and valuable event for the couple hundred partners who attended, and in that mix were a number of HTG members who took advantage of the membership they have in SMBA because of the HTG-Ingram relationship and partnership. I was honored to deliver a keynote on Friday morning as part of the event, and would like to share a bit of the content I shared since many were not in attendance. I would encourage you now to put a hold on August 29-31, 2010 for the next event to be held in Orlando.

The first topic is the value of community.

HTS (our VAR reseller company) has grown to our present state because of our participation in community. We have been active in Ingram’s VTN, HTG, Exchange, CompTIA and others. Community gives us a lot of value and has been key to our growth. So what kinds of things do we get from spending time with our peers?

Community has provided perspective. Without it you don’t know what “good” is. So many partners operate their organizations in a vacuum and have no way to know if they are doing well or not. Both SMBA and HTG offer benchmarking opportunities provided by Service Leadership for members to be able to compare how they are doing with their peers. That information is critical to be able to make adjustments in how you run your business. Without it, you are guessing at best. The opportunity goes further in a peer group when you really “get naked” with each other and openly disclose and discuss those numbers and benchmarks in complete and total detail.

Community has provided relationships. Because of our participation in channel communities, we have been able to build deep and valuable relationships with key executives and staff at our distributors, vendors, peer organizations, subject matter experts and media folks. We would never have had the opportunity to even meet many of these people if it weren’t for the opportunity to connect through community.

Community has provided guidance. Without it the ability to stay relevant is more difficult. Through community we have been able to share and receive many best practices from companies that have already figured out the problems we were facing. There is no reason for anyone to figure out every mistake on their own. We need to learn from one another. In HTG we talk about the go giver version of SWIPE – share with intent and purpose every day.

Community has provided growth for us at HTS. We have completed 5 M&A’s as a result of relationships in communities we participate in. Good things happen when you spend time with others. It allows for sharing of values and life, and provides the opportunity to get acquainted with other business owners and find those compatible and interested in working together or even joining forces. The risk goes way down because there is a great trust level and deeper understanding of each other.

Community has provided success. That is the bottom line. Our company would be nowhere close to where it is today if we had not got involved in community. It takes work. It requires time. It costs money. But all things that matter do. And the more you invest, the more you will receive. Community is where the Go Giver mentality really works best. But thinking about getting involved, wishing you would take the step, pondering what it might do for your company – none of that matters. You have to take the time and be part of community to gain the benefits. Thinking about it doesn’t count.

Next Up - Ingram SMBA in Charlotte

Next week three of our HTG groups - 6 - 18 - 19 - will be holding their Q3 meetings in Charlotte ahead of the Ingram Micro SMB Alliance event. HTG has had a strategic alliance with Ingram now for over a year, and our participation in this event is an exciting part of that continuing to grow to fruition. We will have 50 or so HTG green shirts in attendance at the event on Thursday and Friday and will experience a great agenda filled with content.

Over 200 partners from Ingram's SMBA channel will be on hand to share and learn together. We will hear from key industry leaders like John Fago and Ryan Grant from Ingram Micro, Mike Parrotino from HP, Justin Crotty from Ingram Seismic, Paul Dippell from Service Leadership, David Russell from MANAGEtoWIN and many others. There will be dozens of vendors on hand to connect with and understand how we together can succeed. Breakouts will cover all sorts of timely topics and feature industry experts. I even get some time on stage to talk about the power of community and how peers can make a difference during these challenging times.

I often get asked about the value of communities like VTN or SMBA compared to that of HTG. My answer is always that they are designed to do different things and are complimentary in nature. HTG is focused on business skills and peer mentoring and accountability. Channel communities are typically focused at a higher altitude and provide significant connections to vendor and industry relationships as well as high value educational content from speakers that HTG cannot afford nor fit into our peer focused agenda. So there is plenty of reason to be part of a peer group like HTG and a channel community like SMBA, thus our strategic alliance. They give partners two legs up on competitors who are trying to run their business in a vaccum and are struggling to know how to survive.

I hope to see many of you in Charlotte at the SMBA event Aug 26-28. I know the HTG and Ingram teams have been working hard to be prepared to offer unprecedented value to those who attend. If you are in the crowd there - no tomatoes or heckling allowed. Wear those HTG green shirts on Thursday, and let's have a great time learning, sharing and go-giving together.

A Word of Correction or at Least Reason

Ingram Micro released a press release today about the relationship with HTG (which we announced months ago actually – July in Houston to be exact) and because of their clout it is on every news service known to mankind. That is one of the benefits of working with Ingram – they do know how to get attention from press and vendors. If you haven’t read it, check it out at these two links currently with more coming I am sure:

CRN Story - http://www.crn.com/it-channel/212500324;jsessionid=OIG5Q1TGN12OGQSNDLOSKH0CJUNN2JVN

Echannel Story - http://www.echannelline.com/usa/story.cfm?item=24025

So there is need for a few words of clarification. Always interesting to see how news comes out. Here is the real skinny.

- HTG is still HTG and will be called such and continues to be totally independent from Ingram – they are contracting with HTG to provide peer group services for their members that qualify
- HTG is managing all peer groups and activities (contrary to what the story in CRN says)
- Much of the activity will involve online groups
- Ingram is providing help with vendor management and backend infrastructure
- Ingram is allowing all HTG members to receive the benefits of their SMBA program and will help recruit partners that are a fit
- Ingram is helping with vendor recruitment, vendor contracts and fundraising

So the reality is that we as HTG are getting the industry leader’s help in building out our program and bringing additional benefits to our members, and we are helping them provide value to partners in their program that want and qualify to get involved in a peer group. It really is that simple. A win for both of us. So if you read the article and got excited – take a deep breath – it is business as usual for HTG. We didn’t sell out or give away the farm. Quite the opposite. Actually it is not just business as usual but business much better than usual with HTG 2.0. We are going to have a fantastic year as we add more and more value to this program. There are some fantastic changes happening to companies that leverage their peers in our community, and the best is just beginning. I look forward to making it even better as we continue down the path together. Have a Merry Christmas!

HTS Recieves CRN Fast Growth 100 Award

HTS was honored this past week by being named to the CRN Fast Growth 100 Awards list for 2008. We were recognized on the 2007 list at #67 but this year have climbed to #24. We are honored and blessed by the good things that have been happening at HTS. We recognize that this is a team award - that management may guide the ship - but there are 85 professionals that are touching and serving our clients every day that make growth possible. The team at HTS has made this award possible, and we are grateful for each and every one of them.

Check it out online at http://www.crn.com/it-channel/209600540?pgno=3. You can learn all about the Fast Growth 100 online at CRN as well. This is a very prestigious award for us to recieve two years in a row. Part of the celebration will be a day in Chicago mid October where we will be able to connect with others on the list and learn from those who have achieved much in their companies as well.

We never quit learning, which is why the Heartland Tech Groups are so important for us. Part of the credit for this award has to also go to the many companies in HTG that we have learned from quarter after quarter. We may be one of the largest in the organization, but we certainly don't have it all figured out and learn continually from each of you as we share our businesses and lives together. Thanks to each of you for your impact, encouragement and participation.

We also recognize that our key vendors - Microsoft, HP and Sonicwall - have made this possible by providing us with great products we can build solutions and services around. And of course our distribution partner Ingram has been a huge part of our growth and success not only by delivering products on time but by investing in our company through many avenues - most importantly connecting us with great people.

None of it could happen at all if we weren't surrounded by fantastic small and medium businesses who entrust their networks and IT needs to us every day. Our team continues to go out and find ways to help our clients succeed which is really the end game for all of us.

So while I am humbled by the award and position we have been given, I also know it took a village, if you will, to allow us to become what we are today - a small business VAR (or solution provider, or system integrator or whatever you want to call us) in the middle of an Iowa cornfield. It didn't happen without the investment of very many people and to each who have been part of that journey I say thank you!

Another New HTG Group

This week we started another chapter in the HTG playbook as we began a new peer group in cooperation with Ingram Micro. As a part of their focus on the SMB Alliance program they offer their VAR's, Ingram is starting to roll out the HTG peer group experience to their membership. They are helping drive the recruitment and making investment in the members that join through their program. This is a happy day for HTG and particularly the channel.

Success for all of us is dependent on VAR's and disty/vendors partnering for success. Part of the key to that success is helping us grow as solution providers in our business skills and giving us tools for success. Ingram is stepping up to help begin that investment in the channel. A majority of us began life in either a sales or technical role. We were good at what we did, got some customers and then decided we wanted to be our own boss. So we started a company and began to have success. Pretty soon we were hiring a person or two and then we had a small group we were responsible for. About that point panic sets in. We have not capitalized our business properly, we just had a few bucks and started doing business. We have no formal business education, particularly around HR and finance. So the value of being part of a peer group to help get answers to questions and realize we are not facing a bunch of unique problems is huge.

We were fortunate to have a couple Ingram folks in the room as resources for our two days. They were able to answer questions, email out documentation on different programs and services, do email intro's to people in different parts of Ingram's huge resource team and just make things happen as we walked through our agenda. A special thanks to John, Janice and Erin for helping partners leverage the resources Ingram has available. So many things are built for us as partners by disty and vendors that we fail to use - primarily because we are too busy to find out they exist. The interaction with people on the street as part of the peer meeting was huge in that the information was timely and enabled us to put it to work immediately. So a big thanks to Ingram for seeing the value and making the investment. I look forward to many great things in the days ahead as we partner together to grow the channel.

So who needs a distributor

I was in NYC this week to serve on a panel for the GTDC (global technology distribution council) http://www.gtdc.org/. This group consists of 32 of the leading distributors of IT products worldwide and this was their Wall Street briefing. The room was filled with disty execs from Ingram, Tech Data, Synnex, Bell Micro, Arrow, Avnet and others as well as a room full of Wall Street investors from the large players. The audience was there to determine the health of distribution and determine investment strategies for the coming year. I came in a sports coat and no tie and was about the only one there not is a black suit and tie. Sort of didnt' fit but they still let me serve on the panel.

There were three panels during the morning session. The first consisted of four specialty distributors, the second a panel of resellers, and the third the four broadline disties. When we went through the introductions it was questionable why I was up there. Reseller number one did over 1 Billion in sales last year. Reseller number two a mere 950 million. I was number three with a puny 17M and the fourth on the panel was a services reseller who did about 4M in revenue. So it was quite a variety to say the least. The main focus was on the economy and how we see our customers impacted. These investors wanted to know if things were going to be impacted by poor purchasing. We have not seen that in our customer base and the overall feedback was that resellers are optimistic about the year. We certainly are at HTS.

It was a good experience and I learned a lot about distribution I did not know. These guys obviously play to Wall Street. One thing I have really began to understand is the power of Wall Street to control the behavior of our distributors and vendors. They cause unnatural activity around month, quarter and especially year end. These guys have the ability to take the stock price down in a heartbeat and there is a real concern about keeping the folks on the Street happy. Seems like the CEO's and other key leaders in the IT sector are very focused on that.

I did learn some facts that are pretty amazing. The GTDC members did over 100B in sales last year (yes that is B as in Billion). So for me to think I have a lot of impact on these guys is just plain crazy. They experienced 14% growth and their gross margin was 8%. They have been making a shift to more value add for us as resellers which is the same thing we are trying to do with our customers. They have a bit over 5% of their sales in operating expenses and that leaves them a little over 2% in margin. Their overall operating income grew by 23% year over year which is good - we need these guys to stay in business or we are all out of work.

Some other interesting facts were as follows:
Desktops grew at 10.6% on a 1B sales category. And people think the desktop is dead.
Notebooks grew at 14.4% on 3B in sales.
Storage grew at 6.8% on 1B in sales
Warranties grew at 72.8% on 1B in sales. There is some real action on this one.

The most amazing statistic I heard was that the 100B in sales from the disties is out of a total sales bucket of 1T (T as in trillion) so they are only getting today abouit 10% of the total technology sales worldwide and the general attitude was lots of optimism as there is certainly plenty of upside for them.

So I encourage you to show some love to your distribution partner(s). Our strategy is to consolidate our purchasing primarily to Ingram and go deep in our relationship with them. We don't buy on price but on value. That is how we sell, so it only makes sense we are consistent and focus on the relationship and value rather than the price. We actually practice what we preach to our customers and it is working out quite well for us. Far too many partners think they have to get the lowest price on the products they are reselling. We just don't find that to be true at all. Splitting your purchasing among a number of sources dilutes the relationship and ultimately the value that a disty can provide. Take a look at how you run your purchasing. Incent people to bring in the most value to your organization and customers, not the lowest price. Price can be extremely decieving and often does not reflect the reality of what value a distributor can provide. We do have a second disty that we use if product is not available to us - now we are aligning with Synnex for that role - but it only happens when we can't source it from our primary. Our purchasing people don't waste time getting competitive prices - they consolidate all our purchases and place the order. That alone takes a lot of cost out of our model and is a part of the value we get from single source purchasing.

Hug your disty - we need them as much as they need us!

Do you have an attitude of gratitude?

Yesterday we wrapped up our HTG3 meeting here in Raleigh at the Microsoft offices. It was a great couple days of sharing life and business together. We traded great ideas, cool technology hints, little known secrets of the web - but most of all we spend a couple days living life together. One of our agenda items this meeting was some "thank you time" where the folks could express gratitude to others in the group for impact that had been made on them and their businesses over the last three years of meeting together. We don't do that nearly enough. Not in our business life, and certainly not in our personal lives.

None of us becomes successful on our own. We are helped by mentors, vendors, distribution partners, other small business IT owners - we get help from all over the place. It may come from reading an article in a magazine or listening to a podcast. This meeting we had Cecelia Galvin, editor of ChannelPro magazine, sitting in as an observer for a bit. ChannelPro is one of the places I get ideas for my business. But how often do I take time to say thanks to the folks who make it happen. HTS would fail without the investments made in us by our key vendor partners. We would have no products to sell, no message to market, no future. Without our distribution partner - Ingram Micro and their team - we would never survive. They not only pick, pack and ship the things we need to have work to do, but their services and interaction with our team make it possible to succeed. The members of HTG, VTN and other peers share so many great ideas that we SWIPE (steal with integrity and pride everyday) that if we stripped the things we have learned from others HTS would be a pretty lonely place for me to work because it would be back to that one man shop I started 23 years ago. We didn't figure out success on our own. We did it by learning from others and imitating what they were doing our own way.

So I want to take time to thank the many who have helped me personally become what I am today and for the investments made that have allowed HTS to become the company it is today. More than that, I want to encourage you as fellow IT professionals to take time to write an email or place a phone call to at least one person who has made a difference in your life and your business. Don't let the opportunity to bless another with a heartfelt thank you slip any longer. Develop an attitude of gratitude and be one of those unique few that say thank you to people every day. It will set you apart. The world is great at taking and expecting. We need to become great at sharing, giving and being grateful. Do it TODAY!

Working with Vendors

We had a great day yesterday in our HTG peer meeting sharing about business and life. One thing keeps coming up over and over the more time I spend with partners - the frustration of trying to work with vendors. I had numerous conversations with partners yesterday and most every day for that matter, about how they struggle to be connected to the vendors their very business depends on for success. It is a strange phenomenon. Vendors are very dependent upon us as partners to sell and support their products for success as well. So it really is a situation where both parties need the other to succeed. But somehow there are so many breakdowns in that relationship it just seems to be a mess for many most of the time. Partners get frustrated and jump to the next vendor thinking the grass has to be greener over there only to find the same end result. The reality is that a partner-vendor relationship is about people and that is a very complicated affair. It is really not all that different than being in a deep friendship or marriage - you have to work at it and not give up. Marriages fail because people decide it is not worth working through the problems to get to the other side. There has to be something better. Partner - vendor relationships fail for the same reasons. They consist of imperfect people who don't always do what is expected (even though those expectations are not clearly defined by either party). They consist of change in personnel and programs and direction by both companies. They are a moving target that require a lot of determination and hard work. But if I was going to sum it up in one word - success in building a vendor relationship requires one thing - COMMITMENT. From both sides - moment by moment and day by day. It is not always going to be pleasant or fun. It will be frustrating. But as partners we need to make wise choices on who we will go to market with, select a handful of go to market partners, and then make a deep commitment to get connected and stay committed to them. We can't move with every change in the wind. We have to be honest when we are frustrated and work with them to resolve it. We also need to be grateful when things are good and thankful when their products and programs have a positive impact. I hear a lot more whining than I do gratitude from the partner community. It is like vendors "owe us" or something. They don't owe us any more than we owe our customers. Certainly we don't like to think of that relationship that way. I treat my vendors like a customer, as that is what they truly are. We are blessed to have deep relationships with our key vendors - Microsoft, HP, Sonicwall, Ingram and a few others. Building those has taken many years and a lot of work, and the process never ends. People change and it is a continual process of going deeper and wider in each of those companies. But it is well worth it. We are blessed to have great vendor partners. It is a win win for both of us. It can happen. But it starts with a commitment and then rolling up your sleeves and getting to work.

Investing in Team

Today and tommorrow the HTS team which I lead is at an offsite in Kansas City. We hold an annual all hands retreat each year to bring together our entire team and get people connected and on the same page. We started this back in the late 90's and have been holding a time away and together for 10 years now. It is one of the best investments we make in building team and positioning us for growth.

During our two day event we focus on a number of training objectives. This year we have training being presented by our key vendors - HP, Microsoft, Sonicwall and 3Com. Our distribution partner will be with us as well - Ingram Micro. We will be learning about their key technologies for 2008 and positioning our team as the go to partners with these partners. This year we are taking a page out of the HP playbook by doing a lot of our sales and technical training in one large room with our sales people sitting with the engineering staff that supports them. This is something we learned from sending a couple of our staff to the HP technology summit in Houston last year that has paid big dividends for us. It will allow these small teams of a sales person and the appropriate engineer to talk about specific customers who can benefit from the solutions being presented as we go through the day. Our objective is to leave Saturday afternoon with a list of target clients that we can go present these solution ideas to and hit the ground running.

Of course one of the main purposes of the event is to have fun together. Tonight we have our opening celebration. This years theme is based around the concept of an orchestra and each of our 8 locations will be presenting a song - yes singing or lip syncing - to the group that describes their office. Last year we did an olympic theme and again had each office do a skit along those lines. It gets pretty creative and crazy but there are lots of laughs and pokes at the boss so I just hold on and see what happens. We are blessed to have a great part of our management team in Jane Cage who is awesome at driving this event each year. She is focused on having every detail in place and making sure each person gets the most value possible being at the event.

So what does it cost? A lot. We pull 80 plus people from the field plus feed and house them off site at a hotel in KC. I am typing this blog post from my room there now as we came in a day early as a management team to prepare and make sure we are ready to get the maximum return from our time together. So if we measure the cost in dollars out, we are only looking at one side of the equation. That is what a lot of us do as partners. But when we consider the impact of training, team building, relationships, vendor interaction, distribution interaction and just overall letting our hair down for some fun - it far outweighs the cost. I encourage you to make and take time to build your team. Having a staff that is connected and together on the same page is a key to success and growing your business. You can't get there alone. All of us are smarter than any one of us. It is about us.....not me.