As 2010 gets off to a roaring start (well at least compared to the anemic start of 2009) it is time for all good business applications partners to evaluate what knobs need adjusting to “trim out” their performance for this year.  I think it is fair to say we are off the bottom of the worst recession in years, but it would be overstated to say we are going to return to 2007 growth rates anytime soon.

So with that in mind it means that cash to fund growth must be extracted from ongoing operations, and this is the place to look.  Let me first say that having covered the world last year for Microsoft we can clearly identify the top three issues that are plaguing partners bottom line today. They are:

1. Lack of mid-level management to assist the owners with driving the business. When times are tight, you need extra hands to drive growth and change.  When you look around and everyone is out billing, it makes it hard to capitalize on the new opportunities being presented. So a balance has to be achieved where a true leadership team can emerge at the same time, making everyone at minimum a break even proposition.
2. Organizational design. Providing a small span of control and compounding it with non-revenue generating goals is eating the bottom line of many partners right now.  PLEASE STOP THAT.  Taking a senior person (read: expensive), making them a non-billable resource so they can “manage” a team of 4 – 6 people is really impairing the ability of many partners today to do anything.  To make matters worse, in core areas of focus like sales, it is even more dire, we mash together 3 roles into one, then wonder why no one achieves the plan.  These are two structural issues that left unattended, will make partners EBITDA in the low single digits.
3. Lack of visibility into core leading indicators. We are all good at looking at the bank balance and P&L after the month has passed, but this is like driving in reverse down a high speed freeway.  After conducting dozens of deep dive evaluations of partners this year across the globe I can say that as an industry, we have failed ourselves by not building in systems that show us leading indicators.  Things such as new marketing “pulses”, learning and growth for our technical teams, customer satisfaction and the process improvements we are actually gaining on.

I believe 2010 can be a year for growth in our industry. But we have to stop making the same mistakes over and over again, and start focusing on the core drivers that increase profits.