Editor’s note: This is the latest in a series of interviews with leading technology executives in the Carolinas and Georgia about how companies can survive – or grow – in the “nuclear winter” economy of 2009.
CARY, N.C. — Jim Davis, chief marketing officer and one of the top senior executives at SAS, must maintain a global perspective about the ever-flattening and slowing world economy.
In the darkness, he said, the winning executives are those who will identify and seize opportunities.
“The winners will be the companies who knew how to identify opportunities in the downturn,” Davis explained. “
“Survivors understand their market and themselves well enough to reinvent themselves, to capitalize on their strengths and minimize the liabilities.”
Davis also said executives need to be smarter.
“Quit wasting your time and resources on initiatives that aren’t profitable,” he explained. “Quit wasting energy solving problems that don’t matter.”
The world’s largest privately held software company entered the fourth quarter headed for another record year of revenues north of $2 billion. But even SAS acknowledged some project cancellations or delays after the September Wall Street collapse.
Facing his own challenges, Davis shared his insight into how SAS will deal with 2009 and how other entrepreneurs and executives could as well.
What is your advice to fellow and would-be entrepreneurs entering the New Year – conserve, cut or invest? None of these? Please explain.
Resolve to improve your decision-making. Whatever industry you’re in, start basing your decisions on facts. Determine the facts by harnessing the data you already have with a business analytics framework. If you’ve been in business awhile, chances are you’ve accumulated plenty of data in an astonishing array of formats. Get a data-integration strategy, optimize processes and establish a business analysis framework to move your business forward.
If you’re a would-be entrepreneur just starting out, two things:
- Make sure you’re creating a product people want.
- Create a business analytics strategy to lay a foundation for sound decisions. It’s the little black dress of business savvy. It fits all industries and never goes out of style.
Who will be not just the survivors but the winners still standing when the recession ends?
The winners will be the companies who knew how to identify opportunities in the downturn. Survivors understand their market and themselves well enough to reinvent themselves, to capitalize on their strengths and minimize the liabilities.
What is your biggest fear/concern entering the New Year?
I encourage organizations to look for the opportunities the downturn presents. Now isn’t the time to withdraw. It’s time to focus, align and make the most of existing resources.
Conversely, what are you most optimistic about?
In 2008, we increased revenue and did not lay off any employees. Why? Because SAS has a solid value proposition. We are not in the business of positioning technology in the market place. We are in the business of providing value-based solutions. There is a big difference. It’s all about quantifiable business benefit. Gartner said IT spending this year will be flat, except for data management and business process management. Those are areas where we are strong, which puts us in a very good position.
In what areas do you see opportunities for growth in 2009 – Means to help companies become more efficient? Enabling technology to help people do more with mobile devices? Investments in clean technology? Further evolution of the Web? Tell us what you think.
Companies will more carefully scrutinize their decision-making processes to ensure technology investments drive them forward. That’s why risk, optimization and marketing automation will be big this year, as will turnkey software-as-a-service solutions. Companies shouldn’t buy technology for technology’s sake. They need to make the most of what they already have – staggering amounts of data – to optimize the bottom line and grow the top line. We build solutions in an iterative fashion, through a business analytics framework that grows over time so meaningful decisions can be made quickly. We can show them how to save and make money.
If the IPO markets remained closed, how can life-science, medical device and other capital-intensive startups best generate cash to keep investors onboard and the company doors open while pursuing R&D?
If you’re trying to stay in business, focus on satisfying the 20 percent of customers who bring you 80 percent of your revenue. Quit wasting your time and resources on initiatives that aren’t profitable. Quit wasting energy solving problems that don’t matter.
What do you believe will be executives’ biggest challenges this year – Financing? Growing sales? Balancing the cutting of costs with need for R&D as well as consumer support?
All of those matter. The question is how do you focus and align your organization to balance these areas? SAS has had 33 years of continuous growth because we’ve put employees and customers first. Invest in those two, and the revenue follows.
Will venture financing tighten, especially for startups, as recent surveys have indicated? If so, how do you (or) your clients (or) your portfolio companies adapt?
Whatever business you’re in, understand what works in this economic climate. Focus. Align. Make sure whatever you’re working on provides value. In this economy, it’s not necessarily true that everything that has made you successful to date will keep you afloat in the coming months. Challenge the status quo.
Do you believe off-shoring of jobs will increase this year? Please explain.
I don’t know. Linda Cohen at Gartner told CIO.com last month that downturns lead to more outsourcing, not less. Tough times do force companies to think about what and how they do things. I encourage them to think long-term. If the deal isn’t going to benefit customers or your organization for the long haul, don’t do it.
What advice would you offer to job-seekers in such a tough environment?
If you’re job hunting or have been laid off, consider adding to your skill set. A great example, if you’re in the Triangle area, get a master’s degree at N.C. State University’s Institute for Advanced Analytics. Jim Goodnight helped establish this 10-month program, and the first 23 students graduated last May. Within four months, every student was employed, and the average starting salary was $83,500 – during the worst economy since the Great Depression.