The Secrets Of Guerrilla Management

Tweet

There was a time when keeping a company alive through its start-up phase required one sort of managerial attitude, and running a going concern required another. These days, however, the lines are blurring. For more and more businesses, the struggle for survival associated with the unpredictable start-up days has become a way of life. Even managers of mature companies now have to be able to adapt quickly to sudden changes.

Advances in technology can make equipment obsolete overnight. Sophisticated communications techniques give competitors immediate feedback on market chanes. There are more entrepreneurs, a greater flow of venture capital, and more corporations clawing for new markets. This is true in businesses ranging from women's clothing to financial services, from print shops to urban messenger services. It is certainly the case in my business, personal-computer software.

As I look over my past five years helping to guide Software Publishing Corp.'s growth from start-up to nearly $30 million in revenues, I realize that we are most successful when we fight for our survival, much as a start-up has to fight for its place in the market. We stub our toes when we become too comfortable or confident.

Analogies between warfare and business are always imperfect, of course, but I do believe that the principles of guerrilla warfare in particular are useful to managers who find themselves in a constantly changing environment. Just think about the effectiveness of guerrilla tactics. Guerrilla fighters, though outnumbered and poorly equipped, can inflict serious casualties on enemy troops. In situations in which political loyalties are uncertain or changing quickly, highly motivated guerrillas can force political compromises or even win battles. In my view, executives who view the marketplace as a quick-changing battlefield can use similar tactics, what I call guerrilla management, to achieve remarkable success.

The challenge is to implement guerrilla management consistently and on an ongoing basis, since it goes against so much of what we're taught. As a company becomes successful and well established, for example, there's a natural tendency to institute controls, establish hierarchy, and accumulate assets. But I think this is dangerous and runs directly counter to the individual initiative that is the backbone of guerrilla management. Long-term planning also conflict with guerrilla management. If you plan ahead more than two years, you lose your flexibility and run the risk of locking youself into approaches that will lag behind new developments. So I dream far ahead, but I don't plan far ahead.

The first step in making guerrilla management work is to establish the right conditions in your company. The second step is to use those conditions to strategic advantage.

The right conditions include the following:

* Troop mobility.

Just as heavy equipment can impede an army in its battle with guerrillas, fixed assets can be a drag on companies in fast-changing industries. Fixed assets not only lock companies into technology that is soon out of date, but they can also be a drain on your most important resource, management energy. Acquiring fixed assets is always a temptation, though, because on paper at least, it seems to cost less than contracting work out.

I know, for instance, that on the face of it we could save a lot of money if we brought certain tasks in-house, such as order processing and fulfillment, disk recording, and instruction-manual production. These are all the sort of operations you would expect a software company the size of ours to do inside, but we don't.

Here's why: suppose we decide in the coming years that our smartest move would be to change the direction of our operations. One possibility might be to become a captive supplier of software designs to a major computer company. We'd leave the production to them and merely collect royalty dollars. If we had our own production and manufacturing facilities, we'd be stuck with a useless investment. Or suppose the technology for recording software disks improves dramatically in the next few years. If we already had a heavy investment in equipment, we might be reluctant to make any changes and would probably end up at a competitive disadvantage.

To my mind, many of the comparisons managers make of the cost of doing things in-house versus subcontracting are misleading. We subcontract data processing of our accounting and our payroll and benefits, for example, and, according to the comparison charts, that doubles our expenses. But the charts are based on some unrealistic assumptions. One is that in-house equipment would be used constantly. It wouldn't. The comparisons also ignore maintenance and service-contract costs, making space for the system, setting up a separate salary and wage administration, and planning meaningful career paths for the data-processing managers.

Perhaps the biggest hidden cost is the management energy that goes into setting up such operations. Management is our scarcest resource, and I want it directed only toward those things that are most essential to Software Publishing's success: engineering and marketing.

* Battlefield communications.

In the heat of battle, a guerrilla commander needs accurate information and the ability to communicate quickly with troops. The same is required of guerrilla managers, so we've set up a number of systems to improve communications.

We've eliminated all secretarial positions, which means we all answer our own phones. You'd be surprised at how much more you learn when you talk directly to salespeople in the field or to distressed customers. So that things don't come to a standstill when we're away from our desks, we each have an answering machine to record our messages. Let me give you an example of how the system works.

Early last year, when I learned in a staff meeting that the new tax laws could have important ramifications for our company, I called our chief financial officer to find out if we had a plan. Since she wasn't in, I left a message of her answering machine. Shortly afterward, she left a message on my machine that our accountant was due in at three o'clock to explain our options. The meeting was set up without either of us being at our desks -- and without a secretary.

 1 | 2  NEXT