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BMC and the anatomy of a successful turnaround

Rob Enderle | June 23, 2014
Most tech companies trying to turn themselves around start with the products that customers don't want right now, not the products those customers will want several years from now. That's why most turnaround efforts fail. BMC, having gone private and assembled a new executive team, seems to have learned its lesson.

I've been fascinated by corporate turnarounds ever since I architected one at IBM, only to have the executive in charge agree with my plan but decide it was too much trouble and sell the business unit in question ( ROLM Systems). I also helped evaluate buyers and provide a report clearly showing that selling the unit to Siemens would be a catastrophe. Of course, that's exactly what the executive did — and it was a catastrophe.

I've covered a number of turnaround efforts over the years and closely follow Dell, HP, BlackBerry and BMC these days. Recently I had a chance to talk to Paul Appleby, BMC's executive vice president of sales and marketing. The meeting took place under NDA, but I can give you some general impressions. (Disclosure: BMC is a client of Rob Enderle.)

Telling It Like It Is
Sales executives often try to blind you with BS, for some reason thinking that folks are incredibly gullible. Appleby was candid and BS-free, which allowed me to ask a series of pointed questions about his background and what was happening at the company.

Appleby mostly mirrored my beliefs on how to do a turnaround, some of which are proven best practices. The best part of candor, though, is that it builds trust. That's core to a leader trying to execute a process that generally fails because of investors. Because if employees don't trust you, you'll still fail even if everything else is executed excellently.

Looking to the Future
Appleby has his eye on 2020. This is important in a turnaround, as it takes between five and seven years to pull it off. If you focus on the tactical as a template for the turnaround — in other words, current market needs — you'll likely find, assuming you even complete the effort in the first place, that you're now five to seven years behind the market.

Now, predicting what the world will be like several years from now is virtually impossible with any degree of accuracy. However, you can identify current trends, project them forward and refine your vision so that, when the future is now, your company is with it. Appleby fully understands this process and had implemented it at BMC.

Drawing on Experience
Experience with turnarounds, of course, is a key foundation for success. Appleby has an impressive pedigree in this practice and cited three instances where he successfully managed turnaround efforts. You learn a great deal when you execute one of these. (Most seem to learn never to do one again because their efforts failed.)

Appleby understands what it takes to pull one off, which means he lacks the uncertainty most executives experience when coming up with a plan and then executing it. One common misstep is simply avoiding a plan in the first place. Appleby knows you can't do a half-hearted turnaround and suggests that his team has properly provisioned its efforts.

 

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