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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.

Start With the Customer
In many turnaround efforts, the executive team starts with the existing product set in order to formulate a strategy. That's backwards - if the product set properly targeted customers, you wouldn't need to turn around. Appleby believes, as I do, that you need to start with customers, define solutions around them, create the perfect offering on paper and, only then, start looking at the existing products to see how they fit.

Remember that Steve Jobs basically recreated Apple's entire product set during his turnaround and focused on consumer electronics, not the PCs that Apple had been known for. Had Jobs tried to build a strategy using printers, PDAs, cameras and PCs for both business and consumer — all of which Apple sold when he took it over — he'd have never created the iPod that transformed the company into the world's leading consumer electronics firm.

This goes back to the directive Thomas Watson Jr. left with IBM: Be willing to change everything but what you stand for. If you start with customers rather than products, your mind opens to what needs to be done, which helps you create a strategy that will actually work. You have to be willing and able to reinvent the company around the customer. That appears to be BMC's secret sauce.

The New, Private BMC
BMC has gone private, which has allowed the company to approach its turnaround much more aggressively than a public company beholden to shareholders and quarterly earnings reports. That, plus an impressive executive team, points to a high likelihood that the firm will succeed.

BMC already anticipated the need to protect IT with efforts such as MyIT and the Cloud Planning Workshop, both of which enhance IT's ability to survive and even prosper during the cloud age. Expect BMC to top these offerings as its turnaround effort dovetails with the changing world.

 

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