The transition from working in a large company to a small startup can be particularly jarring, nearly as jarring as developing a small startup’s culture, or transitioning it between a service and a product orientation. One person with particular experience in guiding all of these transitions is Diana Hage, former senior director at IBM and current CEO of RFID Global Solution.
ABERMAN: So, how easy was it to go from being a senior manager of a large company, to CEO of an emerging business, particularly one you didn’t start yourself?
HAGE: Well, I’d say the first thing I noticed was the acceleration of time. Every project that I’d worked on within the context of IBM, suddenly every quarter was the equivalent to a year or two years, you know, within a larger company. The second thing I noticed was the resource dearth, and just the challenge of not having administrative and financial resources that I was accustomed to. You know, and then I’d say working with a founding team, and stepping into a company that I didn’t start, was an interesting navigation of embracing their vision and what they wanted to achieve, but looking at, how do we scale this business and grow it?
ABERMAN: That’s very interesting to me, because my experience as an outside investor and a board member is, I’m often in a situation of trying to coach founding teams how to change how they’re approaching culture, because frankly, with a lot of businesses that are started inward-looking founders, culture’s something they really don’t know how to develop.
HAGE: I found that joining the last two organizations I’ve been part of as a startup, I was embraced. I was welcomed by the board, welcomed by the management team, but trying to shift a business that’s been a services and a technical engineering company, into one that’s focused on product and building an asset that we could repeatedly sell to the marketplace, was the biggest challenge. You know, it’s moving away from the easy, consistent, revenue of each new win, and the exciting win of closing a deal, into a longer term time frame and planning style.
ABERMAN: It is interesting because, products ultimately are really profitable because they sell themselves. But because they sell themselves, you don’t get the dopamine hit of closing a sale.
HAGE: That’s exactly right. You’ve got to invest for the long haul, and sort of look at that future product that you’re building for a market. But the interesting thing is, as you work with clients, you get requirements, and you can shape your product, and they’re funding it, and it’s real time build. But then you get trapped into building those features that are uniquely appropriate for that customer at that time, and you might miss the other 20 features on your wish list that you don’t have time to build.
ABERMAN: Yeah, that is really the challenge of being a service-oriented business. If you’re good, you want to do what the client wants, and you end up building what the client wants. People will talk about culture. As a CEO, give us an example of the kind of tactics you use to change a culture. I assume it’s not just pizza parties and clown hats.
HAGE: We started with bringing in outside advisers to host our January kickoff sessions, and really using those external voices to ground us in what it takes to really be on top of the market, really focus on technology trends, and do broad surveys. We’d invite some of our clients in, trying to set up small user groups, to get that frame of reference to be a broader scale, and to look at us within the context of a market. So, really bringing in outside viewpoints was the first thing we did to try to focus on where we aim this company.
ABERMAN: Did you do things like change compensation, or promotional practices, to reinforce values, also?
HAGE: I’ve tried to bring lightweight versions of large corporate practices into a smaller business. One thing that you don’t have in a small company, often, is a defined career trajectory. So, for folks in the D.C. area that might be accustomed to, every two years, having a promotional opportunity, we defined seven levels of opportunity within our different career divisions. So, that gave people a sense that they were building towards something, they could take on more responsibility.
And we’ve always told everyone, as much as you can embrace and you can take on, you could be leading a very significant business here, and you will learn more and faster in a small business, than you may get the chance in a larger organization.
ABERMAN: So that means that, when you come into a small organization as a professional manager, the tools that are most relevant are, sounds to me, more myth building and sense making than hard metrics.
HAGE: I think being able to tell a story, and craft that vision, and get everybody to embrace it, and get on board with you, and be excited about the opportunity, is something quite significant.
ABERMAN: It’s interesting to me to hear that, because again, that that’s very much my sense, that a CEO of an emerging business is much more of a teacher and a coach than a head teacher.
HAGE: And sometimes chief psychologist, I’d say.
ABERMAN: Absolutely. So, the psychology of changing the culture dovetails very well with, to my mind, the psychology of managing technological change. Things are moving so fast. How do you change an organization while, at the same time, the technological needs of your clients are changing at the same time?
HAGE: This particular sector, so, we work in the wireless industry. We focus on asset management solutions using a range of technologies, and when I stepped out of IBM, it’s been almost 10 years, this was a Wild West. There was just unfettered growth and innovation around product sets, there was no standardized spectrum, many competing technologies. And it’s like the mobile industry, you’ve got to stay abreast of all of the different players in the marketplace, who is likely to take the lead, look at some of the early adopters, and what technologies they’re embracing, and then be part of standards organizations, and help set and drive that technology agenda.
So, it is very challenging to, now, as the market has moved from a focus on radio frequency and early wireless technologies, to the Internet of Things, and focusing on IoT, keeping it on top of all of the sensors, and the new offerings, and all the consume- oriented offerings coming out, the Alexas and all of the products from Google and Microsoft, and just being aware of how they influence our customers’ perception of what they want to buy, and what our product needs to include.
ABERMAN: I think that is really a significant lesson that many entrepreneurs don’t focus on, which is that there is generally a core technology trend. And for a time, people thought it was RFID, now it’s internet of things with 5G. But if you don’t understand that, you’re not going to win, and more to the point, if you’re a small business, you’re not going to set that agenda.
HAGE: The landscape is littered with many promising startups, with really strong technology and great teams, but they didn’t find that intersection of product market fit, or they didn’t find the early customers that would pull them forward, to give them that runway that they needed. And so, my first goal when I took on this position was, I wanted to be the last woman standing in this industry. I’ve been coached, subsequently, that no, you want to be the second to last one.
ABERMAN: You want to be bought by the last! That’s exactly right. Before I let you go: in light of what the last nine years of your life have been, building this company, would you recommend this career path to anybody listening?
HAGE: You know, I’ve given that question quite a bit of thought, and an interesting article came out last week: it said, the new face of entrepreneurial success are women that are 50 and above. They’ve got the ability to juggle time, and manage things, provide that emotional empathetic leadership in a small business, and when times get really tough, they usually have a core of persistence and hard work. So, I would say it’s proven to be a great career path for me, and I hope other people follow.
ABERMAN: Hear, hear. Thank you very much for joining us, that was Diana Hage from RFID Global Solutions. Thanks for joining us.