Business 101 - When times are tough you either need to figure out how to make more money or how to save it!

May 11, 2009

Sherry Hess is vice president of marketing at AWR, bringing with her more than 15 years of EDA experience in domestic and international sales, marketing, support, and managerial expertise. For the majority of her career Sherry served in various positions at Ansoft Corporation including director of European operations and later as vice president of marketing. Before joining Ansoft, Sherry spent two years with Intel Corporation, where she worked in the ASIC Group and developed relationships with companies such as Bell Northern Research and Northern Telecom. Sherry holds a BSEE and an MBA from Carnegie Mellon University in Pittsburgh, Pennsylvania, USA. www.awrcorp.com.

To comment or ask Sherry a question, use the comment link at the bottom of the entry.

Thanks to the many of you who clicked in to read Week One of my blog!  I appreciate Jorge's comment about President Obama and the US collective voice to change the status quo.  And I like David's comments as well. Especially his final line, "So I agree it is a good time for action, provided the action either helps reduce costs or helps win business."  In fact, that was the direction I had already planned for this week's discussion.

For all of us in the RF & microwave industry--or any other industry for that matter--you don’t need to be a Nobel-winning economist to see that change is in the air. And that when times are tough, you need to either figure out how to make more money or how to save it.  The headlines these past few months likely have us all believing that most firms out there are figuring out how to save money and stay in business by reducing their costs. 

I'm pleased to report that at AWR we are in the minority and and are actually growing during this recession.  Take a look at our recent Financial Release  for a pick-me up / bit of good news if you will. But that's not the point of my blog just yet. 

Ok, so make more money or save what you've got.  I asked the AWR Board of Directors just a week or so ago to share with me what is worrying them these days, and also what concerns the C-level execs at other firms in the tech space whom they advise.  It was unanimous.  Cut costs.

But are cutting costs and making more money mutually exclusive? Certainly not.  It is a two way street, at least from where I sit.  AWR is helping our customers save money by giving them a microwave & RF design platform that provides a lower total cost of ownership vs. any other alternative.  AWR is also helping our customers make more money by empowering them to evaluate design ideas faster and be more productive than their competitors.  If I were to poll our top 10 customers, I'd likely find they are all beating the "norm" for growth these past six months.  Certainly, the success of our customers fuels our own success.

Wow, have I gotten a rise out of any of you yet to comment on this topic?

And thanks to a bit of synchronicity, I found this blog just the other day:

Spin, Baby, Spin – Oracle’s case for spending in a tough economy by Brian Sommer

It was encouraging to read. The main ideas I pulled from it that resonated with me are the following two bullet sections:

Software and service firms can sell in a recession when they possess:

• products with great ROI - business-usable innovation

• real innovation (not copying an idea that a competitor introduced five years ago)

• add-on capabilities, especially strong vertical solutions

• solutions that can be implemented really fast (think SaaS)

• solutions with immediate value delivery

• solutions that do not require a blank check for an implementer to complete

What won’t sell well in a recession?

• re-packaged suites - new platforms under old applications 

• generic, horizontal applications

• re-automation initiatives

Reading through the first section, I nodded with every bullet point and said, "Yes, AWR offers that!" But then maybe I'm biased so let's see what an AWR customer had to say to the informal question - "What makes AWR successful?" The answer: "The formula is simple: Good People + Good Company + Good Product = Great Value" Seriously, is there any better testimonial than that?

Ok, enough on cost savings. I want to either hear more from you on this topic and then next week I hope to switch to the other option presented in the headline: figure out how to make more money!

Comments

[Tim]

My company has had some lay-offs. Management seems to be focused on eliminating "deadwood" and using the recession to let some people go. Unfortunately, my co-workers and I are now busier than ever. We have so much work (the deadwood actually supported us "critical" workers) that jobs are falling through the cracks or poorly executed. And these are jobs directly tied to revenue.

Meanwhile, I keep seeing new job posting for RF engineers through the microwave & RF community on Linked-in. It's hard to get a real sense of where things truly are heading.

Companies (seems like the majority) that cut costs through their own people (i.e. lay-offs) rather than shave their operating costs or re-negotiate with their suppliers are short-sighted about the future. In engineering, talent is not a commodity to give up. There are dire long-term consequences. Cutting resources impacts future innovation and ability to deliver products today.

The companies posting jobs in this market are probably the ones with the foresight and aggressiveness to be the winners on the other side of this recession.

[Sherry]

Tim, thanks for the comment. I read it and had an "ah moment." TSMC supports your view. They have seen more than 60% revenue decline in the past six months yet are investing in people. Just the opposite action from what we've come to expect. I think forward looking people and companies that see their employees as their IP are the ones trying hard to buck the trend to shed "dead wood". Being a leader and not a follower is the quote that comes to my mind.

-Sherry