Sunday, August 5, 2007

Be relevant

Had a beer with a friend the other night. After talking about important stuff – friends, family, life – we shifted gears into biz talk. Specifically, the perils of a small, publicly traded, OTC-BB software company that we both knew.

What’s up with them? Earnings are lagging. Stock price’s flat. Growth has stagnated. The CEO’s fried. A recent acquisition fell apart. The CTO bolted. They’re running out of cash. They’re too small to be public. The board’s unhappy. Analysts don’t care. It was a standard, morbid diagnosis of a limp-along company.

Satisfied with our analysis, we transitioned to sports: Barry and 756, the passing of Bill Walsh, college football, our cognitive and emotional dissonance of admiring Pete Carroll but hating USC. Mid-drink, we returned to the hamstrung company. (In retrospect, it was eerily similar to the brake-pushing, head-turning exercise of witnessing a roadside accident.) Seriously, what’s wrong with them?

Well (with apologies to Beavis and Butthead), they’re like totally irrelevant, one of us opined. Nobody really cares.

Ouch. It sunk in. I thought about the CEO, a good, hard-working friend who’s pulled many a lever to bolster his company’s market cap. He reminds me of the Wizard of Oz, operating behind the curtain, winking (with, of course, no response) in the dark. Our recalculated diagnosis was encapsulated in one word: relevance.

To boost earnings, enrich a company’s stock price, foster growth, enliven leadership, successfully execute transactions, retain key employees, and keep enough oxygen (cash) in the tank, a company needs to be relevant. Relevance leads to differential value that leads to – post execution – market dominance.

What is relevance? To me, it’s getting people to care by generating value and interest and demand and intrigue and inspiration. It’s about creating and stoking a bonfire, one with ever-growing visibility and a desirability to participate. It's encapsulated in one of The Cluetrain Manifesto's theses: Companies that do not belong to a community of discourse will die. It’s hands down the paramount challenge CEOs face.

Relevance matters only in the minds of your constituents; it’s their perception, period, that counts. And, all stakeholders count: Customers, prospects, partners, shareholders, employees, analysts, competitors … your entire ecosystem. It’s doing something – a lot of things – to edge people to the front of their chair, to raise an eyebrow, to engage a phone call, to elicit an, “I’ve gotta do something -- invest, buy, partner, work, lead, support – with this company," action.

Fostering relevance is an (check that: the) ante to success. The rest – the blocking and tackling of business – is easy and boring. If you’re not relevant – if you can’t get key constituencies to care – move on. Treading water in an empty pool is painful for all involved.

Post-script: Thanks to my alter-ego Dave for the kick in the rear ... vmail this weekend: Dude, enjoying the blog, but you've gotta stop writing about other people's stuff, and write about your stuff. Kick: Get relevant.

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