This past week I was thrilled to see a demonstration of what Microsoft really means by its theme, “People Ready,” and the impact it can have.  Microsoft was a premium sponsor of the Boston Business Journal’s Pacesetters event, the second year for the gathering that honors the Boston area’s fastest-growing privately held companies.  Two realities became evident very quickly at this event: 1) despite our economic challenges, many companies are growing today at skyrocketing rates; and 2) the reason for that growth is the relationship of people to the company’s mission and to each other.

Among the 60 firms honored as Pacesetters this year, the average revenue growth was 61 percent year over year.  While the lowest rate was a very impressive 40 percent, the highest was 1,066 percent.  What recession?  And these companies didn’t represent just a single booming sector of the economy.  They included construction firms, biotech companies, software companies, staffing firms and others.

How have they done so well in such tough times?  The single common thread tying all these winning organizations together was that they made a point of hiring and retaining the best and brightest people in their arenas.  Their working thesis was that “A” players attract other “A” players; and they, in turn, attract “A” customers.

Similarly, all these companies placed significant emphasis on using technology to communicate, whether through mobility devices, Microsoft Exchange Server e-mail technology, Microsoft SharePoint portals or other means.  In fact, Microsoft Gold Certified Partners, like Syrinx Consulting of Waltham, Mass., were among the honorees themselves.  Syrinx was listed among the top 10 in growth, with a revenue increase over the past three years of 411 percent.

My observation is that the success of these companies really has evolved from the interplay among the people within the firms and between the people and the company structure:

·         These companies indeed hired and kept the best people.

·         They stayed true to their core values.

·         They had a good business network among their peers that also included people in other business sectors.

·         They made adjustments to market trends, conditions and demands.

·         They communicated in real time to manage those adjustments.

·         And, above all, management listened to their employees.

The president of one of the honored firms, for example, told me that she thought she had done a good job of staying in touch with her people.  But one day, an employee approached her and said, “This may be awkward, but I think we need to have some fun.”  The president was taken aback—she thought they already were having fun, with Xboxes, basketball hoops and other perks.  But the employee said that his colleagues simply wanted management to bring in pizza and offer some recognition and acknowledgement of the work they were doing.  The next day, they had a massive pizza party and; ever since, the president has felt a much closer connection with the attitudes of the people on the front line.

Going forward, all of us will find we need to slow down to speed up.  We need to slow down for a bit to think about what we need to prepare for the future, to take the time to plan and, during this time, to listen carefully to our people on the line and in the field.  Then combining what we hear with the data in our systems, we can strategize for the kind of spectacular growth that Boston’s Pacesetters are celebrating.

Over the past 10 days, I’ve been reflecting on the great insights that executives shared with me at our customer briefing for Connecticut and Western Massachusetts business owners.  We held the session, co-sponsored by Microsoft and EMC, at the Mohegan Sun Casino to talk about the next big bets that companies in the region are making on technology.  In just about every conversation, I heard two common themes: a desire for more business intelligence capabilities to improve decision making and enthusiasm for unified communications to make businesses more productive.

Fewer businesses are relying on “gut decisions” these days, and investment criteria are more rigid than they used to be.  That’s why Business intelligence (BI)—the ability to mine information from data about customers, sales and operations—is becoming an increasingly important tool for small and midsize companies seeking investments from venture capital firms and for larger companies trying to determine where they should invest in equipment, people and technology. 

With the current credit crunch, venture capital firms are demanding more real metrics from businesses before investing in them, and BI technology allows top-level executives and managers to pull those key indicators from all the company’s data.  It provides senior leaders with a “dashboard” that shows in real time how profits are shaping up, how agile the company is operationally and how costs are tracking against production.  Previously, executives would need to pore over mounds of written reports once a week or so to try to get a handle on how the business was trending.  BI automatically displays the indicators that are most important for each individual company and keeps those indicators constantly up to date.  The Gartner research firm recently rated Microsoft’s BI technology, based on SQL Server, in its top category.

Unified Communications, or UC, is the other urgent topic in the region.  UC digitizes voice communications so that all the barriers between your computer and your phone disappear.  You can hear your e-mail read on your phone or play your voicemail on your computer.  You can tell when colleagues are available or busy and connect with them through a single mouse click.  E-mail and calendars can be accessed and updated through cell phones and other mobile devices.  With businesses opening more international locations and expanding their affiliates, this type of instantaneous communication offers true competitive benefits. 

One way businesses are employing UC is to set up nearly instant videoconferences.  Microsoft’s RoundTable technology provides two-way video and audio to the extent that people in two distant offices feel as if they are in the same meeting room.  As a result, companies that once scheduled monthly meetings that required flying executives to headquarters from far flung locations now can meet virtually face to face anytime.  Of course, these sessions are not likely ever to replace the personal interaction involved in onsite meetings; but those meetings now can be scheduled quarterly, for example, instead of monthly, saving the company considerable costs in travel expenses.

Additional savings result from being able to establish and expand a remote workforce.  Companies can offer employees the flexibility of working remotely and increase productivity.  Instead of sitting in traffic for three hours, employees can work from home.  They enjoy having that option, their productivity increases and their satisfaction with the company soars.

I’m betting that BI and UC rapidly will become part of the business alphabet for companies of all sizes.  These technologies already are beginning to form the foundation for how we make our business decisions and how we communicate those decisions instantaneously to keep pace with our changing markets.

Few would dispute that the nation’s overall economy  has taken some big hits over the past several months, and troubling times often lead graduating college students to look for prosperous pockets in the nation’s geography and “safe” jobs that will provide some economic assurance.  But the locations of those burgeoning communities and the nature of the secure and higher-paying jobs have flip-flopped in this confusing market. 

The steady and reliable money-making jobs like those in banking, mortgage companies and real estate are collapsing, while the once-volatile technology jobs continue to grow rapidly and steadily.  The Southwest and West Coast that once seemed a Utopia for job opportunities and salaries are among the areas hit hardest by the housing/credit crunch, but the tried-and-true Northeast can’t find enough people to fill the tech jobs that are billowing like the sails on a Yankee Clipper. 

All across our region, students are finding great incentives to earn an engineering degree because technology is changing our local economies. Businesses in Hartford, for example, have demonstrated a tremendous increase in the pace at which they’re demanding and adopting technology from Microsoft and our partners.

Hartford-based Oakleaf Waste Management, the nation’s leading provider of sustainable waste logistics and recycling solutions, is an outstanding case in point and recently received the 2008 Microsoft Dynamics Customer Excellence Award.  Oakleaf was an early adopter of Microsoft Dynamics GP 9.0 and Microsoft Dynamics CRM 4.0.  Microsoft technology enabled Oakleaf to grow into a technology powerhouse, where IT now is prized as an asset rather than being viewed as a cost.

Oakleaf Senior Vice President and CIO Frank Wilk says in the Hartford area, “There’s a growing demand for technology to modernize systems that automate transactions with clients and vendors as much as possible.”

His company has done just that with one large client, using service-oriented architecture and Microsoft’s BizTalk Server to replace 1,200 daily incoming service requests and dispatch orders to haulers —along with 1,200 confirmation calls to vendors—with an automatic system for routing requests, purchase orders and acknowledgement receipts.

Businesses in Hartford and throughout the local communities of the Northeast can take pride in their success thus far in tacking with the economic winds during a sea change in our nation and leading the way to good and valuable jobs.

Despite a slowdown in venture capital deals in Silicon Valley, the pace of investment in the Northeast appears to remain healthy.  Dow Jones VentureSource recently compiled figures for Web 2.0 investments by VC firms in various regions of the company.  Between 2006 and 2007, the number of deals in the San Francisco Bay Area dropped from 74 to 72; but here in New England that number rose to 20 from 15, and the amount invested doubled—to $158 million from $79 million.

With every player in the financial markets taking a closer and often more conservative look at where money is invested, however, it’s crucial for startup firms to distinguish themselves from others in the field.  There are thousands of tech companies clustered here in New England, all competing for financial investment and broader markets.  To be one of the winners in this financial marathon, here are some ways you might consider separating yourself from the pack and gaining the attention of new investors:

·         Specialize in some sort of custom intellectual property that plugs into an established product line.  A number of independent software vendors, for example, have thrived by developing solutions for specific industries that expand on the capabilities of Microsoft Dynamics technology and increase the business value of the ERP system.

·         Show the track record of the leaders of your firm, including their past successes, their education, the way they started the company (such as a spinoff from a major university) and their outlook on the marketplace.

·         Clarify how you support your client base, including your customer-service policies, timeliness/availability and on-site as well as remote help.

·         Develop a long-range marketing plan, extending over six to 18 months, incorporating online media and minimal print advertising.  Be certain to target your message from a vertical standpoint.  Protect your intellectual property but also work to help others succeed in the market.  Conversely, reach out for advice when you need it, and don’t let pride stand in the way of good judgment.

·         Be able to tell a clear story to your clients about why your firm is not at risk anytime soon.  Show the growth that you are factoring into your plans, the connections you are making in the community through local organizations and boards, and the financial footing that supports your operations.Share your business plan.   Investors should have a clear idea of what your financials are, specifically how you plan to grow and how you intend to stabilize your company for future expansion.