Thesis work paper Motivating the Team

As with any turnaround, motivating the software team after redundancies can be particularly difficult. Unlike manufacturing situations where firm capacity is partly dictated by the factory machinery, motivating knowledge works is considerably more difficult. Davidson (Davidson, 2001) recommends involving the staff at the emergency action phase.
Normally staff are well aware of the firm’s problems and like Teng (Teng, 2002), observes that knowledge workers can frequently feel helpless because in many cases they are more qualified than the managers (who caused the firms problems in the first place) to solve particular operational or strategic issues.
However regardless of the abilities of the staff, deep personnel cuts are still important due to cash flow constraints, and Davidson (Davidson, 2001) observes that cutting too deep is better than not cutting enough at all.
Blumling (Blumling et al., 2002) recommends putting in a new turnaround management team because like most corporate recoveries, the credibility of existing management is usually questionable at this time. He observes:
“When a company is sliding, senior executives tend to lose credibility, attrition within the ranks becomes rampant, and organisational discipline grows slack owing to poor management. The worse the situation, the more probable it is that the CEO will be forced out and an outsider brought in to manage the turnaround. A C.E.O. hired from outside is likely to turn over the management of the company in order to change its skill sets and improve its credibility.” (Blumling et al., 2002).
Even when such management changes are made, Blumling (Blumling et al., 2002) observes that unlike other turnarounds, software turnarounds often need essential skills and controls in place prior to tightening discipline. This is because the need for cost cutting is so strong (and so deep) that resolute business controls are usually needed.

Thesis work paper The Development to Marketing Ratio

The Development to Marketing Ratio
Typical industry benchmarks for sales and marketing are that for every $1 dollar spent on Research and Development, $5 to $10 dollars will have to be spent on sales and marketing (Davidson, 2001). As such the cost of delaying a software product rises quite considerably, and eats in to the firms cash flow. The implied costs behind the “development to marketing ratio”, is part of the reason why turnarounds can be so difficult.

Thesis work paper Strategic Realignment: Check the Target Market and Complement Industry “Power Players”

Shapiro observes that information and software companies can focus too much on marketing features rather than customer benefits.
The software turnaround then, will most likely need a strategic and marketing realignment (which reinforces Davidson’s (Davidson, 2001) observations). As always, the focus must return to solving a customer problem and presenting them with a clearly defined solution, than advertising about particular product features. As Sutton (Sutton, 2002) remarks, sometimes it is merely a need to change the message of the advertising and to target the correct market, than a need for operational measures.
Shapiro (Shapiro et al., 2000), states that normally in the software industry poor marketing is the most common problem for firms (after lack of capital).
Furthermore, he observes that even in cases where firms have targeted their market correctly, the timing of the software release has been inappropriate, as many newer products require long-term market education.
Chakravorti (Chakravorti, 2004, 58-67) recommends strategically realigning what customers want with those of the industries ‘Power Players’. By complementing their products rather than merely seeking self-contained niches, firms can feed off their product growth. E.g. Adobe turnaround was aided by their redesigning their Acrobat Reader to work inside Microsoft’s Internet Explorer. Allowing their documents to be read via web pages. Further strengthening demand for their Adobe Acrobat Writer product.