XChange EMEA day one: Culture is the lifeline of the IT channel

CRN’s first European XChange event is underway in Amsterdam with keynotes covering how to be successful in the region and the importance of culture for business

Sarah Shields, alliances director at Computacenter opened CRN's XChange EMEA event in Amsterdam sharing advice on how to land and successfully grow in the region.

In 2016 Dell Technologies acquired EMC for $67bn, a merger that made Dell into the what it is today - one of the largest IT companies on the planet.

"That showed me what good looks like when it comes to inorganic growth," said Shields, who worked at Dell for a good part of her career.

She pointed at inorganic growth as one of the proven ways to expand a business.

"The pros are very clear. It gets you much faster growth than you are able to achieve without purchasing a competitor.

"It gives you a huge knowledge expansion, for Dell Technologies that was knowledge in the enterprise space. It wasn't a technology grab. It was access to enterprise customers, customers that had been EMC customers for a long time and trusted the EMC brand. And Dell wanted to expand that portfolio.

"And it gave Dell a competitive edge over the pandemic. Dell was one of the most successful organisations, even when supply became constrained."

However, Shields also highlighted that inorganic growth comes with its challenges, warning decision-makers to be sure it's the right move for the business.

"Inorganic growth is expensive. You've got to spend money to purchase the company, money to integrate the company and money to make sure that the systems and processes align.

"It's a massive culture shock to everybody involved. You have to be aware of what it's like to be the acquirer and the acquiree.

"Both have very specific needs, and you have to address those very carefully because you will lose customers, you will lose employees, you will lose revenue.

"So you have to be sure of what you're doing, how you're doing it and how do you control that loss."

Growing organically

The alternative to that, she told the audience, is organic growth, which gives the business more control over what happens to the company.

"You've managed to nurture your talent and take them with you and that growth happens from within, you maintain control. You grow at the pace that you can grow it as your systems and processes develop," she said.

"You can control that growth and it is the most cost-effective way of growing.

However, Shields cautioned this can slow you down.

"There are natural ceilings that you will not get past unless you go and acquire another company, a competitor, a new line of business, a new set of customers and you will lose your competitive edge over time if you are relying solely on organic growth.

"The reason being is your competitors will be looking at inorganic growth, and it's the real case in our industry of eat or be eaten."

Shields explained that when going through inorganic and organic growth culture remains the most important element.

A weak culture, she said, will lose valuable people as well as customers and sales on the way.

"Don't lose the DNA of the company you are acquiring," she said.

"So many companies go on an acquisition path and we've all seen it happen and you lose that DNA that made that company special to you.

"And you lose the people that make the decisions that were pivotal to the success of that acquired company."

She urged delegates to "remember who you are and what you stand for with your company."

When going through multiple inorganic growth, Shields claimed businesses need to make sure they understand and develop a DNA that will make them unique and make their business successful as they launch into Europe.

"You also need to be aware that what works in one country won't work in another country."

The Dell veteran highlighted the phrase "customer is king" which she says works in the UK and in the US, but in France, for example, that phrase won't stick with companies.

"In France, business is about the workers and the power is not the king, there is no king, it's the mass."

Culture, culture, culture

While business success presents itself in many forms and through many means, the first panel of XChange EMEA 2023 further analysed culture as one of the essential pillars to success.

Guy Golan, CEO of Performanta, explained the importance of hiring people that are a cultural fit for the business.

"The reality is that culture plays a major role in everything you do," he said.

"One of the things we do [at Performanta] in terms of employment is, while I trust quite massively all my leadership team, I try to ensure that I've got a 10-minute interview with anyone we hire across the company.

"I think it's a worthwhile investment, I normally ask questions that are related to fun elements which help me understand if there is a culture fit and sometimes puts the interviewee in a bit of an awkward situation and I want to see how they react to that."

Golan argued that particularly in the cybersecurity space, it's really important that employees feel the culture and feel engaged within the business, especially in the new hybrid world of working,

He revealed that one of the ways Performanta does this is through its weekly Thursday Café call, in an effort to keep in touch as much as possible.

Edel Creely, director of Auxilion raised a point about integrating new talent into the company's culture.

"Certainly nowadays, I think finding that culture is tremendously important. And one of the questions we would have with the teams across the company, the senior managers, middle managers, management, etc. is ‘how can we bring new people into the company and ensure that they feel welcomed that they understand the culture and they get to live the culture over time?'"

She explained the most important part of building a strong culture is to make sure that it's authentic.

"A very wise person once said to me, the most important thing you do in your business is make sure that you get all of the right people on board, the first 100 people are most critical for the building and development of your business.

"And make sure that you then sustain your culture and your values through those people. And then make sure that that's continued on as you continue to bring other people into the organisation.

"I think, certainly, if you look at upselling today, which has also had quite significant rapid growth over the last number of years, and we've opened a managed service centre of excellence based in Sheffield, and we've had rapid growth in the MSP side of the business which has been fantastic."

Creely said that also meant the company has had to bring a lot of new people into the business.

"It's interesting though, because we're an Irish company, so how do we ensure that we're really all working together as one team and giving I suppose giving that same voice and that same experience to our customers as he as we engage with them?"

She argued that, at the end of the day, being in a service business, it's not just about the technology and how it delivers.

"It's actually how the people are engaging together in the business and then that's going to make sure that the company successful and continue to be in the future."