The 72-hour solution

Getting an entire senior management team together in one room for three days may seem like an impossible task. What Tulsa, Okla.-based consulting firm TeleChoice could be attempting to accomplish in those three days may be even harder.

TeleChoice recently unveiled its Business Strategy Lab, which during a three-day session aims to help a management team come to a consensus on a target market, develop a business plan and formulate a way to present that plan to potential customers.

The lab grew out of TeleChoice's regular work helping companies develop their strategy and message. According to TeleChoice President Christine Heckart, that process normally takes six to 12 weeks to complete.

Many companies wanted to get through the process in a shorter amount of time. The lab offers the services of three individuals from TeleChoice: a head strategist, whose main task is to help formulate and develop a business plan; a troublemaker, the subject-matter expert who can point out flaws in proposed ideas; and a scribe, who keeps a detailed record of the goings-on and contributes to the conversation, albeit on a more limited basis.

During the lab, the TeleChoice consultants become very familiar with a company, helping to formulate a business plan and message that they believe will help the company succeed. TeleChoice is confident enough in the quality of the offering that if participants are not satisfied with their results at the end of three days, they do not have to pay the $50,000 fee.

A day in the lab, which can easily last well over 12 hours, involves in-depth interaction among TeleChoice's consultants and the participants, said Bob Castle, president and CEO of Coriolis Networks, which went through the lab in June 2000. The lab, he said, demands a near-complete time commitment from its participants.

“It's not rocket science but it is methodical,” Heckart said. “We take the company through a process that helps them understand what is their completely unique and defensible strategy.”

The first step in the process, dubbed “TeleFocus,” explores the company's competencies, strengths, weaknesses and expertise. Next comes “TeleScoping.” During this step, six to 12 possible business strategies are mapped out based on the core competencies previously determined.

During TeleScoping, Heckart said, the TeleChoice staff has the participants look forward three to five years and describe how the company would look under each strategy. After coming to an understanding of the different paths they can take, the company evaluates and eliminates the strategies until only one remains.

As part of this step, called “TeleMapping,” the management team must reach a consensus regarding the strategy the business should follow. “The idea is to have them all say this is the right focus for this company, and it's the right focus because [of the given reasons],” Heckart said.

For Laura Howard, vice president of marketing and business strategies at Gotham Networks, this step was key.

Gotham, which offers a platform that consolidates the provisioning, switching and routing functions of multilayered edge networks, went through the lab in June 2000. At the time, members of the management team had different ideas about where to take the company. The lab helped Gotham choose a direction, Howard said. Gotham was then able to develop and create its public face before its debut in September 2000, something that would have been much more difficult without unified senior management. “If the whole executive team isn't behind a strategy, it's too big a task for marketing to do alone,” Howard said.

M&A Watch

Acquirer	Acquired	Terms	Closing date	Description
MDU Communications	Digital Solutions	$1.97 million	April 30	Satellite TV and broadband provider acquires private cable digital satellite provider
Infineon Technologies	Catamaran Communications	$250 million	Early August	Infineon acquires maker of SDH/Sonet and 10 Gb integrated circuits
MobileSys	Bitmo	Undisclosed	Late April	Wireless infrastructure provider buys developer of voice-based wireless browser
RadiSys	S-Link	$4.5 million	Mid-April	Signaling gateways developer bought by maker of computer systems for embedded computer applications
Intel	LightLogic	$400 million	2nd quarter	Chipmaker acquires 10 Gb Ethernet networking company
Rebar	TellSoft Technologies	Undisclosed	Early May	Tech holding company acquires streaming media technologies ASP
Compiled by Toby Weber

After a forward-looking business strategy is decided on, TeleChoice takes participants through the message crystallization process. This stage, said Heckart, is about “helping a company… articulate in a very concise way — five minutes or less — what is most unique and most compelling about its product.”

While the companies that have gone through the lab are apparently pleased with the results — so far no one has taken the option not to pay — the intimacy that is established between TeleChoice and the participants raises some questions about objectivity.

TeleChoice consultants regularly give comments to the press and in press releases, sometimes about companies that have gone through the lab. This begs the question: how can a consultancy firm that helped formulate a company's business plan and message objectively evaluate that company for the public, and how should those statements be presented?

Of the eight communications companies that TeleChoice identified as willing to talk about their experience with the lab, five quoted TeleChoice analysts in press releases or on their Web sites. None identified the relationship between TeleChoice and the company. At least one quote, though, was given before the company went through the Business Strategy lab.

‘I think our objectivity is always in question, as is anybody's in the industry…. It gets proven out over time, not over one or a few instances.’
— Christine Heckart, Telechoice

According to Heckart, TeleChoice has an extensive policy regarding what analysts can and cannot say to the press that helps maintain objectivity. Statements, she said, must follow a pattern: If the company in question can deliver on its promises, then it has a possible solution.

“We don't endorse,” she said. “You can say this is a potential solution. You can't come out and say they have [succeeded in addressing the problem] unless you have scads and scads of evidence.”

She added that TeleChoice's objectivity shouldn't be judged on a few examples. “I think our objectivity is always in question, as is anybody's in the industry…. It gets proven out over time, not over one or a few instances.”

Bill Furlow, president of the Association of Professional Consultants, a group of more than 35 consultants in the Orange County, Calif., area, did not object to the concept of TeleChoice giving quotes to former clients. By doing so the company must put its own credibility at stake and would therefore be self-policing, he said.

“They're putting their own reputation on the line by doing that,” he said. “I would think that they have a self-interest in making sure the statements that they make are not overly broad or inaccurate.”

Furlow, himself a consultant, did say that TeleChoice's relationship with these companies should be noted in statements intended for public consumption.

“They have a less than arms-length relationship with the company. The important thing to me would be the disclosure.”

Start-up pitfalls

According to TeleChoice, new ventures without a defensible strategy often become one of three types of companies

Kitchen sinkers: Suffer from a “goodness overload” and cannot make good and rapid decisions about growth because every direction seems equally appealing

Rat holers: Mistake a product or market strategy for a business strategy. If market conditions change, they do not know what to do next. They often become kitchen sinkers until they find the next rat hole

Backseat drivers: There is a unique and defensible business strategy, but it is continually challenged and debated by the executive team, hampering fast and effective decisions

Source: TeleChoice