Learn and live

“You can't out-phone company the phone company.”
—Larry Lang, vice president of marketing, Cisco Systems' service provider line of business

The requirements these companies must comply with to remain healthy seems to get longer and more complicated as times get tighter, to the point that some emerging service providers are probably locked in a state of operational paralysis just trying to remember which way they're supposed to be turning or where their weight should be shifting.

Last year I made the dubious decision to seek out professional golf instruction. The most enlightening part of this pursuit—outside of the recognition of how very bad I am at the game—was the realization that there is an astonishing amount of data that has to be accessed and processed every time a golf ball is addressed: Head down. Arm straight. Relax. Easy grip. Eyes on the ball. Fluid swing. (Head down!) Shift weight. Turn hips. Follow through. Hold the pose. Remain calm. Don't swear.

After a short time it became difficult for me to find playing companions because of the inordinate amount of time it took me to complete each swing (not to mention my consistent failure to comply with the last two items on that checklist). All that information was paralyzing. And it didn't help my frustration level that after loading me down with all those tips, the pro would tell me I was “thinking too much.”

It occurs to me that service providers—especially those newer to the game—must feel somewhat the same as they try to adapt their businesses to the industry's current financial climate. The roster of requirements these companies must comply with to remain healthy seems to get longer and more complicated as times get tighter, to the point that some emerging service providers are probably locked in a state of operational paralysis just trying to remember which way they're supposed to be turning or where their weight should be shifting.

The instruction they get also isn't always very consistent, which isn't necessarily anyone's fault but still must be frustrating. Some of the service providers that are tanking now are the ones founded amidst a blinding euphoria, when the seed of an idea could generate funding as long as the word “broadband” was in the business plan. Now fickle investors are looking for ironclad revenue guarantees, paths to profitability and, perhaps most important, specificity.

The list of operational requirements, for better or worse, is starting to sound a little bit like the hackneyed refrains of the golf instructor: Attract experienced talent. Execute the business plan. (Head down!) Provide value-added services. Create customer intimacy. Maintain capital efficiency. Remain calm.

Larry Lang, vice president of marketing for the service provider line of business at Cisco Systems, certainly knows the competitive importance of finding and maintaining a different angle on an existing business. The opportunity for innovation among service providers, he says, lies in creating a different kind of relationship with the end customer that's focused on the customization of content and enhanced customer service in addition to connectivity.

Lang's “phone company” comment isn't necessarily intended to denigrate. The reference is to the incumbent outfit that's focused on maintaining position vs. the insurgent that is required to innovate. Most incumbents are more strongly rooted and, therefore, in better shape to compete on price. An insurgent that tries to enter a market offering services that merely mirror the incumbent's will have trouble holding its own in a price war.

The competitor should try to out-innovate in more specific areas: service creation, customization and customer care. Make careful and targeted technology decisions, Lang says, but then go above the technology level and develop ways to foster fulfilling customer experiences that are markedly different from those offered by the incumbents. Along the way, attract the right talent, be efficient with capital and execute the plan.

Oh, yeah—and don't think too much.

Contact Jason Meyers atjason_meyers@intertec.com