Flashback to May 2006 – CML Emergency Services
Have you ever called 9-1-1? For North Americans, most of those calls are handled by software and systems from Plant/CML, a recent merger of Plant Equipment Inc. and CML Emergency Services (CML), who now have about 60% of the North American market for this technology. Golden Gate Capital of San Francisco, who also owned Plant, acquired CML in late 2005, then arranged to merge the two companies. I talked with Steve Panyko, hired in 2004 as CEO of CML Emergency Services. Panyko is American, with 35 years in the Telecom industry – in New Jersey, Illinois, California, and Ottawa.
CML is 25 years old, and moved into the Emergency Services space about 10 years ago. The products were solidly engineered, with a reputation for high reliability. Although most of the effort had been on legacy products, R&D chief Doug Roberts had developed a new IP-based software product called Patriot. The IP architecture had the potential to leapfrog all competitors, but had been released before without success.
Local CEO dials 9-1-1 for Marketing
When Panyko arrived, the company had a sales team but no marketing function. It was a classic case of ‘marketing’ being viewed as market communication only, hence the company was not positioned for easy scale up. In Panyko’s view the company had little in the way of “market strategy” and little competitive intelligence or competitive positioning, areas that had to be improved. Some market strategy assets had been overlooked, such as the IP-based product’s potential to be parlayed into a formal Cisco alliance, as well as contribute a great deal to market reputation. Panyko needed a Marketing executive that could establish CML’s thought leadership, grow sales channels, re-launch Patriot, and create sales methodologies that promoted value instead of features and functions.
Strategy Session – First, a strategic planning session was held, run by a professional facilitator using the formal ‘Strategic Thinking’ process. This gave the team a cohesive view of the software opportunity and the competitive landscape. The product line, both hardware and software, was facing increasing pressure from competitors, and it was evident that hardware was going to become commoditized, as it has been in many tech markets. All these factors were considered, and a new strategic plan was developed.
Executive Hiring Strategy – By late 2004, the search was on for two new positions – VP Marketing and Director of Product Management. Ottawa’s David Perry of Perry-Martel International was engaged for the executive search. Perry met with the management team, as well as reviewing the strategic issues and investor expectations with Panyko. Candidates were not expected to have direct experience in Public Safety systems – but were expected to have strong and diverse experience in strategic marketing and product management techniques, and strong general business knowledge. The VP marketing position needed to be someone from a different space – the software industry, with multiple channel experience, since that was the direction CML needed to go in. The person hired was Darryl Praill, formerly of Kinaxis (formerly WebPlan), and he was given two immediate challenges – develop and communicate a new brand for the move to becoming a software company, and develop a new image for the company in Ottawa, to help with recruitment. The Product Management position ended up being a tougher job to specify – the person had to work well with technology people as well as customers, implement robust go-to-market and product lifecycle processes, and manage the portfolio’s profit & loss performance. This position was filled by Allan Zander. Together, they applied themselves to the challenges of creating a new corporate marketing culture, and getting the most mileage out of the new IP-based product design.
Sales Channels – ‘To expand, we needed more feet on the street’ commented Panyko, ‘so we put in a channel management function and put it in marketing. We did not put it in sales, because marketing has a process building orientation, whereas sales people are skilled in processing transactions.’ Processes were developed for channel identification, qualification, training, assessment (for existing channels), and certification, for new and existing channels. This resulted in expansion into new geographies and new partners.
Results – The company was now executing to “skate to where the money will be” (an idea from Clayton Christensen, author of The Innovator’s Solution, noting Wayne Gretsky’s habit of skating to where the puck will be, not where it is now). CML was able to meet its goals on several fronts – growth rate over 25%, profitability solidly up, global distribution started, and expansion into new territory in North America. Also, CML established a Cisco Systems relationship as a Certified Application Development Partner, making CML the only public safety solution endorsed by Cisco worldwide. Patriot was re-launched at the industry’s largest show in August, supported by Cisco and by Tom Ridge, former head of homeland security. In parallel, discussions with Plant and Golden Gate had begun. The mid-2005 announcements from CML increased their global profile, even attracting other potential acquiring companies into merger discussions. With this interest, CML’s CFO David Jeffrey had lots to sing about. The stage was set, and Panyko’s team were able to attract a company valuation several times higher than the late 2003 valuation, making for both market and investor success with the business strategy.
This article by Peter Fillmore, was originally published in SCAN – MARKETECH in May 2006.