Telstra made all the right noises last year when agreeing to pay $333 million to acquire one of Australia's leading IT services companies, the Kaz Group. It would be run as a separate business unit, we were told, and the only significant change would be that Telstra's financial clout would give Kaz the ability to take on larger multinational competitors like IBM, HP, EDS and CSC.
But 18 months after news of the acquisition first broke, the analyst community is less than impressed with the progress Kaz has made (see ARN October 5 edition, page 1). While several issues have been highlighted, the most important is surely the value of people and the relationships they have built with customers and partners over an extended period of time.
Business is all about those interpersonal relationships at the end of the day, particularly for a company like Kaz that had done a very good job over the years of building a reputation for offering customers a more personal touch. In losing people like Andrew Richardson, and letting Peter Kazacos fade into the background, Telstra has diluted the most important Kaz message.
Current Kaz boss, Mike Foster, and his team are no doubt very capable people but the business has lost its key differentiator in the market. Instead of making a leap into the upper echelons of the services market, Kaz is in danger of becoming less relevant and appealing to its traditional customer base without making any significant ground further up the services tree.
While Telstra has largely created its own people problems within Kaz, keeping your best people is always an issue in the channel. Progressing from reseller ranks through a distribution role and eventually landing a plum job with a vendor is often seen as a natural career progression. And the more training and experience an employee gets under their belt, the more attractive they become to those operating on the next rung of the ladder. The desire to improve staff skill sets and the fear of losing them as a result is one of the biggest Catch-22 scenarios in this and many other industries.
Money talks and there is little or nothing you can do to compete with the financial pull and greater exposure that is on offer when a vendor comes knocking on the door to whisk away one of your staff members. So there is little point in worrying about it.
But there are some things that can be done to reduce the risk of important staff walking and minimising the impact if they do. It goes without saying that somebody who is happy in their job and feels they are being given an opportunity to grow will be less likely to have their head turned by a job offer from one of your partners or, even worse, competitors.
The most important points to remember are to keep staff challenged, reward them appropriately for performing above and beyond the call of duty, listen to any problems they may have and make a genuine attempt to solve them. Control the factors that are within your grasp and don't worry too much about those that are not.