Joshua Dinneen On How To Successfully Navigate A Recession Or Challenging Economy
For those working in Revenue Operations, high inflation or signs of a possible recession can be worrisome. But even during a challenging economic environment, there are steps one can take to try and ease the blow. What are the strategies that CROs and financial experts recommend to successfully navigate a recession or challenging economy? As part of this series, we had the pleasure of interviewing Joshua Dinneen.
Thank you so much for doing this with us! To start, can you tell us a bit about your ‘backstory’ and how you got started?
After college I served my country with distinguished honors for eight years in the United States Marine Corps, rising to the rank of sergeant. I was fortunate to start my career in the late 1990s at AT&T. It was a terrific learning ground for me as I learned an incredible amount about the telecom industry, how corporations are run, how to develop leadership skills and how to seek out and benefit from some great mentors. In addition, I got my first taste of technology, and it was the start of what I consider to be a rewarding career that is now in its third decade.
After AT&T, I shifted from telecommunications to IT services, a very fast-growing market segment that was born out of the explosion in information technology. I was fortunate to be part of hypergrowth at services firms including Level 3, Presidio and Corporate IT Solutions. At that time, businesses of all sizes were embracing automation, application software and database technology. They needed to harness the power of technology by working with third parties to run their data centers and corporate IT functions.
In those days, IT was mostly an on-premises function, but on-demand software and cloud computing were the next great wave of computing. After about fifteen years of increasingly responsible roles, I started my own firm, Norwell Technology Group, where I served as President and CEO. Norwell was acquired by GreenPages in 2018.
It has been said that our mistakes can be our greatest teachers. Can you share a mistake you made when you were first starting?
When I joined AT&T it was in a direct sales capacity. I had no background in sales but after an amazing training program and with my personal drive I was released into the wild to go hunt for new business in the commercial markets selling voice & data services. Sales was a different animal back then and there were a lot of brute force selling tactics to find and penetrate new prospects.
We used to have “blitz days” where we were assigned a couple of cities/towns to go try and open doors. We would ride elevators and descend on office parks to try to get introductions. Being new to the industry, I walked into a competitor’s office and tried to sell them services. Needless to say, I didn’t make the sale. The lesson for me was to understand the target market and differentiate yourself. Key to that is understanding the competitive landscape.
None of us are able to achieve success without some help along the way. Is there a particular person you're grateful for?
I truly believe we are a collection of our experiences, and our success depends on how we leverage them. There have been so many influential people helping me on my journey. It is hard to pick just one. My parents obviously had a huge influence on me and the thing I really took away was having a strong work ethic is key to success. I had a lot of coaches that saw things in me that I couldn’t and help me grow as a young man.
These two external forces really set me on my track to success. As you can imagine, the Marine Corps helps build and shape you to be elite and harness the drive and leadership needed to win. In my professional life, I had a few individuals I aspired to model myself after. I saw how they carried themselves and led teams to success. The important lesson for me is to stay inquisitive and follow a continuous improvement philosophy. We learn every day; it’s being aware of it and using it to drive better outcomes.
Can you share a time that was challenging for your business based on external factors like the economy? When was it, how prepared were you and what changes did you make to get through it?
The dot com rise and fall of 1999-2002 was a huge wake-up call for me as a young professional. I don’t mind admitting that I was completely unprepared for it. The same is true for many of my colleagues, our customers, our competitors, and I believe, many across the tech industry.
I was in telecommunications at that time and as an industry, we had just been through an incredible growth phase thanks in part to the PC proliferation, the rise of network computing, and the e-commerce explosion driven by the commercialization of the web browser a few years prior. Venture capital funding was plentiful and in tech, it was all about finding greenfield opportunities and establishing first-mover advantage.
There was a “gold rush” mentality. However, at this time, the picks and shovels were new technologies like networking, servers and storage. With many young companies being born seemingly overnight and the first e-commerce platforms delivering new web services, it really did not matter if companies were profitable. Well, as we all learned, that dynamic was unsustainable.
The dot com burst was incredibly painful. However, I was able to weather the storm personally and professionally. I did so by working closely with my teams to remain true to our value proposition to customers, keeping our composure and level-headedness by reading the signals that the market was sending us and thinking about the long-term potential versus the short-term carnage we had just witnessed.
As mentioned, I was in sales for AT&T at the time and the key thing we focused on was not panicking. When you are selling on your heels, customers can feel it. They can smell and see “blood in the water,” if you will. When you adopt that approach, it completely undermines the value of the product or service you are selling, and you are competing on price. That is really something you never recover from. It certainly helped that I was part of a rock-solid company, and I had some great mentors and colleagues to work with to navigate that challenging time period.
Was there anything about the whole experience that surprised you? What was your expectation and what was the reality?
Without a doubt what surprised me most was how quickly things can change. Initially, our expectation was the good times would keep rolling and that there was more than enough business for everyone in tech and in telco to support the needs of customers building their IT infrastructure. The reality then—and with any downturn—is that cycles shift, budgets freeze, and tough decisions on cutbacks based on reduced demand get made overnight.
My one key takeaway from that time period was that it was critical to remain humble, avoid hubris, treat customers, partners, and colleagues with the utmost respect, work hard and remain positive about what might lie ahead. Another key lesson was to not panic and overcorrect. Manage what you can control. With every downturn, there is an opportunity, and you have to figure out what it is quickly.
Is there anything you would do differently in future downturns? What would be your advice to others navigating a recession for the first time?
Having lived through several downturns (including the aforementioned dot com bust, the 2008-09 financial crisis, the 2020 Covid outbreak and after-shocks), I will unequivocally say this: each downturn is different, and each presents an opportunity for business leaders to learn. I am a big believer in applying lessons learned to future situations and scenarios. Because the global pandemic overtook us all just three years ago, the downturn provided some valuable, but poignant lessons that remain fresh in my mind.
My advice to first-timers is this: if things go off track, don’t take it personally and don’t let it define you or your career trajectory. No matter how bleak the situation you find yourself in, remember that all things shall pass. Be realistic but harness the power of positivity.
Do you believe that businesses can prepare in advance for such occasions? Is it about being appropriately proactive or reactive?
Absolutely. There is an old adage that says, “the best time to fix a leaky roof is on a sunny day.” Think about that for a minute. If you truly were taking on that task, think about how easy it would be. It is warm and comfortable. You have plenty of visibility and time. No damage has yet occurred. No poor decisions will be made out of haste. No shortcuts will be taken. You have the luxury of taking your time and doing it right.
It is no different in planning for a downturn during a boom stretch. You develop a contingency plan with a few different models. You analyze pricing strategies and run what/if scenarios. You look at your staffing models to determine if adjustments might be necessary. You build alliances with as many contacts as possible in your customer base. In this way, you have proactively built a plan well in advance of a downturn.
That is playing offense and I am a firm believer in taking that approach. It has served me and my organizations well. In fact, at both Norwell and GreenPages, we’ve grown during downturns. When Covid hit, we were ready at GreenPages. We moved quickly to help clients implement optimization measures to drive costs out of the business by eliminating unnecessary technology purchases and by removing certain things that were not delivering value.
In your opinion, what is the telltale sign that a recession is looming?
In our industry and from my seat as CRO, I look beyond the headlines of the financial press for leading indicators. For example, we carefully track sales cycles and activity. Are they getting stretched out? We also look at win ratios, book to bill comparisons. And other signals too. For example, does it feel like my buyers are getting cold feet? Are more signatures required? Are more projects going to RFP? Are they asking for multiple versions of a project solution? Getting canceled altogether? Are our clients cutting back on their consumption of services or are they reducing internal headcount, etc.?
Industry staffing is a great lead indication. For example, we can see large RIFs happening in big tech right now. Fortunately for us, we are not currently seeing a softening of activity and quarter over quarter and year over year we are seeing significant improvements. But, as every CRO knows, that activity must translate into bookings and revenue.
What are your thoughts on the current state of our economy? Is there anything you’re anticipating or preparing for now?
Despite the turbulence we are all feeling right now, I am a positive thinker and I remain rather bullish on our economy overall and on my industry—technology. Has Big Tech gotten knocked back in the last six to nine months? It has, without question. But when you look at Microsoft, Amazon, Google, Salesforce, and others, you are talking about absolute juggernauts, the best-run companies in the world. They will re-tool, re-trench and respond and they will come out of this situation stronger and even better positioned than before.
Meanwhile, for GreenPages, customer demand for our cloud computing and cybersecurity services remains strong. Companies in all industries remain under siege from all manner of malicious threats. They know they must continue to invest in cybersecurity products and services to protect their data and applications, as well as their customers and their employees.
As for GreenPages, we started our preparation for a possible slowdown nearly a year ago and we are as prepared as we can be. My boss, CEO Ron Dupler, myself, and other members of our executive team have all been through downturns before and we created contingency plans for the year ahead based on different scenarios that might unfold. One thing we did not cut back on is investments in our people and promoting and expanding our leadership team.
Based on your experience and success, what are the five things a business should do to successfully navigate a challenging economy?
1 . Stay Focused – Don’t let things out of your control consume your thoughts and actions or those of your organization. If things get more challenging in 2023—and they likely might—don’t do anything drastic with respect to your business or sales strategy. Make adjustments for sure, as needed. That is only logical. But spending any time and energy worrying about things you cannot control is quicksand.
Throughout my career, I have been able to not only withstand a few downturns, but actually grow my book of business, my team, or my organization during what was otherwise a challenging time period. I have done so by being creative and by focusing on bringing to market new offerings that actually create budget.
At GreenPages this includes services for IT spending governance, such as enterprise expense management or telecom expense management. Other examples are services that address “shadow IT” and make sure that customers are not overspending on unnecessary or redundant technology products and services, or they can exhibit “good hygiene” around decommissioning technology and as needed, helping them to re-negotiate vendor contracts.
2 . Uplevel Technology and Talent – Down economies have proven to be a great time to innovate and to potentially capture some great talent that you might not ordinarily have access to and bring into your organization. There is certainly less competition for talent when compared to the booming times. We are very active in buy-side M&A right now, and looking to do just that. We are focused on investing in our teams and capabilities to bring more value to our clients and the market at large.
3 . Align Products/Services with Business Outcomes and Make Sure They Address Cost Optimization – When I assumed the helm of Corporate IT Solutions in 2009, we were right in the middle of the financial crisis. We focused the delivery of our managed services and hosted applications to small and mid-sized firms and helped them transition to the cloud. Our value proposition was the ability to deliver better business outcomes and innovation while optimizing efficiency and reducing costs. This was pretty powerful when you think of how important it is for any company, regardless of industry, to be able to improve customer service, streamline processes to become more efficient and reduce capital expenses.
4 . Make Sure You Have a Diverse Portfolio of Products and Services – Don’t be single-threaded with a line of business. Make sure you have OpEx and CapEx offerings. We have a history of investing forward. From our transition from components sourcing to a VAR, to an Integrator, to an MSP, to a CSP to cybersecurity and now GitOps, we have been able to bridge the gap of emerging technology to our legacy offerings. This is key in bringing value to our clients. Creating verticals such as Public Sector, Healthcare, Biotech, Retail and Finance is also important.
5. Fail Fast – this is something that we all need to address as leaders. It is critical to understand when and how to pivot if a particular project, product, or line of business is not going to be successful and gain market traction. There have been many times in my past where we tried to enter into a new addressable market and found that it wasn’t a fit for us. The selling motion was different and/or the buyer persona was different. It is important that you realize this and pivot.
6 . Listen To and Have Honest Conversations With Customers – you’d be surprised how many organizations don’t prioritize this. In a downturn, your customers are all experiencing many of the same pain points and they are being given new mandates by their boards and investors. They are tasked with doing more with less but maintaining the quality of service. Only by having frequent and frank conversations about their situation and understanding their business requirements, can you deliver real and measurable business outcomes.
Additionally, when done successfully, this opens the door to demonstrate not only empathy and responsiveness but to show you are a true business partner. It is critical to demonstrate a willingness to listen and understand their pain to be able to offer a solution. Course correcting and maintaining flexibility to help each other ride out the storm will pay significant dividends down the road and strengthen relationships with stakeholders.
The pandemic was a great example of this for us. We had many clients that needed help and were all in unique, but similar situations. We rallied around them and came up with options to control and/or reduce spending, we were flexible in our contract terms, and our main objective was to partner and weather the storm together. This was the key to our success and set us up for a banner year in 2020.
Can you share some common mistakes you have seen other businesses make during difficult times? What should one keep in mind?
- Not cutting back soon enough. Hope is not a strategy, and you need to be grounded in data.
- Not reacting quickly to market signals. Look for trends early. Once again, data plays a huge part in success.
- Losing focus. It is easy to chase bad business or try too many things. Staying calm and focused is paramount.
What would you say is the most critical role of a leader during challenging times?
Without question, building and maintaining the culture is the most important thing to me as a business leader. You build the culture by building trust and by continuously proving that you can deliver consistently and that we are in this together. Our sense of team and the sum of the whole make us great, and we continue to drive that mindset.
Lastly, are there any silver linings or opportunities that can come out of a recession? We’d love to finish on a positive note!
You hear all the time from investors and entrepreneurs that a downturn is a great time to start a new company or pivot and launch a new product or service. And I have done that, so I subscribe to that theory. It is rare that one thing leads to success. This was definitely evident for us as we entered 2020.
We had made many investments in our business prior to the pandemic that helped us not only weather the storm, but shatter revenue records across the portfolio. We built a channel to support an alternate route to market which helped us diversify from our direct sales model. We invested in our Public Sector as a true vertical in our business. We invested in new lines of business like Carrier Services, which really impacted our ability to support Work from Anywhere challenges our clients were facing.
Our investments in the FinOps space helped our clients control costs in the public cloud and accelerate their pivot from CapEx to OpEx with more confidence. Our investments in SalesOps helped manage the extremely challenging supply chain issues. This included investments in backend systems that allowed us to better forecast and react to aspects within our business. I have never seen a silver bullet or magic bean in business.
How can our readers further follow your work online?
I am most active on LinkedIn. I can also be found on twitter here.
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