March 29, 2024

GRIDLINES: The more things change...

by Michael A. Marullo, Editor in Chief
In my May-June 2011 GridLines column I opened a broad-based discussion about change and whether the changes we’re seeing today are – or need to be – evolutionary versus revolutionary.

In my May-June 2011 GridLines column I opened a broad-based discussion about change and whether the changes we’re seeing today are – or need to be – evolutionary versus revolutionary. The fact is, we’ll likely see a lot of both no matter what we think. The one thing you can count on, however, is that change will indeed happen. But even given that we will inevitably have change, something that we usually can’t know very far in advance is exactly how fast that change will come. And we almost always seem to underestimate how much time change really takes.

Funny, but one thing that always takes me by surprise, even after more than 40 years of close personal observation, is that change rarely, if ever, happens as fast as “they” say it will; as fast as it probably could; or as fast as I think it will – and by the way, I know for sure that I’m usually in good company on that last miscalculation! Let me give you a personal example of what I mean…

When we sold the last SCADA company that I was involved with along with three other partners in 1983, we were on the bleeding edge of RTU (remote terminal unit) technology. Having just introduced the industry’s first single-board RTU just a scant 3 . years before the company was sold, we had already designed, built and deployed two newer versions that were better, faster and cheaper than anything else on the market – including our own original design. In our minds (and those are key words), the world – meaning our customers and the rest of our target market – had moved on to the latest and greatest, making our original RTU a legacy product that we still supported but didn’t try very hard to sell. We were on to the newer – and of course, far more exciting stuff – new models that were just starting to roll off the production line. (Man, we were proud!)

But then, through no fault of our own, the bottom fell out of our main market, which at the time, was pipeline SCADA systems. (Those of you who are old enough will remember 1984, the first time that oil prices dipped below $10 a barrel – you know, what we now call the Good Old Days!) It wasn’t good for our small company, however, since our biggest and most reliable customers just tightened their belts and stopped buying SCADA systems. Needless to say, that put us in quite a lurch since no amount of price-cutting or performance enhancement was going to change the status quo. It soon became obvious that this was way out of our hands.

As luck would have it, a company that had been sizing us up for some time and liked what they saw came forward with a purchase offer that we were hardly in any position to refuse. It wasn’t really a bad offer at all, and under the circumstances, it was downright generous. So, we signed the letter of intent and off we sailed, into the sea of due diligence. For those not familiar with that term, it simply means doing a lot of legal and financial investigation to determine whether things really are indeed as they appear to be. That involved turning the company upside down, ferreting out every record or scrap of paper with something scribbled on it to either prove or disprove what was presumed to be the reality upon which their purchase offer was based.

I’ll never forget the words of their CFO when their team of attorneys and accountants descended upon us. He said, “By the time we’re done, you’ll learn things about your company you never even knew before.” I remember (smugly) thinking to myself: This is OUR company. We built it from scratch. There’s nothing you can tell us that we don’t already know. Boy, was I wrong! They slogged through mountains of financial records, project files and even our petty cash receipts. At one point they asked what we did with ten sacks of crawfish at $30/sack. (That was for our annual company Crawfish Boil; something that buyers living 750+ miles from Southeast Louisiana, knew nothing about!) I know this is the long way around, but I’m getting to the point of all this.

When they finally finished looking at all of our records, one part of the results didn’t mesh very well with what we’d been telling them. Most of our sales and technical discussions over the many weeks leading up to the due diligence exercise were dominated by our latest and greatest products. It was those products – and their future market potential – that had everything to do with why they wanted to buy us in the first place. Yet when they looked at what was paying the bills, it was almost entirely our earliest products providing the bulk of the income. Hmm, who knew? This was the quintessential ‘can’t see the forest for the trees’ problem – and a real eye opener, I might add.

How could this have happened without our knowing it? Easy. It all revolved around being so focused on our next big thing, that we had failed to realize that our customers had only recently reached a point where they felt our earliest products were, well – safe. They’d been through all the sales pitches, the pilots, the factory testing, and if course, the critical field testing – all things that simply can’t be rushed. Meanwhile, in our own minds, we were three years down the road; what had come before was ancient history, the way we looked at it. This was truly a teaching moment, and one that I’ll never forget.

These days it’s easy to get caught up in the hoopla with so many new things happening and so much change all around us. But sometimes it’s useful to put the hype aside and focus on reality, because the more things change – almost inevitably – the more some things remain the same. – Ed.