Fryer's Blog in the Mountains

PART 2—A QUESTION OF LEGALITY, ETHICS OR SHEER STUPIDITY

Despite having already blogged about the Halogen – SuccessFactors lawsuit just days ago, it continues to gnaw at me.  It’s the moral and ethical aspects that are problematic, not the legal issue.  Why is that?

Initially, I thought it was due to my present work with some university business students.  We are focusing on corporate strategy, so far slightly skirting the ethical dilemmas of business, but next week we will launch headlong into competitive intelligence and some of the moral implications associated with scouring for competitive data.  Do I think Halogen Software’s alleged behaviour will negatively impact these students?  Not really, although it may entice some to push the envelope.

Taking shortcuts to find silver bullets to enhanced competitiveness tends to be short-sighted.  Although it may uncover a key differentiating factor—a unique feature or a certain price point—replicating it will only be a momentary fix.  It is the company’s processes that directly generate new features, reduced prices, improved margins or superior support.  Matching a product feature, for example, only works until the competitor’s process kicks in, adding a new, compelling feature.  It is the development and near flawless execution of these processes that yield those ongoing differential advantages.

Halogen’s alleged attempts to unearth  SuccessFactors’ secret sauce may have been in vain.  Sustainable competitive advantage is the direct result of an organization’s core competencies which spawn new and improved features, products and prices.  Attempts to bypass the process to quickly replicate a competitor’s differentiated feature may provide only temporary relief.

Ryck Marciniak (Guest Blogger)

A QUESTION OF LEGALITY, ETHICS OR SHEER STUPIDITY

Halogen Software, a Canadian firm, is squarely in the crosshairs of a fraud lawsuit launched by SuccessFactors of San Mateo, California.  As arch rivals in the human resources software market, it is alleged that Halogen established a fictitious company to pose as a prospective customer, to surreptitiously elicit proprietary information from their larger competitor.  Although this is now with the courts, the bigger question is, “Will they be judged differently in the court of public opinion and the market?”

Defending such suits, companies usually adopt one of two public stances.  Either, they state they can’t comment on the situation as it is currently with the courts, or they announce that they will vigorously defend themselves against these baseless charges.  Surprisingly, Halogen apparently didn’t deny their involvement in this clandestine operation.  Instead, they claimed that the information received from it was publicly available.  If true, this makes Halogen look rather foolish for creating such an elaborate scheme that only yielded public information.

Setting aside the legal issue, what does the market think about this kind of manoeuvre?  Some will quietly chuckle at Halogen’s cleverness, applauding their ingenuity and wishing they had thought of something similar themselves.  Others, however, may voice complete disbelief at how easily SuccessFactors was duped.  Equally, both sides have made some mistakes.  But in comparison, I am more willing to forgive the unbridled zeal of a salesperson pursuing a lead than the systematic and calculating attempt by an organization to unscrupulously extract proprietary information about another firm, in this case their fiercest competitor.  Despite Halogen’s cunning, I would also be concerned about their behaviour, especially if I was a prospect, a customer or a partner.  If they can engage in such subterfuge to gain a competitive advantage, what might they do or say to have me sign an agreement?

Corporate cultures are defined at the executive level.  Their behaviour is closely scrutinized by the rest of the organization and forms the template for its ethics.  The deception perpetrated by Halogen obviously had executive support, so it will form a guideline of acceptable behaviour for its employees—and that should worry the Halogen executive team.  Knowing that you have played ‘fast and loose’, it won’t be surprising if lies, omissions, half-truths, and deliberate misrepresentations become commonplace, all in the name of winning.  Or, will employees now listen guardedly to Halogen executives, not sure if this is simply another slight of hand?

The price Halogen pays for this alleged fraud is yet to be determined by both the courts and the market.  Halogen demonstrated some creativity—it’s just a shame they didn’t focus these efforts to improve their product or their execution in the market.

Ryck Marciniak (Guest Blogger)

When "Good Enough" isn't

I'm in a state of constant turmoil about our product.  I have this vision of where we want to be and I have the need to ship useful product now.   Some people would stamp a product "good enough" and ship.   Why?  Because I've been in startups that just keep developing product to an ever elusive and changing end goal.  But never shipped, never had a customer.

But I'm not happy with good enough.  What you ship needs to be much better than anything out there.  So I figured out a way to get both done.   The key is to focus on core functions we absolutely know will delight our customers today.  The rest is "good enough" for now.  Why?  Because every time you release, and customers use the product you gain more knowledge and clarity on the next set of functions and features.  

This constant iteration and innovation drives the product closer to the vision.  So "good enough" doesn't cut it for the core features, but is o.k. for the fringe where no one really knows the right answer until they see it, touch it and use it.