2014 Winner: PowerObjects Sets a BHAG

• By Scott Bekker
• October 01, 2014

For a 25-person company in Minneapolis to set a goal to be named by Microsoft as the No. 1 Dynamics CRM partner in the world seems overly ambitious.

That's what the leadership team of PowerObjects intended when they made it their Big Hairy Audacious Goal (BHAG) in 2008. BHAG is a concept borrowed from "Built to Last: Successful Habits of Visionary Companies," a 1994 business book by James Collins and Jerry Porras.

"At that time, it looked a lot farther away than it ended up being," says Jim Sheehan, COO and partner at PowerObjects.

Fast forward a few years and PowerObjects is up to 230 employees, has booked revenue growth of 107 percent in 2011, 47 percent in 2012 and 46 percent in 2013 and enjoyed profitability through the entire period. As for those awards, PowerObjects won Microsoft's top prize worldwide for Dynamics CRM partners in both 2012 and 2013. (The company was also a finalist for the award this year.) Meanwhile, it's also rolling up the year on a pace to finish with more than $25 million in revenue and a strong possibility for 100 percent year-over-year growth again.

Sheehan says setting that BHAG was critical. "That's what really helped us create our focus. It's like the flag in golf. You know when you're going toward it."

The PowerObjects leaders made sure everyone at the company knew the focus, which was important because the company was in transition. Founded in 1993 by Dean Jones, the company spent a strong first decade as a staff augmentation/custom application development shop with an emphasis on Sybase tools. Opportunities started to wane with the dotcom bust, and the subsequent consolidation of IT services companies. At the same time, innovation was dwindling on the Sybase toolset.

Knowing they needed to do something, the leadership team brought in an implementer to help the company get on the business writer Gino Wickman's Entrepreneurial Operating System (EOS), says Sheehan. During the process, they also focused on the "Built to Last" concept of the BHAG. Nearly every decision by every employee at every level of the company needed to take the new goal into account. It became part of employees' departmental scorecards.

"It was the litmus test that's out there in the distance. Initially, if it wasn't going to allow us to be the No. 1 Dynamics provider in the world, we weren't going to do it," Sheehan says. "It makes business questions very easy to answer."

The goal influenced geographic decisions, as well. Expansion opportunities in a few geographies being roughly equal, PowerObjects chose to open its first office outside of Minneapolis in Dallas to bring the company closer to Microsoft Central Region leadership for better alignment with Microsoft and to establish a presence in the South Central District to match their existing coverage in the North Central District. "We first needed to establish our dominance in the Central Region," Sheehan explains.

Since then the company also opened offices in Chicago, Cincinnati, Omaha, New York, Philadelphia, Atlanta and Seattle. You can see the logic in the PowerObjects expansion by visualizing the company growing first in the Central Region, subsequently moving to create a similarly large presence in the East Region and taking the opportunity to have some resources close to Microsoft's global headquarters in Redmond for further alignment and visibility.

Achieving the BHAG already in 2012 was even surprising internally. "Whoops!" jokes Sheehan. "We had to step back. Did this mean we're done? We knew we weren't. Are we still trying to become the largest Dynamics CRM partner in the world? We are."

At the end of 2012, PowerObjects set a new BHAG -- to add value to 1 million people for Dynamics CRM.

While seats are important, that's not all PowerObjects is measuring with the metric. "It's people using our blog for education. It's customers that we've sold or implemented to. A lot of it has to do with Web site traffic," Sheehan says.

One way PowerObjects generates Web traffic is with "The CRM Book." "One of the ultimate goals last year was to publish the world's most authoritative guide to Dynamics CRM. With the software changing so fast, we thought we can't do a printed book, we're going to have to do a cloud-based book. For the company, it helps us positively impact people," he explains.

Sheehan estimates that at the time PowerObjects set that goal it was 10 percent of the way to adding value for 1 million users. Now, he believes the company is 20 percent of the way to the goal. If history is any guide, PowerObjects management should probably be thinking already about BHAG No. 3.

Read the full 2014 RCP Rocket Award winners feature here.

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