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Managers Who Swim With the Big Fish and Make it Pay

April 14, 1996| Wall Street Journal|Hal Lancaster

Consider the pilot fish, a tiny creature who hangs around with bigger creatures for sustenance and protection.

Now consider the corporate pilot fish, a departed employee of a giant corporation who still swims with his former employer for sustenance and protection.

It is a career path made for today's insecure corporate employee, who wonders whether life outside the corporate sphere might be preferable - or inevitable - but worries about the riskiness of a purely entrepreneurial venture.

Former Digital Equipment employees James McGowan, Mark Dresner and Drew Arlo are corporate pilot fish who bought a controlling interest in Infinite Technology Group in Mineola, N.Y., in 1994 as a way to escape the uncertainties of today's corporate environment. They minimized their risk by teaming with Digital to provide services the big computer maker didn't want to offer. The Digital relationship accounts for the bulk of Infinite's $16 million in annual revenue.

The pilot fish phenomenon isn't new, but it is becoming increasingly common as shrinking corporations focus on the businesses they know best and outsource the rest. Meanwhile, large numbers of ex-managers and professionals want to exploit the skills and connections they developed in the corporate arena.

Consultant Charles Stryker says he has seen an ''amazing'' number of these arrangements lately, ranging from a departing manager contracting to perform his old function to a company spinning off a department and then outsourcing the work to them.

Such arrangements were unusual a decade ago, Stryker said. People whose loyalties weren't secured by a paycheck and benefits made top management squirm. Now people with critical skills can take advantage of corporate outsourcing to quickly build their own businesses. ''It's like situational entrepreneurship,'' Stryker said.

In the Infinite-Digital alliance, both sides find the arrangement beneficial. ''They know the customer base,'' said Bill Watts, Digital's New York state sales manager. ''They know the end-users and the markets we're trying to get into.''

Likewise, Dresner adds, Digital knows the capabilities of Infinite's leaders, who were top salesmen for the computer maker. With Digital's sales force shrinking, ''We have salespeople calling us to work on big opportunities with them because they know our ability to close big sales,'' he said.

Infinite's managing triumvirate all say they probably could have remained at Digital indefinitely. But each had been through the restructuring wars and had become conscientious objectors.

McGowan went through work-force reductions at AT&T, Xerox and Digital. Dresner was making more than $120,000 a year selling to big accounts but realized that his chances of getting into management weren't strong. Arlo faced a choice of moving laterally or leaving. ''I couldn't deal with the fact that someone else was deciding my future, so I opted out,'' he said.

But to make such alliances work requires considerable advance planning. Some tips gleaned from Infinite's experience are:

Hit 'em where they ain't. McGowan, who has been plotting his corporate escape for years, specialized in an area - recruiting outside software providers - that gave him a broad perspective of the marketplace. He was thus able to identify areas where he could provide services more efficiently than Digital.

Your internal relationships are as important as your external relationships. With his eye on the future, McGowan carefully cultivated his Digital colleagues. He charts on a diagram the Digital people he needs to influence and works to position himself better with the circle of people who advise them.

Be sensitive to your allies' internal needs. ''You may have to back away from a sale to help them improve their position,'' McGowan said. ''It's money out of your pocket, but the relationship is as important as the sale.''

Keep broadening your skills. To prepare for his venture, Dresner returned to school for computer-science courses. It isn't enough to know how a piece of hardware works, he said, you must understand all the ways the underlying technology can be used so you can develop solutions to customers' problems.



last updated february 2013