By Richard McAndrew
Integrated System Design
Posted 11/06/01, 05:32:20 PM EDT

The consensus on our nation's economy, even before the horrible events of Sept. 11, was that we were in a recession. While some media pundits continue to look for an official economic pronouncement, the customers I speak with know what a recession looks and feels like-and we are in it.

Zaiq's customers are spread throughout this country and north into Canada. They reside in the high-tech corridors of California, Texas, Massachusetts, New York, North Carolina and Ontario. They are geographically dispersed but nearly singular in their outlook. In speaking with them over the past several weeks, it seems they have but one question as they look at the future of their businesses: "Where do I invest now to be more competitive as the economy recovers?"

Historically, competitiveness has been at the heart of businesses of all stripes, whether Main Street storefront or Microsoft. What seems different today, as we slog through this most difficult of industrywide economic downturns, is a renewed focus not only on what it takes to stay competitive but on doing what it takes to lead in emerging markets. As one customer told me recently, "Being first with more product features at less cost to our customers is key to our success. This means we have to develop products that broaden our market and have a wide range of flexible configurations. On top of it all, we have to do this at a lower development cost."

Competitiveness for this customer-a senior executive at a company recently spun out of a global player in the networking business-is about driving his product pipeline. First-mover advantage, he believes, is everything. Driving technology to the edge (providing more value to the customer for less) is what spells success for him. It is clear, he tells me, that the myriad old "standby" solutions are not going to work, or even be tried. Throwing more bodies at a problem, for example, is not going to get the company where he knows it needs to go. Neither is jumping on the latest tool. Not for the near term, middle term or long term.

Instead, his team is looking to be more strategic than ever. In his mind, the plan is clear: Utilize his team's core competencies, and less resources than even a year ago, to develop only those strategic products necessary to maintain leadership. Then, choose outside resources whose expertise would complement his team, not compete with it. In short, partner for competitive success.

As Zaiq's customers have historically found, it often makes sense to collaborate for competitive advantage, to work with companies whose product development competencies add to your core. Another customer I met with not long ago is also seeking a competitive advantage. For him, helping his customer deliver the cheapest product makes his company a winner. His customers operate in the "take no prisoners" world of consumer electronics. Here, fads and feature sets come and go nearly overnight, and his leadership position depends solely on his ability to allow customers to bring the latest and hippest products to market at costs consistently (and often significantly) below those of competitors.

This customer, too, believes the key to his company's future success lies in broadening his network of collaborators, companies that will allow him greater flexibility in designing and bringing products to market.

Industry analysts have seized on what I have been hearing directly from customers and codified it into what one views as "a new set of competitive imperatives." This new wave of business competitiveness focuses on increased product innovation, more agile and flexible product development execution, and broadening the notion of collaboration beyond traditional supply chains. And what is really becoming clear is that executives at companies that seek to lead their fields are focused on these initiatives today.

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Richard McAndrew is co-founder and chairman of Zaiq Technologies Inc. (Woburn, Mass.), an SoC design services house.

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© 2001 CMP Media LLC.
11/1/01, Issue # 13149, page 44.