FEATURE ARTICLE

Subject: December 2001 ECMgt.com: Year-end 2001 in Review
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December 1, 2001 *4,300 subscribers* Volume 3, Issue 12
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2001 - AN EMOTIONAL ODESSEY
BY MICHAEL DRAPKIN

Like most things in life, being in the business world means that you will have good times and bad times. That goes with the territory. Having been in the consulting business for twenty years now, I have personally experienced bad times before. But when things slowed down this year, several things conspired to make it especially unpleasant, although as 2001 reaches its twilight, there are glimmers of hope for better times ahead. We shall survive, and we will overcome all obstacles. That is the American Way.

I started a consulting firm back in 1986, just in time to be hit by Section 1706 of the Tax Reform Act of 1986. A bill created in a smoke-filled room by former (thankfully) NY Senator Pat Moynihan; it applied law to collusion between government and big consulting firms to suppress small consulting firms and sole practitioners. The next year, we experienced the famous Stock Market Crash of 1987. Yet we continued on, recovered, and lived to tell the story.

Things slowed down again in 1991-92, but at the time we remained relatively insulated from the effects of that recession by staying with recession-proof clientele. In both of these slowdowns - 1986 and 1992, we did okay consulting in the New York City area by staying away from financial services, the mainstay of the New York economy. At that point, I decided I needed a break from my high-risk entrepreneurial activities, so I took a job as a project manager with a major Wall Street firm.

Eventually, I wound my way back to running a consulting firm again, with stopovers as a Vice President, Director of Technology, Chief Technology Officer and Chief Information Officer. I love consulting, and I love helping and fixing my client's projects and companies even more. I started Drapkin Technology back in 1999 and flourished and surfed the Dot Com wave, taking cash - not equity - for my services, thank you very much. I marveled at the ridiculous firms getting funded, but continued to observe the old consultant's adage: "Never question why your clients want to pay you money." I knew we were headed for a meltdown, and stood aside as firms hit the brick wall at 2000 miles an hour.

Smart consultants practice agility, which is why the IBM Global Services and the Accentures continue to react successfully, while the wannabees like Razorfish and Organic looked on helplessly as their clientele melted away. I quickly shifted back to the "meat and potatoes" clients of consulting: big firms with deep pockets. 2001 rolled around, and I withdrew from the dot com clients and went back to servicing Wall Street companies.

The first half of 2001 was actually still OK, as the marketplace was still running on inertia. Unfortunately, you can only coast downhill, and it was clear that the market had bet too heavily on "New Economy" instead of intrinsic value. Did anyone really think Amazon was going to buy WalMart? The writing was on the wall, and it was just a question of time before we headed towards the "R" word - recession.

A former boss of mine, who is spectacularly successful as a senior tech manager at a major Wall St. firm, said to me recently, "I couldn't do what you do. I couldn't stomach the uncertainty." Ironic, considering his industry, where the further up the food chain you are, the closer you are to the door. Indeed, things slowed midsummer, and I hunkered down and cut expenses, anticipating a very cold winter. I knew that the Dot.Com meltdown had created a big imbalance in the market, and besides, we were due for a recession. Nothing lasts forever.

I had mentally prepared to weather the upcoming drought, and actually looked forward to some relaxation at the end of the summer. Things were very slow in July, and August is dead even in good times, as most managers go on vacation and nobody can make a decision, or sign a contract. I expected that after Labor Day, things would pick up as they usually do.

We then decided to restructure Drapkin Technology as XB5 Partners Inc., and brought in some fabulous partners to share the risk and reward, with our sights set at larger projects and revenue. Labor Day passed, and that first week of September looked good. Things were loosening up nicely.

Then September 11th struck.

All business ground to a halt. New York went into shock. Another emotional upheaval, in addition to the personal loss many of us felt from the loss of friends and colleagues. Thank God I was still alive, thank God!

We knew that we were in for a very rough ride. We made a quick tactical decision: Since we couldn't sell our services, we decided that we would give them away for free and in the process help those in need. We started the World Trade Center I.T. Mobilization consortium (http://www.xb5.com/wtcitm) rallying 500 individuals and 30 companies to help firms affected by the attack get back on their feet and stay in New York. We are currently helping a number of firms absolutely free of charge through this XB5-organized effort.

Just because business in NY stopped didn't mean that we stopped. On the contrary, we hustled even harder, making connections and building resources for the time that New York emerged from mourning and started doing business again. This seems to have started to happen again in the last couple of weeks, and I am "cautiously optimistic" about prospects for the future.

You see, we are not a Dot.Com, and we don't have the luxury of folding our company when cash runs out. Consulting is what we do for a living, and we'd like to think we are very good at it. But failure is not an option. So, I am half joking at what I have said in a number of print and radio interviews recently. I said that for American business to truly and effectively fight terrorism, the best thing they can do is to once again go back to business as usual. And, of course, we feel that it is every firm's patriotic duty to do business with our firm.

As the emotional roller coaster of 2001 barrels through its last set of hills and steep drops, we fly along, enjoying the ride, and giving thanks for the chances we have all been gifted with for success in the future. Good luck, everyone! May we all be granted success in 2002.

 

Michael Drapkin is co-founder and Chief Executive Officer of XB5 Partners Inc., which provides senior-level management and technology consulting services to Fortune 1000 companies and e-commerce firms. He is chair of E-Commerce Management for Columbia University's Executive IT Management Program and is Visiting Lecturer in E-Commerce Strategy at University of Chicago's Graham School. Drapkin is an expert at delivering cost-effective business solutions, and specializes in e-commerce deal making and crisis management/turnarounds.

 

 

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