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February 6, 2024
It’s not always fashionable to have standards today. That constant voice often considered a nitpicker, a devil lurking deep in the detail finding fault in matters seemingly unimportant.
Stop-start systems that forever probe and demand more can be tiring for some, downright demoralising for others. Likewise, companies frying bigger fish – revenue or profitability for example – may appear less sympathetic to such an approach. Focus on the rocks, forget the pebbles and sand.
But the true arbitrators of quality don’t view it that way – standards should never slide, rather people and businesses should rise. And the small stuff matters.
“I’m unapologetic, don’t accept bad quality, don’t accept malaise,” stated Michael van Zoggel, Managing Director of Outcomex. “Because that will get you in the end.”
Critics usually – and lazily – confuse this type of statement as an out-dated declaration akin to ‘my way or the highway’… an atmosphere of intimidation designed to trigger improvement through fear.
In the case of van Zoggel and Outcomex, the opposite is true. Like many other high-performing leaders and businesses, setting the bar high in such a fragile corporate world is the minimum requirement for success. Doing so compassionately and professionally is just basic common decency.
“Those small things, those course corrections for the minutiae, build the detail, which builds the professionalism, which builds the brand, which builds the outcome,” van Zoggel said.
While acknowledging the value of having large-scale and long-term goals, van Zoggel stressed the importance of instilling discipline and quality at every level.
“I don’t accept the whole mindset of ‘don’t sweat the small stuff’, sweat everything,” he added.
“Little things become thorns and they get bigger and bigger and bigger. Then before you know it, you have to course correct something that shouldn’t have been there in the first place. That’s a painful process.”
In the eyes of van Zoggel – in union with Marco Delgado as company founder – this is not simply a headline statement, rather a philosophy which underpins all business activity for the Sydney-based system integrator (SI) and managed services provider (MSP).
Small focus, big impact
Founded in 2006 with a rich history in the Cisco product suite, Outcomex delivered $107 million in revenue last year, driven by 155 employees across Australia.
Through a model of applying heavy intellectual property (IP) and experience to a specific vendor product, the company relies on a technical team of just under 90 engineers – all full-time, highly certified and locally based.
The value of integration is derived from applying this unique IP over and over again.
“We have a small vendor set and a very heavy engineering focus so we can challenge the vendors and challenge our customers,” van Zoggel outlined. “What a vendor will present to a customer in PowerPoint is what we deliver.”
In the context of Cisco, Outcomex was the first partner to deliver Application Centric Infrastructure (ACI), Digital Network Architecture (DNA) and Software Defined Access (SDA) solutions in Australia.
For a local organisation operating a “very light sales touch” in a highly competitive ecosystem, such achievements should not be understated.
“These are serious technologies and serious platforms,” van Zoggel said.
Through a laser focus on a smaller pool of vendors – of which Cisco is the big fish swimming in the Outcomex pond – van Zoggel said the business is exposed to increased opportunities across cloud, networking, security, Internet of Things (IoT), collaboration and unified communications.
“What are we missing?” he asked. “End-user compute and applications are not spaces where we want to be.”
Having a high ability to execute on core infrastructure programs is the result of a “heavy commitment” to Cisco. There’s no fear about operating at the cutting-edge of the market, nor a reluctance to back that up with hard cash.
“Cisco is like a religion, we have engineers coming out of university and all they want is to attain expert-level certifications,” van Zoggel noted. “Not many vendors have that appeal.”
Tapping into that religion allows engineers to chart a compelling path forward in a competitive community driven by high standards. Engineering companies are forever “feeding the beast” to ensure technical talent is “happy, challenged and certified” – specialisation thrives off stimulation.
Vendor certifications can run into the hundreds of thousands of dollars per year however, a monetary and time investment that makes most ecosystem partners resentful.
“It’s expensive, difficult and requires courageous commitment but once you do that, then it self propels,” van Zoggel explained. “This is when not being a generalist helps because we can absolutely go all-in.”
If Outcomex is delivering eight out of every $10 from a Cisco solution then the business must ensure that:
Such commitment was realised through recent acknowledgment as Cisco ANZ Partner of the Year in 2023. This was in recognition market-leading innovation, business growth and alignment with the vendor’s strategic priorities.
Through partnership with Cisco, Outcomex has expanded beyond its core market of Australia and branched out with presence in New Zealand and South Africa.
Such expansion can be attributed to enhanced demand for the company’s IoT solutions – powered by 365mesh – which are servicing a range of industries including agriculture, smart cities and heavy construction among others.
Holding the line
As the saying goes, jacks of all trades are masters of none – horizontally leaning folk that are easily swayed by the next market opportunity.
When at the common crossroads of seeking to scale, specialised businesses are often presented with the lure of expansion – new solutions, additional vendors, widened scope. An invitation to abandon the hyper-focused approach of the past in the pursuit of all-out growth, at any cost.
Outcomex has never taken such bait, nor has it been seduced into diluting capabilities.
“If you look at all that technical expertise and unique IP, it’s amazing how quickly that can get lost,” van Zoggel shared.
Despite refusing to name names, van Zoggel cited many examples of organisations that were originally very specialised and highly focused… until they needed to grow.
“They introduced new vendors and capabilities to achieve that,” he recalled. “They considered that as a logical play but it just diluted their ability to execute on those core vendors in the first place. Then they became generalists with no specialisation or depth, which isn’t what we want to do.”
The real trick is choosing the right vendor to back in the first place but even then, van Zoggel acknowledged the discipline required to continually hold the line.
“Sometimes it can be tempting when you can see the dollar in front of you but don’t forget the ripple effect,” he cautioned.
For example, Outcomex runs a level two service desk as part of a large managed services business, operating as subject matter experts which means they don’t take calls from end-users.
The temptation to move to the next level of support is there – such as fixing mouses and keyboards – but that would require a different employee skill set and different business model to compete in a highly commoditised market.
“You can talk yourself out of it even if the money is there,” van Zoggel noted. “We might spend $1 and make $1.20 over there but if we took the same $1 and spent it over there instead, we could make $3. So let’s just focus on that.”
So, does hyper specialisation translate into walking away from deals? Does van Zoggel and his team say no more times than yes?
“I don’t know about that but our close rate on pipeline is 59.7%,” he added. “The industry average is 33% which means our approach yields nearly double the return.
“There’s a couple of bids going around the market today that we can’t bid for because the portfolio doesn’t match. Sometimes projects come to market that you just can’t hit but that’s a skill and a discipline – generalists get seduced by quick short-term fixes.”
Citing the work of “very strong” sales and pre-sales teams, van Zoggel said Outcomex aligns to a rigorous process because it’s expensive for the business to transact. In every deal, one or two architects could be involved, as well as a couple of engineers underpinning that.
“There could be five people putting in time at anywhere between $1600-$1800 an hour,” he calculated. “So we need to qualify opportunities well and put quality into the responses.”
Navigating growth crossroads
According to van Zoggel, there’s certain points in a business that must be prepared for and facilitated otherwise growth aspirations will never be achieved. Opinions vary on the specifics but generally, those revenue markers are $5 million, then $40 million, then $80 million and roughly $200 million.
At those points along the way, businesses will be burdened by cashflow issues, system difficulties and likely, staffing challenges.
“Maybe not even issues but you have to make changes,” van Zoggel clarified.
That translates into putting a layer of management into the business which represents a sizeable investment, supported by enhanced tools and processes. It takes time to implement such changes but if the business is growing at pace, then make decisions even earlier to avoid “starving” other areas of the company.
Speaking from experience, van Zoggel advocated the benefits of investing ahead of the curve given restructuring can take as long as 6-9-12 months.
Outcomex has experienced both ends of the extreme growth spectrum – solid and organic growth on the one hand, hyper growth that blows through the company ceiling on the other.
A combination of both is preferred for most ambitious businesses. For example, Outcomex has regularly recorded 10-20% year-on-year growth and has occasionally been catapulted forward with 50% growth – “and this wasn’t off a small base”.
“If you’re not ready for that early, that’s going to really hurt you and could do some serious damage in terms of burning out staff, overworking people and managing cash flow, insurance etc,” he said.
Steps exist to mitigate this however but the key is acknowledgement and preparation.
“Growth will come if you’re ready for it,” van Zoggel noted. “The faster you get ready for those kinds of numbers – and recognise that they exist – then the better state you’re going to be in once they do hit. I’ve seen companies go down because of this.”
Training the trust muscle
Drawing on more than 25 years of industry experience, van Zoggel initially joined the business in 2014 as National Sales Manager of then Uplinx Solutions – before the company rebranded to Outcomex in 2016.
In early 2020, van Zoggel was appointed as Managing Director in a move which resulted in Delgado transitioning to CEO.
“If you look at my job, I’m almost like a quarterback,” van Zoggel said.
Acknowledged as the leader who starts most plays in the National Football League (NFL) – aka American football – a quarterback usually lines up behind the centre, calls the signals and directs the offensive play of the team.
“But the reality is that, if there’s a problem over here then it’ll get solved over there,” he explained.
“I rely heavily on my team who are specialists in their field and experts. My job is not to generally solve the problem, it’s to provide focused advice as to how to approach something and lay a platform of success to get it done.”
But is it easy to offer such trust? Is that a muscle that needs to be trained as a leader?
“Yes, 1000%,” van Zoggel confirmed.
“Early on in our relationship, Marco promised something which at the time, I didn’t even think about because it wasn’t important. Then 6-8 months later he fulfilled that promise and I didn’t expect it.
“Marco is a man of his word and he looks after his people. I walked into this business having his complete trust which has allowed me and the business to prosper.”
In founding the company, van Zoggel praised Delgado’s ability to hand over responsibility on areas that have a “direct impact” on his wallet, family legacy and heritage as a single owner of the business.
“His trust has allowed us to grow,” van Zoggel added. “There’s so many businesses at that $50 million size that just get stymied because the CEO or owner can’t let people do their thing. It’s happens all the time.”
But not at Outcomex.
“The retention of staff in this place is nuts, it’s double the industry average,” van Zoggel said. “We challenge them, we offer autonomy, we pay them well and we invest in time and effort. We don’t lose many people and that is an extraordinarily important for myself and the leadership team.”
In looking back, van Zoggel is also heartened that the intrinsic DNA of Outcomex which was first spoken about 8-9 years ago – to build an engineering organisation – is still the topic of conversation today. Those core tenants are carved in stone and remain unchanged.
“It’s always been, what it’s been,” van Zoggel added.
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