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(August 10, 2001) It's an old joke. On meeting his successor, the departing CEO offers three sealed envelopes in his top desk drawer. "Open them as you hit your business crises", he tells his replacement. About one month into the job, the new CEO is in a seemingly insurmountable mess. She opens the drawer, takes out the envelope and reads the note. "Reorganize", it says. 90 Days later, things are messy again and she goes for the second letter. "Fire the head of Sales and replace him with a strategy chief", the note opines. Again, 90 days after that, she is in a world of hurt. She opens the final note which says "Write three notes".
BrassRing, the third leg of the newspapers' stool, should have written the story. Three CEOs into an eighteen month history, the company is a scattered mess of conflicting policy, resources and agendas. The spiritual successor to CareerPath, the organization gives testimony to the Newspapers' unflagging desire to reincarnate themselves as government bureaucracies. In other words, BrassRing is setting new standards for screwing up a perfectly good approach to running an online Recruitment service just like CareerPath did in its day.Even the recent appointments of John Haworth and Mike Goiai, two industry veterans, will do little to slow the death spiral. When the ship is sinking, all you can give new captains is something like three letters to use in the predictable event of a crisis. (We nearly titled this piece "Executives In Transition" because Mike and John are liable to be available ... sooner rather than later... and are solid executives in our space. Certainly, that's our prediction, not theirs.)
So what happened?
At one time, HireSystems (now called Brass Ring Systems... one of the many operating units of the consolidator, Brass Ring, Inc.) was a solid play in the resume management / applicant tracking system space. Their key innovation, like I-Search (another recent failure), was to quality check the data generated by scanning paper resumes. But, as you might guess, the data checking business doesn't translate well into an electronic space. With overheads and functions rooted in the notion that all scanning is faulty (and a pricing model based on paper data), the core software business became bogged down in trivial development as the market changed and chaos ruled the insides of the shop.
The little software company managed to hide its growing weaknesses (from everyone except customers) while the larger aggregation play took place. About 18 months ago, the newspapers created a monstrosity called Brass Ring, Inc. It combined the assets of most of the career fairs in the nation, added a collection of resume databases and a struggling online job board called the "Pavement" (as in "how low can you go when you jump?"). Brass Ring Systems, a modestly viable player in the midst of a technology change became the hub of the new entity's integration activities. It was as if someone woke up one morning and declared "Job Fairs, Job Boards and Mailing Lists are all software". And, dumber than any move we've ever seen, Brass Ring began to manage its assets as if it were a software company.
Perhaps you've noticed, as we have, the remarkable ability of marketing departments to make products in our space seem complicated and technical. They aren't either, particularly. Now imagine a company that provides quality control on data pretending that it is a technical company while pretending that the integration of a range of companies in our space is somehow terribly complex. The result is an executive team whose mantra is "this is really hard; its okay that it takes a long time; and it's okay if the quality isn't so hot". It didn't take long for a culture in which nothing happens to take hold.
We once watched BrassRing take over 120 days to issue a finished marketing CD after nine failed "final reviews", each at least a week apart, for corrections..The original disk went inside magazine covers in huge quantities without any final check on quality. The project, which would have taken two weeks in any entrepreneurial shop, got bogged down in the ass-covering, blame spreading culture that dominates the mid ranks of the company. It was a clear demonstration of how a company can screw up everything it touches and tries to fix. There were, of course, no consequences for the culprits nor apologies to the victims.
In the midst of a collapse of the applicant tracking industry, the company could have been positioned for extraordinary success. (Those unlucky enough to miss the column may, in fact end up fleeing to BrassRing as the result of the current wave of failures in the industry. For them, it will be out of the vanishing frying pan into the fiery arms of a vendor who will blame them for problems.) Since customer service wasn't built into the original product and, since the original product is being forced to do things it wasn't designed for, BrassRing systems customer service gives the company a way to play internal "Gotcha" with external data. It's no surprise that the company's important alliance structure is shrinking as partners recoil from the workload that comes from customers who no longer want to call home.
As for the highly profitable, job fair business, it's in tatters. Some smart person didn't notice that the online business was an upsell from the Job Fair's print advertising and separated the two while reorganizing the sales leaders out of jobs. (Evidence that, sometimes, people who don't seem like team players are in the right.) Lost for an upsell on the one hand and lost for a foundation on the other, the split sales force failed miserably, repeatedly missing targets and swallowing cash that could have been used for acquisitions. Original assets of the acquired company, employees who understand the business were, of course the first to go. Better to appoint inexperienced but loyal functionaries. The founders of the original job companies are licking their chops on the sidelines waiting for their non-competes to expire.We invested a number of years of time and energy in the Advisory Board at BrassRing. Our hope, built on the backs of a number of long term relationships, was that this would be the way that the newspapers began to crawl out from under their historical disadvantage in our marketplace. The advisory board was, in theory, "dedicated to becoming the premier brain trust for human resources". Mostly, it turned out to be a vetting function for new BrassRing products. As you might guess, given their dismal track record, there were few new ideas.
As we've mentioned previously, we join the boards of companies we believe in. Money can't buy our participation or our opinion in these things. We're in because we buy in to the vision. We terminated our involvement with the company in February of this year. We could not afford to have our reputation associated with such dismal and misleading behavior. It was clear then, as now, that Brass Ring was a juggernaut headed for a crash on the shores. Its biggest problem? Believing that newspaper parentage protected it from stupid business mistakes.
A Brass Ring is a gimmick used by carnival operators during the early 20th Century. On some carousels, a rider had the chance to grasp at a ring as his horse, chariot or sled passed by the ring dispenser. Every so often, one of the rings was brass and that entitled the grabber to a free ride. Like any gimmick, the odds of actually getting a brass ring were extremely low. The odds that BrassRing will survive the rigors of this market are lower than that.You may recall some of our more constructive suggestions for the company. Stuck with a really bad name, the company has floundered its way through the destruction of the national job fair market, pretended to be a software company, passed off niche databases as "exchanges", tried to position its data quality control business as an enterprise platform, failed to sell in a flush market and flunked the industry consolidator test. The result?
More money from the newspaper companies that own it.- John Sumser © TwoColorHat. All Rights Reserved.
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by John Sumser
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