Genuine Curiosity

Author Dwayne Melancon is always on the lookout for new things to learn. An ecclectic collection of postings on personal productivity, travel, good books, gadgets, leadership & management, and many other things.


Is there a hockey stick in your world?

You may have noticed the deafening silence in my posting this week (or not - but it was there). That's because I work for a software company, and it was the end of a quarter.

In our business, the end of every quarter is a frenzied period in which a large portion of our quarterly business closes in just a few days time. This is fairly common within every software company I've ever been associated with, and it can be an exciting and stressful phenomenon.

Exciting, because there are a lot of great, game-saving "plays" that pull a team together to do what it takes to get the business in. Stressful, because it's really hard to predict where your business will come in when so much of it remains "invisible" until the final days of the quarter. The fact that any delay in process on either side (the company's or the customer's) could cause the business to slip beyond the end of the quarter. In these cases, it can affect the software company's profitability or, in the case of many customers, the budget may "disappear" if it isn't spent.

This is called the "Hockey stick effect" in our business, because it means a big spike at the end of the quarter, causing our daily business graphs to be shaped like hockey sticks.

This effect seems to be rooted in the quarterly-focused metrics of the public software company, but it happens in privately held companies, as well (like mine). I often wonder how much customers perpetuate this phenomenon by holding their buying decisions until late in the quarter to gain extra pricing leverage against software companies?

This has gone on so long in our business that I think it's baked into the fabric of the software business.

What about those of you in other businesses? What kinds of cycles do you deal with? Are they good or bad for you, your customers, and the business?

I'd love to hear your stories.