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Geneca CEO Joel Basgall likes to tell his software firm’s customers that they’re in the software business these days. Whether they’re florist giant FTD, Inc., movie rental upstart Redbox, or Blue Cross/Blue Shield, when it comes to attracting customers, partnering with suppliers, and employees interacting both internally and externally, it’s all about the software.

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“Software is a surprisingly people-oriented activity. You think it’s very scientific and very code-oriented, but so few of the problems you encounter in a software project are actually about software. They’re usually much more oriented around the people and the environment.”

The following is an edited abstract from the Middle Market Thought Leader podcast featuring Joel Basgal, president and CEO of Geneca, and Jack Sweeney, co-host of MME Thought Leader.

MMTL: As a middle market firm how can you compete for some of the same business that the larger consulting firms might want?

Basgal: That’s a big challenge for us, naturally. We’re in competition with people from Google and Accenture and Microsoft, all the way down to small firms where the individual developer is like the entire organization. So what we focus on is the team and the culture that we get to exist in, and that we’re really trying to make some special things happen. It’s not so much about, I need to program this line of code; it’s about, look at this cool thing I’m creating and look at what my customer is doing with that cool thing that I created. So it’s much more of an end result orientation, much more exciting to accomplish something and to build something.

MMTL: Can you explain how Geneca tries to give its people ownership of projects which you’ve said is part of the culture?

Basgal: I differentiate between ownership and accountability. What I mean by that is I believe accountability is assigned. I can assign you accountability but when that happens, I still own the decision, I still own the outcome. I’m asking you to do something and I’m holding you accountable for specific things I’m asking for. They tend to be metrics-based and such. Ownership, people take ownership. If I take ownership of a situation, I’m going to do whatever it takes to make the end result happen, including creating my own metrics to be able to forewarn me. I’m going to ask for help when I need it because I care more about achieving the outcome than I care about the measurement of my accountability. So we try to create an environment here at Geneca that doesn’t promote accountability but rather opens the opportunities for people to take ownership. And we get a much better result because of that.

MMTL: How do you measure that result, is it in retention numbers?

Basgal: It’s certainly in retention numbers, but it’s also in capabilities. Where many organizations say, “Here’s the checklist of the five things that we’re going to rank you on, this is what your bonus is based on” and stuff like that, ours is all around, “What can we do for the client?” and “Wow, wasn’t that cool?” We should be rewarded and we should celebrate that sort of thing. It’s much more oriented towards that success than it is towards the tasks that it takes to achieve that success.

MMTL: Can you tell us how you reward your talent and compete in the high tech space for that talent?

Basgal: We are internally and privately funded. We have a few friends and family-type investors that have been with us for about 14 years now. They like the direction we’re going. We have no immediate plans to IPO for sure, but we actually measure our success not in revenue and profit – although those are certainly things we keep an eye on because they’re important – but we measure our success on capabilities and outcomes that we can create for our customers, on new clients that they can accumulate and new revenue that they can generate. It’s very different in that mode.

I have had discussions with other organizations. We’ve talked about buying them or what have you. And one of the overriding factors that I found is their motivational system tends to be monetary and it tends to be based on things that actually cause a lack of success, I’ll call it. For instance, some organizations base their incentive programs, their bonus programs on billable hours. What that does is that puts the individual in the situation where they want to create more billable hours as opposed to succeed at the thing they’re building. More billable hours is actually contrary to being successful. So our group is focused on how do I create that outcome? And if I can do it faster, that’s better. If I can do it in less hours, that’s better. That’s a good thing for the customer and for us.

MMTL: Can you share what have been the primary obstacles to the company’s growth?

Basgal: Certainly finding talent has been one. It’s a very competitive world out there and we need to constantly differentiate ourselves. We’re not the highest paying organization and we’re not necessarily the sexiest and we’re certainly not the best known, so it really comes down to how do we do in that culture. What we’re seeing as additional obstacles right now is all of a sudden you have this application economy that we’ve actually been promoting and been part of for a couple of years here. Not all firms are getting the idea of how they need to interact with their customers. So they’re still internally focused as opposed to becoming externally focused and being all about what the customer is asking for. Basically all the application economy is is the customer saying, “This is how I want to work with you” and asking for that capability. We’re trying to promote that and enable that and it’s tough because it’s very different than the way people think. It’s starting to think like a software company as opposed to thinking like whatever kind of company you’re starting from, whether it be manufacturing or whatever.

MMTL: Has access to capital obstructed or fueled the firm’s growth in any way?

Basgal: We haven’t really been prevented from gathering capital. We haven’t gathered any since the initial investment 14 years ago, mostly because scaling too big and too fast is actually difficult when your capabilities are based on cultural norms. So when you have a manual and it’s like, “I do X and then I do Y and then I do Z,” that’s a much easier thing to do. But software is a surprisingly people-oriented activity. You think it’s very scientific and very code-oriented, but so few of the problems you encounter in a software project are actually about software. They’re usually much more oriented around the people and the environment. Making decisions on what it should do and where it should go and all those things, they tend to be much more oriented on that.