Brain Breach

I know! I love the title too.

One evening I reviewed an email from Bob Pritchet, founder of Logos Research Systems.   After picking my jaw up from the desk, I started to form my response.  In the short time of research I put into his name, I realized he was an author, and the book looked quit compelling.  Fire Someone Today is a book I will read every two years from now on.  It’s so insightful, and easily worth my cash.

Such clarity.  I certainly appreciate the fact that he is a successful business man, since many times authors are only able to tell you what should work.  He’s clearly not trying to use fancy lingo and impress the M.B.A. audience.  There wasn’t a single term that I wasn’t familiar with.

The concepts….beautiful!  My favorite is the quality,price,service triad.  What a wake up call.  A young punk like myself thinks he can prioritize all of these at the same time, but Bob’s point was clear:  draw a triangle with each of those at a point.  You can only go one direction.  Maybe that direction is smack dab between two (quality and price for Bixly), but it certainly can’t be for all three.  You would be spinning in circles.

What’s more, it validates a lot of other reading I have done.  I love objectivity.

Thanks so much Bob for an excellent read.

Forcing myself to find SOMETHING to read in the generic selection my local library offers, I picked up the most insightful looking book I could find: The Halo Effect

It’s funny, how simple an idea it exposes. Simple and wonderful. The other “Business Delusions” really just support the Halo Effect.  The Halo effect is simple: Generalizing a company based on their profits. It also impedes our learning, which is the real purpose behind the book.  Once you understand the Halo Effect ( you will in a moment ), you begin to see that it is proliferated in most business writing and research.

I will give you an example of the Halo effect.  Which internet company is best known for:

• great technological advances
• being the best place to work
• new strategies/processes that are different but great
• a true focus on what customers what

Google! Your right.  In fact, you would have to live in a box not to have ready an articles praising how Larry and Sergey tie their shoes in the morning.  Here is the problem: Research and journalism at large will not call ANYTHING Google Inc. is doing wrong.  They are making a generalizing, based on how much money they net.  So now, we are left with a distorted model on how to run our companies.

The halo effect infects most every level of journalism and research.  So if we take an employee survey, and ask Googlians if they are treated well, or if their company has an unusually strong focus on customers, the results are predictably positive.  Phil systematically shows how companies that are making a lot money have these generalizations made about every part of the company, and the same thing happens in the negative when the company does poorly.  One Forbes reporter was questioned why he was negative about the very same company he once praised, while really nothing had changed besides their cash flow.  The tactics of that specific company didn’t change, and when Google stops preforming as well ( thousands of years of market history say it will have a downturn ) , the very same tactics/focus/work environment will be castigated as “too loose”, “lazy”, “over the top” etc..

Nowhere does a halo currently shine as brightly as upon Google. Reporters marvel at Google’s wonderful “anything-goes spirit” where the absence of supervision is said to stimulate creativity and where no one needs to worry about whether projects will be profitable. Co-founder Larry Page is said to praise managers who made million-dollar errors, thanking them for their willingness to take risks. In fact, what’s said about Google is eerily similar to what was said about another New Economy wonder, Cisco Systems, a decade ago. That company, too, was admired for its wild ways—until a sharp downturn led critics to castigate it for those same qualities. From Halo to Hell

I have know acknowledged the existence of Halos, which will aid me from this point on evaluate research with much more discernment.  In fact, just the other day I heard a author interviewed on PBS state that Starbucks is loosing profit because they have lost their once great focus on the customer.  Really?  My usual iced green tea tastes great, and is delivered by smiling, competent employees.  I would like to hear the proof that they have lost their “customer focus”.

Having experience playing important roles in a couple business, I found myself quite familiar with many ares of business. One area I hadn’t researched was sales. How does one become a respectable salesman? After spending an hour in Barnes and Noble’s business section, I picked up Exception Selling. Certainly, I am not proposing I lead this area in my company, but until the resources justify a sales team, here we go.

The following are some of my notes on the adventure. I recommend this book, but I don’t know what that’s worth to you, being my first book on sales.

Exceptional selling, notes

Pages 1-50

• when you are feeling pressure, you are doing something wrong
• never answer unasked questions

• just making a value proposition makes customers see your service as a commodity. Then they make a decision based just on price.

• don’t be a lecturer, It’s a ineffective way for them to learn.
• stop persuading and start collaborating

• don’t come in thinking you are a salesman, but a trusted advisory

• value proposition is not enough, everyone offers that.

• value gap, the gap between what you think it’s worth, and what customers do. crossing this gap is done by offer the customer value as they see it in their world

Sales life cycle

value proposition – tell them what you do

value assumption/premise – something you both agree could be a value to them, and MIGHT be confirmed after further investigation.

value absent – investigate the consequences of absent value, quantify, and show

value required – the customer acknowledges value is required

value expected – where you confirm exactly what can be done, for how much

value achieved

Pages 50 – 100

• diagnosis mindset is opposite from presentation mindset.

• you diagnose WITH the customer. selling is something you do TO them(bad)

• go for the ‘no’ early and often. make sure they are ready for what you offer, and if they aren’t, move on quickly to qualified sales leads

• diagnose the problems without insinuating they are incompetent

Mindset

– change guidance
– mutual self respect
– don’t let them run over you
– emotional maturity
– you must remain emotionally detached, but professional in tune

• the process,
  discuss, diagnose, design, deliver,
  the following is the application of those.

• be prepared , and research the company/person you are calling.

• people won’t reject you if you aren’t being a salesman.

• the first call should be one of discovering the problems, from the people closest to the action. – Questions like: do you see this happen? What are the results? – Ask for facts and consequences, – don’t talk about yourself for more than a few seconds

• discovery conversations are not sales calls

• cold call script, pg 92
• towards discovery stage script, pg 97

• don’t answer with questions
• When getting customer is digging to deep before you have appropriate information, keep answers to 20 seconds, and continue where you left off.
• The questions will be; how much and how long, etc. Answer, and get back to learning about them.

• give the customer a small assignment, it keeps them engaged and conjures a sense of collaboration

• high probability to close sale when they learn they have great need

Pages 100 – 220

• once you have permission to move on, start the diagnosis.

• this phase is about thinking of their situation, not your solution

• never let the customer self diagnose, you have the domain expertise

Diagnostic conversation model

– what is happening
– why is it, how bad
– is it bad enough to act on?

• don’t use insulting questions when exploring what they said. neutral ones like ‘can you help me understand ‘not fast enough’’ ?

• questions should start with asking observations, not accusations.

• never insult competition, acknowledge them.

• ask what methods they have used already to fix the problem. don’t assume they haven’t tried.

• let the customers co-create the solution with you, this way, you get a better solution for them, and they gain more trust with customer.

• ask questions from customer point of view; ‘when would you like to see this solution up and running?’, not ‘when can you make a decision?’.

• actually, that’s wrong wording by Thull, again. more like, ask questions from a customer value position, not a sales value one.

Proposals – a confirmation on what has already been decided

1. No surprises
2. Us their wording/phrases wherever you can

• don’t skip diagnosis even if they think they have a problem. they don’t know the value of fixing it until you lay it out for them.

• if you can’t put a cost to the problem, you don’t have a problem

Financial conversation

– how much does our absence cost them?
– What return can they expect from solution?
– How much is that worth to them?

• it’s critical that company execs take part on the sales team when talking to other execs. they have the experience and depth of knowledge regarding their value

It’s not terribly common these days for managers and employees to have learning time built right into their job description. What if the paradigm was shifted a bit to allow this for huge company benefit?

My employees are allowed to study, on my clock, based on how expensive their decisions are. Managers make costlier decisions, and warrant more study time. See, folks that do a good job in management, don’t have to get a terribly large amount done day to day. Managers at a McDonalds, or other store front have a different situation, and don’t justify as much on going training in the theoretical. Folks in say, a lead architect position, or head of marketing shouldn’t be consumed with daily tedious tasks. When would their brain rest and provide me with those great breakthrough ideas?

The more theoretical, the more expensive the decision, the more they should be treated as scholars than janitors. This is in regards to study and brain rest time of course, not respect for the position or person.

This leads to problems though. It might not feel right to the CEO to see high paid managers or other C level folks reading with their feet up on the desk, or taking long walks everyday. “I just paid that guy $100 to get a sun tan!!!!!” are the words I imagine. It should be so clear to them.

Think of a decision that could cost the company $1,000,000, with the potential to make $2,000,000, or $0. Let’s say your head of marketing is making this decision, and has spend a total of three months of combined paid time walking or reading over the last year. That’s simple math! He or She is most likely going to make a much more informed decision with deep contemplation and study. So maybe his time and study materials costs $50,000. Wouldn’t that be a fair price to raise such odds?

Forcing this person to fill their time with menial work, just to keep busy is completely counter productive to bottom line of the business. Our best decisions come from little phrases we read in books, or something that comes up in thought or conversations. Put more of those tokens in the brain of you manager, and reap the rewards.

Voice of the customer. Great companies listen to it, and mediocre companies try to listen to it.

The issue of truly hearing your customers isn’t as simple as just reading complaints and comments. If you don’t think it’s a tricky task, think of these issues:

• Who will analyze the problem?
• Who reports it to CEO/COO?
• How will the customer be notified problem is fixed to see if they are pleased?
• How to we effectively sift through the mounds of data to make sense of it all?
• Will the CEO see these as important money making resolutions?

A sound VOC system will take care of these issues and more. This is where it helps to thrive in ambiguity. It’s obvious that a great company needs to hear their customers. The real problem is how does that happen with piles of data and teams already swimming in tasks. Shall we make a system, outsource it, rent software (which one!), hire a consultant, train employees in house, etc.

Regardless of the attack, a great company must attack it.

Goodman, in a study of 100 companies over three years, identifies 8 problems that great companies have already fixed, and mediocre ones haven’t, when it comes to their VOC process:

1. Inefficient and costly data collection
2. Analysis in a vacuum
3. Inconsistent classification schemes
4. Old data
5. Analysis without priorities
6. Analysis that is not actionable
7. Ineffective presentation of data and findings
8. Failure to track the impact of corrective actions resulting
   from the VOC process

Another interesting observation is the need to reward the marketing department for their attention to the data:

While many companies have satisfaction related incentive systems for operations and service management personnel, they rarely exist for marketing and sales. This is a critical oversight;
TARP’s research has shown that 30% to 40% of customer problems are tied to marketing and sales.

Resources:

Stay Close to thy customers

EFM (enterprise feedback management) blog

Goodman, Depalma: Maximizing the Value of Customer Feedback

One of the first lessons Lawson Barttell, my mentor taught me was to “hire slow, and fire fast”. What does it mean? Take time on the hiring process and make sure you have the right person. Then secondly fire employees quickly if they give you good reason. The ability to fire folks quickly is a good one to have. It’s one way to save a company from corporate cancer; a non-motivated workforce.

I see two main benefits to hiring slow and firing fast. First, your team quality increases. If you continually shave off your bottom 10%, while hiring the best candidates, your team will really shine. Some of my best employees have come from word of mouth. I wouldn’t be able to say that if below average employees were sending their friends my way. They would be on the same level because folks usually have friends that are similar to themselves.

Secondly, everyone knows you expect excellence, and won’t settle for half-hearted attempts. Fire that deserving employee, and just watch the passions in the workplace grow. Down the road it will lead a higher retention rate.

While this is counter-intuitive and seemingly unproductive in some circles, I try desperately to live it. There are even personal benefits to living this selfless mantra. Think of it this way: how does one climb the social latter? By making others feel special, wanted, liked, important. Now I consider that a lucky side-effect, and not the reason to consider others better.

This mind-frame is difficult, and something I must practice whenever I remember. I find it especially difficult with people that are pompous. Imagine looking at the person checking your food out at the store: he/she probably doesn’t have a great education; I am better paid; I am dressed better and maybe better spoken, yet, they are better than me!

Sure they are better than me. How do I get in this mind-set without just lying to myself? Those are all outward appearances, and I really have no idea what they are capable of. John H. Johnson started with nothing, as did many other business greats. I consider the person in question either better than me at what they are currently doing, and therefore fulling their duty, or, consider them an dormant seedpod, who will hopefully find their inspiration and direction and become great.

Now look how I can treat this person. With the same respect I would give an admired or wealthy personality.

I want to build a team of greats, so I will treat them as such.

ps. Sorry to all the great people I have fired. You will be great for someone else ;)