Getting Personal About Business

Business Mentor

Before it Happens to You

Monday, June 17, 2013 by:David Zahn

Take steps to avoid receiving a resignation.

Overhearing a conversation between two senior executives from the same company, they both expressed surprise that the head of their sales function had just abruptly left and had emailed each of them a letter of resignation. While I did not get to see the letter itself, as I listened to their expressions of incredulity, I cobbled together what I thought the letter likely said. While this is an imagined letter, it contains elements of universal truths that cover many resignations (and certainly the sales executives reasons for leaving). Before it is too late, take the steps to prevent this from crossing your desk.

Dear Board Members

Please accept this letter as my resignation from the position of SVP of Global Sales and Customer Development.

While I choose to leave the firm, I still wish you, the employees, and your customers well. I do not leave with rancor in my heart nor with malice. In truth, I leave feeling a little defeated and in the event that I can prevent my replacement from deeling like I do now, I would like to share my thoughts and explain why I choose to leave.

The reasons for my deciding to leave are as follows:

The sales goal established for me and my team was not generated with my input or that of my sales team who have daily contact with customers. You relied on some combination of industry research provided by the highly paid consultant and wishful thinking. Neither was well-positioned to to provide insight into what was possible. While I have provided my forecasts based on having spent time in the field, each of the last several have been ignored. It is demoralizing to me and my team to have our objectives based on something we did not contribute to creating. No matter who you choose to hire after me, please give that person a chance to establish some stake in the creation of sales targets.
At last count, I had 13 HIGH PRIORITY items to complete within the year on my list of objectives. Nevermind the remaining 24 items of lesser importance (though I was to meet or exceed at least 12 of them to be considered worthy of my entire bonus), it is incomprehensible that any one could meet the 16 HIGH PRIORITY items and do them justice. While I tried to meet all 16, it led to failure of focus at work and severely hampered my relationships at home with wife, children, family, and friends. If all 16 were really mission critical, than it was time to rethink the future of this organization. Not all of the items on the list were of equal importance.
You need to acknowledge that our products are not as unique as we pretend. Competition has caught up, and our assumed technological, customer service, and price advantages are no longer. While I have shared with Marketing, Innovation, Engineering, and any one who would listen what our customers seek, I have been ignored and told to “just go sell something” (numerous times). The company needs to stop thinking in terms of “cool” and start thinking in terms of “helping customers do the jobs they need to get done.” Without a customer to buy it, no amount of product tweaking will amount to much.
The marketing effort is not aligned with sales. The presentations, brochures, data sheets, and website may win awards. Unfortunately, they are not helping to win sales. I won’t even talk about the lead generation process. No amount of “likes” or “friending” will convince me that it is better than a bona fide lead from someone who wants to buy. Sales people chasing false leads is expensive, wasteful, a drain on resources, and ultimately paralyzing for the organization.
In spite of the number of times I have mentioned it, I was still ignored when it comes to suggesting we needed to re-organize the company (or at least sales) around industry or vertical issues. Sending a product generalist into a highly specialized prospect or customer is asking for trouble. We are being begged by our sales people to be allowed to focus on one or two industries so that they can become expert and truly provide value. Won’t you please reconsider this refusal before the next person assumes the role?
You do not have enough trained sales people for the opportunities available in the market. I had asked for a headcount increase repeatedly only to get into a shouting match with the CFO and the hacks over in Finance. She (and they) seem to think that until every sales rep is at 100% of their target, there is no need for additional bodies. What planet is she from to think that? And, why do you permit her to make those decisions?
The compensation and bonus plan is far too unwieldy. As I understand it (and the fact that I may not tells you all you need to know), in order for a rep to get his full bonus there have to be eleven (11) different metrics met. My reps spend more time trying to calculate how they are being scored than they do selling. For the love of it all, simplify it!
The culture of being dictated to, command and control may have worked generations ago. However, it is not working now. We hire smart people, but then refuse to let them make decisions or participate in decision-making. Turnover has begun to climb higher as the economy starts to rebound – and now my name can be added to those ranks.

Sincerely,

Jack

Categories: General

No Excuse for Not Measuring Training’s Impact

Monday, June 10, 2013 by:David Zahn

Once upon a time it was assumed that training was something that was good to do, just because it made sense to do it. You did not need to measure it or worry about whether it was strategically appropriate to do it versus other business decisions. The idea that it needed to be financially justified just struck too many people in HR and even budget-wielding executives as just so wrong. However, that is no longer the case. In fact, because training and trainers have failed to quantify their efforts in any business context, it is now considered a luxury rather than a necessity and is often among the first things reduced or removed when it comes time to tighten belts.

There is no excuse for not measuring training’s impact.

The Excuses

The excuses commonly heard whenever trainers have to answer questions about Return on Investment (ROI), are down the following paths:

Training inutitively makes sense. You can’t deny that.
Training is hard to measure because (it is about behavior, it takes a long time to see results, there are other factors that influence results, etc.).
Training is not like choosing machinery or making a purchase. These are our employees – we HAVE to train them or they won’t feel (loved, respected, valued, needed, etc.).
I am a people person, not a finance person. I don’t understand all that talk about costs, assets, per capita, ROI, etc.

Stop the Excuse Making

And you know what – there are elements of truth in each of the excuses that make it more complex than it might otherwise be to measure and evaluate training’s impact. So what?

Rather than offering excuses, we need to just start measuring. We may not get it totally right. We may not even be completely accurate. We will learn as we go and we will improve. In fact, we will train ourselves on how to do better training that impacts the organization and we will see better measures, better results, and better outcomes if we would just stop chasing “THE” answer, and settle for “AN” answer that we will refine over time.

The Basics

Any discussion on training measurement has to include the work of Professor Donald Kirkpatrick. He outlined four levels of evaluation for training:

Level 1 – is Reaction. What did participants or trainees FEEL about the training. Did they like it? Did they see how it could be used on the job? Are they happy they attended? Etc.

Level 2 – is Understanding. How well did trainees comprehend or master the content of the training. Can they answer questions about the material? Are they able to recognize the skills, knowledge, or abilities needed to perform the task(s) as they are trained?

Level 3 – is Transference. Do the trainees use the skills on the job. Is the training being used or applied on the job, or are trainees choosing to default to a prior approach, process, technique, etc.? Is there uniformity and consistency across trainees, or are all “doing their own thing?”

Level 4 – is Results. Is the impact on the business being seen. As a result of the training, is the business more effective, efficient, profitable, or productive?

Admittedly, it is far easier to ask a particicpant if they liked a training event and feel satisfied if the answer we receive back is positive than it is to try to link training to the outputs or outcomes of the business. However, if all we measure is the satisfaction of the trainee during the training, we run the risk of creating training events that are more entertainment than educational, and less relevant for the goals of the business.

If we think that measuring; number of events, hours spent in training, number of trainees that participated is meaningful, then we will receive trainings that meet those standards, but may do little to advance the company’s bottomline. We have to break out of the counting the efforts of the trainers and start measuring results for our customers, organizations, and trainees.

Our pursuit of the best measures have to viewed as a goal, not a requirement. Rather than postpone measuring until we are certain we have it all figured out, we need to start with:

What are the key organizational goals and how does training impact that from succeeding (or failing)?
What are the relevant metrics or measures that can be used to determine success (errors/accuracy, speed, sales, etc.)?
Who and what are required for training to succeed (management endorsement or sponsorship, Subject Matter Experts providing content reviews, training resources, technology, processes, etc.)?

The ability to measure training is not an exact science and it does have some constraints. However, it is inexcusable to avoid measuring and evaluating training at all or just assuming it worthwhile (or worthless).

Categories: General

Playing it Safe is Dangerous

Tuesday, June 4, 2013 by:David Zahn

Business owners will often default to wanting to appeal to as many customer segments as they can. Under the belief that it is not good for business to exclude potential shoppers, the thinking is that it is a good idea to avoid risking turning off someone who might be inclined to spend money with the business. Of course, some businesses will be forced to target certain shoppers over others given the product line being sold (a Mercedes Benz dealership will skew more heavily toward people with larger incomes and assets, while a clothing store may primarily attract people who can fit into the clothing styles – Ambercombie & Fitch being a recent example of a store that tried to justify their targeting of certain shoppers over others, though it seemed to neglect that gift-giving can be a core revenue stream that is not dependent on the shopper actually wearing the clothing).

Contrarian Beliefs

Playing it too safe leads to business death.

In fact, there is a strong reason why this is actually a POOR business decision. If you attempt to please everyone, more often than not, you will please no one. A business with no discernible difference or distinction in the marketplace will have trouble connecting with any shoppers who would proudly proclaim, “this is MY store or MY product.” If you try to play it safe and be “middle of the road” and focus on being acceptable to all and non-objectionable – you run the risk of ending up like many animals on our roadways – roadkill done in by competitors (cars) going in opposite directions, but destroying your business just the same.

Electronic/Social Media

The use of social media, emailing, and other electronic marketing techniques present a whole host of challenges to the business person. One of the fears is that if overdone, prospects and customers may voluntarily choose to disassociate from the business by “opting out” of future correspondence or marketing attempts. For certain business owners, the idea that someone “on their list” may choose to end the relationship is an outcome to be avoided. However, a closer review of the situation would lead one to conclude that opt-outs are not always a bad outcome. Not to ignore the responsibilities or ways that businesses can avoid those circumstances that are counter to their strategies, but there are acceptable opt-outs because the retailer and the prospect/shopper really do not align well together.

It can be expensive to market to someone who will not buy, it may be resource intensive to continue to try, and it is far preferrable to focus efforts against those targets that are interested and capable of purchasing. Returning to the Mercedes-Benz dealership – it would not make sense for them to play up the product’s affordability, accessibility to the masses, easy payment options, etc. when that is not the buyers’ interests that most commonly purchase their products (cars). If a prospect who is not actively pursuing a car purchase, does not have discretionary income sufficient to afford, etc., should choose not to continue to receive emails, is it much of a loss?

If the prospect does not have interest or capability to purchase, it makes little sense to continue to pursue, incent, or engage with him/her (Caveat: the business needs to know the sales cycle and if a prospect today can become a buyer tomorrow/next year/or further out). It is best to go your separate ways.

Services Business

Service businesses or those businesses that sell an “intangible” product will often have to rely on trust, relationship, personality, or other factors that allow the prospect/customer to differentiate options in the market more easily. One example of this may prove the point about the importance of not “playing it too safe:”

Jenny Hamby (http://www.seminarmarketingpro.com/) recently shared with her email list a personal family situation that she was confronting that was going to take her away from her work obligations. Most of her email list were supportive and understanding. However, there were others who felt it was inappropriate to share personal details with her business contacts and castigated/scolded her for it. Jenny shared that as she thought it through, her first reaction was to feel she had made a mistake. She shared that she felt shame over her mis-step. However, the more she considered it, the less she felt that was accurate. Rather, she realized that she had to be true to her own beliefs, priorities, and approaches. While she was not thrilled that customers may not view her as positively as she would have liked, she did recognize that she had strengthened the relationship with those that were her core or targeted customer list.

Being so neutral as to lose the elements that make the business unique is never a good strategy and can end with the business always coming in second (or worse) for the customer’s purchase. It is not likely that any business that is not already a monopoly can claim EVERY customer, so it is far better to choose a customer target(s) and pursue their interests in a way that aligns with the business and business owner’s.

Categories: General

Playing it Safe is Too Dangerous

Sunday, May 26, 2013 by:David Zahn

There are two choices businesses have when it comes to sales and marketing that every CEO, Owner, or executive must make. The choices are not mutually exclusive from each other, however; the decision must be made. That choice is to try to sell more to existing customers or to secure new customers. Best in class businesses will do both in varying proportions. Apple will sell more products to their loyal users while also introducing new users to their portfolio of products.

Three recent examples of other retailers highlight how difficult this decision can be for some companies. JC Penney made a strategic decision to do away with their long-tenured practice of providing coupons and deep discounts periodically on their products. At the same time, they also modified their product selection, store layout, and technological infrastructure within the stores to allow for mobile checkout. However, the press, existing customers, and even employees could not get past the change in pricing and the implications it had on the positioning of the company. In response, the company seemed to take a moderate position of offering a few coupons and discounts (at which point, the CEO was fired when results for this “half-pregnant” approach failed to show results). The company has now brought back the former CEO to try to get the company back on track – and among his first moves are to reverse much of what the previous CEO had done. JC Penney is not clear on the target customer and what s/he seeks. Is it the loyal customer of theirs that “grew up” on coupons and discounts (even knowing that the non-discounted price was inflated to begin with)? Or, is it the customer of a more recent vintage who wanted the “bottomline” pricing without the faux promotions or discounts? In fact, they got neither!

Kmart has become topical again.

Kmart, a retailer that was seen as being all but irrelevant to many has been praised by some lately for being edgy in their marketing and advertising and using double entendres and puns to attract attention and develop “buzz” on social media. While the revenue performance has not caught up to the chatter about the chain just yet, there is some hope that it will happen and that it is just a bit too early to see results. By breaking from conventional wisdom about advertising that would maintain that you do not want to risk offending prospective shoppers, Kmart has at least been on the radar screen of shoppers that previously ignored it. By stepping out and targeting the shopper with a “sense of humor” (even if it is potty humor), Kmart has worked to become a store that would be in the consideration set for some shoppers that would have ignored them previously.

Contrast that with Abercrombie & Fitch which chose to announce very publically that it did NOT want certain shoppers in their stores (in a quote that is now 7 years old! – Just shows that internet reported information does not die easily!). The backlash has been loud, but the chain has not suffered any substantial drop-off in revenue. The customers who were inclined to shop there continue to shop there regardless (maybe even, because) of the store’s positioning.

So, what is the lesson to be learned? The lesson is that by trying to avoid alienating anyone – you please very few. Businesses have to stand for “something” and have to be seen as representing the shopper in ways that go beyond just providing product. By staying middle of the road and doing a little of this and a little of that, a business will more likely be seen as unable to much of anything.

Categories: General

Avoid All Eggs in One Basket

Tuesday, May 21, 2013 by:David Zahn

Most of us grew up with our Mothers sharing their wisdom through quick one or two sentence statements. Some of those statements later proved to be untrue – if you cross your eyes they don’t stay that way forever and if you swallow gum it does not stay in your stomach for decades. However, there are some truisms that Moms around the world know that should be paid attention to when becoming more educated about investing our business resources (human capital, equipment, marketing approaches, sales techniques, etc.):
1. Too much of a good thing can be bad
2. Don’t put all your eggs in one basket

Be careful with business investments, look to diversify.

When choosing where to invest one’stime, energy, and money, it might seem appropriate to pick a single approach to business (product line, service offering, strategy, etc.) that is outperforming all of the other options or competing initiatives in that market and put all of one’s funds into that one “winner.” However, while it may be a good thing today, there is no guarantee that it will remain as such and what appears to be a good thing now may quickly turn bad in the face of unforeseen occurrences.

Underlying this conundrum is that we all make decisions today based on that which is known. However, none of us have an ability to foresee tomorrow’s realities. We are therefore forced to make decisions based on imperfect data. Because of that, according to investment theory, it is recommended that no more than five percent of one’s investable assets be in any one holding. The same approach should be used in thinking about business operations (though the percentages may change, the concept of diversity across products, services, etc. should be adhered to in thinking about business offerings).

Few people saw the likely demise of Blockbuster before it began to fail. Up to that point, the ability to rent a movie at a local store for that night’s entertainment seemed like a winning approach. Investing in a company like that seemed like a very safe decision. Of course, that was before companies like Redbox and their kiosks in local stores became prevalent and Netflix became the supplier of choice for many. The strength of the cable tv programming providers and the capability of computers to stream video from online have all contributed to the weakening of Blockbuster. Because Blockbuster did not see the downside of being “all in” on their business model without regard to other options, they reacted far too slowly (if at all). It is incumbent upon the business leader or company to perform competitive analysis to identify potential threats and opportunities, due to competitive incursions, technological changes, and marketplace dynamics.

Because we do not have an accurate way of telling the future it is best to spread one’s “investment” across multiple vehicle or opportunities s to ensure that if any one of them should not perform as expected, there is a reduction in the impact that portion of the investment will have on the total business. Now, of course, that also means that should that singular business investment suddenly take off and sky rocket, there will be a smaller gain than if the total invested amount had been consolidated in that one investment. Yet, the opportunity to switch the percentages always exists to leverage potential upside gains and reallocate resources. However, given that none of us can “win” by trying to outguess that which is unknown, it is not only prudent, it is also strategically sound to diversify or allocate portions of one’s business investment dollars across multiple investment opportunities.

Just like too much of a good thing could turn bad, so too can putting all of your eggs in one basket become a negative. While the potential upside of getting a huge return is attractive, the reality is that Mom was right and more times than not, putting all of your eggs in one basket will create an unnecessary risk that will leave the investor’s financial portfolio scrambled.

Categories: General

What was Old is New Again

Thursday, May 16, 2013 by:David Zahn

Without giving out too much information about my age and how long I have been in business, I can tell you that when I was first starting out I received a lot of advice from mentors about the importance of:

Determining the skills,services, products, benefits, etc. I could provide or what is now referred to as the “offer.”
Selecting the customer target or what is now called “marketing niche” I wished to meet.
Identifying the approaches I would use to connect me and my services to prospects and customers or what is now discussed as “networking.”

The fundamentals of business have not changed. The methods may have evolved, the technology to accomplish tasks has; but the outcomes have not.

I bring this up because of late there have been a rash of emails, direct mail pieces, and even a few telephone calls trying to convince me that my website needs upgrading, I need to migrate to new platforms, I am late to the party to leverage social media opportunities, etc. I have even been curious enough to participate and listen to some of the sales pitches, demonstrations, case studies, testimonials, etc. What has come through loud and clear is that there is an awful lot of shamans and snake oil sales people preying on the uninitiated.

Social Media

Social Media sites (I am lumping Facebook, LinkedIn and Twitter into this categorization) are primarily designed for socialization. While there are attempts made by businesses to “monetize” their efforts on these sites, it still boils down the same business principles:

Giving prospects and customers something of value (in the digital world, that means links to content, discounts, early notification of new products, etc.)
Providing customer service at expected or above expected levels (in the digital world, that means offering responsiveness, having all links functional, follow-up on requests, etc.).

What is far less certain is how to translate the race for “likes” or “friends” into actual revenue. The misguided view that “clicks” count, or that accumulating “fans” is equivalent to money pervades many attempts to maximize social media presence. Only money counts as money. The escalation of people connecting with the company or the brand may be a start – but only if it translates to actual business. Watching the counter reach six figures is ego gratifying, but does nothing to add dollars to the till.

This is similar to the discussion that NEEDS to be had in executive offices around the difference between “KPI’s” (Key Performance Indicators) and Objectives. KPI’s are not the same as performance as tracked and measured by the business. It is an indicator only. Something that may be correlational or perhaps causal, but is NOT the performance. Saying you will collect forty names a day from your email newsletter is not the same as picking up forty new customers (or even one!). Growing a mailing list is non-revenue generating if those new subscribers to webinars, free incentive downloads, blog readers, etc. do not purchase from you.

Keyboard depression is NOT purchasing.

While being active in social media provides an avenue and an opportunity to reach more prospects and remain in touch with existing customers inexpensively, and permits tailored messaging or offers, it is not the same as selling new business to them. The basics of business have not changed. Depressing a keyboard character is not writing a check. While we have entered into a new business world in many ways – that has not changed.

Categories: General

We Love the Home Runs

Tuesday, May 7, 2013 by:David Zahn

Culturally, our society loves the big outlandish efforts. We love the Baseball sluggers who hit massive home runs that pull us out of our seats (though we forgive them when they far more often strike out in their attempts to “swing for the fences”). We celebrate the Football defensive players who can “sack the Quarterback” (even though; at best, it happens a couple of times a game out of more than 60 plays). And, at times, we apply the same respect and affection for our prognosticators who forecast outcomes that have “game-changing” results.

Our culture celebrates the home run or big action.

However, while our athletes provide us with entertainment, amusement, and a distraction from our daily lives and can be afforded the liberty to try for the “big play;” following the projections of the so-called pundits who are willing to pursue the contrarian point of view time and time again rarely leads to financial success. The reality is that it is far more common that they are “one-shot wonders” more than repeat champions.

A recent article on www.dailyfinance.com written by Vishesh Kumar (January 18, 2011), pointed out the fallacy in following the pundit who either guessed correctly or made a bold projection of the recession before it happened in 2007. He spotlighted three of the more prominent pundits, each of whom correctly identified the likelihood of a recession well before others recognized it (Meredith Whitney, Nouriel Roubini, and David Rosenberg).

A follow up on their success since then has shown very lackluster results. According to Kumar, Whitney has been right on only 37% of her decisions regarding the S&P 500 Financials Index. Furthermore, Whitney is calling for a meltdown of the municipal bond market now (a forecast few others agree with). Nouriel has made numerous guesses that have not come to pass (hedge fund meltdown, forecasting oil prices would remain at $$0 a barrel, only to see the price top $80 a barrel, and his prognostication that the S&P 500 would fall lower than 600 by the end of 2009. The actual close at the end of the year was 1,115. Lastly, Rosenberg continues to bang the drum for doom and gloom, even as others recognize the recovery and have become more optimistic.

While it is memorable when someone seems to have an inner sense of the future and provides a glimpse of the future, it often is no different than the carnival fortune tellers who occasionally make a projection that comes true days, weeks, or years after providing a “reading.” If one constantly swings for the home runs and is willing to accept a lot of strikeouts, it stands to reason that every now and again, the ball will clear the fence. However, the batting average or number of times that the player actually gets a base hit is usually much lower than the players who do not try to hit homeruns with every swing, but rather, attempt to get base hits based on the situation of the game, where the pitch is placed, and the player’s natural swinging motion.

Categories: General

Working with Sub-Contractors

Tuesday, April 30, 2013 by:David Zahn

In today’s economy and business environment it is often necessary for service providers to cobble together a solution for their clients or customers by employing experts and niche providers as sub-contractors. The approach used to hiring sub-contractors, management of sub-contractors, and compensation of sub-contractors is often in misalignment with the goals of the project and/or relationship between the two companies.

Hiring Sub-Contractors

Given that projects often require expertise that exceeds the subject matter insight or experience of any one service provider, it is becoming more common for sub-contractors to be hired in support of a project. While having that resource assigned to the project can often ensure a better outcome; it can only happen if there are certain considerations employed:

Knowledge, experience, and expertise – it almost goes without saying that a good outcome will hinge on the ability of the sub-contractor to meet the requirements of the job. A first requirement for choosing a sub-contractor is ensuring that they have the “goods” to perform.
Cultural – determining if the sub-contractor’s approach to business mirrors the needs of the primary contractor and the end-user customer. In addition to the content expertise, there also needs to be a similar alignment culturally to how the project will be conducted. Formal vs. informal, communication methods, frequency and duration of contacts, demonstrations of passion and emotion, etc. can all impact the success of a project if not consistent across all members of the combined team.

Management of Sub-Contractors

The roles and requirements of the project should be very clearly elucidated to avoid conflict or misunderstanding. Given that the sub-contractor and contractor at times may collaborate on some projects and at other times may actually compete for business, it is necessary to consider how the project will be managed and what the tolerances are for sub-contractors to assume more responsibility, have “face-time” with the client, how they are introduced to the client (as members of the team or as sub-contractors, or other ways), etc.

Contractors that lie to sub-contractors harm the project and relationship.

Compensation of Sub-Contractors

A huge issue for contractors to wrestle with is how to compensate the sub-contractors. A huge issue for the sub-contractor is compensation, too. However, they do not share the same issues around compensation. For the contractor, the issue is often one of how much to compensate or how to determine what is “fair value.”

For the sub-contractor, the issue is more often, when will the fee be paid and how reliable is the contractor in living up to commitments. I have personally been on both sides of this relationship and can attest to the inportance of being able to trust that I would receive payment on time. Once that promise is broken, the relationship is fractured and very hard to repair.

The outcome can often be in jeopardy then – the sub-contractor may choose not to perform on the project (can be harmful if the project is not completed), the sub-contractor may do sub-optimal work by assigning it to lower skilled and lower compensated employees as a way to reduce the exposure and costs incurred, and the relationship between contractor and sub-contractor will also suffer.

Categories: General

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Getting Personal About Business

Before it Happens to You

No Excuse for Not Measuring Training’s Impact

Avoid All Eggs in One Basket

We Love the Home Runs

Working with Sub-Contractors

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