Archive for January, 2012

Talk Show Truths

Monday, January 30, 2012 by:David Zahn
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Ordinarily, business people do not find the morning talk shows and gabfests to be places of enormous business insight. More often, these shows are mildly entertaining and perhaps expose a side of humanity that most viewers find even more outlandish than their own. However, every now and again; there are moments of wisdom that one can extract from these shows and apply to business.

Something About That Man

Something about that man I don't like

One such moment occurred for me not too long ago while watching a Dr. Phil episode.  While the show was focused on a raging conflict between relatives (typical in-laws issues with the spouse of a married child), the homespun comment that the host used has applicability much more universally than just in familial spats.  Dr. Phil shared a story about his Father’s ongoing dispute with another person that included the line, “There is something about that man that I don’t like about myself.”

As I reflected on that line, the wisdom of it became obvious.  We often react strongest and have the most negative response to others when they remind us of what we don’t like about our own behavior.  It is in part because of our shame, lack of confidence, or other feelings about our own thoughts or actions that we react so strongly when we are “triggered” by another person’s demonstration or reminder of that in ourselves.

However, the issue of conflict and whether to avoid it, what to do when it flares, and techniques to use to prevent it from negatively influencing results is not as simple as suggesting that people just look within and make peace with themselves.  Conflict is very real and can have advantageous effects or deleterious impact depending on the way it is handled.

Importance of Relationship

The level of conflict is very much related to the intensity or closeness of the relationship.  We rarely have conflict with those we have little interaction, regard, or involvement with.  Further, we often view those people we do have frequent contact with, but also frequent conflict, as being “difficult.”  Yet, we are tasked with finding ways to be productive and constructive with them without allowing the conflict to interfere.

An article in a blog titled, “Dumb Little Man”  delved into this topic at length.  It explored the tendency we all have to “fight, flight, or freeze” when in the face of conflict.  The main point of the blog was to address different coping skills for managing conflict more successfully.

Suggested Tips For Handling Difficult People

Of course it is easy to conceptualize from an objective and removed perspective (and a whole lot more difficult in the moment), but not everyone shares the same personality, priorities, or expectations.  So, the first task is to recognize that we all have biases and preferences based on our experiences.  By working on our own self-awareness, we can begin to recognize if the conflict is based on differing personalities, experiences, or expectations.
If the issue is not one of personality type, it is not at all uncommon for people to have conflict because they have stopped (or never started) listening to the other person.  Thinking they know what the other person intends, is saying, or what they are like; without truly hearing and responding to what is being communicated can often lead to conflict.  So, rather than addressing the issues as they are viewed by each party – the conflict escalates based on perceptions, beliefs, and assumptions.  By slowing down long enough to truly hear the other person and playing it back to them in one form or another to ensure confirmation of understanding; many conflicts can be avoided, minimized, or resolved in a much shorter time.
True difference of opinions also do occur.  With the best of intentions, and even if the parties are of a similar experience, personality, etc. – people will disagree from time to time.  What they do next to ensure it is not damaging to the success of the relationship or the business outcome can be very important.
What To Do

Managing conflict requires:

  1. Acknowledging your role: Accept  responsibility for your thoughts, feelings, actions, values, and perceptions that you contribute to the conflict.
  2. Flexibility: Look for opportunities to compromise, problem-solve, or brainstorming of different options.
  3. Focus: Identify the real issue of conflict and not react to the ancillary.  Is it the idea that causes conflict or is it the person him or herself that is leading to the conflict?

What Good Can Come Of It?

Conflict can be productive if it improves the outcome by forcing people to consider other possibilities or solutions.  To know if that is occurring, look for the following:

  1. Clarification around important issues is achieved.
  2. Solutions are reached (and agreed upon)
  3. Members of a team or people seeking the same goal build a mutually agreeable outcome that allows them to create cohesiveness and to learn more about each other.

While conflict is not always pleasant, it need not be destructive.  By focusing on more than just being proven “right” and viewing it as a personal attack, conflict can serve to improve the final decision or bring people closer together.

Traveling the Six “C’s” of Trust

Wednesday, January 18, 2012 by:David Zahn
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One of the larger misconceptions among business owners, entrepreneurs, and even customers is that business decisions are primarily made on a logical basis. So, the effort in the selling environment is to share data, facts, questions and answers, etc. back and forth to create a matrix of quantitative assessment criteria. And if it is success and a sale we seek; we are more likely to squelch an impending sale than not.  In fact, when it comes to buyers choosing to purchase, it is the aspect of “trust” that will more often be at the core of that decision. 

Destroy trust and lose the sale.

Trust

In a business relationship or  in a sales environment, there are six components of trust that are relevant.  If a prospect or customer senses that one or more is missing, it makes it difficult for the seller to close the deal as doubt and uncertainty rise about the product, the company, and the seller’s ability to deliver on the solution.  The six components are:
  1. Caring
  2. Communication
  3. Competence
  4. Character
  5. Clarity
  6. Commitment

Caring

If the seller is unable to convey a sense of caring for the buyer, the buyer’s situation and needs, their goals and objectives; then the likelihood of a sale happening is reduced.  If the seller simply asks a series of questions designed to meet HIS or HER own needs (to get the sale), without showing a level of empathy, care, concern, or interest in the buyer – the absence of the “bedside manner” will hinder the progress of the sale.

Communication

If the seller is a poor communicator (interrupts the buyer, ignores the buyer’s “signals,” does not explain product or service well, does not respond to questions, etc.), the buyer may become confused or may fear that the seller is not telling the truth.  The ability to communicate WITH the prospect versus TO the prospect will separate the poor sellers from those that are likely to close a sale.

Competence

The area where most sellers spend the majority of their time and are likely to be at their best is in talking about their product or service.  Answering questions or providing insights on competitive strengths, how something “works” or differences between product models, etc. is often the strongest skill possessed by the salesperson.  A buyer will seek to confirm that the seller has competence and is an authority or expert on a product, but where the seller can further enhance that perception is by speaking knowledgeably about the way the product will “fit” with the customer’s environment (business or home) by including references to uses, connectivity, other considerations, etc.

Character

A seller is always being judged on their character and how they portray themselves. The buyer wants to assess if the seller is; kind, cut-throat, speaks poorly about  others, and if there is a misalignment between them (perception of seller’s morals and values and the buyer’s).  What passes for a joke, banter between employees, comments made to or about other customers, etc. are all indicators of the seller’s character and being interpreted by the buyer.  The more closely they mirror the buyer’s own views, the more likely they are to do business together.

Clarity

A buyer wants to be sure they know what they are buying, how it will work, what the process includes for acquisition, servicing, contracting, etc. If the seller is not clear on these essentials, the buyer will become loathe to do business with that seller.  The best product or service in the world will remain unpurchased if the buyer is not certain about the components of the transaction, use of the product or service, or other aspects of the purchase.

Commitment

The last thing to mention in building trust between seller and buyer is the level of commitment the seller demonstrates.  If the buyer senses that the seller sees the transaction as simply a sale to get closer to a quota, or treats the customer as an inconvenience to be tolerated and dispatched as quickly as possible; the buyer will be loathe to enter into a purchase agreement with that seller.  Inability to demonstrate a commitment to the buyer’s reality and sincerely offer to assist the buyer resolve an issue will hinder the likelihood of a sale occurring. 

While many salespeople are quite adept at talking about the features and competitive strengths of their products or services; it is the best among them that also are able to do so in a way that engenders trust and focuses on a relationship with the customer.  Traveling the six “C’s” of Trust can be choppy at times, but do it enough times and you will be cruising to success more times than not.

Is PETA More Than a PITA?

Monday, January 9, 2012 by:David Zahn
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While catching up on documentaries recently, I came across a video of a few years ago titled, “I Am an Animal.” The video is an insight into the motivation and tactics of Ingrid Newkirk, the co-founder of People for the Ethical Treatment of Animals (PETA) in accomplishing the goals and strategies of the organization.  While Ingrid and PETA are rather controversial with a seeming equal number of people supporting the organization as speaking ill of it; the lessons to be derived from it are plentiful.

While the documentary allows the viewer to explore many aspects of the dynamic between Ingrid and others, the following strike at the core of the issues for many entreprenurs:

  1. Role of the charismatic leader
  2. Branding
  3. Relationship between Company Mission and strategy and tactics.

Role of the Leader

The video makes it clear that PETA is very much an extension of Ingrid’s driven views and that her involvement in PETA’s initiatives are hands-on and that she is aware of every initiative in which the organization is involved.  Her subordinates are seen as assets for her to leverage to achieve her objectives – until they are unsuccessful.  At that point, they are replaced, subject to her scorn and contempt, or counseled by her to change in order to return to her good graces.

Ingrid’s personal views drive the organization’s work and it is very much a reflection of her perspectives.  Subordinates are only tolerated so long as they support her unique views on any of the following: animal rights, methods of uncovering abuses, marketing approaches, or a whole host of other strongly held beliefs of hers.  Remove Ingrid from PETA, and the organization appears ill-equipped to maintain their momentum.  Almost as if by her design; no one else is permitted to make decisions that are not entirely approved or consistent with her approach or preferences.

Branding

On the positive side, PETA has become positively associated with some of the changes that have occurred among:

  1. Slaughterhouses, cattle ranches, and farms used for raising animals for food production to ensure more humane approaches to animal handling (though Ingrid would prefer that there would be no use for any of these businesses as she views these as akin to prisons, concentration camps, and torture chambers that should be outlawed).
  2. Fashion designers and retailers that incorporated furs into their designs without awareness or appreciation for the horrors of fur traders and the conditions the animals face in order to secure their pelts.
  3. Research laboratories that conducted research that harmed animals (any animal research is seen as being unnecessary according to Ingrid and PETA).

While PETA has been credited with some advances and more progressive views about animal handling, they do suffer from a branding issue according to many observers or businesses impacted by their actions.  In short, the notion of PETA taking steps to draw attention to their cause, even if the attention-seeking activities has led to some very strong reactions among others (and even among those within PETA as another co-founder, Alex Pacheco has left the organization and is quoted as saying that Ingrid values attention to her cause at any cost and is willing to undertake more and more outlandish “stunts” to accomplish it.

Relationship between Company Mission and Strategy and Tactics

So strong is her desire to remain uppermost in people’s minds that the organization has staged events that are clearly illegal (break-ins, damaging merchandise or laboratory equipment, harrasssment, etc.) and designed to frighten others on the one-hand, and constructed to draw attention to the organization for stunts and events that have little to do with animal safety or research (nudity in public, throwing pies at people at news conferences, tossing fake blood, or even real blood at people, having sit-ins or taking over offices and retail stores, etc.).

At this point, while some people may support the organization’s goals; and others are vehemently against their methods (or even what they stand for or have accomplished), the question has now evolved into, has PETA lost their focus and has just become a Pain in the Butt (PITA).  When thinking about your own business approaches – how would you answer the questions:

  • How different would your company be without you at the helm?
  • What do constituents, peers, customers, suppliers, and others see as the company’s “brand image?”
  • How closely do the actions of employees mirror the stated purpose of the company?

Structure Rewards Correctly

Tuesday, January 3, 2012 by:David Zahn
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When thinking about building business in the new year, many business owners will consider tinkering with the compensation structures offered to their sales people.  However, there are some caveats to consider when planning how to best create a successful reward and incentive plan that motivates salespeople.  Being ignorant of these warning can lead to less than satisfactory results – and may serve to actually DE-motivate salespeople and lead to reduced outcomes.

The overarching goals of a compensation plan are to:

  1. Reward the right outcomes - achieve results that build the business outcomes the entrepreneur seeks (market share, sales, profit, on-time payment, or other business results).
  2. Motivate salespeople to strive for or improve on past performance.
  3. Fairly provide proportional incentives and rewards based on an objective standard.

By accomplishing those few goals, the sales incentive plans (often referred to as “SIPs”) can be integrated into the daily activities of the salesperson and help provide the right focus, motivation, and ability to achieve objectives.  Unfortunately, that is not always the reality of how these plans are integrated and applied.  An outcome to be avoided is to purposely or inadvertently alienating the best producers or “A” level salespeople – while at the same time, providing appropriate inducements for the other salespeople to accomplish their targets.

Mistake #1 – Limits or Capping Earnings

Placing a maximum amount on the incentive plan serves to protect the pay owed to a salesperson from a company standpoint and is a way to manage expenses – but at the cost of demotivating salespeople, reducing the interest of salespeople to push for additional sales opportunities, and limiting results.  Imagine Geno Auriemma telling his players that every basket they score after they are winning by 20 points no longer counted to the final score!

Mistake # 2 – Reward the Behavior

The outcome of not having caps or limits on sales compensation means that it is possible (maybe likely) that the final income of the best salesperson/salespeople may exceed the income of the business owner.  Nevertheless, that is a commitment that a sales incentive plan should encourage.  Salespeople are tasked with selling.  If they do it well, they should be recognized and rewarded for it.  Not partially.  Not occasionally.  When a sale happens as a result of a salesperson’s behavior; it should be rewarded. 

The idea of unrestricted earnings for high performers is far superior to encouraging mediocre or poor performance – but maintaining a balance of salaries, bonuses, incentives, and compensation that remains true to a predetermined hierarchy of what “should” be the income.

Mistake # 3 – Clawbacks

As a hedge against unforeseen circumstances or changes in the market/accounts, businesses will occasionally include clauses in the incentive plans that allow them to change the parameters of measurement or even reduce or have a salesperson “payback” monies previously paid.  Aside from the legal matter that prevents that from happening in some states (though a sales rep can “volunteer” to return it – an outcome not likely to happen in reality without coercion).  If there is a need for this clause, it is an indication that the plan is not well structured and should not be used.  The only exception to this should be if the salesperson is engaging in illegal activity and has achieved results unethically.

Mistake # 4 – Overly Complicated

A sales incentive plan (SIP) should be easily understood and communicated.  If it requires numerous pages and clauses or overly legal language; it will fail to inspire and will serve to create a distraction.  Now, instead of working on selling behaviors, salespeople will work on understanding the plan, seeking the nuances within it, building defenses for performance, searching for loopholes, etc.  All of that can be avoided if the sales compensation plan can be reduced to just a couple of pages.

A recent post shared the advice to “lead with the headline.”  Providing the commission plan and calculation method upfront as opposed to leaving it in a page to the backhalf of a long document after all of the legal mumbo-jumbo has been covered.  The message to the salesperson is less about rewarding sales and more about protecting legal interests.

The competition for ‘A’ players in the job market is likely to increase over the next year or two.  The economy is improving and there is projected to be greater pressure to hold onto the true stars of the sales ranks. If you want to hang onto yours in 2012, avoid these common mistakes when designing sales compensation plans.