Subscribe
Subscribe via Social
Is Harvard Business School Relevant
Many entrepreneurs have wondered about the relevancy of the good, old MBA. Talking about such relevance in business is often the equivalent of talking religion or politics at a dinner party or Mac vs. Windows at an IT convention.
It appears (from an email I received via my subscription to Harvard Business Review) that now, so is Harvard Business School.
I give Harvard credit for reevaluating the basis of their program. It’s admirable, wise, and it may even work. What strikes me, however, is the comment, “plot its directions for the next 100 years.”
Are they kidding? A business school is going to determine how it will remain relevant for 100 years? I’m all for long-term planning, but if 100 years is how Harvard is going to look at itself – remind me not to hire any of the people who graduate from the business school.
I don’t mean to be brash, but if we’ve learned anything over the last 20 years is that there are no more 100 year plans. The world moves to fast, and any growth manager (let alone fast growth manager) must remain flexible and open. While I’m a fan of Jim Collins book, Built to Last; “lasting” is not a prerequisite for business.
This is symptomatic of one of the major flaws in business – the illusion of certainty. It sounds good to talk about 100 years; it may even feel good. However, I think it’s great if you can focus on five.
What Saving Detroit Doesn’t Teach
I get nervous when I hear the conversation about what needs to happen to “save Detroit.” I’m going to stay away from the politics of the debate, I want to focus on the growth part. Today on several of the “Sunday Shows,” I’m hearing the proponents of bailout say things like, “we already know what needs to be done, they’re doing it at Toyota and Honda. We need to make more fuel efficient cars.”
While Toyota, Honda, and several others certainly have made fuel efficient cars, and cars that are (clearly) more popular. However, if we listen to the proponents and follow their advice to “save” the industry, we’re going to make the exact types of mistakes that we’ve made before – that is we are going to try to copy our way to success. Merely making the same types of cars as Toyota will give Detroit no more likelihood of success.
It’s easy to focus on the end products of Toyota, and hard to focus on the causes. Toyota is one of the most forward thinking, aggressive, and disciplined businesses in the world. Their focus on lean manufacturing and lean design are critical causes of their success. Simply put, they run their businesses differently then Detroit. They know who their target buyers are, what they value, and how they feel. The understand that success yesterday doesn’t mean success tomorrow – they are always looking at the world from their customer’s viewpoint.
As I’ve written before, The Five Unbreakable Rules for Creating Demand mean that first and foremost you must focus maniacally on who your customer is (and who they are not) – then you must run your business.
I am not saying that Detroit cannot be saved. I’m not even saying that the government (unfortunately) doesn’t need to play a role (I haven’t made my mind up about that yet). What I’m saying is that if all we do is restructuring their business – without restructuring their approach to business; then we will fail.
The same is true for you.
The Bailout Translation
Those who can’t do – teach.
Those who can’t teach run behemoth Fortune 500 companies.
Those who can’t run behemoth Fortune 500 companies have the US government run theirs.
Salesperson + Sales Manager = Failure
I realize that I am not the first person to say that you cannot effectively combine the role of salesperson with the role of sales manager or sales leader – but, let me be the latest. The entire premise that allows otherwise reasonable and intelligent people to even consider this idea is based on the flawed premise that either:
- Neither has to be a full time job, or
- The roles are complementary, or
- The only way that a company can afford the intelligence and knowledge of a VP level person is by asking/requiring them to cover their overhead costs through sales.
All three premises are flawed (I’ll address each in a minute) and the failure to understand this leads to as much wasted resource and frustration as any other aspect of a company’s sales and marketing efforts. Just today, I’m in the midst of helping two prospective companies untangle these issues.
Let’s take a look at each premise:
Neither has to be a full time job:
Rooted in the idea that “she only needs to manage 30% of the time, so she can sell the other 70%;” the flaw here is that the key limiting factor in selling is time. This is not true – the limiting factor is attention (often called bandwidth). Selling and managing may not require full-”time” each, but they certainly require full-”attention“.
Both selling and sales management require one’s full, complete and total focus. Diverting the attention significantly increases the likelihood that neither function is done well. While other disciplines require excellence, there is virtually no such thing as mediocre sales performance. It’s either excellent or not-acceptable.
Complementary Roles:
I’m always amazed at the number of people who freely admit that selling is a far different skill than managing. Then they proceed in a constant search of the “unicorn” who can and will do both things well. From there, the justifications begin.
Let me clear, I am not saying that someone cannot be a great salesperson and a great sales manager – I’m clearly saying they cannot be great doing both at the same time (as a matter of fact, the odds clearly say they can’t be good at either if they try to do both). Selling and managing/leading require different disciplines, different thought processes. One has to dominate the other to be successful. It’s a question of what do you think about when you go to sleep. Do you think about leveraging your sales team or do you think about leveraging your pipeline? If you think about both, neither is getting enough attention.
Affordability:
The rationale has the benefit of being true, in that most companies under $25 million of gross profit can not justify the resources needed to retain an excellent VP level person without requiring them to produce revenue to offset their costs. It becomes a chicken or egg type question – do I hire the VP level capability before I get the revenue; and if I can’t afford to do that, how do I get the revenue? This “damned if I do, damned if I don’t” predicament is what leads companies to make the bad decision of mixing the roles (for the reasons mentioned above).
Unfortunately, it’s not as easy as merely eating the expense associated with hiring a VP level person and asking them to manage alone. Why? Because rarely does a company under $25 million in gross profit have the resources or the complexity to be attractive to the type of person they need. Simply put, good managers like to manage – and good leaders like to lead. Companies under $25 million GP can rarely afford to have more than one leader – and that leader needs to be the CEO.
So what can you do when you need management/leadership and you need people to sell. Stay tuned to my next post (and many more in the future).
Damn The Recession – Full Speed Ahead
I’m reminded of a story told to me about how the military trains their troops for urban warfare. I can’t confirm its complete accuracy, but the message is strong regardless of whether its completely accurate.
Given the close proximity when fighting in urban areas, one of the biggest fears and dangers is hand grenades. The reason for this (outside the obvious) is that the first response is to back away from them. This presents two problems:
- First, it puts the soldier in a defensive, reactive position – making them vulnerable to frontal and flank attacks; and
- Second, it exposes the least protected and most vulnerable parts of the body to shrapnel.
So, they teach soldiers that, in closed quarters, when a grenade is thrown, aggressively advance toward the grenade. This is taught for two reasons:
- First, the soldier maintains greater control – as the saying goes the best defense is a good offense, and
- Second, if the grenade is behind the soldier they have their backpack to protect them from shrapnel and there are far fewer critical organs exposed to one’s back.
I bring this up because of the mood that seems to be taking over in many markets. I’m hearing increased incidents where markets appear to be falling apart. Customers, under the claim of “spending freezes,” are cutting projects – unwilling to listen to logic. This, legitimately, is causing great concern among sales executives.
The natural reaction, just as it is with the grenade, is to retrench and be conservative. Shift investments to other markets or merely wait it out. I’d be lying if I didn’t tell you I think about this from time-to-time as well.
That defensive position – just as with the grenade – is the wrong one.
Now is the time to attack. The fact that customers are less willing to listen represents a big challenge – AND A BIG OPPORTUNITY. Listen, when I first got into sales, I was told the sale began when the client said no (so there are lots of sales opportunities today). Those companies that build great sales process and structure will be able to talk with people that NO ONE else will be able to talk to.
Let’s stop talking about recession as a reason to cut back growth expectations. Recessions only matter to companies that have at least 30% of a market. If you have less than 30% of the market your opportunity lies in taking business away from your competitors – and that’s a lot easier to do in a bad market than a good one.
Now is the time where superior offerings can shine – if you’re willing to put the muscle and process behind getting people to listen. Your potential customers need you more than ever, don’t let them down.
Damn the recession – attack and relentlessly execute.
David Brooks Is Right Again
Having been a financial advisor, I’ve developed my own way of viewing the markets. While the volatility of late is certainly a cause for concern (and insanity), I’ve subscribed to the belief that one’s focus should be on the trends, rather than the events and news. I’ve always said that as long as the trends support equity oriented investments, capital growth, risk taking and entrepreneurship, then the long run will take care of itself.
After sharing that philosophy, I’m often asked to give an example of a policy/trend that would go against this philosophy. The first example I give is when the government tries to buffer or prevent the failure of a business (or businesses) because they want to take the edge off creative destruction. What the government is talking about in terms of “saving Detriot” would be an example of that. I’ve been wrestling with why I don’t think the recent financial “bailout” is an example, and an auto bailout would be. David Brooks, of the New York Times, provides an insightful answer – one well worth reading.
Getting Beat Up
Growth is tough. It’s tough in good times – it’s even tougher in challenging times like we are in now. The truth is that the vast majority of companies (and individuals) will not grow any faster (or better) than the prevailing tide. The reason for this?
Recently, I’ve come to the conclusion that it’s because people don’t like to get beaten up. They play it safe – not intentionally, but in reality. They figure that they just need to get it figured out first – then it will work. They try to stay clean and avoid the natural bruises of growth. Unfortunately, the only way to succeed with that approach is by relying on rare luck.
I remember when I started my second company – a coaching/training company focused on the travel industry. I started the company with my family. My parents had run a very successful travel agency and had done quite a bit of consulting in the travel industry. We had a clear plan all laid out – convinced that we’d be raking in the clients.
I went out to Phoenix, AZ for a (planned) two week trip of sales calls. About three days into the trip, I realized that we had a problem. People were not interested in our value proposition. The basis of our approach was not going to work.
Admittedly I was worried – scared even. I’d left a great job, my parents had funded the business with a second mortgage – and I was looking at a failure.
Looking back it was the absolute best thing that happened to us. Had we not gone full tilt into the market we would not have gotten the intelligence we needed to refine our value proposition to the realities of the market.
By the way, the same has been true at Imagine. When I started this company, I got absolutely beaten up in the process. I wasn’t clear, wasn’t comfortable and wasn’t ready for real opportunities. The act of getting “beaten up” strengthened me – and the company. Had I avoided it, I’d still be planning the business instead of running it.
The Formula To Calculate Total Cost
Cost = Price plus consequences.
Next time you get asked about lowering your price; start talking about and calculating the consequences.
And Now Back To Our Normal Programming
Congratulations Barrack Obama. Regardless of your political opinion, the past two years are certainly a testament to the will and capabilities that our country has. Also, regardless of your political leanings, it’s time to get back to focusing on the business at hand.
While the President and Congress will certainly impact the future, their impact pales in comparison to the will and determination of individuals. Whether you’re happy with the result or not, a bigger and brighter future awaits you and your business if you focus on the right strategies.
Good luck and here’s to our future!
Make It Simple & Strong
Today is Election Day. A tribute to the principles of America and to the modern-day marketing machine. Bill Clinton has said that it’s better to be simple and wrong than weak and right. We’ve adjusted Clinton’s Law to – It’s better to be Simple, Strong and Wrong than to be Nuanced, Weak and Right. By the way Nuanced and Weak go hand-in-hand (though Simple and Strong don’t always). That said, it is of course best to be Simple, Strong and Right.
Anyway, the election got me thinking about my early Social Studies and Civics classes. I mentioned to Beth, my managing director, that I learned (and certainly remembered more) from the Schoolhouse Rock than I did from classes. It occurred to me how effective Schoolhouse Rock was. It was Simple and Strong and it taught young boys and girls very complex subjects. Now, I’m sure that Schoolhouse Rock offended constitutional scholars because it was far to simple. The important thing to remember is it was effective. Check this out:
Now ask yourself – How would your story play on Saturday morning, during cartoons in The Schoolhouse Rock?
Defining Your Field of Play
In The Five Unbreakable Rules for Creating Demand, I share that the first unbreakable rule is to: Know and understand your customer better than they know and understand themselves. This means that you must identify who your customer is. As a matter of fact, there is probably no greater nor more valuable effort for a business to take than clearly identifying and articulating their WHO.
Inevitably, whenever I see a sales cycle bogged down, margins compressed, or momentum on the downswing, the underlying cause for these problems is that the company doesn’t clearly understand WHO their customer really is, or WHAT they are really buying.
Understand, if you don’t fully understand your WHO, you cannot know what they are buying. Knowing your WHO, means two things: first, it means fully understanding who your Best Few Client is, and, second, it means knowing who your customer isn’t.
The lack of clarity or confidence about the WHO forces companies to approach the market with vague messaging and weak value propositions. Afraid to turn away someone, they fail to provide a compelling reason to buy for anyone. This means longer sales cycle times and increased costs to make sales.
When you are clear about your WHO – you define the playing field, for both your and your customers. When the playing field is clear, you can create messaging and you structure your go-to-market strategy to play to your strengths. You can innovate with confidence. Differentiation becomes simpler, because it becomes clearer. You begin to stand out in your market. Frankly (and at the risk of hurting my consulting fees), if all you do is focus maniacally on defining who your best few markets and clients are, the vast majority of everything else that needs to be done becomes natural.
So, stop now and start defining your WHO. If you’d like a tool we use to help our clients define who their WHO is, let us know – we’ll be glad to share it with you. If you have ideas or tools that work, please share them in the comments section.
Pardon Our Dust While We Complete Our Move
For those loyal readers, you may notice that the scenery has changed. For all new readers welcome.
After three years of blogging, we’ve moved to WordPress which we believe provides a better platform to support the community we are attempting to build. As with the businesses we consult with, we advise them not to let perfection get in the way of progress.
Moving a blog is difficult – with a significant probability you will lose some audience as the RSS feed doesn’t follow. To that end, we want to get back to blogging on our new platform, with our preliminary new website design. It’s not perfect, but it’s home.
Over the next few weeks, you’ll see our archive build back up, and the site become fully live. You’ll find plenty of opportunities above and beyond this blog to support your efforts to grow. As always, your comments are welcome.
The Critical Positioning Question
Do you want to merely provide a solution, or do you want to solve a problem?
The former is a commodity, the latter bypasses competition.
-
Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
