It’s funny, I started writing this blog seven years ago simply because I felt like I had something to say and I was hoping there were people out there who wanted to listen. I had no idea the impact blogging would have on me, my business, or the readers of this blog.
I remember talking to my brother when I first started the blog. He said to me, “We’ll see if you still have something worth saying a year from now.” Well, so far, so good.
While it’s trite to say that the quality of this blog is what it is because of its readers, it’s also very true. The feedback I get online, offline and in conversations has provided the motivation and inspiration to share my insights and experience.
So thank you for making this blog a delight for me.
This book review originally appeared in Baltimore, Washington and Philadelphia SmartCEO Magazine February 2012 issue.
Anyone whose followed my columns, blog or speeches, knows what a fan I am of Apple and it’s late-CEO Steve Jobs. So, it was with great interest that I downloaded Walter Isaacson’s biography of him.
Isaacson, author of several great biographies, is a fabulous writer and does a great job of providing an enticing narration of Jobs’ life in an historical context. Reading the book left me with three key insights that I hope to take into my business on a regular basis.
It’s About Execution
The myth about Steve Jobs is that the underlying causes of his success are his imagination and creativity. While Jobs certainly is strong in both areas, it was the ability to maniacally focus on execution that led to Apple becoming the most valuable company in the world.
Jobs, more than anything, was a managing editor. He could certainly conceive of technology that didn’t exist before; he wasn’t rare there. His ability to see what didn’t belong and to force his highly creative designers and engineers to stay focused on fewer projects and to bring out the essence of each product are what made Apple foundationally different.A great example is the myth that Jobs merely ripped off Xerox’s graphical interface in creating the Mac. While Jobs’ discovery at Xerox PARC did a lot to inspire the Mac, Isaacson does a great job chronicling how Apple’s execution is what enabled success.
The Goal Can’t Be Profit
When you look at companies like Starbucks (in their heyday), Apple and Facebook, you quickly realize that product is a byproduct, not a focus in itself. As Howard Schultz shares in his autobiography Pour Your Heart Into It, Starbucks’ aim was to make a great cup of coffee and provide a special experience to its customers. By staying focused on that, a great company (and tremendous wealth) was built.
I truly enjoyed reading about the genesis of the iPod, the product most responsible for launching Apple into the stratosphere as a consumer products company. Isaacson documents the inside story how Apple brought the iPod to life, and how Microsoft reacted.
Bill Gates, CEO of Microsoft at the time, realized what a game change the iPod could be, so he invested in what ultimately became one of Microsoft’s most high-profile failures – the Zune music player. One of my favorite quotes in the book is when Jobs says:
“The older I get, the more I see how much motivations matter. The Zune was crappy because the people at Microsoft don’t really love music or art the way we do. We won because we personally love music. We made the iPod for ourselves, and when you’re doing something for yourself, or your best friend or family, you’re not going to cheese out. If you don’t love something, you’re not going to go the extra mile, work the extra weekend, challenge the status quo as much.”
You Have to Break Rules
When I consult with companies who desire to accelerate their growth by breaking through their growth barriers; I caution them that the fundamental challenge is making the appropriate changes to the business without killing the unique dysfunction that makes them what they are. Too often consultants come in, apply their “rules” and take away the uniqueness that made the business effective.
Steve Jobs succeeded his way. He was control oriented, famous for berating employees (and friends), was aloof and moody. Apple, beloved by its customers, is not a particularly engaging firm. They don’t tweet and don’t really listen to the customers all that much.Simply put, if I made a list of the consensus rules for management and growing a company in an interconnected world – Apple and Steve Jobs would violate most of the rules. And it worked for them.
The biggest insight I gained from reading Steve Jobs is that his way worked for him. It probably wouldn’t work for anyone else. The key is to learn from what he did. Then make it work – our way.
It’s probably the great Jobs legacy – to succeed, we must leave our mark.
I often talk about how salespeople and companies can Move Beyond Price to put the focus on what your products/services are worth instead of what they will cost. As part of the process, I explain that price is really a signal, telling both buyer and seller how the other values of the proposition being put forth.
The implications of The Drought we find ourselves in as we continue to emerge from the deep recession puts more pressure on sellers to justify their prices and margins. Sellers must be able to answer a very simple, clear question: Why should a buying organization give your products/services a favored status, allowing you to earn higher prices and margins?
Increasingly sellers are failing to have compelling answers to this question. In my experience, the underlying reason for this is because sellers are either unwilling to put forth the effort to offer propositions that are truly different and better than others, or sellers are merely afraid to make a compelling promise.
Companies have a crucial decision they must make:
- Do they want to focus their profit formula on enhancing and growing margin? or
- Do they want to focus their profit formula on growing volume faster than anyone else?
Companies that choose the former must go further and ensure that their value proposition connects more deeply with their customer’s businesses. They must find and/or enhance their ability to make their customers more efficient and effective.
Companies that choose the latter must aggressively eliminate costs within their organizations so they can continue to deliver their products and services faster, cheaper and better than their competition.
Either road is difficult, but today, more than ever, you must make a choice. Straddling these two approaches is simply becoming too precarious and risky to sustain.
To get you started, here are two articles I just read that show how other companies are meeting this challenge.
- USAToday shares insights into how FedEx and UPS are deepening the value proposition and building adjacent business to drive their growth.
- In the recent filing for Facebook’s public offering, founder Mark Zuckerburg shares the Facebook philosophy with what he calls The Hacker’s Way. Every entrepreneur should read this (regardless of how you feel about Facebook or Zuckerburg). My favorite quote in the piece: We don’t build services to make money; we make money to build better services.
What choice are you going to make?
Sunday, while watching The Washington Redskins (finally) win, I saw an interesting ad from Chevy. I have to admit that it tugged at my heartstrings a bit.
It told the story of a family who tracked down their father/grandfathers original 1965 Chevy Impala SS. The emotional message was, “More than a car…a Chevy.”
I’m not sure how effective the ad will be in selling more cars, but I certainly hope its effective with the management and senior leadership of GM, and other companies. See, the thing that created an emotional bond between Dad and his Impala, is that, like it or not, the Impala was not a boring car. The Impala had character.
GM’s problem today (and for most of the last 20+ years) is that their cars are boring, me-too vehicles. With the possible exception of the Corvette (which has stayed strong), there’s nothing interesting about a Chevy. With all due respect, what the heck is a Chevy Malibu? Don’t get me wrong, the Malibu is not a bad car (I drove one recently when traveling), there’s just nothing special about it. It’s like every other car I’ve driven.
If GM, or you, want to be more than just your product or service – a worthy goal – then take a risk. Stop differentiating and do something different. It’s not a guarantee for success, but I promise its a great first step.
Today, the Washington Capitals fired their coach, Bruce Boudreau. The fastest coach to win 200 games is fired with 201 wins.
My first reaction was a little shock. How could you fire a coach who turned the team around, and has one of the greatest win/loss percentages in history?
Then I realized that’s the cost to be great. The management of the Capitals isn’t satisfied with the best record in the regular season. Success is winning The Stanley Cup. As good as Boudreau has been it’s become clear he wasn’t the guy who would get the job done.
Before you write this post off as the musings of a Capitals fan; ask yourself do you have the discipline (and guts) to make these types of decisions? Look around your office, look at your payroll statements. Is every employee on your team up to winning your version of The Stanley Cup.
I’ve lost count of the number of salespeople, managers or long-term employees who are there for no other reason than they’re nice, loyal people who care.
Don’t get me wrong, I’m not saying fire those people. I’m saying that you’re making a choice – and you need to accept the consequences. Bruce Boudreau is a great guy, a lot of fun, extremely loyal, and he’s quite a good coach. The Capitals made the tough decision that he wasn’t enough – kudos to them for having the guts.
So, what do you think of Howard Schultz’s announcement that Starbuck will “reinvent [the juice] category in the same tonality that we reinvented the basic commodity of coffee?”
Apparently, he sees “a lot of white space.”
What?! Really?! Howard, please, what’s happened to you?
That sounds like Internet CEOs saying they see lots of synergy.
It sounds to me like you’re bored again. I realize that owning the Seattle Supersonics didn’t work out. I guess merely rebuilding Starbucks isn’t interesting enough for you.
How I miss the old Howard Schultz. The one who focused on his core business. The one who, when coming back to run Starbucks, talked about the importance of staying focused and railed against how Starbucks forgot what they really were.
In my experience when a company like Starbucks starts acquiring companies like Evolution Fresh (no offense Evolution) and starts speaking publicly of “white space” what they are really saying is:
We’ve lost our ability to create real value for our customers. We’ve become commoditized. In an attempt to fool our investors and protect our stock price we’re going to transform another industry.
I don’t buy it. What do you think?
As I’ve been watching and reading over all of the news stories and tributes to Steve Jobs, I notice that they’re missing one of the biggest insights to Jobs’ success.
While every story makes mention of Jobs returning, very few of them acknowledge just how close to death Apple was when he returned. What of the most important lessons I learned in business cam from watching Jobs turn around the company.
How did Jobs do it? He cut to the core. He took 22 products that were in Apple’s go-to-market pipeline and cut them down to 4, 2 consumer products and 2 business products. He knew this would result in Apple becoming (temporarily) a smaller company. He told Wall Street, customers and employees:
“Apple will get bigger, first by getting smaller. We will cut to our core, we will focus on our core, and we will forever grow from our core.”
For nearly 15 years, Apple did just that and the result was transforming a company worth $5 billion (and nearly bankrupt) to the most valuable company in the world, valued at $350 billion. A 70x result!
To me, Steve Jobs will also stand for the power of three critical elements:
I never thought I’d feel sorry for a company with a $160 billion market value, but I’m really feeling sorry for Google. Increasingly I watch what they do and I cringe.
In February 2007, I wrote a post called, “Why Google Wins.” I shared: “They do not expose you to advertising or direct you to content (what’s in it for them) until the viewer has gotten something of value (the response to their search). They create value before they receive value in return– that’s a rule we should all live by.”
Back in 2007 Google was the poster child of innovation. Stories were written about how Google required employees to spend 20% of their time just creating new things and exploring new ideas. The result of these efforts – a company increasingly creating solutions where problems don’t exist, and a company struggling for relevancy.
- Google Voice
- Google Wave
- Google Plus One
What do these have in common? Lot’s of hype and no relevancy.
Now Google’s trying to come up with their next version of “the social network.” Here’s my question – why? Does this really play to Google’s strengths, or are they just trying to protect their turf?
Think about it – in 5 years Google has tripled their revenue and their stock has gone nowhere! With the most successful advertising business in history and the introduction of the second best (okay, I couldn’t help myself) mobile phone OS – their stock has performed just like the index.
Personally, I think they’re heading on a downward spiral. I think they’ve forgotten their highly successful formula.
What can the rest of us learn? When you stop focusing maniacally on creating value – you lose plot, and tough times won’t be far away.
Have you ever noticed that conversation topics tend to occur in bunches? This week the conversation of choice seems to be can small and mid-market business hire salespeople successfully? I met with the CEO of a great services business and he’s clearly in the camp of you can’t.
His story is not unique. He’s been the primary salesperson for his company from its inception. He’s tried hiring salespeople in the past. It never worked out. He’s come to believe that you just can’t hire salespeople successfully.
Many statistics and studies would support my new friend. Just recently I shared a devastating study on the effectiveness of salespeople that was conducted by The Harvard Business Review. Recruiters that I talk with tell me that the mis-hire rate for salespeople for small and mid-market companies is 75 – 85%! One of the best all purpose recruiters I know won’t even engage in a sales search.
But, I’ve got to tell you I just don’t buy it. I think small and mid-market business can successfully hire salespeople. They just need to understand what it is they are hiring. There are two fundamental mistakes small and mid-market companies make when hiring/building a sales effort.
- They treat the “salesperson issue” as a people problem, when it is, in fact, a system problem. You must fix the system first.
- They view “sales” and “selling” through singular definition when it actually means very different things. As the chart below shows, there are four distinct roles in selling.
Each role requires different strengths, different focus, different measurements. The priorities for each role are different, and oftentimes conflict. There is simply no way you can find someone to effectively fill all four roles. When they try, they just end up treading water and wasting company resources.
If you’re thinking about hiring a salesperson, take a moment and define which role you are really hiring – then focus on filling that role and build the others later.
Have you solved the sales hiring challenge? What do you do?
This book review originally appeared in Baltimore, Washington and Philadelphia SmartCEO Magazine May issue.
Two of my absolutely least favorite marketing terms are: differentiate and brand. The reason I hate these words is because they are both results that a whole bunch of marketing agencies and advisory firms turned into means so they could both make the process insanely complicated and therefore charge ridiculous fees for it.
My distaste for these words is
far more than merely semantics. My problem is that when companies focus on differentiation and/or branding, in the traditional sense, they are focusing on the wrong things. Both words cause you to focus either internally or on your competition; neither of which are effective for driving profitable growth in today’s hyper-competitive times.
Why Differentiation Is Not Enough
I regularly advise CEOs to stop differentiating, and instead just be different. In working with thousands of small and mid-market companies (and studying thousands more companies) I’ve observed that the only companies that spend significant time on differentiation strategies are the ones that aren’t different.
Think about it. If your business is different, how difficult should it be for someone to realize that? How hard should you have to work to “differentiate”? Companies that are different are differentiated, those that aren’t – are not.
In my experience, I’ve seen what happens when differentiation becomes the focus of company executives. They stop focusing on the critical questions about their customers and what really matters to them.
Instead their center of focus becomes the competition. They start asking, “Is this our unique selling proposition,” rather than, “What would absolutely delight the people with whom we want to do business
Without meaning to, they commit the very sin they were trying to avoid – they start feeling and acting just like every other company. They quickly become what I call a “Me-Too” company.
The Problem With Branding
Don’t get me started on branding (okay, too late). The biggest myth in marketing is the idea that businesses can brand themselves or control their brand – they can’t! Business don’t control their brands, their customers do!
The problem with branding is very similar to the problem
I have with differentiation – the questions branding leads executives to answering are bad questions.
Branding isn’t something companies do to their customers; it’s something customers do to businesses. It’s not about telling your story; it’s about having our stories understood.
Branding isn’t about logo’s, brochures, ad slicks, and any of the other trivial things that businesses do in an effort to “re-brand.” Rather, it’s about ensuring that that what your business is, is what it is supposed to be. It’s about delighting your customers and creating meaningful experiences for everyone that comes in contact with you. Far more than merely being liked, branding is about being valued.
If Not Differentiating or Branding, Then What?
For the last five years I’ve been sharing my discovery about the fundamental difference between great companies and non-great companies. I’ve learned that great companies have mastered five simple rules that others have either ignored or failed to master. I call these The Five Unbreakable Rules for Creating Demand.
Summarized these rules state that the key to creating a great company (and anyone can do this) is to focus – manically – on who your customer is and how can you delight them.
It’s as simple as this:
- Great companies know who their
customer is – and who they are not. They never confuse the two.
- When you are delighting your customers, you don’t have to worry about differentiating anything – your customers will take care of that for you.
There is probably no greater example of how to do this than Apple. In the 3 Acts of Apple they have delighted a core group of customers so deeply that they achieved a cult-like status, they’ve failed to delight customers and nearly went bankrupt, and in Act 3 they returned to delighting customers and are the single best performing company in the last 15 years.
While I try not to review the most popular books in the business space in this column and instead try to highlight authors and books that readers of SmartCEO may not be as familiar with, I’ve decided to make an exception.
Guy Kawasaki was there for Apple’s first act, heck, he was Apple’s Chief Evangelist. Since he
left Apple he’s been delighting a core group of customers. He newest book Enchantment: The Art of Changing Hearts, Minds and Actions is an absolute must read for anybody in business.
From their first sentences in Chapter 1, “The world will not beat a path to your door for an insanely great mousetrap. In fact, the great the mousetrap, the more difficult it is to get people to embrace it …” Kawasaki enchants readers with simple how-to’s to stand out, resonate and build great businesses.
So stop differentiating and start enchanting.
Yesterday, I shared the challenges associated with selling new and better products/services. I shared the six steps to preparing to sell anything disruptive. Today, I’m going to put the six steps in actions and share with you how I would sell word processing in an age when the Selectric typewriter with auto correct tape was considered cutting edge.
Putting It All Together
I’d focus on mid-sized and large law firms. Before the word processor, these firms dealt with paper and writing in massive ways. They had large secretarial pools that created no value but retyping complex documents. Think about the waste!
Also, at the time of the word processor, laws and regulations were changing that dramatically affected a law firms ability to compete. So while the general partners within these firms cared little about the technology called “word processor,” they cared greatly about their partnership distributions and their ability to compete.
I’d provoke their awareness on the large, unnecessary waste caused by the constant typing and re-typing of documents. I’d share with them the leverage they could gain by serving far more clients, with far fewer people. And I wouldn’t stop there. I share how small savings in time and costs spread throughout the organization added up into millions of dollars of lost profits.
I’d ask them what they would do with those profits. Would they add them to their distributions making far more money with no increase in effort? Would they take the cost savings and reduce their fees in an effort to take business and market share from their competitors? I’d highlight the dangers they’d face if they failed to adjust and adopt this new technology. I’d acknowledge the costs, fear and disruption associated with buying from me, and I’d highlight the costs of not buying from me. As history proved, it would become a pretty easy decision.
I think you get the point. I’d sell word processing, not by focusing on the word processor – but by focusing on the result. I’d sell small technology in a BIG way.
Maybe you’re not selling a disruptive technology. Maybe your product/service isn’t the game changer that the word processor was.
It doesn’t matter! In today’s commoditized world, adopting these 6 steps is the only way to ensure that you get the reward your deserve.
Imagine selling word processors, when the IBM Selectric typewriter with self correcting tape was considered cutting edge technology. Think about the challenges you’d have as a salesperson:
- You couldn’t focus on “your solution” because no one knew they had a “word processor problem.”
- You couldn’t rely on explaining your features and benefits because no one would understand them.
- There’d be no word of mouth, because no one was really using them.
- You’d have no case studies, because it has little to no history.
I could go on. Let’s just agree that it would be very difficult.
So, what would you do?
Here’s how I’d handle it:
- I’d get real clear on the critical business result I would focus on. In the case of word processing I’d choose between productivity and costs. Here I would focus on costs over productivity as the primary result, putting productivity very much in the background. The reason for this is that productivity focuses on gains, while costs focus on loss avoidance. When asking people to change, loss avoidance is far more powerful than gain.
- Next I would decide what a good sale is. Do I one to sell one software package at a time, do I want to sell several, do I want to sell in bulk, etc.? In my case, I’ve always been a fan of leverage so I would focus on selling hundreds of licenses at a time.
- Then I’d focus in on what types of organizations are incurring costs that I could impact in a big way.
- As I brainstormed the list I’d be looking for a sweet spot. Who are the people that absolutely need what I do and have the ability to buy at the level I want. It’s important that I focus not only on the types of companies that I want to sell to, but who inside those companies do I want to connect with. I want to connect with the people who have the power to cause change and displace the status quo.
- Once I’ve settled on the key customer types that I want to focus on and who I want to connect with, my job becomes immersing myself in their world and understanding them better than they understand themselves.
- Now my job is to sell.
Tune into my next post to learn the specifics of what I’d do.
While I do not wish to diminish the issues that still must be dealt with, virtually all of my indicators and research indicate that we have clearly entered a recovery phase. This is backed by economic data and a tremendous amount of anecdotal data (including that this January has been the busiest in our history).
The winning businesses of tomorrow must understand the immortal words of hockey legend, Wayne Gretzky – You must skate to where to the puck is going to be, not to where the puck is now.
While true recoveries (and this is the first one we’ve experienced since 1982) represent tremendous opportunity, they also represent significant danger for businesses that are not prepared. Companies planning on growing must understand the advantages and dangers that recoveries represent. And I’m sharing those observations with anyone who wants them.
I’ve just published my first eBook (it’s short – I promise): Successfully Growing In A Recovery: How Recoveries Can Be More Dangerous Than Recessions & 20 Questions To Ensure Your Success. In this eBook, I share:
- The 5 reasons recoveries are dangerous for growth companies
- The 5 areas (I call them The 5 P’s) where a company must excel to succeed in a recovery
- 20 questions and actions (4 for each area) that you must address to ensure your success
The eBook is free. If you’d like a copy just click on Successfully Growing In A Recovery: How Recoveries Can Be More Dangerous Than Recessions & 20 Questions To Ensure Your Success.
PS: Even is you don’t believe that we’re in a recovery, the advice in this book will help you grow profitably as well.
I’m a BIG fan of key performance indicators (KPI). I firmly believe that you get what you measure and track. My best months, quarters and years always occur when I’m disciplined in tracking my KPI.
It’s important to note that the key word in KPI is indicator. An indicator should be designed to highlight what is likely to happen, not what has already happened.
So far this year (I know, it’s only been 3 weeks), we’ve seen a significant increase in companies asking us how we can help them grow. When we get to the topic of KPI, they all list a series of relatively meaningless or arbitrary numbers (like the probability of a close based upon the salesperson’s gut), and inevitably tell us that the main thing they track, measure, and reward is closed business.
CLOSED BUSINESS IS A HORRIBLE INDICATOR
Closed business tells you what happened, but it doesn’t tell why it happened, nor does it tell you what is likely to happen going forward. It’s like saying, “You should buy Enron stock – it was up 75% last year.”
There is a simple reason why people use closed sales as an indicator – it’s easy to identify and track. Plus, it feels clear.
It reminds me of the story of the man who was looking under a street light for his keys. As he was crawling on the ground, passersby asked what he was doing. He told them he was looking for his keys, so they started helping. Eventually one of helpers asked where he dropped them, and the man pointed to the other side of the street. The helper asked why he was looking in a place different from where is dropped his keys; and the man replied, “Because it’s light here, I can’t see anything over there.”
Effective KPI, especially sales and marketing KPI, are difficult to identify. They need to be focused on the cause of sales or revenue, rather than the result. Spend the extra time to identify and track true indicators, and your results will multiply.
In June 2007, I took Ted Leonsis and the Washington Capitals leadership team to task for introducing a new jersey as a “brand awakening” for the Washington Capitals. I wrote that, “if you want to strengthen your ties with current fans and attract new ones, you only have to do one thing – PUT A BETTER PRODUCT ON THE ICE. ”
Well 3 1/2 years later, Leonsis and crew have clearly proven that they already knew what I was talking about. Leonsis took a last place hockey team, in a football-crazed town and turned them into the hottest ticket in DC, having sold out more than 100 games in a row.
Leonsis has since taken over the Washington Wizards and Verizon Center, after majority owner Abe Pollin passed away. The Washington Post has a fascinating story about how Leonsis is turning those organizations around as well.
It’s not only interesting if you’re a sports fan, it’s down right instructive if you are trying to grow your business. I highly recommend you read it.
Here are the three points I found more valuable and instructive:
- Leonsis and crew are maniacal about looking at everything from the customer’s viewpoint. Leonsis spends time with them, and no detail is too small. Whether it’s adding cupholders to the urinals, making sure the pizza is hot, or checking the new packaging on nachos, Leonsis’ crew is on it.
- They know who their best customers are and they cater to them. They allow them to participate and really feel like owners.
- Leonsis realizes that you can’t game your way to success. The Wizards (and the Capitals before Leonsis) were notorious for giving tickets away so that the arena looked fuller than it would have been. Leonsis realizes that this just penalizes those who pay full price (pay attention, discounters). Although it can make the arena look empty, Leonsis says:
I don’t ‘dress up’ the arena. I don’t believe in that. We don’t do it with the Capitals. So some nights, it looks like our attendance is down, yet our revenues are way up because you are not giving away free tickets. We will make the Wizards a hot ticket because Washington is a fantastic market. If we can build the team around the right players who can play the right way and get results, we will sell it out.
It would do many business leaders well to follow Leonsis’ example.