Imagine Business Development operates on the front lines of change. Everyday, we work with small and mid-sized businesses that are embarking on a journey of transformation. They’re looking to accelerate growth, raise profits, and move away from the traditional demand fulfillment business world to becoming a Demand Creator. Despite the challenges, I love the work, and it is the mission that aligns everyone at my company. We wake up knowing that we will confront issues that we’ve never seen before, and that we will guide organizations to a new, bigger, better and brighter future.
Change, as we all know, is difficult. Every time someone shares with me their goals, I always tell them: “It’s not a question of what do you want; it’s a question of what are you willing to do and not do to get it.” I share with them my favorite quote of all-time, from Joe Louis: “Everybody wants to go to heaven, but nobody wants to die.” While the act of change is among the most difficult things anyone (or organization) will ever do, the idea of change is quite enticing. I hear it all the time. “We’re creating a “Blue Ocean” offering,” or “We’re going LEAN,” or “We’re going to transform the industry.” I love hearing those things, but I always wonder if the people who are making these bold statements really understand what they mean – and most often they don’t. Simply saying your a Blue Ocean does not make you one – and the actual act of building one will require you to change everything about your organization – even you.
I was talking about this with a friend and fellow blogger, Bob Corlett, when he was sharing with me the story of a company he had met with that felt they were poised to double in the next one to two years. The only problem was that the company had been around for 27 years and had never experienced growth like that at all, nor did they have a clear plan in place to achieve it. Just yesterday I was talking with an extremely bright CEO of a mid-size business who has plans to introduce a highly disruptive offering and quintupling the size of his company in less than three years. He’s aware of several challenges, but I fear that he is drastically underestimating how much he will need to change to make the journey successful.
A common goal of my clients is to double (or more) their revenue over the next three to five years, so I’m quite familiar with the challenges associated with this type of growth (this is the reason the name of the blog is The Fast Growth Blog). I’ve written many times about how the key to fast growth is becoming comfortable with being wrong. Success in business (or anything for that matter) is not about being right – it’s about being progressively less wrong; faster than your competition.
Most senior executives, however, think their job is to be right. They place their self worth on “being right,” or “being the one that knows the most.” The challenge with this thinking is that you can only be “right” about things that happened in the past. When the concern is about “being right,” the focus becomes the status quo the very change you are championing gets poisened. It’s difficult letting go of what you know in exchange for grabbing what you don’t. It’s down right scary. The option, however, is far worse.
So bring on the big goals. Disrupt and transform your industry – it needs it. And remember, the first step to getting the future that you want for yourself and your business is to be the manifest of the very change you seek.
Netlfix is a darling. Their customers love them, and so does Wall Street. In the last five years, their stock has more than doubled, while the S&P 500 has gone nowhere. But let’s face it – Netflix should not have succeeded – Blockbuster should have. Blockbuster had every advantage – they had the relationships, the cash and the marketing budget. However, while Netflix has doubled, Blockbuster stock is worth less than 1/10th of what it was worth just 5 years ago.
How did Netflix win. After reviewing the presentation below, I’m more convinced than ever that Netflix won because of the culture they have built on purpose. The presentation below has 128 pages to it, but every one is worth reviewing.
Innovation is important. Strategy is critical. Tactics matter. But give me the culture that allows great people to be great and expels people who aren’t – and I have no worries.
My son just got back from Cal Ripken Jr.’s baseball camp. The camp is run by Cal and Bill Ripken‘s company. Cal is a fascinating person to watch. As “The Iron Man,” he can basically do whatever he wants; and he’s dedicated his post-professional career to making youth baseball better. My son had a great time and learned a lot in the process.
The Ripken Academy (which put on the camp) follows four simple principles in their instruction – what they call The Ripken Way. As my son was talking about The Ripken Way, I realized it’s application beyond youth baseball – to, well, everything. I spend a lot of time on this blog trying to share important ideas and examples that will enable small and medium sized businesses (SME’s) to accelerate their growth and create demand. My company, Imagine Business Development, works with SMEs and salespeople to help them improve their results. Without knowing The Ripken Way consciously, I realize that these are four principles that I always try to follow. Now that I know them, I’m going to ingrain in my company and our efforts. I want to share them with you, so you may do the same in your company. (The italics are my take on each principle.)
The Ripken Way is based on the following principles:
- Keep It Simple – it’s easy to make a solution complicated; the power of all great solutions lies in their simplicity.
- Make It Fun – if it’s not fun, it’s a) not worth doing, and b) people won’t stick to it.
- Explain Why- success in the future is all about judgment; if people don’t understand why they’re doing something – they’ll never be able to apply lessons to real life.
- Celebrate The Individual - everybody is special and uniquely talented; allow them to be themselves and they’ll do great things.
How can you apply these principles to your leadership?
Robert Fritz, in his (great) book Path of Least Resistance: Learning to Become the Creative Force in Your Own Life, explains structural tension and how understanding this concept enables you to understand why people do what they do. Simply put, people will take the path of least resistance – which is typically going to be the path that presents the least pain or (this is important to understand), reduces the area of the greatest pain.
For example, understanding structural tension clearly explains why people tend to yo-yo with their weight loss efforts. As Fritz explains it (and I’m oversimplifying here), people who struggle with their weight tend to have competing beliefs. On one side, they have a belief that they should be healthy so they try to keep their weight under control; on the other, they have a belief that they like rich (fatty) foods. Rarely is their situation in balance.
When they feel healthy (their pants fit), they experience very little pain from the belief that they should be healthy. Because they feel no “health” pain, they focus on their belief that they like fatty foods – so they overeat. Overeating conflicts with their “be healthy” belief and, eventually, they feel more pain from not being healthy (their favorite shirt doesn’t fit). Because they’ve been eating what they like, they feel very little pain from the “I like fatty foods” belief; so they, temporarily, change their behavior and diet. This works, until people start complimenting how they look, their shirt fits again and they have been denying themselves their favorite foods. Because of the denial the “fatty food” pain, becomes increasingly acute, causes them to overeat and the cycle repeats.
So, what does this have to do with growth and the current challenges we are dealing with in the economy. Let’s take a look at two, typical beliefs held by growing companies: “expand opportunities” and “control or cut costs.”
When the economy and markets are good and revenue is more than covering expenses, businesses feel relatively little “cut/control costs” pain. So they get lazy and, in the name of “opportunism” and poor strategic planning, pursue opportunities with little discipline. This causes costs to rise at a greater rate than the rewards of their investments. As a result of rising costs or a change in market conditions, the “cut/control costs” pain increases significantly. Add to that the “opportunity binge” companies have been on, there is relatively little “expand opportunities” pain.
Just as people who wake up and realize they can’t wear their favorite clothes, companies go on a “crash diet” and cut expenses with little strategic thought. The lack of strategy and discipline that applied in the growth cycle applies equally in the cut cycle and mistakes are made, weakening the company. Keep in mind, the companies beliefs have not changed – they still believe in expanding opportunities, it’s just that the “cut/control costs” pain has become more acute that the “expand opportunities” pain. Eventually, the cycle shifts as the “expand opportunities” pain becomes greater than the “cut/control costs” pain. And the cycle repeats.
This is precisely where the vast, vast majority of business find themselves – they’re in the exact same position as people who struggle to lose weight. Just like the diet shows, gimmicks and shortcuts don’t work for people, shortcuts don’t work for businesses.
What’s the solution? Stop the insanity (yes, that’s a pun for those that remember one of the funniest diet gimmicks ever)! Fritz says that if the focus is on behavior – change will not stick. Over long periods of time, behavior always follows structure. The answer then is to change the structure and to integrate the beliefs. In business, this means that you have to stop looking at “cut/control costs” and “expand opportunities” as opposite ends of the spectrum. You must get out of the good market/bad market mindset. Companies should always be cutting, controlling, and expanding.
Here’s my challenge for you: How can you combine strategy, structure and people to enable you do get the work done by four people to be done better by three? If you’re always asking (and answering) that question, growth will become consistent and market conditions won’t control your destiny.
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.
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.
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.
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).