Are You Playing to Win?

Named as one of the top management thinkers in the world, Roger Martin, the Dean of the Rotman School of Management in Toronto, talks about why so few of us understand good strategy and what we can do about it. Martin has written eight books, including his latest, which he co-wrote with A.G. Lafley (former CEO of Proctor &Gamble): Playing to Win –How Strategy Really Works(Harvard Business Review Press, 2013). Martin also contributes regularly to Harvard Business Review, the Financial Times and the Washington Post. He advises CEOs around the globe on strategy, design, innovation and integrative thinking. 

Q. Given all of your work over the years with leaders and organizations, what do you think makes a successful leader?

A. Good leaders recognize they have to make choices. Unfortunately many leaders take a wait and see approach to strategy, hoping that and when things become clear, they will make the choices they need to. But if things aren’t clear now, chances are they won’t be tomorrow. The great leaders that I’ve met say: “Yes there is uncertainty” and “Yes it is a complicated world,” but we have to take that and make choices. And that willingness to choose, and the recognition that you have to, is the cornerstone of great leadership. 

Q. Why is it that leaders have so much difficulty making choices? What’s holding them back?

A. Mostly it is fear of being wrong. So many people grow up in a culture that says you have to get an A+ on everything. So, leaders often want to be perfect. It is difficult to face up to the fact that they have to make strategic bets – some of which are not going to pay off.

Q. You recently wrote a blog about strategy versus planning? What’s the difference?

A. A lot of people like to plan because plans tend to be long lists of things we want to do. Planning absolves them from the need to choose implicitly. Strategy is all about choices and giving the rationale for your choice. 

Q. In the executive search business, it seems the hardest quality to find in senior leaders is strategic thinking. Is this consistent with what you see?

A. I think this concern is right. I would say only 10-15% of all chief executives I have ever met in my life know anything useful about strategy. And I underscore “useful.” They may have read a book about strategy, but that doesn’t mean they understand it. 

Q. That is a bit shocking. Why do you think the ability to do strategy is so rare in today’s leaders?

A. I would put the blame on two institutions – the first is an MBA education. The strategy that is generally taught in business schools mainly involves teaching concepts. So if a CEO says, “My business is losing market share and my profitability is going down,” using strategy concepts such as profit from the core, Blue Ocean and core competencies management will not provide the thinking process for getting you from a crummy strategy to one that works. You need an “end to end” approach. 

The second problem is a group of people called strategy consultants (of which I was one for many years). The vast majority of these consultants don’t actually want their clients to really understand how to do strategy. So leaders are left in the dark. 

Q. Are there people who are naturally good at strategy or is it mostly learned?

A. I do think that there are people who, for some reason, are good at strategy whether they even know what it is or not. Many entrepreneurs are great strategists. For instance, my father built the biggest animal feed manufacturing company in Ontario. When I asked him why he built a multi-million dollar, truck-cleaning facility when he wouldn’t spend the money to have his own office, he told me that every time a clean, well-maintained truck came down a farmer’s driveway, it gave the farmer confidence that my father’s company would always deliver. My dad understood, in intense detail, how the customer thought about their business, and how his company could meet their needs. This is strategy. 

Q. What about the 85% of leaders who are running organizations without a compelling strategy. How can they become more strategic?

A. Leaders need to practice being strategic. Start by writing down your key assumptions such as “I am doing this because I believe customers want and care about x, and my competitors won’t do y, and I can build the capabilities to z.” This way you can watch and see if your assumptions turn out to be true. If they are not true then you need to modify. Ask yourself, “What was my pattern of thinking that made me think that customers wanted x and they turned out not to?”You likely won’t get that perfect either, but you’ll start to learn. 

Q. If strategy is set by the CEO, then how can executives who are not in the C-suite influence strategy?

A. I think it is unhelpful to describe strategy as something that happens at the top and then the rest of the company executes. At the top there is a CEO responsible for making a certain set of choices, but under that person there is an EVP of a division or a head of marketing that also needs to make choices – asking where should we play and where can we win?

Q. So aren’t you really saying that good strategy is constantly thinking about and understanding why you are doing the things you are doing?

That is a very good insight. There is not a question I ever asked my Dad that he didn’t have an answer for why he did what he did. Everything was very conscious. It doesn’t mean it’s all going to be right, but it’s all very conscious.

Foster A Collaborative Sales Team: 5 Ways

It's impossible to work together in a dog-eat-dog showdown. Encourage collaboration and you'll see huge sales growth for years to come.

shutterstock images

In the old days, seeing a sales team work was like watching sharks smell blood in the water and furiously bite everything around them. Darwinian sales managers throw chum in the water in the way of contests, spiffs, shouting matches, and "top dog" awards. For companies that have short-term goals, huge prospect lists, and turn-and-burn attitudes, the feeding frenzy can work.

But for companies with longer sales cycles, more complex and expensive products, and more of the total deal value captured in post-sale annuity-type revenue streams, sales teams should be collaborative.

Collaboration is simply more effective. No one salesperson can marshal the information, contacts, and insights that a coordinated team can. And you don't really need your salespeople working against each other by jumping territories or stealing leads. One of the most effective ways to disrupt a set of existing industry players is to sell to your audience differently.

Here are five ways to make your sales team more collaborative:
1. Don't split commissions
The first move many managers make towards encouraging collaboration is to divide commissions among the salespeople who worked on the deal. In practice, though, splitting commissions always ends up in a vicious circle of compensation gamesmanship. Without fail, you'll wind up in discussions about who contributed more to a closed deal and who should therefore take more of the commission home.

In a recent conversation I had with Dan Pink, bestselling author of Drive, he aptly said: "No matter what compensation scheme management devised, the sales folks figured out a way to game it. (That's not a criticism. I'd respond the same way.) That led management to ratchet up the compensation scheme's complexity –- which, in turn, led sales people to ratchet up the ingenuity of their response. On and on it went."

Instead, it's much more effective to encourage a team culture of collaboration with manager praise, kudos from the "team captain," and unexpected spot bonuses.

2. Share information
No one knows as much about your company, competition, and prospects than everyone put together. The more information is communicated among a sales team, the more you can help each other. Discuss deals everyone is working on as a group. Talk about losses openly and without blame. Solicit your alpha salesperson to help a junior member with a deal. Ask everyone on the team to weigh in on a particularly tough prospect. You'll be amazed when you find that the quietest person has a cousin in the purchasing department of the company you're struggling to break into.

3. Invest in your sales team
The vast majority of sales technology spending goes to systems for oversight and reporting, rather than to empowering collaboration and sales success. Investing in tools, services, and training that help your team do well--individually and as a group--demonstrates your commitment to employee success, and will sell more products. 
4. Hire collaborators, fire selfish sellers
This is obvious, but must not be overlooked. When you interview, pay attention to the people who say, "We achieved," instead of, "I beat my quota." Hire the applicants who talk more about their previous company's growth than their one big deal.

After a team meeting or before an offsite, think over each member of your team and ask yourself, "Who would leave the rest of us stranded? When something goes wrong, who shares least?" If you want to send a message of collaboration to the rest of the team, let that person go.

5. Create external enemies
So many sales teams are built on "friendly competition" between members. Get rid of your top-seller award, and instead encourage collaboration by setting up an outside goal that the team can reach together. The best sports teams in the world pay more to their stars, but their attitudes always emphasize team achievements. Your star shouldn't be proud of her MVP award if your team didn't win the championship.  

Want to become a better, smarter, more effective team builder and communicator? Join us at Inc.'s upcoming Leadership Forum June 10 to June 12 in San Diego. Visit leadership.inc.com for details.

Matthew Bellows is CEO of Yesware, an email service that helps salespeople track conversations, create sales templates, sync emails with CRM and much more. @mbellows

From Shy to Schmoozer: 10 Tips for Business Networking

If the thought of networking in a room full of strangers starts your knees knocking, rest assured that you’re not alone. In addition to being prepared beforehand (see 5 Things To Do Before You Walk in the Room) here are 10 simple tips for making the most of your next business networking event.

1) Eat before you go. Networking is best done ‘hands-free’ – leave plates, glasses, portfolios at the table. If you’re forced to carry something, make sure you can do it easily in your left hand, so that your right hand is always free.

2) Remember, everyone is there for the same reason as you are – to connect with other business people who might potentially become clients or whose services might be helpful to you or someone you know. This is not the time to try to sell something on the spot but to meet and get to know some new people and to start building some solid business relationships.

3) Put your name badge on your right side (not your left, which is the intuitive thing to do) because you greet people by shaking with your right hand which puts your badge in clear view and avoids awkward stretching to read your badge.

4) People love to talk about themselves so ask them why they decided to attend this event. How did they get started in their business? What are the things they like most about it, etc. Listen for clues that will help you decide whether this person might be a good contact to develop a longer-term mutually beneficial relationship with.

5) Read the newspaper on the day of the event so that you’re not caught flat-footed on today’s headlines.

6) Be prepared to handle questions like “What do you do?” with a simple, 10 or 15 second elevator pitch or infomercial that tells the listener what you do, for which type of client, that solves which specific problem for them.

7) Carry a pen to make notes on the cards you collect – date, function/event, other relevant details. Also make a note if you think the person you have just met would be worth introducing to someone else in your network.

8) If you need to start with baby steps, ask someone you know to introduce you to someone you particularly want to meet.

9) If you’re nervous or ill-at-ease, the best way to relax is to stop thinking about yourself and how anxious you feel, and concentrate completely on the other person. One strategy is to approach someone else who is standing alone (likely feeling as nervous as you are) and finding ways to make them feel at ease!

10)  Act confidently even if you’re not.  You may not like the expression “fake it ’til you make it!” but the truth is that we become good at what we practice, so practice acting confidently with your shoulders back, head up and a smile on your face.




By: Mary Lou Gutscher , Magnetic Business Solutions

CASE STUDY: COMPETING IN RETAIL– “DAVID VS GOLIATH”

By: Richard Peters

The retail industry and retail strategy have been major influences on the marketing and sales operations of a number of the companies with which I have been involved. I marvel at the innovation and creativity shown by some small retailers in the face of what may appear to be insurmountable competitive threats from much larger players. Probably the largest single threatening development facing small retailers are the “big box stores” the most notable of which is Wal-Mart and the niche market “category killers” such as Best Buy and Future Shop in the technology retail sector.

I want to share a few examples, which I believe,  you will find to be inspiring and motivating competitive advantage stories. These are cases where small retail owner/operators have grown and prospered by turning potential adversity into opportunity at a time when their peers were folding their tents in face of what they perceived as impossible odds.

As I write this case study, I am reminded of the bestselling book entitled “Who Moved My Cheese?” If you have not read this book, you must.

CATEGORY KILLERS

I have spent over 10 years helping software, hardware and internet organizations brand and market their products and services. In that time,  I dealt with dozens of retailers who either exclusively or primarily sold computers and related technology. As this industry started to consolidate “category killers” such as Best Buy and Future Shop became the nemesis of small technology retailers.  Aggressive pricing and extensive product selection caused numerous smaller retailers to close their doors.

Here are few examples of small IT retailers who through innovation managed to survive despite the odds. 

1.   As Best Buy and Future Shop were expanding and smaller retailers were closing their doors, one of our IT retailer’s was actually opening. If memory serves me correctly, he had 3 or 4 stores. I noticed that they were located very close to if not directly across the street from a Best Buy or a Future Shop. I asked him about the wisdom of this strategy. His perspective was that the big guys were either an opportunity or a threat and he chose to capitalize on viewing them as an opportunity

His competitive strategy focused on what he perceived were weaknesses or deficiencies in the big store business model. These were:

• When a consumer purchased a computer, TV etc. from a big store, they would invariably end up being sold cables etc. to accompany their major purchase. Often the additional cost of these ad-on items could be a few hundred dollars.  The store owner advised me that the prices being charged for these cables etc. were significantly marked up from what they had originally cost the store. Actually, the cables etc. were relatively inexpensive to the retailer but provided a significant margin opportunity. The same, by the way, is true of the “extended warranties”  often purchased when someone buys a new computer etc. These warranties represent significant bottom line revenue for retailers.
  
  
  This store owner began to advertise that, at his store, the cables etc. were included in the purchase price of any equipment. The owner noticed that while his big ticket items prices were fairly competitive with the big stores, his clients were willing to pay a little more for these major items to avoid the additional cost of the add-on items. In many cases, despite the fact that some of his big ticket item price was higher, when the customer  factored in the “free” cables and accessories, that they would be required to buy a “big store” , the total cost was less at the small retailer. 

•  Another competitive advantage was his “knowledgeable staff” and outstanding customer service.  In his stores he hired what he referred to affectionately as “nerds” who lived and breathed IT. The big stores on the other hand were less inclined to do so. The big operators offered clients access to in-store tech services such as “Geek Squad”at Best Buy who, if they were unable to deal with your issue in the store would visit your home or office and, for an hourly fee, would resolve whatever issues you had.  The smaller operator also offered to send a technician to a customer’s home “free-of-charge” to help them setup whatever new equipment had been purchased as well as resolve issues with existing equipment. He also opened his stores earlier and closed later than the big stores. He encouraged people to stop by on their way to work and on their way home.

The retailer found that people quickly discovered where he was. Word-of-mouth and referrals were a significant source of business. Once new customers did business with him, he found they tended to check with him before visiting the big stores for future purchases.

2.   Another IT retailer had his stores located in close proximity to supermarkets. He noticed that men were less inclined to want to spend time shopping with their wives or partners if they had someplace to which they could easily escape after parking the car and kill time while their other half was shopping. He trained his staff not to pressure people to buy but to create an atmosphere where people could come to relax, check out the equipment, have coffee, relax, ask questions and feel comfortable. He found that he developed a dedicated clientele who felt a loyalty to his store where they had developed relationships. They were even willing to pay slightly higher prices to shop there because of the level of service, customer relationship practices and convenience.

THE WAL-MART ADVANTAGE

Media and public interest groups have ensured we are well acquainted with the plight of small retailers as they face the “big box” effect caused by large operators moving into their markets. Wal-Mart, of course, has come to define everything that is evil about these big box operations. However, there have been instances where smaller retailers have risen to the challenge and turned even Wal-Mart adversity into opportunity.

A few months ago I read a story about a small “general merchandise” store in Alberta which had the misfortune to be located across from a new Wal-Mart location. The store had been operating for years prior to the Wal-Mart opening its doors but the effect of discounts and expansive product lines was taking its toll on the small store’s business. The owner decided that closing her doors was the final option but not the only one. She looked for opportunities that her new neighbor might provide. She came to realization that by altering her product line to consist of products not sold in Wal-Mart, she could take advantage of the traffic coming to Wal-Mart to also visit her store. 

The Wal-Mart parking lot became her store’s parking lot and her business did better with the Wal-Mart next store than it had before the Wal-Mart arrived.

CONCLUSION

In all these cases, the store owners looked out their store windows and did not see potential customers shopping somewhere else but rather people arriving in their neighbourhood looking for opportunities to spend money.

The challenge as these store owners saw it was to redefine the terms of competitive engagement and they chose to “complement” and “supplement” rather than compete.

 




Other case studies by Richard Peters:

• How Your Site R.A.T.E.S.
• Owning The Client Relationship
• Achieve and Maintain Competitive Advantage
• The Anatomy of a Turnaround
• Ancillary Business Opportunties

6 Tony Robbins Insights That Will Change Your Sales Game

By Kyle Porter 

 

 

When it comes to helping people improve their lives there is nobody in the game with stronger credentials than Tony Robbins. The “Michael Jordan” of thought leaders, Tony has affected millions of people around the world through his performance coaching.  

Tony has certainly made an impact on me. Last year Marc Benioff invited him to be the closing keynote at Dreamforce, the largest software event in the world. There he laid down sales coaching like I’ve never seen. Through his books, videos, and presentations, Tony gave us each new insights into effective selling. 

Tony empowers his readers and audience to improve themselves. So we’ve scoured the web and found source after source of his advice: 

6 LESSONS FROM TONY ROBBINS: 

#1 Know Your Purpose
In your day-to-day sales world, you MUST have a sense of meaning. Walking into the office, grabbing a coffee, checking your email, and taking your day “on the fly” is just not gonna get it done. When you’re at the office everyday you have got to know what you’re going to get done that day. Knowing your purpose will make the biggest impact you can imagine.

# 2 Give positive meaning to everything
The sales rep’s life is all about risks. The more you take the more you win (and lose). It’s how you respond to the losses that makes you special. Keeping a positive attitude, regardless of the issue, will keep your head in the game and ready for the next opportunity. 

#3 Realize that everything you do has a consequence
A sales rep's interactions with customers can either be positive or negative. There’s no neutral in sales. Every action you take matters. It’s not just about being on your best behavior, it’s about knowing your strengths and lining them up to reach your desired outcome. 

#4 Know that everyone is unique, different, and amazing
Sales is a competitive world where people put themselves on the line every day. They often get shot down. Looking at the world through the lens that everyone has meaning will positively affect every facet of your performance. Don’t get deflated when buyers and competitors don’t behave like you want. 

#5 Be driven by your desire for adventure
What drives you? Your past? Your competitors? Or even your fears? Or are you focused on your successes - on solving the next client problem and taking the next step for your company? It’s important to know what moves us and makes us do what we do.

#6 Expect the unexpected
What are you going to do when something unexpected happens in sales? By the way, something crazy always happens in sales. Why do you think we’re always the storytelling life of the party? When any situation arises, it’s important to respond with the right action that helps you solve a customer problem and take the next step.

Management Is (Still) Not Leadership

A few weeks ago, the BBC asked me to come in for a radio interview. They told me they wanted to talk about effective leadership — China had just elevated Xi Jinping to the role of Communist Party leader; General David Petraeus had stepped down from his post at the CIA a few days earlier; the BBC itself was wading through a leadership scandal of its own — but the conversation quickly veered, as these things often do, into a discussion about how individuals can keep large, complex, unwieldy organizations operating reliably and efficiently.

That's not leadership, I explained. That's management — and the two are radically different.

In more than four decades of studying businesses and consulting to organizations on how to implement new strategies, I can't tell you how many times I've heard people use the words "leadership" and "management" synonymously, and it drives me crazy every time. 

The interview reminded me once again that the confusion around these two terms is massive, and that misunderstanding gets in the way of any reasonable discussion about how to build a company, position it for success and win in the twenty-first century. The mistakes people make on the issue are threefold:

Mistake #1: People use the terms "management" and "leadership" interchangeably. This shows that they don't see the crucial difference between the two and the vital functions that each role plays.

Mistake #2: People use the term "leadership" to refer to the people at the very top of hierarchies. They then call the people in the layers below them in the organization "management." And then all the rest are workers, specialists, and individual contributors. This is also a mistake and very misleading.

Mistake #3: People often think of "leadership" in terms of personality characteristics, usually as something they call charisma. Since few people have great charisma, this leads logically to the conclusion that few people can provide leadership, which gets us into increasing trouble.

In fact, management is a set of well-known processes, like planning, budgeting, structuring jobs, staffing jobs, measuring performance and problem-solving, which help an organization to predictably do what it knows how to do well. Management helps you to produce products and services as you have promised, of consistent quality, on budget, day after day, week after week. In organizations of any size and complexity, this is an enormously difficult task. We constantly underestimate how complex this task really is, especially if we are not in senior management jobs. So, management is crucial — but it's not leadership.

Leadership is entirely different. It is associated with taking an organization into the future, finding opportunities that are coming at it faster and faster and successfully exploiting those opportunities. Leadership is about vision, about people buying in, about empowerment and, most of all, about producing useful change. Leadership is not about attributes, it's about behavior. And in an ever-faster-moving world, leadership is increasingly needed from more and more people, no matter where they are in a hierarchy. The notion that a few extraordinary people at the top can provide all the leadership needed today is ridiculous, and it's a recipe for failure.

Some people still argue that we must replace management with leadership. This is obviously not so: they serve different, yet essential, functions. We need superb management. And we need more superb leadership. We need to be able to make our complex organizations reliable and efficient. We need them to jump into the future — the right future — at an accelerated pace, no matter the size of the changes required to make that happen.

There are very, very few organizations today that have sufficient leadership. Until we face this issue, understanding exactly what the problem is, we're never going to solve it. Unless we recognize that we're not talking about management when we speak of leadership, all we will try to do when we do need more leadership is work harder to manage. At a certain point, we end up with over-managed and under-led organizations, which are increasingly vulnerable in a fast-moving world.

John Kotter

Dr. John P. Kotter is the Konosuke Matsushita Professor of Leadership, Emeritus at Harvard Business School and the Chief Innovation Officer at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations.

CASE STUDY: TEAMWORK = TURNAROUND

By: Richard Peters

BACKGROUND

A few years ago, a business acquaintance referred me to a European multinational media organization which was looking for someone to takeover leadership of one of their major Canadian media operations. The parent organization operated over 300 publications, 60 websites in 21 countries. North America was their largest market and Canada represented approximately 95% of their North American business. The particular Canadian operation that I was asked to lead was causing them significant challenges. The most notable of which was the fact that it had become their largest money loser globally. 

This business unit operated approximately 14 regional and national magazines and newspapers, 3 websites, employed approximately 50 people, was headquartered in Toronto and had 7 regional offices. It was a market leader with a circulation of over 700,000 publications monthly. The publications were printed in 4 different locations across the country and distributed through 7,500 locations nationwide.

In the 5 years prior to my arrival, the senior leadership role of this Canadian company had changed several times. The management team (i.e. department heads) had been negatively impacted by this ever changing leadership. The individual managers, for the most part, while capable within their respective areas of responsibility, suffered from a lack of leadership and as a result had developed a noticeable “silo” approach to handling problems and making decisions. In other words, there did not appear to be any noticeable team approach to dealing with issues and challenges. Each department implemented their individual solution when it came to dealing with situations that were of a more general nature. This had resulted in situations where the actions of one department negatively impacted the ability of another to function properly. There was a fair degree of acrimony among some department heads and, on my first day, I was informed that a few key department heads had submitted written or verbal resignations.

Financially the business was in bad shape:

• there was a significant operating loss and had been for a number of years.
• bad debt was in the double digit range.
• some accounts receivable were over 180 days past due and, of these, several owed well over $150,000.
• many of these larger bad debt accounts were still booking business with the company despite their outstanding debt situation.
• the company’s cost structure had gotten out of control in some areas. For example, websites were locked into a cost structure of $75,000 a month, produced no discernible revenue benefits and were experiencing declining traffic.

The company’s European head office was losing patience with the operation and I was advised that I was the last “kick-at-the-can” for this business. Upon my arrival, I was given several briefings by head office senior executive on their views of what needed to be done which included a list of which members of the management team should be replaced and where costs should be slashed.

SITUATION

My assessment of the challenges I faced was:

• My superiors wanted to see developments quickly. (NOTE: The global COO, to whom North America reported, met with me 2 weeks after I joined the company and within an hour of our meeting advised me that “my vacation period” was over and I was to send him, within 48 hours, a list of my 10 quick fixes for the business.)
• I did not want to immediately act on the suggestions made by my superiors. I needed to be able to make my own decisions regarding my management team.
• There were a few members of my management team who had indicated their intention to leave. I needed to convince these individuals to stay.
• I had a reluctant and battle scarred management team. Many of whom were convinced that my primary responsibility was to wind down the operation at the behest of my superiors. The management team’s buy-in and commitment was integral to any transformation strategy for the business. The challenge was to find a mechanism for achieving this immediately despite their misgivings.
• I needed to produce identifiable and meaningful short-term progress in order to reassure my superiors that my decision to not implement their suggestions immediately was a proper course of action.

STRATEGY

It was important to get the management team involved in the problem solving and decision making process at the outset. They needed to feel empowered and involved if I wanted them to stay around, take ownership and be part of the turnaround process. 

In hindsight, I guess I was implementing a cross functional team style approach. The benefits associated with this approach, included:

• Faster problem solving and decision making
• Increased level of by-in or commitment to the resultant action plan by those who crafted the solution.
•  Increased ability to get multiple situations dealt with simultaneously. A cross functional approach should require less senior management involvement in each problem solving and decision making circumstance. In my case, I worked with individual managers to help identify the key issues or problems and then turned the matter over to teams who would return to me when they had arrived at what they felt were implementable solutions. This allowed me to have a number of problems being worked on simultaneously without personally being involved in every detail and running the risk of being the source of delay.
• Opportunities to assess the quality of the management talent by observing them in real work situations. It can be a very effective way to measure how individuals function in a team, their leadership or potential leadership qualities, problem solving and decision making skills, organizational capabilities and overall work ethic.
• Improved customer relationships resulting in increased sales and brand strengthening. I have on occasion put inside and outside sales together with finance to manage aspects of the sales process and experienced surprising benefits.

This idea first came to me when I was running a company that was facing a particularly aggressive competitive environment. We were losing sales because the sales reps, especially the outside sales reps, when trying to cut deals with clients were required to contact their supervisors for approval before they were permitted to wander off the official pricing schedule.

The solution was to have the sales management team and finance department work together to come up with a pricing management process that would provide the field reps with the latitude to make pricing decisions while sitting with the clients while at the same time safe guard the businesses margin requirements. Finance and sales management structured a pricing practice that, while riskier in terms of maintaining margins, ensured that our reps left very little money on the table for competitors.

In addition to the direct benefits in terms of increased sales, clients were impressed that our reps were empowered to make these decisions and to make them quickly. This reflected well on the reps individually as well as the company.

IMPLEMENTATION

Beginning the day I arrived, I spent most of my time meeting with my managers one-on-one to discuss their departments and to get their perspective on what they felt was required to get things back on track. These meetings were always held in their offices, never in mine. I needed to get them to accept my presence and this was the best way to reinforce that I was part of their team and my role was to remove obstacles as well as help and support them. I had no hesitation in telling them that they were the experts when it came to their departments. Through these initial sessions and ensuing discussions, I believe it became evident to the management team that I had high level of confidence in their ability to get this organization back on its feet.

Initially, from a few Department Heads, I was greeted with a litany of “won’t, don’t and can’t” responses to my suggestions on how we could attack a problem. This was not entirely unexpected, I had experienced this type of resistance in previous roles. Most of what I was suggesting were actions that these managers had requested under previous administrations but their requests had been met with resistance and traditional risk averse rationalizations. What I was now hearing was the re-iteration of what they perceived as the parent company’s resistance to these ideas.

NOTE:  I always find it amazing that when companies or business units find themselves in dire circumstances the senior management (i.e. the guys in Head Office) often adheres to “safe” practices that probably got them into their difficult situation in the first place.  A major portion of my career has involved being recruited into organizations to lead management teams that are underutilized and, often, have become demotivated due to being subjected to risk averse senior level decision making and problem solving practices. The major challenge I usually face is transforming these teams into motivated, energized groups that embrace innovation,  make the tough decisions and zealously pursue being best-in-class.

I seldom have encountered managers or department heads who do not want to take a risk. What I have encountered are managers who have been discouraged from taking risks because of a lack of senior management support. Someone once expressed it best when they said “senior management want us to take risks but not to risk anything”.

Changing or transforming an indigenous team can be difficult and not without its challenges. Often it is preferred to replace all or part of the existing team with known talent that you may have worked with previously. It has been my experience that the management team that was in place when an organization went off the rails can be the best team to get it back on track. It seldom is the front line management or department heads who have caused the problems, they are just the ones asked to accept the blame. Given the opportunity and the proper environment they often quickly rise to the challenge.

RESULTS
 

With a few exceptions, I was able to keep the original team intact and in the first 12 months the team was able to accomplish the following: 

• The company, after years of losses, was  returned to profitability.

• Bad debt plummeted from double digit to low single digit.

• Production costs dropped $1,000,000.

• New products were introduced.

• Web costs were reduced almost $50,000 per month and the websites were restructured to be revenue contributors.

• Magazines and newspapers were redesigned to make them more relevant to market needs, to reduce paper costs and to optimize the use of ad space. Studies were conducted regarding readers preference for size and aspects of layout. The objective was to reduce paper costs by reducing publication size but not lose ad revenue by reducing ad sizes excessively.

•  Editorial costs were reduced 25% while maintaining quantity and quality of content.

•  Distribution was re-engineered.
  
  
  
  Richard Peters other case studies include:
  
  
  • How Your Site R.A.T.E.S.
  • Owning The Client Relationship
  • Achieve and Maintain Competitive Advantage
  • Ancillary Business Opportunties

Leadership Principle: People Do What People See

What do your people see in you?

Two men, down on their luck, sit on a park bench in shabby clothes watching businesspeople in crisp suits rushing to their offices. The first man says, “The reason I’m here is because I refused to listen to anybody.”

“That so?” replies the second fella. “I’m here because I listened to everybody.” 

Both practices are recipes for disaster. Successful people don’t take the advice of everyone, nor do they try to do everything on their own. Instead, they find successful models who exemplify the values, skills and qualities they desire to possess. 

If you’re a leader, I hope you have already found models to follow, but that’s not what I want to discuss. I want to ask you this simple question: Are you worthy of followers?

One of the most important leadership principles I’ve discovered is this: People do what people see. When your team looks at you, when they watch what you do day in and day out, what do they see? If they were to emulate you, how would you rate them?

I base my leadership primarily on my values and a pragmatic approach. I do what I know works. But I’m also very conscious of the fact that others are watching me and following my lead.

What I do, they will do. How I work, they will work. What I value, they will value. So I ask myself: What kinds of traits do I want to model? 

1. A Passion for Personal Growth 
I know too many people who suffer from what I call “Destination Disease.” They’ve identified a certain career position or financial goal they want to reach, and then they work very hard to achieve that goal. But once they get there, they stop working hard and growing.

This mindset creates two problems for leaders. First, it causes them to stall. You’ll stop improving the moment you lose the tension between where you are and where you have the potential to be. Second, it sets a bad example for their followers. Think about it: How many people in your current circle didn’t see your former self, the one who fought hard to achieve? If you’re resting on your laurels, they’ll assume you are doing what you’ve always done and follow suit.

If you feel yourself slowing down, it’s time for a self-assessment. If you’re done working, retire and get out of the way of your business. But if you stay, you must keep striving. If you slacken, your people will do the same—Destination Disease is highly contagious. To keep it from taking hold, set new, higher goals for yourself and make sure your people see you pursuing them. It’s a surefire way to keep your organization humming. 

2. A Heart for People
If you’ve ever seen me in person, you know I don’t blitz through a crowd. Instead, I stroll across a room, shaking hands, saying hello, offering smiles. It’s my way of showing that I care.

I’m a busy guy, but these moments are worth the pause. People want to know that the leaders they follow can be trusted. They want to know that the leader cares about them as people, not just as tools to help realize a vision.

Taking this extra time also forces me to stop and listen. How can you add value to people if you don’t know them and understand what they want? So slow down. Talk. Listen. Connect. This practice will not only help you grow as a leader, it will also establish a caring culture across all levels of your organization. 

3. An Ability to Coach Others to Reach Their Potential
“The only difference between a rich person and a poor person,” says Rich Dad Poor Dad author Robert Kiyosaki, “is how they use their time.”

Boy—is that statement ever true of successful people! This is one principle I really try to model for my team. You won’t catch me idling. You will see me trying to wring the most out of every day.
Here’s a good place to segue into another way I like to cultivate leaders: by mentoring them. You can model all sorts of valuable traits, but sometimes people need hands-on help, too.

One of the best things I did for a member of my leadership team years ago was to meet with her every few months to talk about her priorities. She was a good leader and got a lot done, but she sometimes lost sight of the big picture. Our regular meetings helped her to stay on track.

If you can learn to coach people, you’ll help them, your organization and yourself. By coaching, I don’t just mean giving people the skills to do a job. That’s training, which does have value. But coaching—that long-term, guiding relationship—is even more impactful. According to the International Personnel Management Association, training increases productivity by 22 percent, while a combination of training and coaching increases it by 88 to 400 percent!

This is a message I practice as much as I preach. Early in my career I offered experienced leaders $100 for 30 minutes of their time, just so I could ask questions of them. That would work out to around $1,000 in today’s dollars. I really couldn’t afford it back then, but it was the best way to learn. Even today, I look for guidance from other leaders I admire.

“You will never maximize your potential in any area without coaching,” my friend Andy Stanley writes in his book Next Generation Leader . “You may be good. You may even be better than everyone else. But without outside input you will never be as good as you could be.

Self-evaluation is helpful, but evaluation from someone else is essential.”

So mentor your people. Show them how you seek guidance on your own endless quest for self-improvement. And remember these words by Andrew Carnegie: “As I grow older, I pay less attention to what men say. I just watch what they do.”

Are you doing what you want your team to do?
 

A Simple Ethical Rule of Thumb: Would You Tell Your Kids?

Barry Schwartz

Professor of Psychology at Swarthmore College

Our shaky confidence in the ethical commitments of our corporate leaders seems to take a hit every week. Even though culprits rarely go to prison, firms have paid hundreds of millions to settle accusations in the last few years.

Lately, the issue has been insider trading. Goldman Sachs. SAC Capital Partners. Both were accused of several instances of insider trading. Sometimes, insider trading is blatant and clear cut. You find out at a board meeting that your firm is going to be bought for 30% per share above market value, so you call a deep-pocketed friend who buys ten million shares. It’s a no-brainer that this counts as insider trading.

But it isn’t always so clear. A few years ago, we were shocked by the disclosure that David L. Sokol, protégé of Warren Buffett, purchased shares in a company shortly before Buffett’s Berkshire Hathaway bought it. Buffet's announced investment caused shares of the company to skyrocket, and Sokol stood to make millions. Was Sokol’s purchase of those shares an instance of insider trading? And was Buffett complicit? Both men assured us that Sokol did nothing illegal. U.S. securities laws require disclosure of “material information,” which has in turn been defined by the Supreme Court as information where there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” This definition leaves plenty of room for interpretation. Moreover, the fact that Sokol did not have final decision authority in making the deal almost certainly mitigates against a ruling of materiality. So I’m willing to bet that Sokol did nothing “illegal.” And, indeed, the S.E.C. decided in January, after a long investigation, not to file charges.

But even if it’s not illegal, is what Sokol did unethical? Here, too, the situation is far from straightforward. He might have advised Buffett to do the deal for the same reason he bought the stock — because he thought that the company was sound and undervalued. Buffett has made his billions precisely by seeking and then buying good, but undervalued companies. I doubt that if you put a bunch of business ethics professors together in a room they would emerge with a consensus about whether Sokol and Buffett did anything unethical. Admittedly it seems odd that a man like Buffett, who apparently values his reputation for honesty and integrity more than all his billions, would do anything that had even the appearance of impropriety. But the issues are complicated, and reasonable people can disagree, so perhaps we should give the “Wizard of Omaha” the benefit of the doubt.

What this episode reveals, beyond its particulars, is how difficult ethical judgments can be in the complex world of finance. Sure, we can make a bunch of “bright-line rules,” but as long as the world the rules applies to is fuzzy, there will always be room for interpretation and disagreement.

So, to cut through this complexity, I want to propose a single, simple ethical rule of thumb — one question people should ask themselves before embarking on a course of action. If people asked themselves this question, and took the answer to heart, we wouldn’t need ethics courses, ethics texts, and ethics panels. The question is this: “Would you tell your children?” If the answer to that question is yes, then go ahead and do it. If not, back away.

Other quick and dirty rules of thumb have been proposed over the years, but this one has the others beat. “Does it pass the smell test?” is one, but we invented perfume so that almost anything can pass the smell test. “Will you be able to look at yourself in the mirror?” is another, but for forty years psychologists have documented the ways in which people can deceive themselves when they look in the ethical mirror. “Would you tell your spouse?” That’s better, but also flawed. Our spouses have already learned about our various moral imperfections. They’ve gotten used to us. And they’ve learned from experience how ethically ambiguous life can be. We’re afraid that our spouses are too likely to give us a pass, or at least, the benefit of the doubt. But our kids? To kids, the world is a place of moral clarity and moral perfection, and their parents are moral heroes. There is no money in the world that can make up for the look of disappointment in a child’s eyes. If people just got in the habit of asking themselves this one question, many of the ethical problems we encounter on a daily basis would vanish.

Would a doctor order a procedure she thought unnecessary to earn a fee because she knew it would do no harm? Not if she asked herself this question first.

Would a banker offer a no-doc, unaffordable loan to eager home buyers, even if the post-teaser rates were fully disclosed and the clients insisted they knew what they were getting into? Not if he asked this question first.

Would a teacher deliberately teach students items that would be on the standardized test, even when he thought it was bad pedagogy? Not if he asked this question first.

And would Sokol and Buffett have done the deal? I don’t know the answer to this one, but my guess is that at the very least, they would have thought longer and harder about it before going forward. It’s amazing how ethically complex issues get simplified when we imagine having to explain ourselves to our kids.

I know that not everyone has kids, that some people’s kids are too young, and other people’s kids are too old — already jaded by corrosive experience in the actual world. But it shouldn’t be hard to adapt this question to your individual circumstances. “Would I tell my sister’s kids?” “Will I tell my kids when they get a little older?” “Would I have told my kids when they were in sixth grade?” I’m convinced that if we adopted this family of questions as our ethical touchstone, we could throw most of the ethics texts, casebooks, and guidelines away. We would do the right thing more often, and with less effort.

Posted by:Barry Schwartz

How To Create A Disney-Like Addiction To Your Company

Step one: Make eye contact and smile. That and six other seemingly simple steps can help make customer-service magic.

By: Dayna Steele 

I have always said I would never be that person with a Disney stuffed animal sticking out of my bag on a flight home from Orlando. Never. No way. I am much too cool for that. 

After a recent speaking engagement at Disney and four days in the Florida parks with the Disney staff and their fans, I now understand the Disney obsession so many people around the world have. That addiction is fueled by Disney’s customer service and their employee “cast member” attitude:

1.It is good, clean fun. That sounds sort of old fashioned these days but it was nice. Disney employees are well groomed, with clean uniforms, and great attitudes. You do not overhear any employees complaining and you definitely do not hear any employees using foul language. Come to think of it, I do not think I heard any guests using expletives, either

2. Disney parks and facilities are clean. Really clean. You could serve a meal in their bathrooms and never think twice about it.

3.Every Disney employee looks you in the eye and smiles. Every employee I passed in the hotel and in the parks--from managers to ride operators to cleaning staff and more. Every. Single. One.

4.Disney has embraced a healthy initiative making it easy to find fruit and other healthy foods in the parks. At one point, it was easier to find an orange and an apple than it was to find a hamburger and fries.

5.Disney employees always try to say “yes.” I watched a Disney employee turn people away from a reserved VIP parade seating area for an hour without ever uttering the word “no” – instead saying, with a smile, “This area is reserved” and then pointing out a place where the guests could find good seating.

6.The unexpected is expected of Disney employees and that makes for great interaction with the customers as well. I watched a child go from happy with popcorn to sad when it spilled back to happy again when two Disney employees swooped in – one to clean up the spilled popcorn and the other offering to get the child a refill. All within a matter of two minutes.

7.Disney has designated smoking areas but I do not think I was ever near one. Not once did I smell second hand smoke in four days. That was pleasant.

After a little research, I discovered my seven observations were not that far off from the way Disney employees are trained. Here are the Seven Disney Services Guidelines:

1.Make eye contact and smile

2.Greet and welcome every guest

3.Seek out guest contact

4.Provide immediate service recovery

5.Always display appropriate body language

6.Create dreams and preserve the “magical guest experience”

7.Thanks each and every guest

These seven service guidelines should be the first thing in company employee manuals the world over. Once you master these seven simple steps in everything you do… the rest is pure magic.

And yes, I did return home with a stuffed Mickey Mouse sticking out of my bag. Walt Disney is now on my Rock Star company list.