All posts by Steve

Customer Management, Customer Relationship, Management

Deliver the Bad News

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We have all seen it, and probably even done it at one time or another. A customer wants something. It is a logical request. They are a good customer. We really want to make them happy. The problem is that we are just not able to provide them what they want. It is now somebody’s responsibility to tell them.


 


It may be too expensive to develop the capability or to do. You may not have the resources available. The product or service may just not be technically capable of delivering what has been requested. It may be so far outside the contractual arrangements that you just can’t do it.


 


It is bad news.


 


Our first response is to try and soften the news. We naturally look for some way to get around the issue. We want to leave some feeling that there may be some way around the problem or a potential solution in the future. Don’t defer it, avoid it, or assign it to someone else.


 


This is only digging the hole deeper.


 


Business is about setting expectations and then meeting them. If you can not meet a customer’s request, you need to deliver that position and set the expectation that the request will not be met. It is business. People understand that they will not always be able to get everything they want. If positioned properly and honestly, it will be known that it is your desire and position to provide the best service and capabilities available, but that sometimes you are not able to fulfill every customer request.


 


In the future, if a solution to the customer’s request is found or developed, they will be pleased as their expectations (of no solution) will be exceeded. Whereas if you have positioned for a potential review or solution at sometime in the future to avoid delivering bad news, you have delayed meeting their expectations and created frustration. Customers understand a “yes” or a “no” answer, but a “maybe” will almost always frustrate them.

Change, Management, Performance

The Black Swan

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Have you ever seen a Black Swan? I had to go out and Google it to see if they really exist. They do. All the other swans that I have seen were white. When someone mentions swans I think of white ones. It was a common expression in the early U.K. as a statement that describes an impossibility, from the old world presumption that “all swans must be white”, because all historical records of swans reported that they had white feathers. The Idea of a Black swan was outside my initial perception set. I guess it shouldn’t have been. If we can have white (albino) tigers, why can’t we have Black Swans?


 


So what?


 


A gentleman by the name of Nassim Nicholas Taleb wrote a book in 2007, by the name of The Black Swan. Taleb asserted, “What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability.” He goes further to state “A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.”


 


I think we need to apply this theory to business. In looking at the various corporate cultures and methods of business conduct that I have been associated with, I see many, many white swans. When I look back at the various roles I have had throughout my career, I find that I was my most successful when I decided to operate outside what was then the expected norm and go my own new/different way. I had my highest impact on the organization, and I was my most successful.


 

In today’s unpredictable business market it may seem risky to operate outside of the expected norm. After all, the Chinese proverb is “The nail that sticks its head up gets pounded down.” On the other hand, as businesses today strive for cost reduction and profitability improvement they are finding that they don’t need as many white swans in the labor flock. In this day and age I think I would rather be regarded as “High – Impact” and “Rare” than be regarded as just another member of a flock that is being reduced.

Customers, Markets, Sales

Diversify Revenue

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It is very easy to fall into the trap of being very good at one thing. You start with a successful sale. You follow it up with a similarly applied successful sale, then another, and so on. Soon you have what you feel is the “recipe” for your product/service and a market. The key item to be aware of here is “a”, as in singular market.


 


Being very good at one thing is great while that market is good, but no market is good forever. You need to make sure you are diversified in your revenue sources.


 


I am in the communications and technology industry. It has been a rollercoaster ride for over a decade. Companies have flared up very large by taking advantage of the various technologies and needs bubbles, only to almost disappear completely when that particular market bubble bursts.


 


Good rules of thumb are to focus on the needs and uses of the end users of your product or service. This means you must potentially have to “see through” your customer, to their customer, if you are not dealing directly with the final end user of your product or service. As the communications industry learned in a very painful way, it was not the network that drove the end user; it was the end user that drove the network.


 


Examples of revenue diversification can include understanding the various demographics and needs within the market and grouping like ones as targets. This would be an example of vertical market definitions and diversification. Markets such as “Governments”, “Financial Entities”, “Education” and “Manufacturing” are good examples. That way you diversify yourself into specific markets that hopefully do not move fully in coordination with each other.


 


Another methodology is to move into complementary goods and services. If you are an equipment or product provider you may want to look at moving into providing services that are associated with your product. That way when customer capital expenditures are reduced, you can still generate revenue from the service associated with your product.


 


It sounds simple, and it sounds like common sense, but it seems that all too often in the heat of the drive for ever increasing revenues, we end up focusing only on what we have done well before, and not on other potentially unfamiliar markets that we should do well on in the future.

Change Management, Efficiency, Process Management

No More “Work Arounds” – Enforce Change

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We have all been in the position where an unexpected issue arises. It can be a product capability shortfall, or a process application mismatch, or just about anything in between.  Our first impulse is to find a “work around”. Something quick and dirty that will get the job done and allow us to move on. We have all done it.


 


The problem with this approach is that it requires two “fixes”: the initial “work around” and then the revisit of the issue to put in the correct long term change. The “work around” allows us to stay with the existing process or capability, when by the very nature of the need, we are seeing that we need to change. In today’s short resource, profitability and resource challenged environment, the “work around” has become too expensive.


 


The normal issue with a “work around” is that since it is working, we never seem to get around to implementing the correct long term solution. Change doesn’t (need) to occur and the “quick and dirty (re: inefficient) becomes the accepted process. It becomes the standard by default and gets (re)coded into the process going forward. The quick and dirty has solved a short term need, but has not generated the needed change to achieve long term efficiency and profitability.


 


In today’s economy when you encounter an issue, more often then not the correct course of action is to implement the long term fix – make the change. It may take a little longer than the quick and dirty fix to the existing system, but the end result is a cleaner, longer term solution. The business also ends up stronger, more efficient and more profitable.

Commitment, Excellence, Pride

Business Without OCD

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I play bass guitar. I would like to call myself a musician, but that would indicate that I have more talent for it than I do. I do appreciate excellent musical instruments though. I even own some. I was out on the web looking at custom made instruments when I came across a luthier (guitar maker) who had an interesting blog on his web site.

He asked the question about how difficult it must be to be in business (in his case making instruments) and to NOT have OCD (Obsessive Compulsive Disorder). Obviously I was hooked and had to read further.

He brought out the (not almost) obsessive attention to detail that he felt about his work. He asked the question about how it felt when “good enough” was in fact good enough, even when you knew you could do it better. What came through was the pride he felt in the works he created. The compulsion he felt to not just get it done, but to get it done to the very best of his ability.

He questioned how hard it must be for other people to work and produce without that obsession with detail and that compulsion to do their absolute best at whatever they are doing. At this point he had struck a significant chord with me.

Please pardon the PUN, I couldn’t resist.

At this point I was interested  in his instruments. He seemed like my kind of guy. I read further. It was at this point that he went to a level that I just couldn’t go. He challenged his prospective customers to prove to him that they were worthy of his instruments. What could I say? I am really not that good a musician. I don’t know how I would have reacted if he had paraphrased the Soup-Nazi character on Seinfeld and said:

“No. No guitar for you.”

I did learn about what kind of pride in ones work, and the attention to detail that exists, and that how those things are key to creating the best product one is capable of. I’ll keep practicing and maybe I will get one of his instruments later.

It also reemphasized what I already knew about attention to detail and pride in ones work. We all know it, but on occasion it is still good to hear it again.

I just won’t ask my boss to prove that he is worthy of my output………

Commissions, Incentives, Sales

There is No “Tipping” in Business

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A good friend of mine, John Schlueter, provided me with some topics for this blog. Here is one of them.

 

If you go to a restaurant and the waiter is late with your order, and you can see that he is working very hard in a busy section with many demanding customers, will you still tip him?

 

Most of us, pretty much without exception will tip the waiter based on the situation and the obvious effort he is putting out. Unfortunately in a performance based role such as management, or sales, this would not be the case.

 

In past sales roles there have been years where I have worked some of my longest and hardest hours pursuing sales, only to be not rewarded when the sale did not come in. Everyone knew how hard I was working, that I had difficult customers and significant competition. It didn’t matter.

 

I didn’t get a “Tip”(commission).

 

A “tip” is an incentive commission to drive a desired behavior in business. It is not an entitlement.It is there to drive a desired outcome – either fast and courteous service, or achievement of a sales objective – as the case may be.

 

Despite that position, I would still probably leave a tip, but I have been in roles where my bosses didn’t feel that way at all.

Management, Organizations, Structure

Cloud Computing – Yes, Cloud Management – No

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As the use of cloud computing proliferates, the ability to access applications via the network without having a defined path or structure to them, we also seem to be proliferating “Cloud Management”. Cloud management is the creation of a matrix structured organization where both responsibilities and reporting structures are overlapped.

 

Cloud management can occur when Sales reports via a geographic structure, Operations, Marketing and Support report into functional structures and customers are organized by vertical market alignments. The cloud gets worse when none of these reporting structures converge until the very senior most levels in the organization.

 

The net result is that usually each reporting structure begins to duplicate aspects of the other functions due to the number and difficulty of management hand-offs and the lack of overall alignment. Sales will create operations and support “like” groups, operations will create sales and support “like” groups,etc. to make sure that their needs are looked after.

 

When multiple groups have similar responsibilities, it ends up that no group has final responsibility.One group will always think another has the responsibility, and can point somewhere else when the goal is not achieved. The matrix organization structure can be very elegant in theory, but very difficult to implement and work well. Organizations where reporting structures, responsibilities and objectives are clear, simple and defined reduce functional overlap and clear up the business confusion that the “Cloud”can create.

Execution, Planning, Strategy

John McKay Was Right

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John McKay was a very successful college football coach at the University Of Southern California (USC) in the 1960’s and early 1970’s. I am not aware of many unsuccessful football coaches there, but I guess there may have been one or two. Coach McKay was also the first head coach for the Tampa Bay Buccaneers professional football team when they came into the league in 1976.

 

As an expansion team the Buccaneers did not win a single game in their first season. Despite all the planning, preparation and strategies, they were not able to win. There was a question of the talent that was present on the team, but coach McKay never said that was the issue.

 

What coach McKay did say is best summed up in a comment he made in response to a question he was asked after one Tampa Bay’s many losses. When he was asked what he thought of his team’s execution that day, he thought for a second and then said…

 

“I am in favor of it.”

 

What he brought out, with a sense of humor, is that planning and strategy and talent and everything else is good, but it is the execution, the doing of the things that you are supposed to do, that is the key to winning, or losing.

 

Making sure you have a workable plan and that you have the best talent are keys to a successful business. Making sure that everyone is executing their responsibilities and achieving their objectives is the key to successful leadership. Your team’s“execution” will be the difference between winning and losing in the market place.

Communication, Planning, Strategy

Secrets and Common Knowledge

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I heard it once said that the difference between a business secret and common knowledge was that common knowledge was far more difficult to come by. I think to some extent this is probably the case.


 


Whether in sales or business management, as you progress up the ladder you become more of a “knowledge” worker and somewhat less of an implementation worker. By the nature of your expanded role you are entrusted with more information regarding the plans and strategies of the accounts or business (usually both).


 


This is pretty heady stuff. You are entrusted to know things that others are not. The urge is to show off and tell others the things you know. The requirement is to communicate strategies and directions so as to best align the resources to execute on the plans. The need is to do so without “broadcasting” in such a way as to reduce the value of the information by providing it to those who do not need, or should not have it.


 


I have stated in the past that the value of information is in sharing it. The art is being able to select what to share and who to share it with and how to share it in such a way as to be able to achieve your sales and business goals without your proprietary business information becoming “common knowledge”.

Deals, Management, Sales

Perspective and Point of View

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We have all been in the position where we have had to predict some performance or business event. It is a key part of leadership and management whether you are in general business, sales, or any other business discipline. There are those that are good at it and those that “needs improvement” if I may use the ratings jargon that we are all familiar with.


 


I have found that those that are good at this type of predictive management have the gift of not only assuming others points of view – being able to look at things from where others do, but also have the ability to assume the perspective of others – being able to look at things how others do. It seems that the difference is subtle but the results can change dramatically.


 


The key here is that when we look at issues from others points of view we still have the tendency to ascribe our preferences and biases to the view. Someone who is risk averse may not see the same opportunity as someone with a higher risk tolerance regardless of the point of view.


 


It is these perspective mismatches that can then lead to the issues. What may be blatantly obvious to one regardless of where it was viewed, may make no sense at all to another regardless of how it is described.


 


Successful business and sales requires you to not only look at things from where others are standing, but also to try and look at it through their eyes. You can not ascribe your preferences to others because then you are always expecting others to “see it your way”.