I have just had a discussion with a good friend and long term client of Objective Assessment about the comparative benefits of the OMG Objective Assessment of sales candidates and various popular Psych. profiles. As it turns out, old habits die hard for some people as they do in this case.
John has been using one of the more popular behavioural profile tests on sales candidates for many years prior to becoming a client of ours. In our initial discussions with him about 3 years ago, he talked about how good these tests were are identifying good salespeople. We then went through the performance of his sales team and found that of the 10 on his team only 2 were performaing ahead of target while at least 5 were serious underperformers. This immediately made me challenge his assertion that his current testing was great at identifying good salespeple. Clearly it wasn't unless you consider 2 out of 10 a good strike rate.
From that time forward, John has been using OMG evaluations to assess his sales candidates but behind the scenes he has been using his old Psych Test as well (he couldn't wean himself off them), which was the subject of todays discussion. John had us test a candidate using the OMG self assessment and found that he was not hireable in the role in question. In fact he tested very poorly in most key areas of the evaluation. When John tested him using the traditional Psych Test, the candidate was identified as having many of the behavioural traits necessary to be successful in sales. This created a dilemma for John. He needed new sales people but he had conflicting results.
Psych profiles in a sales context will tell you whether a person can do the things necessary to succeed in sales, things like prospect, ask meaningful questions and get to decision makers. The problem is that they don't tell you whether the candidate in fact WILL do these vital things in the field. It's not unusual for there to be a conflict between the OMG evaluation and any number of Psych tests. The difference is between can and will. Many of us have the necessary attributes to be successful in sales yet very few of us are successful. Why? Because we either lack the strengths necessary to enact these behaviours or else we have any number of hidden weaknesses which undermine our ability to do what we know we should to be successful.
As I told John, it may well be that your candidate has the ability to sell but his OMG profile makes it pretty clear that it is highly unlikely that he will. He is what we call a sales ghost. He looks like a salesperson, acts like a sales person but cannot make sales.
John has been using one of the more popular behavioural profile tests on sales candidates for many years prior to becoming a client of ours. In our initial discussions with him about 3 years ago, he talked about how good these tests were are identifying good salespeople. We then went through the performance of his sales team and found that of the 10 on his team only 2 were performaing ahead of target while at least 5 were serious underperformers. This immediately made me challenge his assertion that his current testing was great at identifying good salespeple. Clearly it wasn't unless you consider 2 out of 10 a good strike rate.
From that time forward, John has been using OMG evaluations to assess his sales candidates but behind the scenes he has been using his old Psych Test as well (he couldn't wean himself off them), which was the subject of todays discussion. John had us test a candidate using the OMG self assessment and found that he was not hireable in the role in question. In fact he tested very poorly in most key areas of the evaluation. When John tested him using the traditional Psych Test, the candidate was identified as having many of the behavioural traits necessary to be successful in sales. This created a dilemma for John. He needed new sales people but he had conflicting results.
Psych profiles in a sales context will tell you whether a person can do the things necessary to succeed in sales, things like prospect, ask meaningful questions and get to decision makers. The problem is that they don't tell you whether the candidate in fact WILL do these vital things in the field. It's not unusual for there to be a conflict between the OMG evaluation and any number of Psych tests. The difference is between can and will. Many of us have the necessary attributes to be successful in sales yet very few of us are successful. Why? Because we either lack the strengths necessary to enact these behaviours or else we have any number of hidden weaknesses which undermine our ability to do what we know we should to be successful.
As I told John, it may well be that your candidate has the ability to sell but his OMG profile makes it pretty clear that it is highly unlikely that he will. He is what we call a sales ghost. He looks like a salesperson, acts like a sales person but cannot make sales.
16/11: Sales Force Evaluations: A vital tool for all L&D professional in the sales force development field
The supposed strength of their company’s sales force was being questioned by many CEO’s in the midst of the recent GFC. The economic downturn after more than a decade of revenue growth hit many companies hard, with some suffering more than others. It became apparent to many CEO’s during this period that they had been ignoring warning signs within their sales organisations for many years; signs that their sales team had become no more than order takers in an overheated market. In many cases they had lost or had never even possessed real selling skills.
This failure to perform under pressure reflected negatively on the training that these companies had provided to their sales force in the past. In the eyes of many CEO’s sales training had failed so why invest in further in this area. Training was being blamed for the lack of performance when the culprit was in fact their lack of an overall sales force development process.
With the arrival of the economic downturn sales people had a ready-made excuse for not performing; it’s the economy, no-one is ordering, they don’t have the money, nothing is being approved.....and so on. Interestingly, those companies that had invested in a comprehensive sales force development program were not experiencing the same problems. As one CEO told me “At worst, the economy isn’t growing but it is no smaller than last year. All my guys have to do is maintain their share and we will do OK”. The fact is that many companies did much better than OK. They actually grew substantially over the past 18 months and continue to do so.
The key to sales success in any market conditions is having a sales force that is made up of “A” players. Having sales management that hold their team accountable, coach, mentor and motivate their salespeople and recruit the best possible people. These principles are brought into greater focus in challenging times.
To build a high performing sales team there is no doubt that sales training is of critical importance but it is not the first thing that companies should look at; in fact it should be towards the end of the sales force development journey.
Before you start any change program it is vital to have absolute clarity about where you are at that exact point in time.
1. What are the qualities of your current sales assets, the people, processes and systems?
2. What are the problems that your sales force are encountering in the field?
3. Who of those in your sales organisation have the potential to improve and who should be utilised elsewhere in the organisation?
4. What could we expect from a top performing team – raise the bar.
5. Recruit only “A” players and ensure that you have the right leadership.
6. Implement targeted and meaningful training on an ongoing basis to lift the capabilities of all of the people in your sales team.
7. Embed the training and hold everyone accountable for improved performance.
You will note that training comes in at step 6 of the 7 steps yet most companies turn to training as their first initiative to improve performance as they really don’t know what else to do. The modern science of sales performance is often a mystery to them.
Training is like medicine, and I don’t mean that as a negative. When you go to the doctor with an ailment, the doctor will follow a number of simple steps. Firstly he will endeavour to gain an understanding of what your current problems are and what may have caused them. This will normally be followed by tests to ascertain whether the prognosis was right. Once ascertained the doctor will often endeavour to have you avoid the behaviours that got you into trouble in the first place before they actually prescribe a treatment.
You will notice that treatment or medicine, as with training, almost always comes at the end of an exhaustive process. In this way you know that you have a better chance of seeing long term improvement in the patient/salesperson.
Building a better training program – why many just don’t work:
Understanding the strengths, weaknesses and skill levels within any sales organisation must be the first step in establishing the training needs of its people. Often sales training is prescriptive in that it focuses on the classic competencies of Hunter, Qualifier, Closer and Farmer. There competencies require sales people to behave in a certain way to achieve a desired outcome. The theory is if they do what they are taught, they will get the desires sales outcome.
Why then does most sales training fail to achieve its goals? Because it fails to take into account the mindset of those being trained; those factors that make it literally impossible for some people to do what’s necessary to be successful in sales.
Take for example a sales person who has a high need for approval. These people not only build rapport effectively, they want everyone to like them or in extreme cases love them. In a sales situation, when it comes time to close the sale, do you think they are going to ask for the order and use the closing techniques that they have been taught? Not if the answer could be NO. This type of rejection will be paralysing for a person who needs to liked or loved by the prospects; it can stop them putting themselves in another situation where they might be rejected. It doesn’t matter how many closing techniques you teach them and it doesn’t matter how well they role play in a training environment, in the field they simply will not execute the strategies they have been taught because they cannot handle this rejection.
This is only one of dozens of self limiting records that prevent sales training being effective and leads to failure as a sales person.
The Objective Assessment Sales Force Evaluations:
The goal of all L&D professionals is for their clients to gain the greatest benefits from the training programs that they deliver. This is their value proposition yet for many; the long term effectiveness of their training is out of their control. The question is, how do you gain this control? How do you accurately evaluate the barrier to execution and remove those prior to training?
The Objective Assessment Sales Force Evaluations will enable you to answer the first three questions that we asked above:
1. What are the qualities of your current sales assets, the people, processes and systems?
2. What are the problems that your sales force are encountering in the field?
3. Who of those in your sales organisation have the potential to improve and who should be utilised elsewhere in the organisation?
These evaluations provide you with the knowledge that you need to ensure your training once delivered has a significantly enhanced probability of embedding. Not only will the training embed better but the trainees, having the barriers to sales success removed, will achieve far better results in the field.
From this strong starting point, you, as the L&D professional, will be able to assist your clients in establishing clear expectations of outcomes for their team (raising the bar) once the mind set and skill set training is completed, and ensure that only those that will benefit from training participate. The use of these tools greatly enhances the outcomes from your training and delivers real benefits for your clients.
Next month I will write about a customised Sales Force Training program that has been developed by Dr John Gora to link directly with the findings of the Objective Assessment Evaluations. It achieves the duel goals of addressing mindset and the specific weaknesses identified in the evaluations prior to addressing specific sales competencies and skills.
Get them to really think like sales people before you teach them to act like sales people.
This failure to perform under pressure reflected negatively on the training that these companies had provided to their sales force in the past. In the eyes of many CEO’s sales training had failed so why invest in further in this area. Training was being blamed for the lack of performance when the culprit was in fact their lack of an overall sales force development process.
With the arrival of the economic downturn sales people had a ready-made excuse for not performing; it’s the economy, no-one is ordering, they don’t have the money, nothing is being approved.....and so on. Interestingly, those companies that had invested in a comprehensive sales force development program were not experiencing the same problems. As one CEO told me “At worst, the economy isn’t growing but it is no smaller than last year. All my guys have to do is maintain their share and we will do OK”. The fact is that many companies did much better than OK. They actually grew substantially over the past 18 months and continue to do so.
The key to sales success in any market conditions is having a sales force that is made up of “A” players. Having sales management that hold their team accountable, coach, mentor and motivate their salespeople and recruit the best possible people. These principles are brought into greater focus in challenging times.
To build a high performing sales team there is no doubt that sales training is of critical importance but it is not the first thing that companies should look at; in fact it should be towards the end of the sales force development journey.
Before you start any change program it is vital to have absolute clarity about where you are at that exact point in time.
1. What are the qualities of your current sales assets, the people, processes and systems?
2. What are the problems that your sales force are encountering in the field?
3. Who of those in your sales organisation have the potential to improve and who should be utilised elsewhere in the organisation?
4. What could we expect from a top performing team – raise the bar.
5. Recruit only “A” players and ensure that you have the right leadership.
6. Implement targeted and meaningful training on an ongoing basis to lift the capabilities of all of the people in your sales team.
7. Embed the training and hold everyone accountable for improved performance.
You will note that training comes in at step 6 of the 7 steps yet most companies turn to training as their first initiative to improve performance as they really don’t know what else to do. The modern science of sales performance is often a mystery to them.
Training is like medicine, and I don’t mean that as a negative. When you go to the doctor with an ailment, the doctor will follow a number of simple steps. Firstly he will endeavour to gain an understanding of what your current problems are and what may have caused them. This will normally be followed by tests to ascertain whether the prognosis was right. Once ascertained the doctor will often endeavour to have you avoid the behaviours that got you into trouble in the first place before they actually prescribe a treatment.
You will notice that treatment or medicine, as with training, almost always comes at the end of an exhaustive process. In this way you know that you have a better chance of seeing long term improvement in the patient/salesperson.
Building a better training program – why many just don’t work:
Understanding the strengths, weaknesses and skill levels within any sales organisation must be the first step in establishing the training needs of its people. Often sales training is prescriptive in that it focuses on the classic competencies of Hunter, Qualifier, Closer and Farmer. There competencies require sales people to behave in a certain way to achieve a desired outcome. The theory is if they do what they are taught, they will get the desires sales outcome.
Why then does most sales training fail to achieve its goals? Because it fails to take into account the mindset of those being trained; those factors that make it literally impossible for some people to do what’s necessary to be successful in sales.
Take for example a sales person who has a high need for approval. These people not only build rapport effectively, they want everyone to like them or in extreme cases love them. In a sales situation, when it comes time to close the sale, do you think they are going to ask for the order and use the closing techniques that they have been taught? Not if the answer could be NO. This type of rejection will be paralysing for a person who needs to liked or loved by the prospects; it can stop them putting themselves in another situation where they might be rejected. It doesn’t matter how many closing techniques you teach them and it doesn’t matter how well they role play in a training environment, in the field they simply will not execute the strategies they have been taught because they cannot handle this rejection.
This is only one of dozens of self limiting records that prevent sales training being effective and leads to failure as a sales person.
The Objective Assessment Sales Force Evaluations:
The goal of all L&D professionals is for their clients to gain the greatest benefits from the training programs that they deliver. This is their value proposition yet for many; the long term effectiveness of their training is out of their control. The question is, how do you gain this control? How do you accurately evaluate the barrier to execution and remove those prior to training?
The Objective Assessment Sales Force Evaluations will enable you to answer the first three questions that we asked above:
1. What are the qualities of your current sales assets, the people, processes and systems?
2. What are the problems that your sales force are encountering in the field?
3. Who of those in your sales organisation have the potential to improve and who should be utilised elsewhere in the organisation?
These evaluations provide you with the knowledge that you need to ensure your training once delivered has a significantly enhanced probability of embedding. Not only will the training embed better but the trainees, having the barriers to sales success removed, will achieve far better results in the field.
From this strong starting point, you, as the L&D professional, will be able to assist your clients in establishing clear expectations of outcomes for their team (raising the bar) once the mind set and skill set training is completed, and ensure that only those that will benefit from training participate. The use of these tools greatly enhances the outcomes from your training and delivers real benefits for your clients.
Next month I will write about a customised Sales Force Training program that has been developed by Dr John Gora to link directly with the findings of the Objective Assessment Evaluations. It achieves the duel goals of addressing mindset and the specific weaknesses identified in the evaluations prior to addressing specific sales competencies and skills.
Get them to really think like sales people before you teach them to act like sales people.
16/11: Lessons from the GFC
There is no doubt the GFC caught most of us by surprise. After the initial shock of what could have happened, there was a clear financial downturn that impacted all of us in business one way or the other. Whether that impact was directly on our revenue or caused the decline of some of our clients, the fact is that few of us escaped untouched by it.
What we are now seeing is more of the long term impact of financial crisis.
• Unemployment is continuing to climb in Australia, even more so overseas.
• Government charges for a whole range of services and amenities are creeping up as politicians commence the long and painful job of trying to recover the money they splashed out on their stimulus packages. This is going to impact us for decades to come.
• Banks are tightening even further their lending criteria.
• Companies are stretching out their payments to suppliers well beyond agreed credit terms.
One of the unexpected impacts of the downturn has been the highlighting of the weaknesses in many sales organisations. Companies that thought they had good sales teams have found that they only really have order takers not sales people. Once the orders stopped flowing, the revenue dried up and the sales team were incapable of restarting the sales machine.
Having seen this downturn occur you had the choice of either taking responsibility and acting to turn things around or making excuses and waiting for the good times to return.
Those organisations that identified the problem and acted decisively to rectify it, are now starting to see a rebound in sales. They have assessed where the weaknesses are, upgraded their sales teams, provided targeted training and held everyone accountable for their performance.
Those that blamed the sales downturn on the GFC are still waiting for the good times to return. The fact is that the good times won’t return as their competitors have most likely stolen their customers and left them with little hope of recovery.
In some ways this “head in the sand” approach is not unlike the reason many men don’t go to the doctor; they don’t want to hear what might be wrong with them. The fact that such ignorance could kill them doesn’t seem to occur to them.
In just the same way, remaining ignorant of problems with the sales team can and often will lead to catastrophic failures within your organisation. You owe it to yourself and your employees to diagnose the problems as early as possible and do whatever it takes to fix them. It is critical that you act swiftly and with courage.
The GCF is a problem and will remain so for quite some time. In most cases however it did not cause your problems it just brought them into sharp contrast. This must be seen as a good thing and not the cause of any gnashing of teeth.
What we are now seeing is more of the long term impact of financial crisis.
• Unemployment is continuing to climb in Australia, even more so overseas.
• Government charges for a whole range of services and amenities are creeping up as politicians commence the long and painful job of trying to recover the money they splashed out on their stimulus packages. This is going to impact us for decades to come.
• Banks are tightening even further their lending criteria.
• Companies are stretching out their payments to suppliers well beyond agreed credit terms.
One of the unexpected impacts of the downturn has been the highlighting of the weaknesses in many sales organisations. Companies that thought they had good sales teams have found that they only really have order takers not sales people. Once the orders stopped flowing, the revenue dried up and the sales team were incapable of restarting the sales machine.
Having seen this downturn occur you had the choice of either taking responsibility and acting to turn things around or making excuses and waiting for the good times to return.
Those organisations that identified the problem and acted decisively to rectify it, are now starting to see a rebound in sales. They have assessed where the weaknesses are, upgraded their sales teams, provided targeted training and held everyone accountable for their performance.
Those that blamed the sales downturn on the GFC are still waiting for the good times to return. The fact is that the good times won’t return as their competitors have most likely stolen their customers and left them with little hope of recovery.
In some ways this “head in the sand” approach is not unlike the reason many men don’t go to the doctor; they don’t want to hear what might be wrong with them. The fact that such ignorance could kill them doesn’t seem to occur to them.
In just the same way, remaining ignorant of problems with the sales team can and often will lead to catastrophic failures within your organisation. You owe it to yourself and your employees to diagnose the problems as early as possible and do whatever it takes to fix them. It is critical that you act swiftly and with courage.
The GCF is a problem and will remain so for quite some time. In most cases however it did not cause your problems it just brought them into sharp contrast. This must be seen as a good thing and not the cause of any gnashing of teeth.
I was asked at a recent roundtable to address the issue of retaining and motivating younger employees, in particular Gen Y. This is what I put forward.
"When addressing the issue of retaining good staff it is vital that you firstly understand how they think. The problem is how you view your employees will very much depend upon how you think. Under HBDI principles, those of us that are left brain will see the issues very differently from those that are right brain. Our head of evaluations reviewed my comments here prior to posting and came up with a very right brain issue that I had missed. This is item 6 regarding change and variety.
This demonstrates the importance of balance within management groups. It allows us to see the issues from a broader perspective.
1. Hiring correctly
• When addressing the issue of retaining employees we must start with how we hire. The first and one of the most significant mistakes that employers make when hiring new staff is not using the correct hiring criteria. It doesn’t matter what the role is within a company, it is vital to establish the criteria that are vital to success in the role.
• We mistakenly hire people that meet one of two criteria: They are like us or they like us. We become heavily influenced by mirroring during the interview and evaluation process.
• We don’t dig deep enough during the interview to establish the truth. Resumes are marketing documents and must be heavily challenged to confirm the truth.
• We undertake cursory reference checks if any, rather than taking the time to dig deeper into the candidates past. We should spend the time to greatly improve our recruitment skills using a system such as Topgrading.
2. We fail to monitor performance and act appropriately
• Once employed we generally do not use a formal review process that is based on the criteria upon which the person was employed.
• Our feedback on performance is often patchy or influenced by our need for approval.
• We are too tolerant of behaviour that we ourselves exhibit. This may be detrimental to the performance of the person in their job and noted by others but not brought to the persons attention by you as their manager.
3. We often reward behaviours that we do not want to encourage. When conflicts arise between the objectives of the leadership and those of the individual there is the opportunity for conflict and rebellion
• Vietnam War V WW2 - Generals goal is to win the war V Soldiers goal is to stay alive = Conflict in objectives
• Rewarding all uniformly irrespective of their performance
• Setting stretch targets but rewarding just hitting the numbers.
4. A Corrupt Culture
The danger is that we have a false impression of the true underlying culture of your organisation. It is not in your staffs’ best interest to tell you the truth. Culture is like a virus and infects all employees eventually. It’s the way we do things around here. Your real values as opposed to your stated values are what influence the culture of all companies. An independent cultural survey will provide you with an accurate picture of the values that actually exist within your organisation. A corrupt culture is one of the major reasons that Gen Y leave companies.
5. Failing to understand what motivates your staff
Not everyone is motivated by the same factors. In order to retain good staff and gain the greatest effort and performance from them, there must be a clear understanding of what their individual motivators are. Establishing goal setting programs for all staff enables a manager to understand what is important to the individual and what they will do to achieve this.
6. Change and variety
It is important to provide, where possible, the opportunity for Gen Y to grow and change within the organisation, Gen Y like change and variety. They don’t respond well to tight constraints. This is different to their motivators, this is their future and where they are headed. We need to listen to where they want to go. They also need to have some a greater level of ownership or control over their work and work space than was necessary in the past.
7. Failing to walk the talk
Staff motivation declines dramatically when they perceive that management are not being open and honest with them; this is particularly true where management’s actions are in direct conflict with their stated intentions.
8. An emphasis on morality or equity instead of efficiency
A major reason for good staff to leave an organisation is where they see that poor performance is rewarded due to equity (length of service, seniority etc) rather than efficiency.
Your behaviours as managers are the key determining factors in the retention of good staff of any generation. Retaining Gen Y means hiring them correctly, understanding their motivations and walking the talk.
I just have to pass this on to you. I really thought it was clever.
We have been recruiting for a Marketing role with one of our clients. You would hope that Marketing people know how to market themselves but this one candidate stood out from the pack and ensured an interview through one comment on the covering letter he sent with his resume.
At the bottom of the covering letter he wrote:
Please note that my salary expectation is $95,000 or $5,000 less than the next best candidate.
How could I not talk to this person. They differentiated themselves and that was what appealed to me.
We have been recruiting for a Marketing role with one of our clients. You would hope that Marketing people know how to market themselves but this one candidate stood out from the pack and ensured an interview through one comment on the covering letter he sent with his resume.
At the bottom of the covering letter he wrote:
Please note that my salary expectation is $95,000 or $5,000 less than the next best candidate.
How could I not talk to this person. They differentiated themselves and that was what appealed to me.
I was working with the CEO last week who was finding it difficult to hit their sales numbers in the current economic climate. This was a new client so one of the first things we do is test how committed they are to doing what's necessary to fix the problem.
In this case the problem was one that the CEO was not prepared to deal with. His Sales Manger was not holding his sales people accountable, was hiring the wrong salespeople and was leaving them to their own devices, uncoached and unmotivated. In short, the problem was his Sales Manager.
The Sales Manager didn't accept this finding and the CEO wasn't prepared to stand up to the Sales Manger. In the end the problem was really the CEO.
The question that we ask is, "How much pain do you need to be in before you act?" In this case he was clearly not in enough pain yet. This was all about "him" and and what "he" would have to do. He was not even thinking about what's best for the company. The company would continue to decline until "he" can't take any more pain. By then it will most likely be too late.
For all of you CEO's out there
There has never been a better time to upgrade your staff. I know it's not easy but the fact is you don't have to put up with mediocrity. Give your business a shot in the arm and inject new talent and enthusiasm into your team. Your company deserves it.
Bite the bullet, get rid of underperformers and give some top performers a chance. They are out there, you just have to know how to find them.
In this case the problem was one that the CEO was not prepared to deal with. His Sales Manger was not holding his sales people accountable, was hiring the wrong salespeople and was leaving them to their own devices, uncoached and unmotivated. In short, the problem was his Sales Manager.
The Sales Manager didn't accept this finding and the CEO wasn't prepared to stand up to the Sales Manger. In the end the problem was really the CEO.
The question that we ask is, "How much pain do you need to be in before you act?" In this case he was clearly not in enough pain yet. This was all about "him" and and what "he" would have to do. He was not even thinking about what's best for the company. The company would continue to decline until "he" can't take any more pain. By then it will most likely be too late.
For all of you CEO's out there
There has never been a better time to upgrade your staff. I know it's not easy but the fact is you don't have to put up with mediocrity. Give your business a shot in the arm and inject new talent and enthusiasm into your team. Your company deserves it.
Bite the bullet, get rid of underperformers and give some top performers a chance. They are out there, you just have to know how to find them.
It is well known that in the past miners took a Canary with them down the mines to warn them of imminent danger. The Canary being sensitive to many dangerous gases would die long before the concentrations of the gas became fatal to the miners. This gave them the opportunity to escape the threat.
In our deliberations it occured to me that businesses could benefit from the proverbial Canary which would warn them of imminent danger. In the current highly challenging market where many businesses are struggling to survive, this would give companies the opportunity to regroup and hopefully identify a new strategy which will see them through. Firstly thought, they need to know what danger to look for.
We think we have identified the Canary:
Absolute Clarity on your Value Proposition
In all of the companies that we have helped turnaround over the past few years, the one constant that stands out is a lack of clarity on the value that they are offering their customers from the customers perspective. This is a very important point. It's no use you thinking you are offering the customer value if they, the customer doesn't see that offering as important to them.
It would be like trying to sell an efficient electric car in Saudi Arabia. What do they care about how much fuel they use?
For a value proposition to meaningful, it must be viewed from the buyers perspective, not yours.
Ask yourself this question:
Do we fully understand what is important to our customers and how do we know that this is true?
If you are guessing or going with gut feel, the likelhood is you are wrong. If sales are declining and you still haven't asked your customers "what's important to you about what we do for you", the question has to be, Why Not?
Understand and communicate your real value proposition or else someone else surely will. You ignore the dead Canary at your own peril.
In our deliberations it occured to me that businesses could benefit from the proverbial Canary which would warn them of imminent danger. In the current highly challenging market where many businesses are struggling to survive, this would give companies the opportunity to regroup and hopefully identify a new strategy which will see them through. Firstly thought, they need to know what danger to look for.
We think we have identified the Canary:
Absolute Clarity on your Value Proposition
In all of the companies that we have helped turnaround over the past few years, the one constant that stands out is a lack of clarity on the value that they are offering their customers from the customers perspective. This is a very important point. It's no use you thinking you are offering the customer value if they, the customer doesn't see that offering as important to them.
It would be like trying to sell an efficient electric car in Saudi Arabia. What do they care about how much fuel they use?
For a value proposition to meaningful, it must be viewed from the buyers perspective, not yours.
Ask yourself this question:
Do we fully understand what is important to our customers and how do we know that this is true?
If you are guessing or going with gut feel, the likelhood is you are wrong. If sales are declining and you still haven't asked your customers "what's important to you about what we do for you", the question has to be, Why Not?
Understand and communicate your real value proposition or else someone else surely will. You ignore the dead Canary at your own peril.
01/07: The Entrepreneurs Mindset
You know how you occasionally have one of those "Ah-Ha" moments, where one of lifes great mysteries suddenly becomes clear to you?
Well I had one of those yesterday.
Those of you that know me will know of the Sales Force Evaluation work that we do with the Objective Management Group (OMG) in Boston. At this years OMG Conference in the USA, the CEO Dave Kurlan talked about a phenomenon that all of us that have worked with Sales force evaluations has experienced and that is the Entrepreneurial Owner who evaluates poorly on our sales evaluation who nevertheless is consistently successful in sales for their company.
Dave and his team investigated this anomoly and found that the key drivers in an Entrepreneur were generally so strong in areas such as desire to succeed and risk taking that they enabled the Entrepreneur to behave in ways that overcome even the most severe sales weakness such as need for approval and a non-supportive buy cycle.
This made sense to me as I deal with companies led by people who do not have classic sales characteristics and would not work in sales roles in other companies but are outstanding as the lead sales person within their own companies; their Entrepreneurial drive compensates for any lack of sales capability.
What Dave failed to mention was that once the Entrepreneur is no longer the beneficiary of companies success, in other words, when the Entrepreneur sells the business for instance yet remains on for a period after the sales, the drivers that compensated for the lack of sales capability disappear and you are left with an often underperforming sales person.
The tragedy of this situation is that the "once entrepreneur" does not understand what is happening and can't come to terms with their lack of success after the sale of the business. They become frustrated that they are not getting the outcomes they once did and stresses often build between the new owners who are looking for "once entrepreneur" to perform at the previous high levels and the now employee who is doing their best to achieve but is not succeeding.
My "ah-ha" moment was in realising that even with significant future performance elements in a sales agreement the "once entrepreneur" no longer has the "ownership" that drove them to feats way outside their comfort zone and no matter what you or they try to do, nothing will change this....once it's gone, it's gone!
I will know in future that the Entrepreneur is very much like a Truffle in that you know where it thrives and how it grows and that it's worth it's weight in gold but no matter what you do to duplicate it, it only exists in a specific "rarefied environment" and cannot exist outside of that environment...it cannot be duplicated artificially.
If you are buying a company, keep this in mind....it could save you a lot of stress and money.
Well I had one of those yesterday.
Those of you that know me will know of the Sales Force Evaluation work that we do with the Objective Management Group (OMG) in Boston. At this years OMG Conference in the USA, the CEO Dave Kurlan talked about a phenomenon that all of us that have worked with Sales force evaluations has experienced and that is the Entrepreneurial Owner who evaluates poorly on our sales evaluation who nevertheless is consistently successful in sales for their company.
Dave and his team investigated this anomoly and found that the key drivers in an Entrepreneur were generally so strong in areas such as desire to succeed and risk taking that they enabled the Entrepreneur to behave in ways that overcome even the most severe sales weakness such as need for approval and a non-supportive buy cycle.
This made sense to me as I deal with companies led by people who do not have classic sales characteristics and would not work in sales roles in other companies but are outstanding as the lead sales person within their own companies; their Entrepreneurial drive compensates for any lack of sales capability.
What Dave failed to mention was that once the Entrepreneur is no longer the beneficiary of companies success, in other words, when the Entrepreneur sells the business for instance yet remains on for a period after the sales, the drivers that compensated for the lack of sales capability disappear and you are left with an often underperforming sales person.
The tragedy of this situation is that the "once entrepreneur" does not understand what is happening and can't come to terms with their lack of success after the sale of the business. They become frustrated that they are not getting the outcomes they once did and stresses often build between the new owners who are looking for "once entrepreneur" to perform at the previous high levels and the now employee who is doing their best to achieve but is not succeeding.
My "ah-ha" moment was in realising that even with significant future performance elements in a sales agreement the "once entrepreneur" no longer has the "ownership" that drove them to feats way outside their comfort zone and no matter what you or they try to do, nothing will change this....once it's gone, it's gone!
I will know in future that the Entrepreneur is very much like a Truffle in that you know where it thrives and how it grows and that it's worth it's weight in gold but no matter what you do to duplicate it, it only exists in a specific "rarefied environment" and cannot exist outside of that environment...it cannot be duplicated artificially.
If you are buying a company, keep this in mind....it could save you a lot of stress and money.
How many of us know what we are capable of under extreme circumstances. I often challenge managers who are reluctant to make difficult decisions by asking them "what would you do if your life depended upon it?"
This challenges them to move themselves out of their comfort zone and confront the reality of their situation.
The challenge was brought home to me in stark relief last week when I visited a very special client...........they are based at Kinglake in Victoria, the site of the savage Black Saturday Bushfires.
What would you do if your life depended upon it.
Well for a start you and a few of your brave workmates would evacuate the farm and fight the most horrible fires in Australia's history alone. With over 300,000 Chickens on the farm you would battle to protect them from the flames while trying to protect the infrastructure that provides a livehood for dozens of local people. You would constantly cover yourself with water as you fought fires that reached temperatures of over 1300 degrees celcius. You would battle without assitance for 18 hours before any emergency service personell arrived. By that time the fires had taken their toll.
But the most amazing thing that you would do is save the lives of a family of 4 at 2.30am in the dark of night with bushfire flames all around you. You would battle along a flaming tree lined driveway to a house fully in flames and collapsing. You would take the two children and put them in a creek to protect them from the flames and convince the parents that they had to come with you. We would carry the children through the flames and lead the parents to safety dodging fallen trees across a dark country road until you found a police vehicle and relative safety hundreds of metres along the road.
You would then go back to protecting your own property and workmates for a further 12 hours before assessing the damage in the cold hard light of day. $5 million in damage, no lives lost on the property and all of the birds alive and well.
You would then load up a semi trailer with eggs, still before any help had arrived, and drive it to Melbourne, a tractor clearing the way ahead of burnt fallen trees, to meet your contractual obligations. The delivery literally can't be missed as the eggs are used for vital medical purposes.
All of this in just 18 hours. The brave souls that fought the fire are dead on their feet but going that extra yard simply because they must. They saved enough to save the business but many lost everything that day. Of the 5 men that stayed behind to fight the fire, two lost their own homes in the blaze.
Now when I ask someone "what would you do if your life depended on it?" it will have far more meaning than ever before.
Now when you hesitate at doing the difficult or unpleasant things that you know must be done, think of the people of Kinglake that didn't hesitate to do what they knew must be done.
This challenges them to move themselves out of their comfort zone and confront the reality of their situation.
The challenge was brought home to me in stark relief last week when I visited a very special client...........they are based at Kinglake in Victoria, the site of the savage Black Saturday Bushfires.
What would you do if your life depended upon it.
Well for a start you and a few of your brave workmates would evacuate the farm and fight the most horrible fires in Australia's history alone. With over 300,000 Chickens on the farm you would battle to protect them from the flames while trying to protect the infrastructure that provides a livehood for dozens of local people. You would constantly cover yourself with water as you fought fires that reached temperatures of over 1300 degrees celcius. You would battle without assitance for 18 hours before any emergency service personell arrived. By that time the fires had taken their toll.
But the most amazing thing that you would do is save the lives of a family of 4 at 2.30am in the dark of night with bushfire flames all around you. You would battle along a flaming tree lined driveway to a house fully in flames and collapsing. You would take the two children and put them in a creek to protect them from the flames and convince the parents that they had to come with you. We would carry the children through the flames and lead the parents to safety dodging fallen trees across a dark country road until you found a police vehicle and relative safety hundreds of metres along the road.
You would then go back to protecting your own property and workmates for a further 12 hours before assessing the damage in the cold hard light of day. $5 million in damage, no lives lost on the property and all of the birds alive and well.
You would then load up a semi trailer with eggs, still before any help had arrived, and drive it to Melbourne, a tractor clearing the way ahead of burnt fallen trees, to meet your contractual obligations. The delivery literally can't be missed as the eggs are used for vital medical purposes.
All of this in just 18 hours. The brave souls that fought the fire are dead on their feet but going that extra yard simply because they must. They saved enough to save the business but many lost everything that day. Of the 5 men that stayed behind to fight the fire, two lost their own homes in the blaze.
Now when I ask someone "what would you do if your life depended on it?" it will have far more meaning than ever before.
Now when you hesitate at doing the difficult or unpleasant things that you know must be done, think of the people of Kinglake that didn't hesitate to do what they knew must be done.
For many years we have been "Topgrading" practitioners in our recruitment practice. Topgrading is a continuous process that ensures that you only employ "A" players in any given role. The process was developed by Dr Geoffrey Smart during his time as an executive coach at GE.
In applying the Topgrading principles within our business, we have noticed that many Boards, when recruiting a CEO, place inordinately high importance on Emotional Intelligence rather than a history of achieving financial results. While both aspects are important in any CEO or Senior Executive, we have found that the best overall outcome for the company is delivered by those CEO's with a higher focus on achieving financial results than those with exceptionally strong EI.
This is directly contrary to much popular thinking in which EI is seen as the No.1 desireable attribute in a CEO.
Our observations in this matter have now been validated in a University of Chicago study in which the performance of 225 CEO's that were "Topgraded" were assessed. The results, which are detailed in the attached website, validate our belief that the existence of "Hard Skills" is what differentiates CEO performance. While soft skills are important in a CEO, hard skills are vital.
It is interesting to note that the Wall Street Journal, which reported the study found that 40% of CEO's are gone within 18 months, 64% fail to achieve the results for which they were hired and only 34% have had previous CEO experience.
The cost of these hiring mistakes for the average company runs into the millions of dollars. In fact the Wall Street Journal asserts that the cost of mis-hiring a senior manager is 27 times their base salary. This is a staggering figure and one that should be kept in mind when you next make a hiring decision.
Click here to read more on this article
In applying the Topgrading principles within our business, we have noticed that many Boards, when recruiting a CEO, place inordinately high importance on Emotional Intelligence rather than a history of achieving financial results. While both aspects are important in any CEO or Senior Executive, we have found that the best overall outcome for the company is delivered by those CEO's with a higher focus on achieving financial results than those with exceptionally strong EI.
This is directly contrary to much popular thinking in which EI is seen as the No.1 desireable attribute in a CEO.
Our observations in this matter have now been validated in a University of Chicago study in which the performance of 225 CEO's that were "Topgraded" were assessed. The results, which are detailed in the attached website, validate our belief that the existence of "Hard Skills" is what differentiates CEO performance. While soft skills are important in a CEO, hard skills are vital.
It is interesting to note that the Wall Street Journal, which reported the study found that 40% of CEO's are gone within 18 months, 64% fail to achieve the results for which they were hired and only 34% have had previous CEO experience.
The cost of these hiring mistakes for the average company runs into the millions of dollars. In fact the Wall Street Journal asserts that the cost of mis-hiring a senior manager is 27 times their base salary. This is a staggering figure and one that should be kept in mind when you next make a hiring decision.
Click here to read more on this article