The Meyer Group - Blog

It started with what appeared to be a stroke. Yes, this is about your business, please stick with me here. We'll highlight something that can help you to grow your business more consistently and systematically.

The stroke patient assumed that his event was part of the unstoppable decline of his brain. His assumption: Brain death is a given. With that assumption neuroplasticity must be impossible.

And now you may be asking what neuroplasticity might be. This may be over simple, but neuroplasticity is what happens when patients re-route their own neural pathways so that different parts of the brain take on new functions. That suggests that our mind can repair our brain. For centuries this was considered impossible.

Now there is plenty of literature to support the sensibleness of neuroplasticity. So today I can turn to my friend and say:

"20 years ago, your stroke would be considered permanent damage. Here in 2016 your doctor has studies that demonstrate that you might be able to repair your neurological injury without surgery. Are you interested?"

This question is going to generate a conversation. In a few paragraphs I'll bring it around to our businesses, but let's consider how to explain the brain part in plain English.

Example: Treatment for One Patient
What I say here will become part of the business discussion. It'll be simplistic but accurate enough to say something like:

"When you drive to work, and the freeway is under construction, you can route around the blockage. If you have to repeat the detour for enough days you just adapt. You still get to work in an automatic manner. You make a good route and continue to use it. "You don't need a surgeon to do that do you? You just explore the alternatives yourself. It's almost second nature to assume that it will work. And when you hit that roadblock the first time you don't need to know exactly how you'll adapt. But you assume that you will find a way to make it work.

"The same thing can happen in your brain. Your synapses hit a block, and you can just stop and sit there and wait. Or you can make a different route. We used to think that impossible. Now we call it neuroplasticity.

"This always starts with assumption and conviction. In the traffic metaphor, you're assuming that you'll make it happen for your drive. That conviction, that you'll do this, is the key that helps you transition from stuck in traffic to moving on a new path. You don't need to know the next turn to feel sure that you can make one happen.

"The studies show is that this assumption is clearly transferable from car traffic to your neurology. That means that the solution is not in knowing the exact path. The solution is in knowing that you'll make a path."

In other words, the key to making this work is asking the patient to decide that he can reroute. I'm not trying to show the patient how to reroute. I am confident that when he decides that he can, he'll do it. That sounds odd, but it is clinically pretty accurate.

Applying This to Your Business
Your business will probably face roadblocks as it grows. The question is not if you will. The question is not whether you immediately know what to do, you may or may not. The question is:

"What assumptions do you and your team members make when the road crumbles in front of you?"

This is may sound odd, but I'm not asking you to assume that you will find new paths, nor take them. I'm asking you to assume that you will make them. Lets look at two examples.

Examples: Making Sales Happen
This can be as simple as when sales project comes to a roadblock. Early in my career I was close to finishing a deal to provide an important solution to a turbine company. The customer's executives had chosen our solution, verbally committed, and then told people outside their company. We felt pretty good about it.

Until the CFO discovered that he could neither pay cash for the project, nor tap his credit. The sale was going on hold because the CFO could not get the money until the next year. It was clear that the President of the turbine company wanted do this project immediately, but said that he felt limited in what he could do. He felt compelled to delay. However, to me a postponement would be tantamount to losing the sale.

What you want in your representative is someone who will not stop just because the CEO says no. You want a representative who will start face a roadblock and assume that his or her job is to look around the roadblock and make, not find but make, a solution. The ultimate solution isn't clear, but the assumption is.

In this case we built a custom lease for the customer and closed the sale in a week. The President got the value for his company he wanted. But that isn't the point is it? The point is that my team all assumed that we would make this work.

I had a similar situation with the owner of a chain of newspapers. He chose my solution and started to implement it. However, the many unions couldn't agree among themselves on how to support our project and everything stalled. It wasn't about the project. It was about politics between union locals. However, this was halting any chance to get the value the plan could bring.

The owner wouldn't accept the statement that "it can't be done." This man had a long history of exceeding previous limits, and his business and social stature reflected that. He assumed that we would make a way. He asked my help and we made a path for it to happen.

The solution we crafted kept his papers growing for several years. It happened when he worked from the assumption that he could and would make a new path inside his plants.

The 2x2 Growth Grid
Those examples might be a flash of the blindingly obvious to you. That is a good thing, but lets look at how this works.

Remember the 2x2 Growth Grid from a previous post? It has a vertical axis of 'limited or growth' and 'take or make' on the horizontal axis.

 

Lets map the examples here. The President of the turbine company was in the lower left corner. He was assuming a limited capacity. He chose to take the options provided, not try to make any. The owner of the newspaper chain made a different choice. He was focused on growing past previous limits and choosing to make a new path instead of taking the case presented by the unions. The owner of the newspapers was up and to the right on this grid.

This is about our operating assumptions. We control those. How we do that happens deep in the fabric of the business, just like changing neural pathways. This is about choosing business neuroplasticity. And we can make that choice.

The otherwise impossible solutions work when you start with the assumption that you can grow and that you can make instead of just accept what seems to be there. The same is true when you choose, even though it might be heretical, to do this in your business.

From Intuition to Successful Growth
For the patient, for the sales person, for the CEO, for the owner, the key to success isn't knowing what path she or he will take. It is his or her personal assumption that she or he will make the path the company needs.

You know intuitively that not all salespeople and not all executives are excited about making a new path. For them the pattern of success from the past is the right starting assumption. The past is always relevant, but it doesn't guide us. We get to make our own choices here. Do we assume growth? Do we assume that we make instead of take? Do we assume that we can build new paths? When we do, we are performing neuroplasticity on our business. And we are promoting sustainable growth.

Friday, 18 August 2017 03:05

Growing Your Revenue and Using an OS

Where do you start if you want to grow revenue? Let's look at a different approach.

When you use your phone or computer, you use an OS. It is the basic set of rules and assumptions for your device. They are in place when you boot up.

It is the same with projects to increase revenue. When your sales, marketing, operations, and customer service teams start up tomorrow morning they'll start with rules and assumptions already in place. This enables your revenue growth. Let's explore that for a second.

Booting Up
But first, do you remember BIOS? Whenever your PC style computer boots, there is a Basic Input/Output System (BIOS firmware) that tells your computer how to think. It sets the assumptions for hardware and software.

You should never see the BIOS, but you'll often find the limits it sets on your machine's performance. Someone invested a lot of time and money to set the assumptions for you. Your business machine deserves the same care and thought if you want it to run smoothly. And that takes your attention.

The Starting Point
Lets start with the two assumptions from this book:
- Would you want your sales team to work from an assumption of limits or an assumption that they should strive for more growth?
- Should the team assume that they take revenue or that they make revenue?

The assumption of limits vs. growth is fundamental to how they approach their territories. The choice of taking what comes or making things happen is fundamental to how they generate you revenue growth. These make up part of the BIOS for your sales team. (And for your marketing, product, operations, HR, and other teams.)

Who is responsible for the OS for your sales teams? Who sets the assumptions with which they start every day? This isn't a sales training issue. This is a cultural question. Who is responsible for the culture of the team that grows your business? Do you want to accept that this is correct for you, or do you want to help make the assumptions better? Who should make that decision if not you?

When your sales team boots up today, do they assume what you would want them to assume? This is the key leverage point for your revenue. This is where you can have immense impact on the way your business grows.

Timing
This is not a once per year discussion; no more than BIOS is updated once each year. You can cause a refresh of your sales/finance/operations/service team's BIOS next Monday. Or next quarter. But why wait to start right?

If you want some suggestions, look at Mindset by Carol Dweck or Ansel Adams' Autobiography. Or give me a call. But let's make it an intentional choice.

This is the true story of how a CEO lost an important sale—and how he could have won it. If you are selling ideas to an investor, a colleague, a customer, or someone you want to be on board with you, this story might help you to get them used. What was the CEO trying to sell? He was making a pitch to get enough money to keep his company alive. He was selling an idea, and he failed. This is a story of listening and asking, and what you'll find here might make you more productive at selling your own ideas. Selling ideas can be difficult. It isn't just a transaction; you want your idea to be implemented. For that you need to get an emotional as well as an intellectual purchase. You need to be heard. Whether you are a technical expert or a business unit manager, getting your idea utilized is key to helping any division or company grow. Losing this kind of sale and implementation can cripple your efforts—and perhaps your business.

How the CEO Lost the Sale

The story starts with Heidi Roizen, the operating partner at DFJ. DFJ (formerly Draper, Fisher, Jurvetson) is a successful venture capital firm. Heidi is one of the best-known entrepreneurs in the technology world. But this is not about the firm, it is about one failed attempt to sell an idea, as she experienced it. This story illuminates the difference between, and value of, both listening and asking. It's a key lesson that you can use to sell essential ideas both inside and outside your business.

As Heidi tells it, she came into a meeting with the CEO and as she sat down she raised her hand to ask for time. Heidi explained that she had just returned from dropping her son off for his first year at college. Anyone who has had a child leave for college will recognize the emotions, and Heidi was still feeling them. She was also self-aware enough to know that she needed to pause and reset in order to give this guy a fair hearing. So she asked for the breathing space to do that.

The entrepreneur nodded, barely paused, opened his computer, and said: “OK, let's get at it.”

That was the moment his pitch failed. He did not get Heidi's support for funding from DFJ. What might have saved the deal, and maybe his company? Listening and Asking.

Listening: Respecting the Emotional Context
It is easy to say that the CEO deserved to be dismissed for being rude. But if rudeness were enough to disqualify entrepreneurs from getting funding, there would be a lot fewer successful startups in Silicon Valley. Something more fundamental was missing here: Listening and Asking. Since Heidi was the person the CEO wanted to persuade, it makes sense to start with her perspective.

“Most entrepreneurs,” Heidi says “come to us and treat us like trolls on the bridge guarding a giant pile of money. If they get past us, they get the money and the experience is over and they go do good things.

“That is not how we see it as venture capitalists. We look at these deals as long-term relationships. If we invest with someone, we'll be working with him or her for up to 10 years. I have to look at these guys as people whom I want to work with closely.”

In other words, DFJ invests as an active owner/partner, not a bank. The firm wants to be engaged in how the small company operates and grows and be closely involved. To make that work here, Heidi's team has to feel personally comfortable with the CEO and his team. If the CEO does not show the ability to listen and ask, it is a sign to Heidi that he may not be able to work smoothly with her team. No matter how compelling the business case, if the CEO wanted to sell the idea of investing in his company, he needed to understand DFJ's definition of success. To get that, he needed to connect with Heidi as a person, not a checkbook or even a businessperson.

The same applies to any situation where you want your idea to be implemented. Making a one-time sale can happen based on purely logical answers. Getting an implementation requires that the people buying your idea be supportive and feel involved. It is an emotional sale as well as an intellectual one.

How could the CEO who came to ask for that giant pile of money have done better? If he had listened to the emotional context, respected Heidi's need for a short time reset, and put his own issues aside for a minute, he could have gotten a lot further with his pitch.

But would that have been enough? The truth is, giving her space to come back emotionally would have been a necessary first step. However, if you want to get an idea seriously considered and then implemented, listening and providing emotional space is insufficient. The other party's involvement in the success of your idea starts when you ask.

Asking: The Importance of Perception
Listening for the emotion is table stakes: You absolutely need to do it, but it just gets you started. Asking is the other key factor. As important as listening for emotions would have been in this meeting, there was a clear mismatch. From Heidi's perspective, the mismatch was between how the entrepreneur saw her firm, and how the firm adds value.

No matter how the entrepreneur really saw it, if Heidi thought he viewed her as a troll and her firm as a checkbook, she wasn't going to buy his ideas. How could he have helped her accept and adopt his ideas? Just saying that he understood would not have been enough.

To truly sell his ideas, he would need to ask for her success criteria for the meeting and for a great investment. Asking for success criteria is not just being polite. If you want to get your ideas sold and then implemented, start with asking about success as the implementers see it.

The CEO needed to sell an idea to Heidi to get her firm's support. And despite the fact that she was looking to invest in the right firm, Heidi had her own success criteria. To be clear, this is not about what the CEO wanted in his mind; this is about her perception of him from the first moments.

Why Can't He or She See What Is Obvious to You?

The CEO may have come into the meeting working from a perfectly logical position. He had an idea of value, and believed DFJ could make more money by funding his idea. Logically he might assume that he did not need any more support for his pitch. After all, DFJ is made up of very bright people.

However, even smart people are not logic machines. Economic models and marketing plans constantly fail when they rely on the assumption of a fully rational buyer. What is analytically obvious to you may be uncomfortable to someone you wish would implement your idea.

Your success depends, then, on their commitment not just to understand, but to feel comfortable implementing. A commitment to act is as much emotional as analytical. You'll succeed at selling the idea when you work from the premise that there is more than analytical thinking at work in any transaction.

There is a reason that most great leaders are charming as well as logical. Great persuasion includes both feeling and thinking. If you want to sell an idea and get it implemented, then you want to transcend the purely logical position and include an equal part of emotion.

By not listening to Heidi's feelings and not asking for her success criteria, the CEO got exactly what he deserved. He lost the acceptance of his idea, and perhaps threatened the success of his company.

Two Steps to Get Your Idea Sold and Implemented
What is the best way to handle this kind of pitch? Start with realizing that you have a potential customer here. Whether they work for your company or not, they are a customer for your idea and implementing it. Don't assume that you know how your customer sees it. Ask. The simple question would be: “What will make this a good idea for you to implement?” Even if you think you already know the answer, it's the right question.

The following are the two steps to make your pitch work and get your idea implemented:

1 - Listen to the customer on both an emotional and analytical level.

2 - Ask for the customer's success criteria, and then be very clear that you understand them.

What would have been good practice in this situation? To ask Heidi how she defines success in this investment. Then perhaps to close the computer and talk to her as a partner instead of a checkbook. Either would have resulted in a much more productive meeting for both of them.

It's difficult to be a successful executive or salesperson if you can't learn to “hear” emotions. Not hearing the emotive messages from customers and colleagues means that you miss half the critical information you need to be average, much less superb, at your job.

If you listen well, you are aware of both the emotive and analytical messages without projecting your own agenda. If you want to build relationships with customers, ask for success criteria at the start of every important conversation. You will grow your sales, your time, and probably your grins. Try it the next time you want to call on someone important to your success.

Notes
While this article focuses on selling ideas, many readers will be interested in the world of venture capitalists. If you are interested in VCs, and perhaps in pitching to them, here are some resources:

For information on Heidi Roizen: www.heidiroizen.com -- Site the CEO could have viewed before visiting Heidii

For information on DFJ: http://dfj.com/ --- Another site he could have visited

For information on how to pitch a VC, some resources recommended by insiders include:
- Warp-Speed Growth, by Peter Meyer. Published by Amacom

- http://www.forbes.com/sites/davidteten/2015/02/11/dont-pitch-a-venture-capitalist-without-this-checklist/#2715e4857a0b170572fb1bc7 (Article in Forbes, by David Teten, February 11, 2015)

- https://www.ted.com/talks/david_s_rose_on_pitching_to_vcs?language=en (Video recording of a TED talk by David Rose, March 2007)

- http://www.inc.com/josh-linkner/11-insider-tips-for-pitching-a-venture-capitalist.html (Article in INC by Josh Linkner, December 2011)

- The Startup Game: Inside the Partnership between Venture Capitalists and Entrepreneurs by William H. Draper, published by St. Martin's Griffin

- The Art of the Start 2.0 by Guy Kawasaki and Lindsey Filby, published by Portfolio

For more information on crafting presentations:
- Presenting to Win: The Art of Telling Your Story, updated and expanded edition by Jerry Weissman, published by Pearson.

The Best Practice to Grow Customer Loyalty.

If you want consistent revenue growth for your business, it makes sense to systematically build long term customer relationships.

Customers typically buy from one of three points of view.
1 - Some customers buy because he or she truly likes and trusts the salesperson.
2 - Others buy from you because your rep gives them exactly what they want. This usually means discounts and special terms.
3 - There are situations where customers buy to get real business value and your team consistently delivers that. When these customers feel good about doing that for themselves, they can have intense loyalty to you. If that is what you want, keep reading.

In the first case, having charming salespeople does work. It works for you because people buy from people. However it leaves you vulnerable. If you are in a highly competitive market, having a charming salesperson can be the difference between making your sales numbers and missing them. However, you are at risk because likable salespeople can be out charmed by someone from another company. Worse, your competition might hire your representative. You might lose the customer as he or she follows the charming salesperson. Relying on charm leaves your business vulnerable.

In the second case, you can earn the business. However you get to support higher administrative costs with less revenue. Worse, if you discount for some customers you usually wind up discounting again and again with them and then with other customers. It is a downward spiral that crushes your margins.

The third case requires a totally different strategy. You focus on identifying, with the customer, exactly what he or she needs to grow their business. However, your margins and top line improve when a customer buys for him or herself and chooses you to be part of that. This builds long term loyalty.

To earn long term customers, a best practice is to build a virtuous cycle of:
A - Learning the customer's needs to grow his or her own business,
B - Delivering against those needs,
C - Showing that you listen, and then
D - Getting to hear about the next set of essential needs.

When you do that, you become part of the customer's own internally driven growth process. You integrate into their business plans and assumptions.

That loyalty will always be stronger than the loyalty to a charming or discounting salesperson. Building this cycle will inoculate you from the most likable salespeople in other companies. Because customers value a partner who listens, doing the cycle builds consistent revenue over time. This is what gives you the best chance of systematically growing your revenue, so lets focus there.

             

Salespeople as Leaders Builds Loyalty to Your Business
You don't need to send people to charm school. Instead, train your salespeople to be accepted as leaders with your customers. Not just suppliers of service and product, they should take a leadership role as well.

What does it mean to lead a customer? Lets start with the way that Barbara Kamm (CEO of Tech Credit Union in San Jose, CA) explains leadership.

". . .leadership is about making people like themselves when they are in your presence."

To practice doing this, your sales team need not focus on product knowledge or on being charming. Instead, have them focus on the skills to help your customer feel good about themselves when your salesperson is there. This works best when you intentionally add value to the customer's business. That means value as the customer perceives it, not as you wish that they would perceive it. It comes from asking about the value as the customer sees it. It never comes from assuming you understand the value to the customer.

And it usually means helping the customer grow their business, not just saving money. It's about supporting their gain, not just resolving their pain.

You will earn the most loyalty with your customers when your sales people take a leadership role to help the customer to grow their business. That happens when your sales people help your customers feel good about themselves. Not good about you, about themselves when they deal with you.

What are the keys to your salespeople helping the customer feel good about themselves? The first step is when you help the customer to learn. In a practical sense and in an emotional sense we all respond well to chances to learn. If your team helps someone to learn, that adds real value to your customer. That in turn helps generate sincere and lasting loyalty to your business. When your customer starts to use you to help their business to grow, you are earning their loyalty.

Learning rarely happens when your sales team talks, but it does happen when they ask good questions and then clearly listen. The key skill that you want to see your reps develop is asking great questions. These would be questions that help both the customer and the rep learn about the customer's business. Then your responsibility becomes to make sure that your business delivers value as the customer sees it.

The Best Practice to Grow Customer Loyalty
The best practice works like this. The rep goes into the customer but doesn't pitch your company or your products. Instead, she asks questions about the customer's business. Some are obvious, but if she focuses on the future as well as the present, she can ask questions that will bring thoughtful silence. These will be questions from which the customer and she both learn. The Forum Group calls these "High Gain questions." They truly are, because you gain and your customer gains when you ask them.

It can be as simple as asking:
- Where will you get your new customers next month?
- Where will you get your new customers in 12 months?
- Where will you get your new customers in 24 months?

When your salesperson asks the right questions, she learns what really matters to the customer for his or her business future. The closing question then becomes: "If we can help you resolve this, would you like to know more?" If the answer is yes, then she requests a follow-up meeting.

The best way that you can support your customer is to carefully listen to what your salesperson learned. This helps you to learn as well; and it helps you to make sure that your representative has a solution that will solve the problem.

Every time you follow this pattern, you combine adding value with helping the customer feel good about themselves when he or she works with your team. When they feel good about themselves around you, and you deliver value, you have the combination that you want. When you help a customer learn, they feel good around you and your team. You will earn their long term loyalty.