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, 16 June 2017 03:21

Creating a New Market:

A Problem, An Example, A Successful New Business

Do you want to create and dominate a new market? Are there still opportunities for you to do that? The good news is that as long as there are problems, you have an opportunity to create a new market. For an example let's look at a well established and even boring market that engendered a new high revenue business.

New markets are not reserved for emerging niches like the internet of things or cell phone handsets. They're available to businesses that have little romance. They can be started wherever there are important problems that customers really feel.

The successful new markets start with problems, not with solutions. The example? What might seem a prosaic business — selling transistors — and how a former purchasing specialist built a whole new market. His name is Mike Wood, and he started with a problem.

First: The Problem
Transistors and other semiconductor components are unexciting but they sell well. Most of them are very application specific. At any one time there are perhaps 100 million different semiconductors being manufactured. This generates around $300B (U.S.) in revenue.

"Once (an expensive manufacturing) facility gets up to capacity, the owners are wary of investing another $2 Billion to build another facility." This is Mike describing the dynamic. Most chip companies manage fluctuating demand by juggling lead times as orders come in.

Since the individual products are highly specialized and the fabrication facilities are expensive to build and run, manufacturers often juggle several customers at once. That juggling is hard on customers. Sometimes very hard.

The result is that some customers get the wrong kind of surprise — their expected delivery dates change dramatically. Mike's team will get a call saying: "I always buy it from (the same supplier) and they always deliver it 8 weeks after order. (Today) I call 'and say: 'here I am again, and I need 100,000 of these transistors in 8 weeks.' (The supplier) says: one 'small problem, this time the delivery is 20 weeks.'"

Suddenly adding 12 weeks to an order cycle is a big deal. It leaves the customer in trouble because these products are so specific that it is hard for other manufacturers to fill in. It's potentially a disaster for their customer.

For a company that makes something as simple as a toaster, delaying production is not an option. The appliance company cannot assume that Best Buy and Wal-Mart will cheerfully wait an additional three months while a transistor delivery problem gets sorted out. The retailers will order from someone else for this and probably future quarters. For most toaster companies, this is unacceptable.

This supply issue happens every day. Transistor manufacturers can't build room in their schedule for sudden requirements. Most distributors cannot afford to stock enough transistors to fill an unexpected spike. When this happens the toaster company cannot replace the components with something else. Then urgent calls go out to transistor suppliers: "Does anyone have access to the product I need in less than 20 weeks?" The answer is usually: 'No.'

If that wasn't complex enough, the trend to outsource manufacturing has added a second problem. The toaster has a brand name on the front, but that toaster may be made by a contract manufacturer. The contract manufacturer buys transistors and other components for dozens or hundreds of different products on their lines. To manage that business, the manufacturer keeps an inventory based on forecasts from the appliance company and many others. The contract manufacturer does not keep excess parts around.

You know how this falls apart. Sales frequently varies from forecast. The companies involved wind up with excess inventory that pools in unpredictable places around the world. These gaps or excesses are very challenging.

There are now two problems:
— 1 - A gap in inventory on one side and
— 2 - An excess in components sitting around somewhere else.
The stakes are high. Missing a delivery of kitchen appliances to Wal-Mart or Best Buy can be fatal to the supplier.

Ideally, this should never happen. We have predictive computer modeling and collect a lot of data. However, the world is dynamic. When someone in a small country in Europe makes a series of bad loans, consumer product sales across all of Europe might be dramatically lower. The threat of a terrorist attack may mean that communication product sales are no longer predictable in a major city. When a dry summer combines with lightning strikes a part of the California economy might change for months.

Any of those scenarios can disrupt a company that buys components month to month. Too few or too many of even an inexpensive chip is unacceptable.

In other words, the problem is real. To the consumer who buys the toaster, it may only be an inconvenience. For the companies involved, it can be fatal.

The solution seems obvious on the surface — use brokers who buy from companies with excess inventory and sell to companies with sudden need. This doesn't work. Person-to-person selling can't scale up to match the need. No one company can afford to buy a large chunk of the worldwide excess inventory on a speculative basis and post it on their web site.

Mike had been buying semiconductors for Siemens. He knew the imbalance problem and how serious companies found it to be. What Mike wanted to do was to build a solution that would actually solve the problem.

Next: Crafting The Solution
When Mike left Siemens he took a role working for what is now HPI AG, a speculative broker in Germany that buys and sells excess electronic components. As good as that company is, no speculative broker can handle enough volume to solve this problem. So he started to build a solution that would provide a way to directly connect the contract manufacturer with excess inventory to the toaster manufacturer with a sudden and urgent need.

As he did this, Mike was building an online chip exchange that would clearly compete with his employer's main business. Each transaction on the exchange might take revenue away from the parent company. Even with the obvious risk, HPI supported Mike. He developed a web site that would allow the owners of excess chips to connect to the companies with sudden needs. He named the new company Virtual Chip Exchange or VCE. It worked, and it worked in a big way.

It worked because the problem mattered. Mike had a solution, one that changed the game for the semiconductor industry. The VCE model works on a larger scale than any broker or distributor can support. VCE makes it much easier to solve supply and demand issues. Mike says that: "We have $2 Billion worth of excess inventory to sell on our site. The largest (stocking) distributors might have up to $1 Billion worth of inventory. The total available-to-sell inventory at (the largest worldwide distributor) is actually lower than the total available inventory at Virtual Chip." In other words, VCE has become an industry giant by solving a problem that customers feel intensely.

Summary: Start with the Problem
The problem? A series of expensive and time-critical mismatches between the supply and demand of transistor style chips. This means that products are not delivered when promised.

The solution? A new market where Mike and his team can dominate by solving a real problem.

The result? A new market where none existed before, a large company of which Mike is the CEO, solutions for sellers and customers, and profit for Virtual Chip Exchange's owners.

The lesson? Even in prosaic industries, new markets can be created with easily built technologies, and they can become dominant and profitable in a matter of months. They do it by finding a problem, sexy or not, that people will pay to solve. Because the problem is important to the customers, revenues can immediately grow and the solution can be profitable.

Can you create and then dominate a brand new market? Yes. You do it by starting with an old but important problem.

 

Thursday, 28 December 2017 01:53

Do You Want to Encourage Last Minute Revenue?

This is in response to a request: "Have you got a strategy to encourage the last bits of revenue from the calendar year?" So let's consider something you can do this week. Let me start with three thoughts.

First: Most of my clients and business friends are looking to get as much revenue as possible in the next few weeks. If that is you, keep reading.

Second: The traditional path is to discount deals and add pressure to the sales team and customer. This works some of the time, but you know that there are deals where it won't work. Everyone knows the game, and your customers are often resistant to it. They think of end of year revenue as our problem, not theirs. And they are usually right aren't they? So we try to buy or pressure their help.

Third: Most people, under pressure, return to old habits. The more pressure we apply, the more they work from history. In other words, under pressure most people hunker down to what they used to do.

Is that what you want?

If pressure and discounts are not working, consider reversing the pressure. Two options for you:

1 - Go to the prospect and say that you are done trying to pressure him/her. Ask what they would want that would add value instead. If you have a $500K proposal on the table, instead of discounting another $25K, ask what service you could provide that is not in the proposal that would help them this year or next. If you can do it for less than $25K, just make it part of the deal. They get something they didn't expect, you get to hold your price at $500K.

The point is not that you are giving them a discount in another way. The point is that you are letting them define value as they see it and you are delivering it. You are releasing pressure and changing the conversation. When the customer relaxes, she or he can see other solutions. You gain as well.

2 - Back off the pressure, start talking about 2018 plans and goals. Ask what she or he wants to get done next year, and just let them talk about that. You'll learn about what your future deals can be. Just as likely, if they are budget constrained (pressure from their own organization instead of you) then see if you can help them do some of that in this year's budget. You become part of the solution to their problem. You might wind up modifying your offer to be part what you had in mind and part what they had in mind, but still book a deal this year.

The point is not that you are backing off. The point is that you are engaging them to help them get something done that matters to them. You are releasing pressure and changing the conversation.When the customer relaxes, she or he can see other solutions. You gain as well.

It may be hard in December, but take a breath. Help your customer take a breath. Let both of you move from hunker down to a two way conversation. You might just book some good 2017 business as you do.

By the way, if you are asking where I have been, thank you. I spent a large part of the past few months intensely experiencing our health care system. I'm fine, getting stronger, and working again. And now I'm blogging again as well. My mind is going full speed, spin me some questions and requests!

Wednesday, 27 December 2017 20:14

Encouraging Last Minute Revenue

Do You Want to Encourage Last Minute Revenue?

This is in response to a request: “Have you got a strategy to encourage the last bits of revenue from the calendar year?” So let’s consider something you can do this week. Let me start with three thoughts.

First: Most of my clients and business friends are looking to get as much revenue as possible in the next few weeks. If that is you, keep reading.

Second: The traditional path is to discount deals and add pressure to the sales team and customer. This works some of the time, but you know that there are deals where it won’t work. Everyone knows the game, and your customers are often resistant to it. They think of end of year revenue as our problem, not theirs. And they are usually right aren’t they? So we try to buy or pressure their help.

Third: Most people, under pressure, return to old habits. The more pressure we apply, the more they work from history. In other words, under pressure most people hunker down to what they used to do.

Is that what you want?

If pressure and discounts are not working, consider reversing the pressure. Two options for you:

1 - Go to the prospect and say that you are done trying to pressure him/her. Ask what they would want that would add value instead. If you have a $500K proposal on the table, instead of discounting another $25K, ask what service you could provide that is not in the proposal that would help them this year or next. If you can do it for less than $25K, just make it part of the deal. They get something they didn’t expect, you get to hold your price at $500K.

The point is not that you are giving them a discount in another way. The point is that you are letting them define value as they see it and you are delivering it. You are releasing pressure and changing the conversation. When the customer relaxes, she or he can see other solutions. You gain as well.

2 - Back off the pressure, start talking about 2018 plans and goals. Ask what she or he wants to get done next year, and just let them talk about that. You’ll learn about what your future deals can be. Just as likely, if they are budget constrained (pressure from their own organization instead of you) then see if you can help them do some of that in this year’s budget. You become part of the solution to their problem. You might wind up modifying your offer to be part what you had in mind and part what they had in mind, but still book a deal this year.

The point is not that you are backing off. The point is that you are engaging them to help them get something done that matters to them. You are releasing pressure and changing the conversation.When the customer relaxes, she or he can see other solutions. You gain as well.

It may be hard in December, but take a breath. Help your customer take a breath. Let both of you move from hunker down to a two way conversation. You might just book some good 2017 business as you do.

By the way, if you are asking where I have been, thank you. I spent a large part of the past few months intensely experiencing our health care system. I’m fine, getting stronger, and working again. And now I’m blogging again as well. My mind is going full speed, spin me some questions and requests!

Friday, 07 July 2017 03:20

Getting Growth from Giving Grace

You're here because you are looking for ways to help your business grow. Making that happen, even when it's difficult, is what this story is about.

Let's start with the problem. When Paula took a new management assignment at IBM, she found she had an employee who hadn't been performing for a long time. The direct manager, Bethanne, had been told not to take action because "We are all family. We help the weak ones."

You've seen it before. It seemed as though a manager was choosing to be liked instead of making a hard decision. When you want your people to grow, this is a terrible example to set; it festers in the organization. Paula wanted growth instead. Which of us would not? This posting is about her plan to move from disease to healthy growth. It is a great example.

This solution for growth comes from:
— A key starting point
— Engaging with people but not doing the work
— Giving grace

1. The Starting Point
You probably know at least one manager who was effectively fired by her own people. It's what happens when the employees stop respecting their manager. One of the fastest ways to engender resentment is to try to please everyone. As leaders, we sometimes define ourselves by how others see us. However, if you look at the successful managers and executives throughout these postings, you'll see individuals who define themselves from their core and their values. The executives who promote sustainable growth are the ones who define themselves from what they know is right. They don't define themselves from an external standard.

These leaders start with their own sense of what is right, and they hold tightly to that internal key. They look at their core values and what they stand for. That drives their decisions. Often, not always, it drives the social norm in that business. It is always key to successful growth. Paula was strong enough and aware enough to start from what she knew in her core was the right way to act and not react.

2. Engaging
The choice to shelter employees has never felt right for Paula. It hurts the business and it hurts the employees. Sheltering is usually a reaction based on fear, and you stifle growth when you let fear guide your choices. We and our businesses don't grow from fear; we grow from stretching to fulfill our potential. We don't grow from protecting; we grow from expanding our current abilities.

We grow when we act, not react.

When you choose to help your team members while making your targets, you may feel your role changing. You will actively:

Structure meaningful problems for them to solve Engage with them as they solve these themselves Get the heck out of the way as they own the issue and learn

Growth happens when you are there, engaged, and managing the growth and not the activity.

Engaging with employees is not protecting them. Engaging is choosing the challenge they will face and then choosing to guide the learning and growth. It is acting to stay very involved the whole way but not doing the work for the team.

Paula wanted to give this employee a full chance to make things work. Bethanne "…did that, but after another 90 days we just knew that he could not do the work." Instead of protecting Bethanne and the team member, Paula decided on two strategies. The first was to make the change easier for Bethanne to address herself. The other was to structure this to become a learning experience for Bethanne.

"Having to deal with the bureaucracy and political burden of having to move somebody out of the business—that was not new. Firing someone in a Fortune 100 company where poor performers do not get moved out of the business—that was the hard work."

Paula chose to get and stay engaged on this but clearly not to do the work for Bethanne. She could have done the task, and done it faster, but instead she asked Bethanne to take each step while Paula stayed involved.

"Bethanne had to take reach out and then use a director-level Human Resources executive. From the HR advisor she got the technical information such as ‘this the process, these are the steps, this is the level of detail you will need to provide." Paula could have supplied that but Paula chose a different role: "From me she got the encouragement. I told her that this is the right thing to do. I provided the grace to do this."

3. Giving Grace to Get Growth
What does Paula mean by "providing grace?" This is how she explains it: "I recognized that this was going to be a demanding activity for Bethanne. It had to be executed excellently"—and with real sensitivity. For Bethanne to do this and to have "room" to grow, Bethanne needed more space from her everyday urgencies. That is the "grace" that Paula wanted to give.

Instead of saying something like "This is your job, and so is all the rest, get it all done" Paula looked at the best way to help Bethanne do this right. "There were some assignments that I would have had go to her. I didn't." Bethanne knew that Paula was involved, and was investing in her but never doing the work for her. Bethanne felt supported but also knew that she had the responsibility to get this issue right.

Paula made the decision to put Bethanne's development first. She gave Bethanne fewer urgencies while holding Bethanne to the challenge. Bethanne acted in the way that Paula hoped. "She responded to that by doing a complete job."

It feels like a luxury to give Bethanne time to think this all through, to work out the details. That meant a conscious decision to reduce her workload in an environment where workloads were increasing. That decision happened because Bethanne's development "…became a more important priority."

There is self-interest here. "It is important to me as her manager…she becomes more valuable to me. It is important to Bethanne because important skills are expanded, it is important to the corporation because they have one more skilled manager." No matter whether your team is small or large, having a skilled manager is going to be an advantage. You don't make or forge this skill; you grow it. You owe it first to yourself and then to your business and team to grow good managers. "Giving grace" is part of nourishing growth and growing your business.

Fostering Growth
Bethanne had a much better chance of success if she could have the grace and time to do this well. Paula's task, as she assigned it to herself, was to grow the time and offer the grace for Bethanne.

Did Paula challenge Bethanne? The answer is yes, giving grace includes giving a challenge to stretch to grow.

Engaging and giving grace are about being very present, but not doing their work. It is about knowing how to provide grace for the right priorities. And then doing so.

The truth is that when we work from our core, not from input of those around us, we will find that we can select the right priorities. Do you make growing people one of those important contributions to your business? Paula made that choice here. "Investing in her was the right thing to do. She was a good manager on the verge of becoming a great manager. What more important managerial job do I have? That is the top of the game for me."

Grace starts with working from your internal strength and values. The bad news is that you can't rely on anyone else to get it. The good news is that you don't need to rely on anyone else, and your team members don't need to rely on you. You can let them supply their own strength if you can give them the grace, sense of values, and engagement to do so. Grace is a gift that you can always give at the right time. To give someone room to grow when it really matters, to listen, to support without interfering or judging, is to do immense good for your business.

The principle is much as we said earlier: Progress is a changeless law. Individuals grow and you can't control that. But you can support it, assist it, and gain by it. Holding to your core value, engaging with your team, and giving grace for growth and action is a way to turn a problem into growth for your organization.

 

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.

Three practical questions for you:

- Do you make gratitude?

- Is now the right time to do it?

- Does it help grow revenue, your access to time, and the people on whom you rely?

The answers to all three are ‘yes.’ As you start the year, let’s look at quick hit ways to make that work for you.

 

Do You Make Gratitude?

This is both obvious and not. You know people who are good at expressing gratitude, and you also know people who just don’t seem able to express it. It isn’t about what you do for her or him. It’s about how they choose to act, is it not?

And isn’t that true for you? Are you a person who looks for reasons to be grateful? It could be gratitude with customers, employees, suppliers or anyone else significant in your life. More important, it could be to you. You can choose to do this, you need not wait.

You are always the best place to start, and when you do you set an example that others can follow. Some will, and then you will benefit.

 

Is This the Right Time?

If you’ve not been known for expressing or promoting gratitude, the start to the year may be the exact right time to start. Whenever you change behavior, people assume that it is temporary and that perhaps it should not be trusted. If you do it at the times of highest pressure (for example, at the end of a sales period) many folks will just ignore it.

This week is the right week, when you may have been out of sight for a little while. You can come back and say “I have been reflecting. I plan to practice gratitude a lot more this year, starting now.” Then you can start. Until you display it, nobody will believe it. And why they should they?

 

Does it Help Grow Revenue? Time? People?

Each of the key people in your business life has a choice of where they focus their time, energy, and best effort. If you are the one who expresses gratitude, you can expect more of their best work. And you will have earned it.

Post holiday is a great time to think about and express gratitude. Not about for what you are grateful from the past year. This is the time to do it to create a new standard for yourself, and then for others to emulate. Your business, and daily life, will do better for it.

Today is the right day to start.

 

Friday, 21 July 2017 03:13

Grow Your Time and Business

Can you do both?

What is it worth to you to grow access to your time? Is it even possible?

Getting to the right answer starts with asking if you are growing or finding. Most managers ask if they can find time and then conserve it. When you ask if you can grow your access to it you are working from a different starting point.

Time is like any natural resource with which you build products. Like any other raw material, you use it but it's never in charge of you. Like a crop, assume that you manage your resources. When you start with that position, you can find that you can grow it.

Starting With Boundaries

In her role as the Chief Executive Officer (CEO) of Tech CU in Silicon Valley, Barbara Kamm grows her access to time with boundaries and with confidence from self. She starts by scheduling time that she wants to have.

"We schedule meetings. We should also schedule other things that are important. If I want time to think or do some work, it doesn't (happen) unless I deliberately block it off."

For Barbara this is not about scheduling. It's about boundaries, and willingness to hold to them. "You have to set those boundaries. If you don't your schedule will be everybody else's schedule." That requires confidence in your ability to be in charge of your most important resource: Your self. That is from where she starts to grow time.

Barbara's boundaries are about prioritization and discipline. Part of the discipline is choosing what not to do. In the same way that a farmer improves her agricultural yield by not planting too much, you grow your available time by choosing what not to plant into your calendar.

Charles Rogers from technology leader Nexmo is finding the right boundary for himself and his team. He wants his direct employees to do things on their own but he wants some things done right every time. He recognizes that he can't grow his team, or himself, if he tries to manage what the team does in every important task. So he sets boundaries. He gives his staff great latitude right up until they produce customer-facing materials. Then he gets involved to check what the customer will see to ensure that it meets the standard that he sets.

This boundary is clear for the team. If the deliverable meets his standard, then he does not need to spend time on why and how. If it doesn't meet the standard, he can tell the individual what would meet the standard and to try again. If the work is not customer facing, he can keep a much looser hand on what is produced. Charles no longer does or even checks all the work his team produces. He reviews it later for his own understanding, and he invests his best time into work that is customer facing.

As Charles does this he is saying no to doing work that his team can and should do. Leaving something alone is difficult. Saying no to a meeting or a priority is not always easy. He does it because he feels confident in where he is taking himself. It works when he is confident from his core values, from self.

Charles is growing time for things that he wants on his schedule. By using boundaries and trust, Charles grows the time that he can access for critical issues that he should handle. He feels more ownership of his day.

Using Boundaries Like a
Jigsaw Puzzle Box Top


Making the choice to let people learn is about choosing and holding a boundary. Barbara and Charles work on the assumption that you can and should know the details of what is going on in key parts of your business. Their boundary is the line between knowing it and doing it. This is assigning a jigsaw puzzle, showing the box top and then letting the team assemble the pieces without your intervention. You define the box top. The team assembles the pieces their own way. You inspect the result. You don't invest time building it. Once you set the box top, you have set the boundaries and you can step away from the way it will get assembled.

Boundaries can be difficult. Holding boundaries requires self-confidence on your part and on your team's part. Helping your team can be an exercise in assisting them to recognize their own confidence. That means helping them see their internal strength.

As you do this, you may not get quick results. You will get to invest trust in them for a while before it pays off with them trusting themselves and then you. Investing in that now helps you grow more access to time later. The payoff is very worthwhile.

The Question That Divides Teams
and Limits Growth


I often make a simple request of teams. I ask them to tell me:

- "Can you ask yourself a question for which you cannot find an answer?"

Over hundreds of conversations in which I have asked that question, the answer was obvious to almost every person whom I asked. In most teams, members are shocked to find that their coworkers have a different answer than they do. That difference matters.

Consider: If you lead a team of people where half think the answer is yes and half say no, will that impact how the team works together? If they don't work as well together, what does that mean for your growth?

Either they know that they'll to find the answer, or they put themselves in a more restricted place where the answers have to come from outside themselves. If you want to grow your time, you'll want to get all of your key team members to agree on the same answer to that question. This is a core value. It defines boundaries which each individual chooses as real.

If your team does not agree on one answer to this question, you want to know now and not later. To grow your time, you need to understand how you and your team set boundaries.

We each set our own boundaries. When we do, we limit what we can and will do in a given set of situations. Ethical behavior is a boundary. Fiduciary responsibility is a boundary. So is the choice to not do the work of others. As is the choice to allow mistakes, starting with each of us allowing ourselves to err. We need boundaries in business to manage well. That question about capabilities shows a current boundary that we hold.

Each of us can do this. Each of us can set boundaries. Each of us is strong enough to enforce the boundaries we set. That strength comes from within, and with confidence from self.

That leads to a question on empowerment: Who empowers your team?

Who Empowers Your Team?

Another question I use to illuminate key boundaries is:
 - Are you empowered by the company, or
 - Are you empowered by your self?

The first is empowered by an outside power, the second empowered from within. There is no wrong answer. What is worth knowing is whether members of the same team have different answers. That disparity would make it hard to manage the team to the same goals. This is another core value for your team.

Managing that disparity in your team is time consuming, not time growing. It starts with you as the leader. You can address the question and grow your time, starting now.

Applying This In A Regulated Business

When Barbara took her CEO role, Tech CU was following a traditional path. The good news about most credit unions is that they have a predictable business model. They are retail businesses, working with individual savers and borrowers. The bad news is that in a difficult economy the retail business is like a one legged stool; it is unstable. In the case of her CU, "I believed that to stay exclusively on a retail platform was akin to a slow death."

To grow instead of die, Barbara chose to develop a commercial portfolio. Retail and commercial are two different kinds of business catering to two different kinds of customers. When one revenue stream is down, the other can cover for it.

Retail banking is about many similar transactions. These regulations are "cookie cutter." In the retail world, borrowers are treated as individuals but the CU does not address each transaction uniquely. Exceptions are to be minimized.

Commercial banking requires constant development and monitoring of individual transactions. Instead of groups of transactions, each loan is individually crafted and managed. The banker succeeds when he or she knows each customer well and is able to craft the package around each. In the commercial business exceptions are desirable.

Running that commercial business is entirely different from running a retail banking operation. Tech CU's team was expert in retail banking. The regulators responsible for ensuring that the CU is well run were just as expert in retail. However, they are unfamiliar with commercial.

When the CU added commercial loans "the regulators (started) to quake in their boots. They don't understand business loans. We have to be very patient about explaining what we are doing and why." The team's position is that they might be: ". . .training the regulators. We can help them learn." And it was and is clear that the overseers need to learn in their own way. They needed a good box top. They also need to work the puzzle on their own.

When the regulators come to the CU, the team there is both supportive and willing to hold to boundaries. The team members show their support when they are happy to help the regulators understand this different business.

The test comes when a regulator insists on treating commercial loans as though they are retail. An agency supervisor may insist on enforcement that would hurt the commercial customer, the loan, or the result to the credit union. When that happens the CU team member has to stand up and say that their commercial customer needs to be treated differently from a consumer loan. The team member has to enforce a boundary.

"We are not going to let the regulators run our business for us. We are going to keep moving forward and doing the right thing." Here is where success requires confidence from self. "We are going to be questioned, we going to be possibly written up on examinations. We have to go" to uncomfortable places. However Barbara is clear that the CU wants the regulators to understand and support Tech CU team in this growth to a different market. "We have to do what it takes to bring the regulators along with us."

Does this grow access to time? In the short run, no. However, any other alternative is going to set up a constant contention between the governing bodies and the credit union. If that happens the customers lose and the CU loses. To grow time, to grow the CU, Barbara's team has to hold to boundaries immediately. You can direct this, and help everyone on the team feel confident in the group and in himself or herself. When you help them to do the puzzle assembly without you, it will increase your access to more time.

Managing From Boundaries

Can you grow your access to time? Can you grow confidence from self? You can. As you do, your business is easier to manage and to keep on the right track for sustainable growth.

Today, Barbara is managing a financial institution into the next level where it can be more stable. That would normally suck up an immense amount of time. However, now she is increasing her available time to do that well. She chooses to set boundaries, and hold to them. This works because she is driven from within instead of driven by the people around her.

Barbara and Charles must work with their teams and help them by setting the direction. Then Charles and Barbara make the conscious decision to trust their teams to do the right things inside boundaries that they set. They lead by setting puzzle box tops, by helping the team members feel competent to act on their own. Is there any reason that you cannot do the same?

Barbara put it well when she quoted a former mentor:

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

People are more likely to like themselves, and be more productive, when they are learning and when they feel confident in themselves. When you set boundaries, when you govern, and when you model confidence from within, you are helping make that happen. You grow your own business, from within you. And you grow your own access to time in the same way. When you work from this perspective, you are in charge of your time and so is your team. That is key to being in charge of your business.

Peter Meyer is a founder and principal of The Meyer Group, a management consulting firm specializing in creating new markets. He has done speaking tours on management, technology, and strategies throughout the United States and in Europe, the Far East, and Australia. He has also twice addressed the Commonwealth Club of California and guest lectured at the University of California and at Santa Clara University. He has published articles in Excellence Essentials, The Wall Street Journal, The Canadian Business Review, Business Horizons, Dateline, Internet Business Journal, Executive Female, and The Recorder as well as a profile of him in Entrepreneur.

Thursday, 28 December 2017 01:51

Growing Revenue: How Do We Make Money Happen?

This is a book and blog about growing your revenue, your time, and helping your people grow as well. Since we are talking about business, we’re going to start with revenue. In the end, it will be the tail that wags the dog, but revenue tends to get the most attention.

You have probably told someone that money doesn’t grow on trees. You have to make it happen. And if this someone was a teenager, you probably said that it was through hard work.

But there is more, isn’t there? People who work incredibly hard have businesses that crater. Some people who work smart have operations that excel, but even more have businesses that putter along and don’t excel. People who are connected succeed, but just as many people who are connected fail.

What is the difference between failure and growth? To illustrate, I’m drawing a 2x2 grid or Johari Window. The vertical axis goes from the assumption of "limits" at the bottom to the premise of "growth" at the top. (You can read more about this in Dr. Carol Dweck’s book: Mindset.) On the left side of the horizontal axis you will see "take" and on the right "make." (The photographer Ansel Adams discusses this in: "Ansel Adams: An Autobiography.") How does this 2x2 model work in business? Let’s explore that.

 

First, this is not fixed. Looking at the vertical axis, you see an assumption that scales from "we are limited" to "we are going to continue growing even further." Each of us is somewhere on this scale in every moment. At the same time, each of us makes an assumption of "take" versus "make" and that’s reflected on the horizontal access. We don’t live in one pane. We move from pane to pane as we learn and explore.

This book and blog are going to start with exploring good practices for growing revenue. But revenue is just the side effect. We’ll look at how to use the same window to help your people grow and then help you to grow more access to your time. In other words, you can use this as a tool to help you build your whole business.

And it starts with a core premise: We choose where we want to be in the window.

Limits or Growth?

We approach every moment with mindsets, our views of how we operate. One of those is just how limited we are. This is the feeling that we’ve topped out. Maybe we feel that we can only go so far, and then we’ll be done succeeding. Perhaps we feel that there is no limit, that we can grow indefinitely. The lower left of this window is assuming that we will have a limit. The upper left is feeling that we can grow further than we used to think possible. We don’t live at either end, we are always moving somewhere higher or lower on the scale.

Dr. Dweck and some associates have written extensively about how this works for students. Dweck refers to "fixed mindset" and "growth mindset."
• "In a fixed mindset students believe their basic abilities, their intelligence, their talents, are just fixed traits. They have a certain amount and that's that, and then their goal becomes to look smart all the time and never look dumb.
• "In a growth mindset students understand that their talents and abilities can be developed through effort, good teaching and persistence. They don't necessarily think everyone's the same or anyone can be Einstein, but they believe everyone can get smarter if they work at it."
[Dweck, C. S.; Leggett, E. L. (1988). "A social-cognitive approach to motivation and personality". Psychological Review 95 (2): 256—273. DOI:10.1037/0033-295X.95.2.256.]

Some people like to reach a place of excellence and then stop, thinking that this is the end of their ability. Some can’t stand that idea. They insist that there is nothing but upside opportunity. Success for the upper end of this axis is not reaching targets, it is continuing to grow past them.

How we define success when we start projects is important. If success is to aim for a specific target, you can get and then stop there. Your target becomes a limit on growth. Saying that we want to grow past a milestone isn’t placing a limit.

To be clear, when we define success as meeting a targets we are staying low on the vertical axis. When we define success as continual growth we are higher on the vertical axis. Yes, we meet targets along the way, and that is a byproduct.

Most of the people you work with will be somewhere along the spectrum. At first, you might think that this is binary: either you work from a fixed and limited mindset or you work from a growth mindset. In practice, all of us move up and down the vertical axis each day with each challenge.

Take or Make?
In his photography, Ansel Adams set many standards. Lets focus on one key assumption from which he worked: "You don't take a photograph, you make it."

When you pick up a camera, you have two choices. One is to look at what you have been given. The other is to look at what you want to do with it. Do you ask your team to approach a project based on what they are given? Or do you ask them to look at what they can make with whatever resources are reasonable?

You initiate from one of two starting points. You can look for what is available. The other is to try to make an image that you want. Along with many other great photographers, Adams strived to make, not take.

It is easy to say that we have a limited set of resources from which to generate success. The same is true of Adams standing on a promontory. He had only one camera, and a few plates on which he could make images. He had a limited view in front of him. Still, he took the position that he built his photograph to match his vision, and that he’d make an image and not just take one.

Adams made photographs by working from his inner vision, and assembling the resources in a way that worked well for him. He made images work by starting from his inner strength. It is something he had, that we all have.

This is also not binary. There also are many times when Adams says that he got the image he wanted by what he called an act of God. In the "make" vs "take" spectrum, you don’t need to get to 100% make. Just moving past 50% will put you in a rarified atmosphere. The people around you have enough ability. The question is whether you can help them choose to make something more with their ability. Do they sleepwalk through the work? Do they follow the traditional paths with enthusiasm? Do they make new paths? These would appear as three different marks on the horizontal axis.

You can ask the question that grows revenue on this axis:
- Are you taking what you are given from the outside or making what you will want from the inside?
Consistent revenue growth comes when you help people see a way to take themselves further to the right.

Which of Four Positions Will You Be In Today?

In any given sales or development effort, you and the people around you might be feeling that you:
- Have topped out and it is time to take what you have and pause (lower left pane).
- Are at your best and you want to make more and more with what you have (lower right pane). - Have much more that you can take and use (upper left pane).
- Have much more that you can do, and you can make revenue that was never forecast (upper right pane).

The more time you help people spend in the upper right, the faster your revenue grows. Just as important, the success there is self-reinforcing. If you can help your team taste the upper right more often, then they will want to live there. Then your task moves from pushing increased growth to managing increased growth. This is a better problem to have, no?

The more time you and the people around spend working from high growth and make assumptions, the more they will grow as people and you will grow your time. This is the cornerstone of growing your revenue, time, and people.

Getting you, your people, and your business to the upper right is what this book and blog are about.

Saturday, 27 January 2018 05:43

Growing Your Business - Better Negotiation

You want to succeed at negotiation, but is it strategic for your business growth? How can you make this an advantage inside as well as outside your company? 
 
Many of us were trained to approach negotiation with spreadsheets and margins and then add game theory. It’s a start.
 
However, is your business just about numbers? Not a chance. Don't you use negotiation throughout your day, with people on whom you rely? Let’s look at a way to integrate all this to help foster growth.
 
 
Your Start
 
You may know Chris Voss’ book on negotiation (“Never Split the Difference”) as a discussion of very high stakes. He was a top hostage and terrorism negotiator for the FBI. Despite his personal aggressive style and the hard people and situations he faced, he suggests that you negotiate with “unconditional personal regard.”
 
If you sit down with someone and just assume that they are nothing but good, Voss holds that you will have an advantage in the negotiation.
 
This does not mean that you assume that they are right or that you should give an inch. You just assume that they are good. This works. It’s grounded in research. 
 
“Unconditional personal regard” comes from work done by Carl Rogers back in the 50s, where he applied it to therapy. I’m not suggesting that good business negotiation is therapy. It’s an ongoing process to get agreements that work for you while you improve relationships that matter to you and your business.
 
 
Don't Split the Hostages
 
When you start with unconditional personal regard, two things happen. One is that you are relaxed and able to use that to build and hold a position. The other is that you telegraph your ease. That can help the other person trust you. And maybe trust themselves more. 
 
The title of the book, “Never Split the Difference,” refers to how Voss succeeded. Using unconditional personal regard as a start, he never chose to say: “You have 4 hostages, I’ll take two and you keep two and we’ll split the difference.” He went for everything. He usually got it. 
 
So what does that have to do with your results? It means that while you hold to your position, both you and your opposite feel comfortable that you are held in regard. You strengthen your relationship even as you get the results you came to get. 
 
 
Unconditional Personal Regard
 
One of the keys to Rogers is that he let his patients feel that they were capable of doing their own work. Instead of the therapist fixing the problem, doctors who use this take the position that the patient inherently has the tools and just needs to be guided to use them. 
 
In business, this would be like saying: “You have what it takes to make this happen, I’m comfortable that you can. Now go do it.” Isn’t that how you like to be managed?
 
This is not about negotiating transactions anymore. This is about how people feel about working with you. Do they feel like there is a constant need to defend themselves? To be on their toes just in case?
 
Or do they feel that they can work with you over time? Do they feel that while you may not support all their actions or results you will always hold them with unconditional personal regard? 
 
If you start that way, you have a good chance of ending that way.
 
Voss uses unconditional personal regard when he negotiates. He usually gets everything. But for a growing business this is about more than negotiation. It is about making a business grow. 
 
On that subject, I want it all and so should you.
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