Peter Meyer

Peter Meyer

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Wednesday, 14 February 2018 02:14

Growing Your Time by Giving Grace

Can giving grace be a way to help grow your own time and your people? Yes.
Here’s an example for you.

Let's start with the problem. When Paula took a new middle management assignment she found that it included an employee who hadn't been performing for a long time. The employee reported to Bethanne who now reported to Paula. Before Paula got the assignment, Bethanne had been told not to do anything to penalize or remove this employee because "We’re all family. We help the weak ones."

"We’re all family. We help the weak ones."

Sometimes we make the kindly decision to support one person’s weakness over the needs of the organization. Often, we don’t like it but just accept this and let the situation continue. It leads to dysfunction. It saps your time and the respect of people on whom you rely. In an organization with extra resources, this might be acceptable. However, how many of us have extra resources these days?

So how did Paula both generate growth and support people who needed help? This solution for growth comes from:
— Starting from the right place
— Engaging with people but releasing the work
— Giving grace

1. Starting From the Right Place

You already know that one of the fastest ways to engender resentment in employees is to try to please everyone. It is tempting to want to help people feel better and to do that we sometimes define ourselves by how others see us.

However, executives who succeed at sustainable growth don't define themselves from an external standard. Those who consistently make growth work are the ones who define themselves from what they know is right.

These successful executives lead from their own core values. Those are what drive their decisions. Often, not always, it drives the culture in that business. It is always key to successful growth.

Paula chose to start from what she knew in her core was the right way to act and not react. She chose to improve her organization even if it meant releasing the employee who wasn’t performing. Prioritizing performance might not seem common in her company, but it is core to her values. And acting instead of reacting is another key value for her. She chose to combine these into a plan to engage but not do Bethanne’s work.

2. Engaging But Not Doing

The choice to shelter either the employee or Bethanne didn’t feel right for Paula. Sheltering is often a reaction, and one based on fear. 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 don’t grow from protecting. We grow when we act, not react.

That feels intuitively correct, but how do you manage people to grow them and your own access to time? Instead of hands off management, you can:

- Provide meaningful problems for them to solve
- Engage with individuals as they solve these themselves
- Get out of the way as they own the issue, make mistakes, and learn

Engaging with employees is not protecting them. Engaging starts with actively choosing the challenge they will face. It continues with actively guiding learning and growth. It is acting to stay available and present for the work but not doing the activities for your people. This is hard work.

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

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." Paula could have terminated the employee herself, and done it faster than delegating that task. However, she decided to structure this to become a doable learning experience for Bethanne.

"Having to deal with the bureaucracy and political burden of having to move somebody out of the business” 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. From me she got the encouragement. I told her that this is the right thing to do.” But telling her was not enough. “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.” The employee could be valuable elsewhere in the company, so this move had to be executed excellently and with real sensitivity. For Bethanne to do this and to grow, she needed relief from some of her everyday urgencies. That is the “grace” that Paula wanted to give.

It feels like a luxury to give someone time to think this all through, to research the right answers, to work out the details. For Paula that meant a conscious decision to reduce her workload in an environment where workloads were increasing. Paula chose to make Bethanne's development a more important priority than any one project. She prioritized the organization’s growth ahead of both Bethanne’s normal workload and ahead of the employee’s comfort.

Paula looked at the best way to help Bethanne do this right and changed her workload for several months. "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. She also knew that Paula was not doing the work for her. Bethanne felt supported but also knew that she had full responsibility to get this issue right. Bethanne acted in the way that Paula hoped. “She responded to that by doing a complete job.”

This was was the reverse of normal delegation. In order to give Bethanne space to work this process, Paula had to take on more work for herself. Paula was was putting out more effort, not less.

However, 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 (we) 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 assemble skills like this; you grow them. 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 for Your Organization

Do you choose to make growing people one of those important contributions to your business? Paula made that choice here. “Investing in (Bethanne) 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.”

“What more important managerial job do I have? That is the top of the game for me."

Growth 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.

More good news: If you choose people well and let them learn, 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. Doing this grows your own access to time.

People will make mistakes, but progress is a changeless law. If you hold to your core values, and ask them to do the same, you will foster growth. Giving grace is a way to turn a problem into growth for your organization. And growth for your time as well.

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.

This is going to be an odd question, but could be a very useful one for you. If you try it, you’ll clearly differentiate yourself with customers. You may learn a lot about them and they about themselves.

At the same time, if you ask the people on whom you rely some will increase their respect for you. Some may think that you are crazy. Consider yourself warned.

Oh, many people you ask will want to know your answer, so you’d best have an answer for yourself. So the question is:
     Why did you wake up this morning?

Of course there are no wrong answers. When I have asked over the past week, the replies include “To urinate,” “Get going for a meeting,” “To sell” and “To find more ways to grow myself today.”


What Is In This For You?

Consider these three benefits you can gain:

1 - If you ask a potential candidate for a hire, you’ll probably get information that can make your decision easier. It’s a great interview question.

2 - If you want to get a customer to reflect (instead of just hammer you on price or product) this can be a great question. You may find it hard to ask. However this question helps you to move from a commodity image to a more thoughtful one.

3 - Some people will take this as an aha moment. They will start to change their day based on the answer. With luck, you will benefit as they do.


My Own Answer

Yes, I’ll answer this as well. Of course this varies day by day, but in the past few weeks my own answer has been consistent. I was surprised by what I discovered.

I expected the answer to be around gratitude for my own ability to write and work. I was wrong.

When I’m just plain honest with myself, the reason I woke up this past few weeks is to do more today than I did previously. It is sort of about pushing my envelope, growing into new areas. As soon as I ask, it is really obvious to me.

I’m happy with the answer but I am even happier with the idea that I was wrong before. I think that we all want to learn, especially about ourselves. And I did. Using this question can help generate learning. With it, you can be a positive influence.


Benefits to You

Any time that you help a key person, or a customer, or yourself learn more you are differentiating yourself and your business.

- In commodity markets, this helps you to differentiate your business.

- In high service markets, this help you to show why you should be the vendor of choice.

- And when you want to attract and retain great people, this might help them see you as the person with whom to work.


Give it a try, ask the next person to whom you talk: “Why did you get up this morning?” You may both learn a lot. You may change the ground rules for your year. You will probably get a grin.

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.

 

Thursday, 28 December 2017 05:10

Setting Up the New Year for Growth

New Growth for the New Year

This is also in response to a request: Do you have a good process for setting up the new year for growth? Not just to do the same we’ve done already, but to grow?

I’m going to reply with something simple but not easy. It looks a lot like a formula, and I guess it is. If you get the people on whom you rely to focus here it will help you to grow into the future instead of just repeat the past. If you go with this, you can increase revenue and get more things done in early 2018.

 

The Formula

First, what is the formula? My answer:

1 - Try new stuff

2 - Pay attention

3 - Repeat.

It looks simple. It is simple. And it works.

 

Why Three Steps

When we actually try new stuff and review it we are exploring and learning, moving into the unknown. We automatically improve. The key is getting started.

One of my axioms is that all of us enjoy growing and learning. It is true for all of us.

 

Why Three Steps?

Have you ever seen projects that get launched and then abandoned? It happens all the time. Projects and programs get chartered, launched, and then ignored. Not much learning or productivity comes from that. So doing something new should be followed with “Pay attention” to what happened.

Ask the people on whom you rely to examine what happens. This is your chance to gain as they learn and improve.

 

What Will Everyone Learn? Will it Be Enough?

We never know what we might learn. It is a step into the unknown. Many will avoid it, deflecting the risk.

However, most of us will be willing to try to define the unknown if the chance of failure seems less than the joy of exploration. If we knew what we were about to learn it would not be new, would it? If you want to start the year with a sense of growing, that means moving into the unknown. Getting folks to accept that is not always easy.

A key is not to request large jumps. Take small steps instead. Promote the sense that any small growth is a good step. You can help people to enjoy the taste of success. Instead of asking your team to think large, ask them to try new things that they can do with comfort. Reduce the risk and stress of experiments, go for incremental success into the new instead of single big steps.

 

Pay Attention

Be obvious about looking at what happened.

The most common next step after a new idea is to ignore what happened and start something else. The second most common in many organizations is to look for what went wrong.

Instead of a “why did we fail” meeting to review an effort ask yourself, and the people upon whom your rely, to look at what they learned and can use again. Pay attention to what worked and how. Use that to focus on the transferable skills that you want to encourage.

 

Repeat

You may learn, but you can be sure that there is more. So the third step is to repeat the first two. If you are taking small steps, and getting satisfaction, this is easy. More important, if people are enjoying the learning, this is easy to promote. When you get it rolling, it can be difficult to stop. That is a good thing.

 

Make It Happen

As you prepare yourself, your team, your customers for 2018, ask yourself how you want them to see you. Do you want them to see you as you were in 2017? Or as progressive and growing and helping them grow in 2018?

As you lay out the start to your year, don’t just talk about what you did and what they can do to extend it. Ask them how you can help them do new things. Then ask them to take small steps, try new things, pay attention, and then repeat.

And you should do the same. You will get more grins per week, and why not do that in 2018?

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!

Can Offering the Customer Safety Increase Your Business' Revenue?

When you consider how to increase your revenue, start with your own buying preferences. Why might you choose to pay a premium for a product? Does that apply to others as well? Specifically, consider three questions:

1 - Would you pay more if you got a guarantee of satisfaction?
2 - Does guaranteeing your work say something about you?
3 - What is a guarantee's total cost compared to the revenue?

The first two of these questions are tightly interrelated. When I buy on line or in person, I tend to shop where returns are easy. Lands End and Boure Bicycle Clothing are great examples. Each company flatly guarantees that I can return purchases or gifts with no questions asked. Does this mean that their clothes or bags are automatically better? No, but their service is. Their guarantee makes my purchase safer. The guarantee is a statement of their values. I bring my business back to them because of that. For me, questions 1 and 2 are important reasons to choose my supplier.

You can use this to substantially boost your margins. Customers come to you with questions to resolve. Answering those questions in a way that makes you the safe choice can increase your sales price and reduce your risk at the same time.

Consider what you already do to differentiate your product. If you sell tires or roofing materials, do you want to just sell prepared chemicals? Or do you want to deliver safety on the road and in the building? Is your product a combination of ingredients that anyone can buy, or is your product the way that you deliver those materials to individual customers?

To command a higher price, make the offering you deliver a mixture of two things. First, start with your ability to get the problem and success criteria defined up front. When you do this with your customer before he or she buys, your customer is more likely to get the solution that they tell you they want.

That allows you to deliver the second part of the mix comfort. A guarantee is part of that sense of comfort. Combining your understanding with comfort for the customer will lead to increased margins. Negotiating success criteria in advance shows your customer that you value their uniqueness. It also allows you to know exactly what you should guarantee.

Increasing Margins by Doubling Your Price
Start by looking at what you value. Would you pay a premium to get a satisfaction guarantee for something important to you? How true is it for others? We asked over 100 executives if they would pay a premium for a guarantee, and how much. They said ‘yes.' The average increment that they were willing to pay was 100 percent.
Not only would they pay more for the safety of a guarantee, they would pay twice as much. It's a strong statement.
A guarantee is an expression of your values. That value is attractive. It is also a commitment to protecting the customer. That's also attractive! Those mean higher value to your customer. With that value, you can and should collect additional margin from every customer. It is worth it to you to be worth it to them.

The Satisfaction of Delivering Satisfaction
Increasing revenue is only part of the reason to offer a guarantee. Because you are going to do the work right, you get the privilege of your own satisfaction. Do you feel good about delivering quality and value in your business and personal life? One of the main reasons to deliver satisfaction is that this is how you want to perceive yourself. When you are working to your own greatest satisfaction, you are working from your internal compass, from what you are as essence. It feels good.

Satisfaction with your business starts within you. Your sense of quality comes from within you, not from an external source. You may measure the level of quality by comparisons, but your ability to recognize that you deliver quality comes from inside you.

When you deliver from there, it's clearly part of your product. You do what you would feel proud to do, and that shows. You want it to show, and you probably show it now.

To put this in perspective, consider:

If a customer is unhappy with what you have done, would you turn your back?
Or:
Would you work to craft a solution?

The answer seems obvious. Consider the statement you are making. “Yes” to that question is a statement that you deliver quality work, end of story. You want to do that, and you want to be known for that. You are working from your internal guidance, from your sense of what you want to be and how you want to see yourself.

That commitment to “Yes” is a key part of why your customer should buy from you. It is as much a part of your product as tires or roofing materials or billable hours.

Your guarantee that you will take care of the customer, that you are offering to guarantee their satisfaction, is the clear statement from within you to them. One of the best reasons to offer that statement is because you are telling them about what you and they both mean to you.

When you act from what you are, you will make an effort to find ways to make your customer happy. You'll get satisfaction from delivering satisfaction. You are going to do what is right.

Your customers value your focus on the problem as much as they value the hardware or software. When you focus on their problem, you are going to do what is right for them. If you give them that focus, and show you mean it, you will double your margins and more.

If you are going to do what is right, why not tell your customers that this is how you operate? Why not collect the additional margin that they will pay for that commitment to their satisfaction?

Reducing Your Risks
Can we afford this level of guarantee? It's a discussion of revenue versus cost. The revenue can be forecast, but the risk can seem enormous and incalculable. When you offer a satisfaction guarantee you run the risk of a customer telling you that you have failed, and then having to make it right. It raises questions.

The first question should be:
Do you want to know when you have failed in the customer's eyes?
For most of us, the answer is ‘Yes.'

The second question would be:
- Are you going to fix the problem anyway?
My guess is that when you look within yourself, you will find that you want to do what is right for the customer if you can. ‘Yes,' you'll find a way to make it right.

If so, why not ask to be paid for your commitment to excellence in every transaction? In several decades of consulting projects in our firm, we have gotten very good at asking for definitions of success criteria from large companies and small ones.

We've always been good at meeting our commitments. We deliver good work, and we guarantee it. How often do we have to pay out? In the 20 plus years, we've refunded money one time. Just as important, we have increased our sense of doing what is right for each customer.

You can manage your risk by ensuring success. The biggest tool to ensure customer success is how you communicate with the customer before the project is started. Success Criteria are your tool for margin, delivering value, and reducing risk.

Together you and your customer have the opportunity to define success for a project. If you want to make sure that you will both feel satisfied that you delivered satisfaction, make an opportunity to define success before you start.

Before you do price negotiations, ask for an understanding that you will be successful if X and Y are done, and that you have the ability to negotiate changes if both parties agree. It sounds pretty obvious, but how many projects do you start without a clear and common agreement on how you will know that you have finished? Success Criteria help you and they help your customer.

Once you agree on that definition, you know your targets to deliver satisfaction for you and the customer. You know what you can and will do to satisfy your own internal drive for quality. You know your capability to satisfy your commitments to the customer. And you know that you can ask a premium because you asked for the Success Criteria and then promised to meet them.

In other words, your risk goes down. Your margins go up.

The essence of the risk changes as well. Before you were concerned with issuing a refund. Now you are more concerned with making things right. Again, wouldn't you do that with or without a written guarantee? Isn't that what you stand for? If so, what is the risk of the guarantee? There is very little risk and a lot to gain.

Over the years we have clearly gotten revenue that might not have come to us. Why? We display the commitment to satisfaction. I know this because customers have told us.

What risk would be unacceptable to me as an owner? The risk that I would say no to supporting a paying customer, or the risk that I would not work to understand a customer's needs in advance. Working from my core, my internal compass, I won't accept the risk. I want to treat my client in a way that I enjoy being treated.

The biggest risk for me? Going home thinking that I did not do the right thing for the customer or myself. Since I won't accept that risk, this is the argument that keeps me offering a satisfaction guarantee. The additional revenue is the happy side effect.

Choosing to Guarantee
The arguments to offer a guarantee are:

- Increasing revenue to more than cover what you will pay in claims

- Keeping the focus of a transaction on the work that you are doing instead of the price of doing it

- Presenting the same sense of quality that you strive to be

- You are going to fix things that go wrong anyway. It is one of your strengths.

You might as well get paid for one of your best qualities. Peter Drucker put it well when he said: “The single most important thing to remember about any enterprise is that there are no results inside its four walls. The result of a business is a satisfied customer.”

A significant part of your product is your value, and the core of your value is what comes from within you, not from what you produce. That is good news; you can produce more value by focusing on that, and by generating more from your source. The benefits to you, your customers, and your business are great. You just have to figure out how to do it.

Remember that a guarantee is a contract with your customer, and both parties are involved. So start with asking to jointly define success before any important transaction that you will guarantee.

Do you want your customer to feel comfortable buying from your business? Do you want clients to respect how you do business? If the answer is yes, then guarantees can be a low cost way to help customers buy.

In the end, your guarantee of customer satisfaction is not about the hardware or software or service. It is about the statement that you are making to your customer and to yourself. The benefits include higher revenue, but the chief benefit may be how you and your customer see your value, and your values.

(This posting is based on the book: Growing Your Revenue, People, and Time which I am still writing. It has appeared in a similar form in the Business Quest, the journal of the Richards College of Business. If you have comments or suggestions, please let me know!)

 

Friday, 09 June 2017 03:32

Hunker or Grow:

Is It Time to Hunker Down or To Enter the Revenue Stream?

The economy still seems challenging. If you own or manage a business that sells to other organizations, you have a choice.

- Do you opt to hunker down and ride out the difficulties?

- Or do you find ways to get proactive and create opportunities?

More than ever, our ability to know what to do is clouded. The lessons we so painfully gained in the past lessons don't seem quite as relevant. Yet, commerce is clearly still happening. People are still buying.

This is two blog articles. In the first, published this week, you’ll find suggestions about whether to hunker down or to seek opportunities and take advantage of them despite the current disruption in the economy.

In the second, to be published soon, you’ll find strategies to take quick advantage of disruption. You can make disruption your ally.

Hunker or Grow?
As a manager do you hunker down and ride out the current economic difficulties? Or do you choose to get proactive and find and make use of new opportunities?

Many managers are acting in shock. They are not taking the initiative because they cannot predict the immediate future. Your ability to know what to do based on past lessons is challenged. Doing nothing feels safe, acting feels risky.

With all that, it is easy to forget that commerce is still happening. Companies are looking to take steps to make as well as save money. Governments are continuing to invest in services. It is easy to forget that things are still being sold and that customers want to buy more of them.

If you own or manage a business, you have a choice. One option is to bide your time during the disruption. You can wait for the revenue to appear. Many managers will choose this.

Another option is to move into unknown areas to create revenue projects. The unknown is not the easy choice for many, but some will choose to try to create opportunity. The good news for the latter managers is that this disruption is creating opportunities that never existed before. This is a time when new products and services can take hold.

You face risks when you move into the unknown. Many projects you propose to customers may fail. However, if only a quarter of the new projects happen, that is a major opportunity that other companies may miss. You have an opportunity that your business will miss if you wait out the recession.

When you talk to your sales teams, remind them that there is a continuous river of spending. Although the rate of flow rises and falls, the river never stops. The economy changes and takes odd turns, but the river of spending never dries up.

Some times you stand on the side of the river of revenue opportunity. You point at it and discuss how much larger it was last spring. You watch it and wonder what next spring will bring. Perhaps you walk along, looking for the right place in which to dip a toe. Sometimes you step into the river of revenue and get thoroughly immersed in it. Right now that might be appealing.

Getting the Sales Team Into a
Revenue Stream

For your sales team to take advantage of the stream may require that they take a different view. You may want them to look at customers a bit differently. Consider:

- There are businesses to which you sell that are withdrawing and hiding and hunkering down, hoping to survive. They provide trickles of revenue.

- There are also customers who are looking to thrive and grow their own revenue. These businesses are part of a fuller and fast stream.

The key here is that your sales team may not realize that these trickle and fast stream customers are often people who work in the same company. In many businesses, managers hoping to survive are in staff roles like human resources (HR) and information technology (IT.) The ones planning to thrive and grow are in line positions on the revenue side of the same business. It is time to ask:

- Do your sales teams call on the staff or the line?

If not both, they may be missing the stream of revenue.

You can take real advantage of this in a competitive marketplace. This is because some of your competitors are in survival mode; so they appeal to the hunker-down folks in staff roles. This works to your advantage when you work both the staff and the line in your sales strategies.

Fewer of your rivals are stepping into proactive mode. They differentiate themselves by talking about revenue. They appeal to the managers and executives who want to grow their businesses. They are in the faster stream; you may want to join them in that stream. As late as it is in the calendar year, their are still new deals to be had in this stream.

Your fastest path to the quickly growing your revenue stream this year is going to be found with the line managers of customer companies, people who also need revenue this year. Every company has managers who want to find ways to get things done and are willing to break budgets to make revenue happen. At this time of year, they are more frustrated and more willing to work with a new supplier. That is an opportunity for you.

Approaching Your New Customer – Three Practical Considerations
The economy isn’t an object to which you are prey. The economy is an average, a line defined by mathematics. There are companies and people below that line, and companies and people above it. No one of us is average; each has a choice to be above or below that line. You control that choice.

Customers aren’t monolithic. Each company or municipality is a combination of buyers and decision makers with different agendas. This is a good time for your sales team to take advantage of the difference between those taking the survive path versus those looking to thrive.

For example, you might rely on the news to say that Cisco Systems is gathering cash to retire debt and buy businesses at a discount. You could say that General Motors (GM) is unable to spend money, a poor place for you to invest sales time this year.

But these generalizations hide important truths. Cisco is cutting back at the same time the company is investing in growth. Their non-revenue departments are looking to avoid spending. At the same time, GM is spending substantially in tools, consulting, and, of course, new technologies for cars.

Even saving money is expensive. Closing plants requires a substantial investment. GM will do it. On the revenue side, GM is building the cars of the future. That requires a substantial investment and creates a revenue stream. At GM, you will find top managers focused on revenue. There is a stream there for someone to tap.

To gain an advantage for your business, you need to ask your sales team a question:

- Do you call on cost control departments or revenue generating departments?

For most, it is cost departments. There is nothing wrong with doing that and building long-term relationships, but this may not grow your business this year. Your goal is long-term profitability, but can you also have the short term? Can you increase your market share today while your competitors hunker down? You can.

Start by designing sales strategies that bring value to the revenue oriented groups at your prospective business customers. That means adding value as the customer sees it, not as you want him or her to see it. Letting the customer define value can be uncomfortable. So is reaching high into executive offices that are not familiar to your sales team. On the other hand, if there was ever a time to get uncomfortable, it is now. This is a high leverage period because other companies are withdrawing from competition.

The good news about this being a blog is that if you want help you need only send over a note. I’m an author, I love it when you read what I write and ask questions. Drop me a note at Peter @ MeyerGrp.com

A practical step to locating your revenue stream is to segment each customer company into individual buyers, focusing on whether the individuals directly contribute revenue. Some of those buyers are on the cost side of the company. Some are on the revenue side. Don’t let your sales teams miss either side.

It is not just companies that have revenue-generating departments. So do governments, medical centers, and nonprofits. Governments have tax collection and economic development groups. They are quickly creating revenue streams this year. Have you allocated some of your sales resources in that stream?

The second practical answer? Make it easier than ever for the revenue managers at your new customer to make a decision to go ahead.

Ask:
- Can you make it easier to for your customers to buy in small bites?

- Can you make it lucrative for your sales teams to sell small deals to new customers?

- Can you help your new customer ease into the relationship with you?

- Are you compensating your sales people to prospect for this kind of business?

- Can you offer bonuses for new customers? Even if located within in companies you sell to?

As the economy rebounds and a customer grows, to whom will the revenue managers turn? It will be companies and people that focused on selling small and easy to absorb projects during the recession. Why not make your company the preferred source?

If your team is not used to talking to customers’ revenue generators, the third practical step to take is to take a leadership position. Show them by doing it. That requires time and attention, but it is likely to be the best investment you can make this year.


Conclusion
As you guide your business, you have the option to hunker down and let things get better. Or you can take advantage of the opportunity to get a larger market share and add new customers. The best way to focus your sales teams on obtaining new revenue is to recognize that potential new customers include individuals inside businesses. Point your teams toward managers who generate revenue for your prospect.

One of the key investments is your own energy. If you want your team to be proactive with customers, you will need to act that way. If you combine your leadership with the right product and service packaging, you are likely to get revenue for your company that others will miss. As Intel’s spokesman said when announcing the $7 billion building plan: "You never save your way out of recession. You invest your way." Will you invest in a revenue stream? Will you make it work for you?

This posting is from the upcoming book: Grow Your Revenue, Time, and People. It has appeared in a slightly different form in BusinessQuest, the journal for the Richards School of Business.

 

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.

 

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.

 

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