A Lesson: It’s what you ask, not what you know.

A true story with a moral for all of us

A friend recently told me a story that had nothing to do with business, but unintentionally had a great lesson for all of us.  He had asked his arborist if he could move a mature tree from one part of his property to another – to make room for an addition to his home.  “Yes,” replied the professional.    “And how much would it cost?”  To which the arborist responded, “We’d charge $18,000 for that.”

Surprised by the high cost of simply moving a tree several hundred feet, the friend weighed cost against benefit, having a difficult time deciding whether to say ‘yes.’

As an afterthought, he asked, about how many years does this old tree have to live?  And the surprising answer from the arborist was “I’d say, about two to five years before it dies.”

… and the moral is…

[Email readers, continue here…]   That incidental afterthought of a question clarified the decision, and certainly saved money and later unhappiness.  And it points out to all of us that asking the right questions may be more important than having the right amount of knowledge.  Our friend could have been an architect attempting to protect the look of the homeowner’s property or view from a window.  He would have known the positive visual effect of relocating that tree would have created.   But he might never have known the consequence of that knowledge if never asking the critical question about the life of the tree.

Are we guilty of knowing so much but not asking the critical questions that might undermine our limited knowledge?  It is more than curiosity at work when solutions become much clearer when we have the skill and motivation to ask the right questions.

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Posted in Protecting the business | Leave a comment

Should you battle the dragon? Or just avoid the encounter?

Frustrated by a competitor that wins when you should have?

Sometimes a competitor is just too entrenched, too strong, too well equipped to directly face in battle.  At least that is the conventional wisdom.  Yet, there are constant examples of new entrants into a niche that do grow, prosper and sometimes even become dominant.

So, when do we know which course to take?  Quietly abandon a niche?  Refuse to engage?  Or charge in full speed?

Here’s a story I know too well.

In one industry I know well, the dominant player with 22% market share was acquired by one of the largest companies in the technology world.  Everyone, including those connected with the newly acquired dominant player, wondered what changes would affect their company and their personal lives and fortunes.  Well, even though that acquisition is still playing itself out on the field of battle, it appears quite clear that the new parent has directed its new subsidiary to abandon the lower end of the market and focus upon the larger sales, corporate customers, and major brands.

Opportunity can come when least expected.

And if that new strategy is proved to be true, the five-hundred-pound gorilla in that niche just moved out of the way of many of its smaller competitors, leaving a market that will surely see a scramble for new competition in the near future.

What if you had abandoned that market, reallocated your resources, and focused instead upon other non–competitive geographical or industry segments?  There’s an example of avoiding the encounter and losing the lead position when an opportunity to compete surfaces unexpectedly.

How could you compete with the gorilla?

[Email readers, continue here…]    But doesn’t it take seemingly unlimited resources to compete against the gorilla in a niche?  The answer is found in defining the niche itself.  Has your competitor left a geographical area virtually untouched?  Forgotten about selected vertical markets within the niche?  Been skewered for slow customer service?  Each of these discoveries would provide an opportunity to compete and perhaps win, defend and build from a distant base to fight the larger battle.

The issue of mature companies as competitors

One more thing, absolutely common to technology companies:  generations of technology do not transition easily. Leading players in one generation often do not transition well into the next, as they carry the burden of a large existing user base with demands for support, feature–functionality and attention that drain the resources of even larger companies.  I’ve seen these waves of technology first-hand in one niche, counting six such waves during the past 35 years, and watching new entrants arrive during each transition to attract customers with new products using new tools, sometimes to grow larger over time than the last generation’s dominant player.

So, how do we answer the question?  Battle or avoid? 

We look for the underserved niches, avoid the direct encounter until dominating at least one of those niches, and use the profits and reputation from that small victory to take on ever–larger niches once dominated by the gorilla.  We’ll call that clever avoidance for the sake of a much fairer but later battle.

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Posted in Finding your ideal niche, Positioning | Leave a comment

What do you wish you’d known yesterday?

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Posted in Protecting the business, The fight for quality | Leave a comment

How to avoid “death by meeting.”

Zoom, Teams, phone, or in person?

Imagine yourself with a calendar requiring you to be in six meetings in a day.  Day after day.  It doesn’t matter whether you’re required to be there in person or virtually, you get worn out after a few of these. Your attention span sorely reduces to nil, and your quality of input and insights fall as the long day progresses.

When to call it a day and become personally productive?

How long would it take to induce you to rethink your use of time – and that of the others Zooming, phoning, Teaming, sitting (or standing) beside you?  More important, how long would it take to realize that there is something wrong with the enterprise when it takes constant meetings to get the job done?

Slowly in many cases.  And expensive. 

The best performers and managers dislike meetings and show their disdain by being abrupt or at the opposite end, distracted.  Often the most attentive ones involved in constant meetings are those who feel protected, shielded from measurement of personal performance, or at times less self–motivated to perform.

And the cost to the company of those meetings? 

Staggering, if you take into account the lost production time of those present, not just the salary cost.

And yet, there are times when co–ordination between people and groups requires a meeting, whether in person or over those digital channels.

So, let’s examine ways to make meetings more efficient – those that are actually required.

[Email readers, continue here…]    The concept of a scrum is a good one to use in many cases of immediate need to coordinate a working group.  In the office conference room, attendees stand rather than sit, reinforcing the urgency and need for a short meeting.  Leaders of virtual meetings reinforce the urgency by keeping those anxious to elaborate in check.

The purpose of the Scrum

Individuals address issues that are blocking them from completing their tasks, requesting help from others in removing the blockage.  Scrums are effective and should be short, scheduled, and supervised.

Board meetings are often killers. 

Hardeners of the arteries of progress.  Most devolve into a series of reports from each constituency, spewing facts that could have been printed and passed to the board ahead of time.  Board meetings should revolve around issues, not progress.  Reviewing sales account by account is not an effective use of a board’s collective time.  Attacking critical issues after providing background information and perhaps a list of alternatives is a good use of board time.

And the ultimate alternative?

If there is little to discuss, perhaps the wisest decision of all is to just cancel the meeting and bank the time saved for more critical use.  Certainly, most of us would applaud the decision to return a bit of lost time to its rightful owners.  And to avoid the occasional (slow) death by meeting, so common in companies today.

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Posted in Depending upon others, Surrounding yourself with talent | 1 Comment

Your eye of the needle: Do you worry over bottlenecks?

Here’s your question to ponder…

Think for a minute whether there is any process or person that could be classed as the eye of the needle in your organization.  Is there anything, process or person, that stalls the flow of work from start to finish?

A CEO once told me that she was the eye of the needle in her organization, purposely controlling quality of service and making sure all of her direct reports let her know of each decision and action they undertook.  Her intentions were pure and admirable. She wanted only the highest quality for her organizational reputation.

The unintentional effect

But the unintentional effect was that she inserted herself into every process as the bottleneck that actually defeated her goal of making her organization a model of efficiency and quality.  Such behavior removes individual employee incentive to innovate and lessens the chance that her direct reports will grow through learning to manage and in turn delegate effectively.

The lesson learned

[Email readers, continue here…]   Sure, you should worry over quality and speed of service.  And sure, you should worry over bottlenecks that reduce the speed of completion of the total task.  But the worst way to do that is to micromanage, to become the bottleneck in the process, to discourage individual creative thinking by others.

It is a fine line for young or first time CEOs to walk.   Removing bottlenecks is one of the more important tasks for a senior manager.  But never should that happen at the expense of creating just such a bottleneck in the process by being one.

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Is your WORK interfering with your JOB?

So, what’s the difference?

First, thanks to longtime reader and friend, Harley Kaufman, for the thought and title for this insight.  He stated, “Too often it seemed our internal staff was more focused on getting the ‘work’ (daily tasks) done and not enough on the ‘job’ (supporting subordinates with resources and encouragement.)”

Wait. Had I been guilty?

Of course, this comment made me think of the many times I had been guilty of this more than occasional heads-down office work over the years of management and assume that most of you who have supervised others have fallen into the same trap.  I recall one of my CEO’s when I was his chairman, stating, “If you are not serving our customers, then you should be supporting those who do”.   Is that statement a bit of a stretch for those in the lowest levels of office work, such as posting accounts payable invoices?  Maybe not.

How do you frame menial desk jobs as “customer support?”

[Email readers, continue here…]   Even the most menial of jobs fit into the grand scheme of customer support.  Some accounts payable invoices come from suppliers providing the company resources to serve the customer.  Moreover, most managers of all groups work to make the company better at servicing the sales staff, the customer support group, or the customer directly.   So, it would be easier to see why you’d want to get behind the rallying cry from that CEO who focused his staff upon the customer – and the company’s mission – which surely incorporated the customer in the first sentence.

Shout it out! 

Harley went further by hanging a banner on the wall of the office with the headline to this insight in bold, large type.  He made it clear that this wasn’t just another sentence in a mission statement to be read by a few and immediately forgotten.

Let’s take this thought one step further. 

If you manage even one other person, are you guilty of focusing upon your deskwork a bit too often when you could have been coaching, supporting, and asking generating questions of your subordinate(s)?

Generative questions?

“What problems are you working with where you could use resources or help?” “Where is your bottleneck, preventing you from doing your job most efficiently?”  “How can I help you succeed today and in the longer run?”  “What if you had more resources, how would you use them to better serve our customers?”  “What do you see happening that we could do better?”

Generative questions such as these make people think and respond in ways they might not have considered.  That’s much better than “How’re you doing today?” to which most people would respond, “Fine” and which would usually end the conversation without generating any positive or negative response or thought.

So, with these thoughts and questions aimed at you, are you a manager who uses generative questions to elicit thoughtful conversations?   If not, consider how you can better support your customers directly or by supporting your direct reports.

Be a better manager of people. Don’t let your work interfere with your job.

 

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Posted in Depending upon others, Surrounding yourself with talent | 1 Comment

Simplify your commission structure. Please.

Is your commission structure so complex that even you must have help understanding it – and calculating a commission on a pending bid?

Salespeople are incentivized by the money.  Of course.

They usually can calculate what’s in it for them before they make the final presentation and ask for the order. But what if the commission plan is so complex that even the people who should be most excited cannot understand or calculate the winning numbers?

Many rules or few?

Far too often, I come across companies with commission structures that take into account “all” the possible permutations of profit on a sale, causing everyone to wait for an accounting person to complete a cost analysis in order to find the magic number, or for a manager to rule on percentage splits for territories or products.

Here are some solutions.

[Email readers, continue here…]   For those who have tried (and perhaps built) a commission structure based upon anything other than gross revenue, there are some relatively easy solutions for simplification.

First, forget the extremes in cost of goods or labor costs for the sake of ease in calculation – and for more effective motivation for the sales staff.  Pick a number for the cost of sales for outside purchases of hardware or services and assign a standard percentage to these.  For example, make all outside hardware and services commission calculated at 25% of the contract sales price, and all inside services commissioned at 50% of the billed amount (as a basis of that line item for the percentage to the salesperson.)

Exceptions to the rule?

Then make a rule that exceptions for commission calculations can be made only for contracts above some large trigger amount.  Codify that the salesperson cannot discount lower than some percentage of the stated prices, usually ten percent, without management approval – and possible commission percentage impact.

For SaaS or other contracted recurring revenue, the commission should be calculated in advance for some stated number of contract months.  Cancelled contracts would result in a chargeback against pre–calculated commissions and charged against future earnings.

Pay upon cash or contract?

Many smaller companies pay commissions as cash is received.  This complicates the accounting process, but importantly not the incentive to the salespeople, who have long since been able to calculate the total commission on the order and look to the extended payments as a form of deferred revenue, not as a penalty.

Company executives have come up with permutations for protection of cash flow or profitability since the dawn of commission time.  But we can address the motivation and resulting follow–though by salespeople as a result of these many types of permutations.

And simplification almost always leads to better sales efficiency, motivation, and more closings by those who now understand their portion of the profit from their work.

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Are we managing like JERKS?

Are we who issue orders to associates or employees ever acting as jerks?  We’d never like to think so, or we wouldn’t do it in the first place.

Here’s a clue…

If someone is saying “This is confusing to me” when you’ve given an instruction or order, there are several ways to respond.  Of course, it may be appropriate to explain your reasoning, or ask what part of the instruction is confusing.

But, as one CEO pointed out to me recently, it may be more appropriate to ask yourself if the instruction was necessary or worth the effort in the first place.  He worded it a bit differently, as in the headline to this insight.

It sure gets your attention. 

Managers can be jerks as easily as anyone with a bit of power misused or misdirected.

So here is the simple test. 

[Email readers, continue here…]   Before issuing any kind of order to perform a task, think of how this might be interpreted by the person receiving the order.  Take the cynical view – the worst-case possibility.  Because it’s a guarantee that many of those on the receiving end will do just that.

Did your proposed order pass the jerk test? 

Will the requested outcome advance any of your goals – or just provide an increment of satisfaction?  Will the output be used in a meaningful way?  Or will this just be another reason for that cynical associate or employee to label you with that term?

Now raise the stakes of that order to the corporate level.  Will a whole department or all those under the level of the issuer feel a bit of the jerk syndrome?

Well, then. You have a tool for the question. And you know how to use it.  Think back to your past.  Ever think that of an action by a leader in your past life?

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Posted in Depending upon others, Surrounding yourself with talent | Leave a comment

Hire on ability. Fire on fit.

This is not necessarily the way we intend to behave as managers, but our headline reflects the reality of most experiences when viewed in retrospect.

Don’t we most often hire based on experience?

We carefully vet the potential hire for experience required.  Ninety days or longer later, if

that person is terminated by management, it often is for actions resulting from the person’s relationship with others in the organization more often than failure to perform the specific task for which the person was hired.  Especially in companies with unusually stifling cultures allowing few errors or deviations from the handbook or rules, some new employees just cannot adapt.

We have a 90-day trial to test this.

Yet, we hired the person based upon our perception of the ability to do the job designated. And yes, some of those hires can be vetted on the job and found unable to perform to standard, deserve a negative review and possible termination within the first ninety days of hire for that reason alone.

When experience meets cultural fit

[Email readers, continue here…]   But experience tells us that more often the person just didn’t fit in, a reference as much to the culture of the enterprise as to the efforts of the new hire.  Should we be so abrupt as to consider letting someone go based upon their lack of a good fit within the organization?

…and the point of this is…

My experience is that it is better for both the new hire and the company to make the

termination decision quickly, humanely, and within the first ninety days of hire.   The shock to the employee, to the culture, to the corporate pocketbook, and to legal challenge is much less than when the process is extended again and again to find the right fit for someone who is just not quite right.  And if that person is visibly or vocally unhappy, the problem becomes toxic and even more dangerous to the culture of the organization.

Protecting ourselves and the employee

Firing on fit is an important rule to consider when examining the early work of a new hire – within the first ninety days.  For the sake of protection, there should be at least several coaching sessions and a documentation of these sessions in the employee record.  But the ninety–day rule is reasonably common across government jurisdictions to protect employers when making early termination decisions.

Everyone hates to let someone go.  It’s one of the hardest things a manager does.  But it is important to protect the corporation and help the new hire to move on – when warranted.

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Posted in Depending upon others, Protecting the business, Surrounding yourself with talent | 4 Comments

Would you celebrate your mistakes?

Leading by example

How do you teach your work force that mistakes are OK as long as they learn and don’t repeat them?  By being a visible example.  A friend and fellow CEO states that he publishes each of his mistakes in his company internal blog along with the lesson he learned.  “If the CEO can do this, he gives permission for anyone to confess as well,” he states.

Think of aviation lessons for safety’s sake

You may not know it but the National Transportation Safety Board has for years offered a reporting program for pilots, air controllers and others involved in aviation safety.  Anyone reporting an accidental safety error (such as flying into restricted airspace) within ten days is granted immunity from FAA prosecution, as long as the mistake was not an intentional breaking of the law.  Even NTSB understands that mistakes are learning experiences as it insulates accidental infractions from prosecution in order to learn and solve problems communally.

What is your culture?

Do you respond to an employee mistake with a warning or even punishment?  If so, it is a sure thing that fear will cause your employees to hide them, cover them up with quick fixes if possible and worry over the consequence of creativity efforts or of pushing the envelope a bit.

So, here’s your question of the week:

[Email readers, continue here…]   Doesn’t the whole enterprise fail a bit each time a learning opportunity is lost or someone hides actions from management?  And what does it say about your corporate culture and your individual management style?  Even if you condone the overreaction of others in management, aren’t you then guilty of reinforcing such a culture of punishment over learning?

Celebrate your mistakes.  Others will follow.

All will learn to share for the sake of safety, growth and open culture.

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Posted in Depending upon others, Surrounding yourself with talent | 1 Comment