The Salesman Who Lost the Million-Dollar Deal

How failure can make you more successful…

We all make mistakes, but do we learn from them?

As children we are often taught not to make mistakes, and that it is important to be right. This is reinforced as we become adults and so we learn to equate mistakes with failure.  And when we do this we limit ourselves and our potential to grow.

I view failure as an opportunity to learn and improve, and from this to grow and develop myself further. If I am not making mistakes then I am not pushing my boundaries or myself, and I condemning myself to be average as I cannot grow. The important thing about mistakes is not just to learn, but to implement that learning so you don’t make the same mistake twice.

I would like to share a story with you about Thomas Watson Sr., the man who founded IBM and oversaw its massive growth from 1914 to 1956. The story goes like this….

“”IBM had survived The Great Depression. Gambling on a post war boom, Watson Sr. had maintained IBM’s employment levels by increasing inventories when there was little demand. Excess machinery and parts crowded basements and filled every nook-and-cranny of Endicott’s warehouses.

Some on the board of directors, because of this, were lobbying to remove Watson as IBM’s President.

He needed these inventories sold.

A very large government bid, approaching a million dollars, was on the table. The IBM Corporation—no, Thomas J. Watson Sr.—needed every deal. Unfortunately, the salesman failed. IBM lost the bid. That day, the sales rep showed up at Mr. Watson’s office. He sat down and rested an envelope with his resignation on the CEO’s desk. Without looking, Mr. Watson knew what it was. He was expecting it.

He asked, “What happened?”

The sales rep outlined every step of the deal. He highlighted where mistakes had been made and what he could have done differently. Finally he said, “Thank you, Mr. Watson, for giving me a chance to explain. I know we needed this deal. I know what it meant to us.” He rose to leave.

Tom Watson met him at the door, looked him in the eye and handed the envelope back to him saying, “Why would I accept this when I have just invested one million dollars in your education?”

It is that last line – “I have just invested a million dollars in your education” – that brings it home to me.  There are two important learnings here:

  1. The failure you experience and the mistakes you make are opportunities for you to grow.
  2. The failure others experience and the mistakes others make are opportunities for them to grow.

Are you tolerant of and welcome mistakes in yourself? And in others?  Currently do you look to learn from your mistakes and failures? And do you help others to learn from their mistakes and failures?

We are living and working in a changing world, and we are finding that what got us here will not get us there. As well as this we are also discovering that what we have always done will no longer get us what we always got.  Failures and mistakes do not stem just from doing something new or different, but they can stem from doing that which we have done before and which has previously brought us success.  The latter source of failure and mistakes is more insidious and harder to sport, ironically because it is so familiar.

So create an environment where failure and mistakes are seen as an opportunity to learn and grow – individually, as a team, and as an organization. Identify the learnings, share them with others, and determine what you need to implement to prevent the failure or mistake from recurring by raising the bar for both what you do and how you do it.

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Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

4 Questions to Prepare for Any Meeting

Preparing for any meeting these 4 questions will help you be more effective.

by Andrew Cooke, Growth & Profit Solutions

4 Questions for Any MeetingWe spend a lot of time meeting and talking with people.  Think how much of your time is spent on the phone, face-to-face, on webinars, video conferencing, conference calls, email etcetera.  It is a lot of time, and often it takes longer than we want and achieves less than we would like.

Yet for all the time we spend communicating with other people we spend remarkably little time preparing for these conversations and dialogues.  Here we look at a simple way to do this – by asking yourself 4 simple questions.  It is quick to do, only takes 30 seconds, and the benefits can be substantial.

The Four Questions

  1. What are the messages I want to convey?
  2. What do I want them to think?
  3. What do I want them to feel?
  4. What do I want them to do?

Let’s look at them each in turn.

  1. What are the messages I want to convey?

Know what your key messages are so that you can share them clearly and concisely.  In doing this be aware of how you need to adapt your delivery style so that your audience (whether it be one person or a thousand) can hear and comprehend your messages. 4 Questions for Meetings

2.  What do I want them to think?

You are looking to engage their minds and thoughts, you want them to give their full attention and consideration to what you are saying so that you can guide their thoughts

3.  What do I want them to feel?

Logic makes people think, but emotions make them act.  Your message may be logical, but if they do not personally engage with it then it will be weakened and ineffective.  If people feel the message, it is stronger, more memorable and more likely to achieve the result you are looking for.

4.  What do I want them to do?

As a result of sharing a clear, consistent message that engages the audience both rationally and emotionally what is the behavior that you want to occur? It is behavior that drives results and outcomes, not outcomes and results that drive behavior. So how do you want the audience to behave as a result of hearing and understanding your message(s)?  What is the call to action?

By reviewing these four questions before your next meeting or interaction you can customize your conversation to the situation and the audience, whilst be engaging them to take the necessary actions/behaviors as a result. Build this into your daily activities and see the difference it makes.

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Why the Work-Life Balance Doesn’t Exist

 

worklife balance X

Considerable effort has been devoted to discussing and developing “work-life balance” – the ability to achieve all that you want in both your personal and professional lives.

The problem with this is that “work-life balance” doesn’t exist!

Let me explain. Work-life balance is an artificial construct developed by people, it is not “real” and you find it nowhere in the natural world. When I started work some 30 years ago the concept of “work-life balance” did not exist, nor was it in the common parlance. Nor had it been for hundreds of years previously. The fact of the matter was that you lived and worked as did everyone else. So what has happened to result in the rise of the “work-life balance” construct.

Personally, I attribute it to two factors:

1. People’s expectations and

2. People’s mindsets

People’s expectations have changed over time. People want and expect as a basic human right the ability to have a work life which will not impinge on their personal life but which, at the same time, will also support their desired lifestyle.

Secondly, people’s mindsets have changed towards that of a fixed mentality in which the size of the pie is fixed, so the only way you can increase your piece of the pie is by taking more. As regards work-life balance this means that to improve your personal life you can only do so by reducing your efforts in your working life. This is reflected in people’s expectations.

The Flawed Assumptions

Why the work-life balance is a fallacy is because it is based on two key assumptions which are essentially flawed.

Firstly, the fixed mindset not only limits your choices, but it diminishes the individual as it reduces opportunities. Rather, there should be a growth or abundance mindset – not “either/or” in work/life but “and”, work and life. This provides you with a wealth of opportunities which you can create and select from, allowing you alternatives that you are otherwise excluded from. Here the size of the pie can be increased, allowing you to obtain more without having to diminish the remaining part of the pie.

Secondly, you only have one life not two. Tell me, do you never think or do things related to your work life when you are in your personal life, or that you never think or do things related to your personal life when you are in your work life? Exactly. So why create arbitrary lines of delineation when they actually don’t exist, and all they do is cause you stress because you never get “work-life balance”.

Life is for living, live it – don’t spend all your time wishing “I will be happy when…”. It is like trying to reach the horizon – no matter what you do you never reach or achieve it.

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How to Find People with the Right Fit

How attitude is a good predictor of prospective employee success, and how you can identify those with the right attitude for your business.

by  Andrew Cooke, Growth & Profit Solutions

Attitude - Churchill Quote

The top challenge for CEOs according to a survey from the Conference Board (January 2013) is Human Capital – the ability to develop and acquire the right people, with the right skills needed to take to the business to the next level.  But skills alone are not enough.

“Hire for Attitude, Train for Aptitude”

This is an old mantra which, if ignored, can be costly.  Companies I have worked with have found that recruiting people with the right skills can be costly if they do not have the right ‘attitude’, where there is a lack of ‘fit’.  This is reflected in a study by Leadership IQ of over 20,000 new hires over 3 years which found that 46% of the people about to be hired will fail within the first 18 months on the job. And they won’t fail for lack of skills but rather for lack of attitude.

Top 5 Reasons for Why New Hires Failed

The following are the top areas of failure (i.e., were terminated, left under pressure, received disciplinary action or significantly negative performance reviews):

1. Coachability (26%): the lack of ability to accept and implement feedback from bosses, colleagues, customers and others.

2.  Emotional Intelligence (23%): the lack of ability to understand and manage one’s own emotions, and accurately assess others’ emotions.

3.  Motivation (17%): insufficient drive to achieve one’s full potential and excel in the job.

4.  Temperament (15%): attitude and personality not suited to the particular job and  work environment.

5.   Technical Competence (11%): functional or technical skills required to do the job.

Top 5 Reasons Why New Hires Failed

The key point from this is that when new hires fail, and 46% of them will, 89% of the time it’s because of attitude and only 11% of the time because of skill.

As such, the key predictor of a new hire’s success or failure is their attitude, not their skills.  As such we need to be clear on what attitude we are hiring for. To do this requires two steps:

  • Define the Specific Attitudes – what are the attitudes that make your business different from the rest.  This is both in terms of what is good (which you want) and what is bad (which you want to avoid).
  • Adapting the Hiring & Interviewing Process – you need to makes sure that you focus on these attitudes, so adapt how you do this as appropriate.

How Do We Do This?

1. Define the Specific Attitudes

Attitudes in themselves are not visible or tangible.  Where they are made apparent is in people’s behaviours.  How people behave is an active display of their attitudes.  Their behavior should also be a reflection of the business’ core values which provides guidance to people in the business.  A good example of how the core values are made tangible, and the expected behavior (and hence attitudes) is shown below.

The US Marine Corp

The US Marine Corps has Core Values of Honor, Courage, and Commitment.  The concept of these core values runs throughout all aspects of Marine life, beginning in recruit training and continuing into combat. These “warrior ethos” provide guidance to Marines in difficult ethics situations and as a reminder to provide good order and discipline. These values are defined as:

  • Honor – integrity, responsibility and accountability.
  • Courage – do the right thing, in the right way, for the right reasons.
  • Commitment – devotion to the Corps and my fellow Marines.

US Marine Corp Values Card

 

2. Adapting the Hiring & Interviewing Process

Too often, when interviewing, we focus on prospective employees’ technical skills and competencies.  Why?  They are the easiest to assess but, as we have seen, they are a very poor predictor of the success or failure of a new employee.

When you look at jobs being advertised the experience, skills and qualification that are detailed it can be seen that the business advertising the position has the expectation that a perfect candidate will apply.  This is about as far from reality as you can get.  Realistically, there is no ‘perfect candidate’ and, as such, there can only be attitudes that are right for your business – they will never be perfect.

Tests for Finding the ‘Right’ Attitudes

1.  High Performers’ Test – what are the distinguishing attitudinal characteristics of your top performers.  List up to 10 responses that reflect your business.  For example:

  • They own the problem.
  • They always see problems as opportunities.
  • They are great listeners and communicators.
  • Etcetera.

2.   Low Performers’ Test – what are the distinguishing attitudinal characteristics of your low performers.  List up to 10 responses that reflect your business.  These are not just the opposite of the attitudinal characteristics that make a high performer. For example:

  • They avoid responsibility and are quick to blame.
  • They focus on themselves rather than others.
  • They do the bare minimum work required.
  • Etcetera.

Once you’ve got your two lists, conduct a quick assessment to make sure every point is on target. This can be done by asking yourself the following two questions about each attitude listed:

  • How does this attitude add value or competitive advantage to this organization? (If the attitude brings no benefit to the organization, it doesn’t belong on the list).
  • Who cares about this attitude? (If the attitude doesn’t bring benefit to your customers, it doesn’t belong on the list)

Doing this provides insight into both what you want and what you don’t want in the terms of attitudes and the associated behaviours.  It then helps you to prepare for the interview by focusing on how they respond to questions around both these areas.  However, how the questions are phrased is just as important as what the question is.  You need to develop the question with the kind of response that you are looking for in mind.  But that is a separate article.

Summary

In summary, be clear on what values, attitudes and behaviours you want in your business, and which you want your new employees to exemplify in what they do and how they do it.  Get clarity by distinguishing the attitudinal characteristics of both your top and low performers – this helps you to identify what you want from a potential employee, and what you don’t want.  Around this then adapt your interview and hiring process to ask the kind of questions that will help you elicit answers which will help you determine the prospective employee’s values, attitudes and behaviours.  Take this into account when you look at their technical skills, as it is their attitude that is a predictor of their skills – not their technical skills and competencies.

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Which Would You Rather Be – Efficient or Effective?

Which would you rather be – efficient or effective?

by Andrew Cooke, Growth & Profit Solutions

Efficiency is doing things right; Effectiveness is doing the right things.The focus for many businesses today is on the short-run, getting more for their dollar and squeezing more out of their resources.  Productivity is the name of the game.  Although this is laudable it has focused businesses on the short-term and distracted them from the long-term.

Efficiency & Effectiveness

Efficiency and Effectiveness are two competing yet complementary approaches to business.  For the purpose of this article these are defined as:

Efficiency

This is ‘doing things right’ and concentrates on tactics focusing on achieving short-term results.  It means doing things better and quicker.

Effectiveness

This is ‘doing the right things’ which is critical to the success or survival of any organisation. Strategy is the key, not just any strategy, but one that is well constructed and then executed.

How these two factors interact impact the business and an overview of these interactions can be seen in the Efficiency/Effectiveness matrix below.

Efficiency/Effectiveness Matrix Efficient vs Effective Matrix

THRIVE: Highly Effective & Highly Efficient

Businesses that pursue the right strategy efficiently thrive. They can meet strategic targets earlier than anticipated, and can go on to meet more challenging strategic targets, so as to sustain their ability to thrive.

SURVIVE: Highly Effective & Inefficient

Many businesses ‘survive’, they show potential but never attain the growth that they should be capable of.  This can be due poor management or inefficient practices.

DIE SLOWLY: Ineffective & Inefficient

The business lacks a clear vision of what it is trying to achieve, and so lacks the right strategies or has weak strategies on which to execute. The lack of clear strategies means that the short-term plans and tactics are lacking.  As such the business delivers poor results for several years and are in a state of steady decline before the business eventually ‘dies’.

DIE QUICKLY: Ineffective & Highly Efficient

Here the business is executing very well, but on the wrong strategies which drive it into a state of rapid decline.   The business leaders are not learning from their mistakes, or are not aligned with the market’s realities, and by doing so negatively compound the effects of their wrong strategies.
What Do You Do Next?

For businesses to thrive they need to get both their efficiencies (tactics) and effectiveness (strategies) aligned – have the right direction and the right actions to help you bridge the gap between where you are now and where you want to be.  Look at what you are doing and where you are going  – review your assumptions, get an objective perspective, and continually review and improve to reflect the realities  of your business, marketplace and the business environment.

So what are you going to do? And will it take you in the right direction? And are you effective and efficient in what you do?

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How Middle-Management is at Risk

Why middle-management is essential for business survival and the risks you run of if you lose or alienate them.

The Challenges of Middle ManagementMiddle management.  Often described as the ‘backbone’ of the company, they provide the continuity across the business and the key people for getting things done; communicating and resolving problems up, down and across the line; translating strategy into action; leading key operational areas; have considerable expertise and experience within the business; providing linkages between senior executives and front-line staff; and are implementing and responding to change.

As such, middle management is crucial to the on-going success and survival of the business.  Senior executives are starting to appreciate their role and the impact of their work, but at a time when it becoming harder to develop and retain middle management.

Middle Management Stress & Turnover

In a recent poll by Lane4 in the UK (July 2012) more than 90% of workers believed that the vast majority of workplace stress was falling on middle management, and two in five (39%) of middle management reported that they were under severe stress.  As such, many mid-level managers are dissatisfied and would like to leave their current organization.   In harder times it is those middle managers who are your best and who perform well who find it easiest to find new roles and new opportunities.

This has several impacts on your business: firstly, the business will lose its top middle management talent, this will put an increase burden on those who are left behind; secondly, the exodus of mid-level talent seriously compromises the business’ future  leadership pipeline and its ability to have the right people in the right place to enable the business to grow and develop in the future; and finally those mid-level managers remaining will be the low-performers, who are more likely to be disengaged and who have “quit and stayed”.  All of this means that business’ ability to survive and thrive – especially in challenging times – is seriously compromised.

The Impact of Mid-Management Turnover

One of the current major growth challenges facing CEOs is the lack of key talent to enable them to grow the business.  This is exacerbated with the turnover of good mid-level manager as it compromises the business’ ability to execute the CEO’s strategy and drive results and outcomes.

Furthermore, the costs of middle management turnover are also high.  A common rule of thumb is to assess the cost of a middle manager to the bottom-line at one-and-a-half to two times their annual salary.  Assuming an average salary of $125,000 then this could mean $250,000 off your bottom line.  Alternatively, look at it in terms of the extra revenue you need to achieve just to stand still – assuming your net profit is 10%, then that is a further $2.5m of revenue required!

Practically, I think this heuristic is conservative.  Once you take into account the corporate knowledge, experience, expertise and insights that have been developed over a number of years you are looking at the loss of a very valuable contributor.  Furthermore, to recruit someone who is an equivalent is both difficult and expensive to do.

Causes of Mid-Management Stress

Middle management is under increasing stress for a number of reasons.  They are the people who have to lay off staff when the company downsizes (or more cynically “right-sizes”), in an environment of poor morale, having to do more with less, with little or no increase in salary or benefits whilst being responsible for more, a reduced opportunity for career progression, dealing with people who like them are worried and scared, and frequently being seen as an “unwanted layer” and at a high risk of being laid off themselves (often having had to lay off others first).

So what do we do?

Dealing with the Problem

In challenging times we need to maintain our middle management.  In economies which are struggling the senior executives need to work with and engage with their middle management even more closely.  It is at the mid-levels that the most important projects are, and reducing their resourcing is nigh on suicidal.  If the level of responsibility for middle management is extended, and their capacity and resources is limited or reduced, then you need to invest in their developing the necessary capabilities.  If this is not done then senior management will be faced with a “frozen” middle management compounded by cycles of low morale and low engagement.

Companies need to be resilient – leaders need to provide clear direction, they need engage the middle management and rebuild trust, and in doing so enable them to engage with their reports and teams in turn.  If you cut out the middle, then you are just left with the head and tail of the business – unable to do the necessary work effectively, and a corpse all but in name.

It may seem counter-intuitive but now is the time to invest in your middle management – this will pay off in terms of loyalty, results and longer-term growth.  Treat your key people as an investment, not a cost to be cut but people to be valued, developed and through whom you can achieve leverage and significant returns.

So what are you going to do?

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How Trust Drives Results

What do high-performing organizations focus on as opposed from low-performing organizations, and what differentiates how they do it?

Businesses are under pressure, there is no doubt about that – but what are businesses focusing on and why in these difficult times?  A recent report from Interaction Associates (Building Trust in 2012) found the top 3 priorities for business to be:

  1. Top line/revenue growth
  2. Profit growth
  3. Improvements to Productivity and Efficiency

No surprise here – but what is interesting is the way in which high performing organizations (those whose net profit grew more than 5% over the last year) and low-performing organizations (those under 5% over the last year or shrank) approached this.

High performing organizations focused on achieving this by focusing on the people aspects of the business, these include:

  • Customer loyalty and retention
  • Attraction, deployment, and development of talent
  • Business agility (speed, flexibility, adaptability to change)

Low-performing organizations focused on:

  • Improvements to productivity & efficiency
  • Cost reduction/becoming more efficient
  • Business agility (speed, flexibility, adaptability to change)

The focus here is more on the systems and processes to drive results and create agility, rather than having the right customers and right people to drive both revenue and profit growth (as with high performers).

So what does this mean?  Greater growth and profitability is driven by people. Systems, process improvements, and cost reductions can contribute towards growth – the only problem is that there is only so many times that you can cut the lawn before it starts to die off.  Conversely, focusing your attention on business and resources on the right customers and talent, rather than squandering it in a shotgun approach, enables you to grow the business with no limit on the upside.  For this, you need to inspire trust.

The key question then is this: are you trustworthy?  More to the point do your customers and staff think you are trustworthy?  What do you think you are – honestly?  And how would you assess how trustworthy you are? Share your thoughts here.

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