Sustainable strategy

Just did a talk at Rasmussen College about strategy for sustainable growth, and wanted to share a few highlights from it.

A sustainable strategy has to be one that wins - consistently, now and into the future.  Companies usually do that through a primary emphasis on one of three ways to compete.

• Product superiority (think Apple or Bose) - and that brings some choices about what sort of people they hire, where they spend resources, where they invest and focus.
• Price (think WalMart) - and that also leads to choices about human resources, investment in systems, attention to their supply chain and logistics.
• Customer Intimacy (think very high-end retail, like Macy's or Nieman Marcus) - where they remember you, know what you want before you do, and go overboard with attention to the customer.

Companies can't ignore any of these, but success comes sustainably when the focus is on one, and the others are sufficient. 

Sustainable strategy has to be reality-based, and more realistic assessments mean better strategy.  A Strengths / Weaknesses / Opportunities / Threats (SWOT) analysis - one foundation of strategy - has to be realistic to be any use at all.  A Political / Economic / Society / Technology (PEST) analysis is an environmental scan that has to be fact-based and current - and repeated at least a couple of times a year.

Sustainable strategy has be be flexible - a plan that doesn't take into account the most likely contingencies is brittle and fragile, not sustainable.

Sustainable strategy takes into account the human resources - how the organization's talent is engaged, retained, developed and rewarded.  A strategy that doesn't consider this is extremely vulnerable to ugly surprises when top talent leaves.  This year, as the economy improves, more companies run serious risk here than recognize it.

Sustainable strategy also builds in continuous process improvement.  Operational excellence isn't a strategy by itself, but without examining and optimizing processes, organizations make the execution of strategy harder and costlier than it needs to be.

More to come on this, and I may be repeating the talk (with its take-away tools) in another venue soon.

Gitomer's Wrong about "Basics" - Why that's a straw man

I read various "sales gurus" on a regular basis, mostly to see if there's anything new under the sun, and most of the time, there isn't.

Today, though, I have to disagree with one of the best known of them, Jeffery Gitomer, who writes that "the basics are over!"

It's a semantic cheap trick -labeling what's wrong and manipulative about selling (like cold-calling and the tie-down and other closes) as "back to the basics" and setting up his approach as "fundamentals" instead.

Of course there are many traditional practices in sales that don't work well now, if they ever did. 

Cold calling a large list of strangers with no idea who they are, for instance, is just bad practice.  It reliably does several things:

• Annoys most people getting the calls
• Hurts branding of integrity or professionalism
• Makes salespeople asked to do this hate their jobs

Unfortunately, it probably works about one time in a thousand, so that variable reinforcement principle that kept Skinner's rats pressing the bar and keeps people playing games of chance keeps the cold calls happening.

Instead of cold calling many, a better idea is to "warm call" those you have reason to believe may have a problem you can help them solve.  That's basic, today, and it was basic years ago.  Cold calling isn't a basic, it's just a bad idea.

Closing is another practice that's just very outdated.  It doesn't work, and instead, it

• Manipulates the buyer into the decision you want
• Undoes trust by exerting manipulative pressure
• Betrays a seller attitude that they buyer is "prey."

Like cold-calling, it probably works just often enough to keep some people trying it.

Instead of closing, the fundamental attitude of helping the buyer make a good decision, based on really understanding the buyer's wants and needs and proposing real help, means that there aren't any tricks to selling. 

Selling is a high-integrity activity of discovering a genuine need, and helping the buyer who has the need get it satisfied. 

The approach that Gitomer mis-labels as "back to basics" of pitching at large numbers of strangers, arguing objections away, and tricky closing techniques just doesn't work.  It doesn't fit the way people want to buy today, and it doesn't fit how most entrepreneurs and salespeople can (or should) sell.

That's not "back to basics."

This week, the sales micro-seminar series begins again, with "Filling Your Sales Funnel" - and it's about what really is basic and fundamental about how to sell with high integrity. 

At the micro-seminar, people will learn (or re-learn) some fundamentals about how to identify potential new customers, how to research whether a need probably exists and who has that need, and how to start the discovery process and get acquainted with potential new customers.

When people sell to meet needs, after understanding those needs and the full situation of the buyer, the only question necessary to confirm commitment (NOT "close"!!) is: "What do you want to do now?"

Why 85% of Sales Reps Fail as Sales Managers

In the last blog, I quoted Dave Stein of ES Research who said that he found that one year after promotion of a top sales rep to sales manager, only 15% were still with that company. 

This time examines some of the reasons they leave (by their own will, or by invitation).

Selection Mismatch - The very same factors that can lead to big success in sales become frustrations or liabilities on promotion to sales management.

One person I interviewed put it very plainly - "When I became a sales manager, everything I enjoyed about my job was gone, replaced by stuff I hated to do."

 Impossible Expectations - Sometimes Reps-Made-Managers are put in a turn-around situation, a crisis with causes unknown or unacknowledged, sometimes beyond their control.  And miracles are expected, quickly.

No Preparation or Support - Sometimes companies think "How hard could it be?"  (Even asking that question usually foreshadows a disaster of unforeseen difficulties!)  When there's little understanding or respect for the hard, skillful work that leading and managing others is, people are expected to just "pick it up" somehow, on their own.  Very few do.

Politics and Interpersonal Stuff - When Reps-Made-Managers are suddenly in charge of their former colleagues, it's tricky.  Jealousy and resentment can turn into passive-aggressive behaviors, even outright sabotage.  Sometimes very good reps who were "passed over" (or who don't want to work for the Rep-Made-Manager) take their careers elsewhere.

Please comment - has this hit the main reasons that sales reps usually fail when they are annointed to be sales managers?  Have I left any big failure factors out?

Next blog - If all these things lead to failure, how do any succeed?

What do the 15% that survive - or the even smaller percentage that excel and enjoy it - know or have that companies can look for?

Strategy Communication - Avoiding "Same Old, Same Old"

When I spoke at Minnesota Manufacturing Group earlier this week, there were a lot of really good questions.

One was how to avoid the reaction of "Same old, Same old" - when the strategy is met with eye-rolls, muttering, and the attitude "This, too, shall pass" or "We can just wait this out - no need to change a thing!"

The reason so many have seen this reaction is that it works.  When an organization's leaders don't have the guts or genius to create a meaningful strategy, or lack the discipline to pick one and stick with it until it works, strategy can easily become a "flavor of the month."

Why's that so bad?  Well, for one thing, it increases organizational cynicism, a highly toxic force in organizational life.

For another, it stimulates or re-inforces lack of confidence in the leaders, since creating strategy, communicating it in ways that matter, and leading its execution is some of the most important work leaders do.

Especially when times are uncertain and challenging, communicating the vision in a way that reaches people's hearts, communicating the strategy in a way that makes sense - again, and again, and again - is a leader's most important work.

So, how to avoid the shrug reaction?  Several key points -

Reach hearts with a high goal.  The vision part needs to be a worthy cause, something that engages employees by seeing that this work makes a difference.

Challenge minds with an ambitious target.  People are motivated by a goals that are not too easy and not impossible.

Engage people with goals and problem-solving.  At all possible levels, set goals that align with and contribute to the strategic plan, so that everyone can see their part in achieving it.

Over-communicate the vision and plan, at all times, to all stakeholders.  When you think you're wearing it out, you might just be getting started!  Great executives can always communicate the objective, scope, and advantage of the strategy - and do!

Connecting strategy and metrics - why, and how - dashboard quality

Did a talk this morning at Minnesota Manufacturing Group - the "7 Mistakes" talk from July, slightly revised.

Tremendously experienced and sharp group, asked some great questions - like how to measure and find the discipline of execution. like how to keep strategic plans from being perceived as "same old, same old," like the time horizon of long-term plans, like how to optimize ownership and accountability at the right levels.  Reflecting on the answers will take several blogs!

Some organizations do carry their strategic plans over from year to year.  If it's working, that's great.  But the question is how do you know it's working, and that gets to metrics.

A strategy without a dashboard is almost useless - and creating the dashboard is where the first hard work comes in.  There should only be a few metrics, since humans can focus on a few things, especially for a prolonged period of time.

And if there's only a few, then they'd better be good ones!

What makes good dashboard metrics? 

They're forward-looking.  On sales, for instance, you need good information about what's in the funnel (or pipeline) several months out, with appropriately cautious metrics that there won't be many surprises.

They're timely.  On customer satisfaction or employee experience, an annual survey is too long to wait to find out if there's a problem!  Better to have smaller samplings more often to keep a finger on the pulse so that corrections can be made when needed.

They measure what matters, rather than what's easy or traditional to measure.  When a call center realized what pressuring to reduce time-on-call meant for customer satisfaction (strong negative correlation), they switched to randomly sampling customer satisfaction, without pressuring agents to get off the phone quickly.

They're trustworthy.  The old adage of "garbage in, garbage out" is as true today as when the phrase was first used in the 70's - you can't make good decisions on bad data.  If a key data source is compromised, leaders need to clean it up or find other data to inform the same objective.

They're strategically consistent.  One person from Minnesota Manufacturing Group told the story of an organization he knew that measured salespeople on gross revenue, and production on cost-savings.  Can you guess what these competing metrics created?

Next strategy blog - how to avoid "same old same old"

Better at Consulting Than Selling

Preparing for the micro-seminar on prospecting, I realize that I'm not much of a salesperson - and that's OK!

One of the ways I work with clients is to teach them to sell - So don't I have to be a super salesperson myself to do that?

Does Rafael Nadal's tennis coach need to be a better tennis player than Nadal?

No, because playing great tennis is not what he does.  The coach's skills are knowing what "great" looks like, how the timing works on Nadal's serve, how he's managing his attitude from moment to moment, what mistakes he tends to make (and there aren't many!), how to get his attention and give him important feedback at just the right moment.

In the last two years, I've worked with several clients who are better at selling than I'll ever be.

What I've helped them do - in some cases like second nature, automatically - is do better homework, figure out their target markets more precisely and frame their whole approach around client needs, not their product.  They know how to make a good first impression, they know what to do next - and why - at any given moment.  They ask better questions, and they're really great listeners.  They help their customers find value in what they offer, from the customer's perspective, without pushing. They also know when to ask for the business, and when (and how) to ask for referrals. They get results!

Their skill is selling.  Mine is helping them get better at it, as their advisor and coach, working from the sidelines, not the field.

Why strategy matters in uncertain times - From Today's Radio Show

Today I was on Peter McClellan's radio show on Twin Cities Business Radio, and we talked about why strategic planning matters most when things are most uncertain.

(If you'd like to hear the whole show, here's the link:  http://thinkonangus.podomatic.com/player/web/2011-10-10T08_38_40-07_00)

As for why an organization would bother with strategic planning now, in the fourth quarter, with all the uncertainty and doubt -- I believe, as many have said, that the best way to predict the future is to create it yourself.

I think the reason that so few companies devote the sort of careful thinking and attention to strategy is that they're overwhelmed.

Overwhelmed by busy-ness, with just too much to do.
Overwhelmed by uncertainty, not knowing what new bad news will come next from the economy or politics.
Overwhelmed by fear of the future, believing it could all fall apart.

But I'm finding with current clients that attention has power.  When we focus on the future we want, and hold that focus long enough for it to become a plan, it starts to take on substance.  With more attention and a bit of discipline to stick with the planning until it's done, it becomes a guiding force.

And when the strategy is set up, everything actually gets easier.

Sometimes the most important information from the process of prioritizing and making strategy is deciding what blinders to wear.  What will you deliberately ignore, that would otherwise frustrate or distract you?  What opportunities will you pass up, so you can focus on what will get you closer to the vision you want?