Focus Redux!

As online marketing continues to evolve at an exponential pace, many of our customers have become increasingly mesmerized by the sheer number of markets and geographies that have opened up as potential destinations for their products or services. They have every reason to be overwhelmed as the number of opportunities is indeed compelling. That being said, business leaders must still remain cognizant of the fact that regardless of the latest trends or the promise of riches that they extend, focus still wins.

It has always been the case that as companies get a little taste of growth and success, they begin to fantasize about being the next great story on the front of the Business Week, Wired or Entrepreneur magazines. Now with electronic commerce, online advertising and social media marketing as potentially powerful tools at their disposal, executives are jumping at the opportunity to incorporate these tools into their attack and in turn expedite their company's path to glory.

Unfortunately, a funny thing happens along the way; most of these executives (and by extension, their direct reports) become consumed with these tools and ultimately tend to get distracted from maintaining a tight focus on the target markets that brought them success in the first place.

The reality is that customers always have and always will respond more positively to the vendor who specializes in something that is relevant to their unique needs (i.e. industry, geography, etc.). The "trick" with online marketing is to make sure that when and if you do choose to embrace this world, that you do so in a way that remains true to the fundamentals of your business, especially the focus that got you to where you are today.

The Reseller Sales Model

Participating in a Manufacturer/Distribution/Reseller model can be one of the most challenging selling environments. The manufacturer wants exclusivity from their Resellers, but won’t extend exclusivity to the Resellers in return. Distributors break bulk and extend credit, offering little more in terms of value for their margin. And the Resellers, they carry multiple manufacturer lines and don’t fundamentally believe that one manufacturer has the solution to every problem. This tension creates for some interesting selling dynamics.

From the perspective of the OEM (original equipment manufacturer) who owns the R&D, manufacturing and distribution of the product, they view the Reseller’s motives and total sales engagement with skepticism. Somewhat analogous to the feelings experienced by the marathoners in the 1980 Boston Marathon where Rosie Ruiz crossed the finish line shrouded in suspicion. One minute she is with the runners, next minute she’s gone, fast forward to the finish line and she is raising her hands in victory as if she was there the whole time.

In a selling opportunity, Resellers who represent multiple Manufacturer lines are balancing their responsibility for objectivity to the client, while on the other side trying to balance their multiple partnerships and most recent commitments to any one Manufacturer. Because of the conflicted role the Reseller must play, they tend to wander in and out of the selling engagement with the OEM as they try to placate both parties.

To the client, they want to represent the best solution while defensively blocking any other competitors who may represent a similar or a different Manufacturer solution. The competitive threat creates a certain “hedge your bets” behavior that again from the OEM’s perspective looks like disengagement from the selling process. Each Reseller wants to win regardless of the solution, therefore potentially reducing their loyalty to anyone OEM.

To the OEM, it feels like they can never gain exclusive support from a Reseller throughout a sales cycle. To the Reseller, they have to represent the interests of the client and the OEM, while guarding against any flanking competition. For this reason, the Reseller/OEM selling relationship must be clear. Early, open, often and honest communication between both parties is a MUST.

Well defined rules of engagement for the selling motion, pre, progressive and post-sales must be clearly set forth. A Sales Engagement Matrix which outlines the key selling steps and interlock between OEM and Reseller must be in place. Dedicated Sales Liaisons must be employed between both OEM and Reseller for all of the elements of selling – Lead Generation, Collateral, Events, Pre-sales Technical Solution support, Solution Selling, Pricing and Sales Logistics. And lastly, a rationalization of Manufacturer solutions carried by a Reseller - think a 3 circle VEN diagram at the most, where there are competitive and collective solution benefits and technologies.

Three critical questions rarely addressed in the diligence process

Having been on been on both sides of the fence through multiple due diligence processes (i.e. both a buyer and a seller), I can state with confidence that more often than not, far too much time is allocated to redundant financial analyses and far too little time is dedicated to getting answers to a handful of questions that ultimately define the success or failure of the investment and/or acquisition. The reality is that 95% of what needs to be known about a company's current financial capacity is uncovered within the opening forays of the diligence process, regardless of whether that diligence was done by an individual investor or a small army of analysts employed by a private equity firm.

This is not to say that capable financial analysis is not a fundamental component of an effective evaluation because it definitively is. An investment opportunity that cannot at the very least illustrate a healthy return on paper need not be considered any further. I would suggest, however, that if more time and resources were focused on the "not-so-obvious" factors influencing a company's future performance and capacity, there would be a significant increase in successful corporate investments. While there are a number of these not-so-obvious elements to consider, our experience has been that the following three questions usually solidify a prospective company in the hit or miss category:

1. What is the sustainability of the opportunity pipeline? - Most company's can paint a pretty picture that is represented by a snapshot in time. The true measure of a company's medium and long-term capacity will be uncovered once you have assessed its ability to generate and replicate an opportunity pipeline that will generate the type of annuity that aligns with your valuation.
2. How capable are the critical members of the management team? - While biographies will provide you with an elementary history of the individuals running the company, nothing can or should supplant comprehensive interviews that will allow you to form your own assessment of whether or not the existing team is capable of delivering the results on which you are depending.
3. What role, if any, do external parties play in defining the company's direction? - A Board of Directors, a Board of Advisors or a significant shareholder can all exert tremendous influence on a company's management team. It is imperative that you gain some reasonable insight as to the likelihood that a third party may alter the strategic direction of your new investment.

Interest will often be piqued when a company's financials align with your investment metrics. However, positive answers to these questions should provide you with the confidence that your investment will actually deliver on these metrics weeks and months after the diligence process is complete.

The need for a new era of "time management"

The phrase "time management" draws slightly more than 9 million hits on Google. By today's standards, that is surprisingly low for what in the late 80's/early 90's was one of THE catch phrases for personal and professional development. So what happened? It's not like the pace of life has slowed at all. In fact, by most people's account our daily responsibilities have increased by a factor of ten over the past twenty years.

One popular theory is that people have become significantly better at multitasking over the years (BTW, the term "multitasking", not long ago unrecognized by Webster's, now gets more than 17.5 million Google hits on its own). Personally, I think this theory is incredibly inaccurate Yes, there are indeed a handful of people who have been blessed with the ability to capably complete three or four things at once but my professional experience is that the huge majority of us do not possess anything resembling this capability. What makes matters worse is that with all the options, activities and "must-dos" that confront us in today's world, everyone is forced to assume the role of multitasker on a daily basis. Perhaps worst of all, a large number of us (i.e. most) have convinced ourselves that we have become very effective "time managers".

My professional prediction is that time management consulting is going to have a massive rebirth over the coming months, particluarly as people rediscover that time management is not actually another "must-do" activity to add to their lists but rather is a philosophy that should act as the framework from which all other decisions are made. While we wait for the avalanche of new time management gurus to populate the commercial landscape, may we offer the following advice:

1. Be careful what you ask for... - The "social media" movement has created the temptation to connect and reconnect with everything and everyone and to be sure is one of the most time consuming activities you or your company could ever engage in. Before you engage with the masses, be sure you that you understand what is involved, what benefits you or your company derive from participating and most importantly, what activities you are abandoning in order to make room for your new priority.

2. "Map" out your time commitments... - Whether you use one of the many mind map software applications that are commercially available or a simple piece of paper, there is no better exercise to go through than that of creating a visual representation of everything that places demands on your time. Ironically, most people will avoid doing this for fear of the decisions they will have to make as a result of accepting the fact that there are only so many hours in a day and thus we cannot do it all.

3. Simply learn to say "no"... - This is one of the most oft-used time management cliches in corporate history but it is also the concept that is ignored more often than all others combined. Until you are prepared to accept the fact that not every one of your scenarios "...is different because...", you will have limited to no ability to gain control of your workload and in turn sustain the work-life balance that is important to you, your family and everyone else that is a part of your life's equation.

Selling Excellence: You need more than just "people skills"

That which separates the good from the great is often a minute detail that one refines and perfects through years of trial and error. However, in the world of professional selling, the gap between sales competency and selling excellence is very large indeed.

While the basic science of selling is not overly complicated, the art of implementing the full complement of skills required to be an exceptional sales professional is far more complex. To develop into one of the "top performers" that companies are willing to pay top dollar for, a sales professional must consider at least two realities:

1. Beyond following a proven sales process, the elite sales professional always possesses a critical balance of social skills, technical expertise and situational knowledge. To be lacking in any one of these areas will ultimately prove disastrous over time and more often than not, will really hurt you when the sales cycle becomes increasingly more complex and lucrative.

2. Like in any profession, the most effective way to perfect your craft is to engage a "coach" who can analyze and correct your approach in real time. Unlike traditional sales training where the student is required to recall and deploy learned skills at a later date, sales coaches work with sales professionals behind the scenes during live sales cycles and look to perfect your approach when it matters most.

The hypercompetitive landscape in which sales professionals now operate demands that you bring more to the table than just "a way with people". If you plan on making a long and successful career out of the sales profession, make sure you invest the time to develop the complete portfolio of skills required to be an elite performer.

Questions to ask when your sales team misses their targets

In 2008, 58.5% of sales people across North America achieved their sales quota, leaving 41.5% that didn’t make the grade (source: 2005-2009 CSO Insights Reports). And while every sales person should be personally accountable for the achievement of their quota, it is naive not to consider the organizational factors that contribute to the underperformance and resulting turnover (22.5% according to the 2009 CSO Insights Reports).

Do your sales people know what to sell? Do your sales people know how to sell it? Do your sales people understand their target marketplace and are they experts in the business represented by the vertical markets they serve?

Knowing how to sell a product or service isn’t as simple as understanding the product data sheets, but rather it’s understanding the true value proposition of the product or service. How does the product or service materially affect their client's business? What are the quantifiable examples where your clients have received material benefit from the use of your product and service? Do your sales people have access to and fluency with these examples?

What has your marketing department provided in terms of competitive information? What are your competitors' go-to-market strategies? What are their competing value propositions? What is their differentiated value for winning deals?

Are you coaching the right segment of your sales staff? 20% of your sales staff, your top performers, are typically driving over 60% of your revenue. What tools do they have at their disposal to drive additional revenue? Does it make sense to top grade your sales team and re-invest your resources in sales support (administrative or inside sales capabilities) to assist your top performers?

These are just a few considerations that must be made in pursuit of achieving your revenue targets, lowering your turnover rate and ultimately building a high performance sales team.

When does it make sense to hire a consultant?

Other than "what does your company do?", the most common question that I am asked with regard to our practice is "when do people hire you?". While there are certainly a plethora of reasons why businesses engage professional consultants, it has been my experience that companies are primarily looking for one of three things when they approach our organization:

1. Specific expertise that is only required on an ad hoc basis - Whether it is a need for a strategic presentation (i.e. investors, etc.), an operational review (i.e. efficiency measurements, etc.) or professional facilitation (i.e. executive meetings, etc.), seasoned business consultants can provide world-class solutions on relatively short notice.
2. Strategic resources that can backfill a role in transition - Regardless of whether the leadership is required to develop the skills of internal resources (i.e. up-and-coming executives, etc.) or required as a stopgap while the company searches for a new candidate to fill an executive position, senior consultants can buy you some much-needed time.
3. Tactical capabilities to assist in flattening the demand curve - There are major fluctuations in supply and demand for every business and both the highs (creating a scarcity of resources) and the lows (resulting in hiring freezes) create major obstacles to generating relatively stable financial results. Consultants are resources that align well with variable demand.

In a perfect world, companies would be able to attract and hire full-time employees to fulfill each and every one of their business requirements as they arose. In the real world where uncertainty and Murphy's Law reign supreme, the need for capable business consultants to augment your team has never been so acute.

To invest or not to invest, that is today's question

Indeed the raging debate over the past eight or nine months for nearly every commercial entity across the globe has been centered around where and how deep to make financial cuts in order to survive the current economic downturn. However, one could (and possibly should) argue that perhaps the better questions to be pondering are how and where to make strategic investments.

Having led both private and public companies, trust me when I say that I do fully understand the complexities involved here. A decline in the demand for your products or services will definitively result in a drop in revenues and inevitably bring increasing pressure from the external entities that influence your organization; your investors, your customers, your Board of Directors, etc.. This pressure can be all-encompassing and will almost assuredly involve frequent (i.e. daily) assessments of your personal performance and career standing.

The decision to do anything other than to divest along with 95% of today's business community is both difficult and complex, but I personally believe that the advantages to overcoming this pressure and investing forward far outweigh the burden of the pressures that we are ultimately paid to absorb. Among other things, making strategic investments in tough economic times allows for the following:

1. Your company can acquire relevant resources and materials at market prices that are at unprecedented lows.
2. Your business will be positioned perfectly for the inevitable economic rebound that other businesses will constantly be one step behind.
3. Your organization will have the satisfaction of knowing that it is not contributing to the vicious cycle of divestment that will undoubtedly prolong the current economic downturn.

As for the second guessing that always accompanies a journey down a road less traveled, be sure to document and communicate the logic and projected returns associated with your investment strategy. Keep in mind that most people inherently want to invest in the future but in economic times like these, they will require a little more convincing if they are to break from the general tendency to retract and retrench when the going gets tough.

Related readings:

http://en.wikipedia.org/wiki/Virtuous_circle_and_vicious_circle ("vicious circle" definition/reference)

http://www.financialpost.com/story.html?id=1311004 (investment in technology saves time, increases productivity)

http://www.americanprogress.org/issues/2008/12/productivity_report.html (corporate investment fuels growth)

Value Proposition - The new language of differentiated selling

It seems everyone these days is talking about their company's "value proposition", but few organizations have truly changed their selling approach or language to reflect a new, differentiated selling model.

It was E.K. Strong in the early 20th century that brought us Feature/Benefit selling. And while Mr. Strong was absolutely correct, features are without context until you equate them to a benefit that's meaningful to a prospective buyer, Feature/Benefit selling doesn't fully represent the convolution of the complex selling environment or product offering.

It is my belief that the Value Proposition sufficiently represents all of the significant selling steps in a relatively simple selling language that differentiates product and company offerings. A Value Proposition is a construct. Its made up of three key elements; feature/function/benefits of the solution, favorable points of differentiation, and lastly the resonating value.

Feature/Function Benefits (FFB)

- These are what we have come to rely on as professional salespeople when asked about our product or service offering. These are the characteristics of the offering, the differentiated features and functions but always couched in a context of benefits relevant to our prospective client.

Favorable Points of Differentiation

- These statements and examples represent the FFBs in the hands of our organization. What do we do DIFFERENTLY with the FFBs versus our competitors? How does our frame of reference and experience related to the deployment or integration of these solutions differ from our competitors?

Resonating Value

- What are the quantifiable benefits our clients have received as a result of the FFBs, in the care and operation of our company. What were the efficiency gains, effectiveness improvements, dollar savings, etc.?

So, the next time someone asks you for your value proposition, remember to ask yourself one important question: "Did I build a construct that differentiated my organization?"

The importance of shared vision

For today's leaders, the past year has presented more challenges than many of them have experienced in their entire careers. These challenges have been relentless for many leaders as they have attempted to navigate their organizations through the intense economic negativity and uncertainty we have all witnessed in this past year. Leaders are being tested as they never have before; some are not able to rise to the new challenges, but some continue to succeed at all levels. What is the difference from one leader to another? Although there are many answers to that question, my belief is that one of the most important elements of sustaining leadership excellence is the ability to create and nurture a shared vision in an organization.

An organization is a collection of individuals. Therefore a significant challenge in leadership, and one of the most critical, is how to create a shared vision amongst all those whose passion, skill and commitment is required for an organization to be successful. This shared vision must ensure the passion and energy of this collective group is directed and sustained towards a common desirable future. As Senge (2006) reminds us in The Fifth Discipline; The Art and Practice of the Learning Organization:

A shared vision is not an idea. It is not even an important idea such as freedom. It is, rather, a force in people’s hearts, a force of impressive power. It may be inspired by an idea, but once it goes further-if it is compelling enough to acquire the support of more than one person-then it is no longer an abstraction. It is palpable. (p. 192).

Creating shared vision is the domain of leadership, not the domain of just the individual leader, but the collective leadership that exists within the organization.

To create the vision of a company, emotionally intelligent leaders need to move beyond a solo scrutiny of an organization’s vision to drawing on the collective wisdom of followers:

Side by side with the rest of the organization, leaders co-create the vision that will serve to rally and energize the group as a whole. Involving people in a deliberate study of themselves and the organization-first by looking at the reality and then at the ideal vision-builds resonance and sustainable change. (Goleman, Boyatzis, & McKee, 2001, p. 206).

The responsibility of leadership is to foster the ongoing pursuit and continued development of this vision, managing the creative tension that exists between it and current reality. In today's uncertain times there is both challenge and opportunity. The ability to meet the challenges and take advantage of the opportunities that arise is, to a great degree, dependent upon how well your organization follows a shared vision that encourages everyone to work in concert to create the powerful force that can drive success.