Decision Process Management

Many deals are lost because the sales organization was either unaware of the true decision process or overconfident of their value in this process. Often sales people get trapped in the notion that the decision process is more or less linear. There is a hierarchy of groups or individuals, which ultimately report to single person with total authority over the decision. This is very seldom true. There is a person who has been given the responsibility to sign the contract. That person may have tremendous leeway in making the ultimate decision. But most of the time the one given the responsibility to sign the contract does not feel they have the total authority to sign it. Most of the time responsibility and authority are two totally different processes.

To get to the bottom of this complex transaction, one must first understand the nature of the business problem. As an example, the IT manager who is trying to buy a new processor has been given the specifications, budget and responsibility to acquire the needed resources. But he or she does not own the business process that is driving the need. The value the IT manager puts on the purchase is driven by competition and budget. The value to the functional manager responsible for the business problem is something entirely different.

A big part of decision process management is the ability to understand the needs and responsibilities of everyone involved in solving the business problem. The IT manager is involved in a formal process with defined rules designed to be impersonal to the organization. This process is several steps removed from the functional business needs assessment because the business understands that the IT manager does not need to fully understand the ultimate reason for acquiring the data processing equipment.

The informal decision process is soft and pliable and is based on factors which change from deal to deal. The informal process is very self-motivated. Informal decision makers have “skin” in the game. They generally have a target return on investment that they must deliver. He or she generally has the ability to make decisions for solutions that are outside the box of traditional thinking.

How many times has the IT manager either dismissed a creative solution as not within specifications or “bumped the idea upstairs for review.” The decision of your sales team to engage any set of players in the decision process is an important step in getting the deal. Don’t make the decision process more complex than it needs to be. But understand there can be other forces involved, and make an effort to determine exactly where they stand. Make every effort to know the entire process so that you can make an informed decision as to how to proceed, keeping in mind the true influencer might be a mentor who is not directly involved in either the business process or the formal decision process.

There are three fundamental levels of resistance when it comes to making decisions. The first level is the logical process of understanding the need. When you see a person’s eyes glaze over, eyebrows furrow, or head tip slightly to one side or the other, he is sending you an unspoken message: “I don’t get what you’re saying.” That’s your cue to slow down and touch base with the person before he or she gets so confused or lost in the morass of your idea that he or she loses interest altogether. After all, if he or she doesn’t get your idea, there’s no chance they’ll support it. The consultative approach to selling will help overcome this.

The second level is s based in the emotion of actually implementing change. Concern that something about your idea will make the other person look bad or lose status in the eyes of others, worry that your idea will cost the person his job or endanger his financial security, Nervousness that your idea will cause the person to fail, perhaps as a result of—and in the wake of—your success. Much of what we have discussed here should help to understand the personal risk involved with moving forward.

The last level is the lack of a trusted relationship. Focus on conversation, not presentation. Ask questions to find out what’s going on in the other person’s mind and why he or she opposes the idea. Find ways to connect with others. Paraphrase their concerns to show that you’re listening, embrace suggestions that piggy-back on your idea, and make it clear that there’s room—and opportunity—for others to join you as you move forward to implement the idea.

Take time upfront to understand this thoroughly. It will improve your chances of success and streamline the sales process.

Guard Against a Potential Recession

I’m not an alarmist by nature so don’t take this as an ominous prediction, it’s not. I wanted to take a minute just to remind everyone of what may appear to be obvious. There is a lot of talk about a potential recession. The old adage is that a recession is when your neighbor loses his job and a depression is when you lose yours. Now I don’t expect either in the near future but prudence says that we should “expect the best but prepare for the worst” So let’s talk about preparing for the worst.

Have you started contingency planning for a slowdown in the economy? Do you understand what that might mean specifically for your company? If you were in the real estate or construction industry you already know. Start taking action to mitigate the potential damage.

Here are some ideas…

Look at your pricing policies to determine if there is a way of assuring future revenue from sales made now. There may be a way of accelerating the recognition of that revenue later if you need it. Remember if you have to discount a deal, always try to discount the one-time products or services over the recurring. If you sell professional service as part of your offering, try to discount those aspects that will only happen once as opposed to your overall billing rate. A discount to your billing rate may last forever.

Take a good look at your pipeline for prospects that might not have the ability to pay in a downturn. The decision concerning what to do is an individual issue. Protect yourself from incurring expenses that you may not be able to collect on down the road.

Don’t start projects that fall into the “nice to have” category both internally and externally. An updated document viewer my make your product more attractive in the long run, but if it isn’t going to pay for itself in the short run consider putting it off until you’re sure the economy is in your favor.

People are your most important asset. If you gain a reputation of jettisoning employees it will be hard to replace them with quality people later on. Make this your last alternative. If the downturn is short lived, the severance pay, plus new hire cost, will eat all your potential savings.

This is a really good time to have conversations with your best customers. Start putting together a contingency plan with them. It will pay overwhelming dividends down the road. It might be a time to accelerate projects while the money is available. It’s also the best time to put together a great business case on why your project should be a priority during the downturn. Proactive thinking beat reactive thinking any day.

Bottom line is; don’t let it happen to you. You have an opportunity to do something about it now. Don’t get so caught up in the day-to-day that you leave yourself exposed. If it doesn’t happen, you will have left yourself in a better position for what will happen.

Absolutely Accelerate Revenue Recognition

Every businessperson wants to grow their company. Growth can be defined in many ways; revenue, profit, market share, asset value, strong team that lets you take more time off, increased happiness and contentment. Not every businessperson wants more money. Interestingly enough, virtually everything that we do want is somehow tied to money. It’s because we live in a capitalistic society. Increased peace of mind comes from the ability to rise above the day-to-day issues of walking this earth. Much of that contentment can come from inner strength to face everyday challenges with less stress. I would say that we could in almost (key word almost) every case tie back the ability to use money to acquire tools that can help solve problems as an underlying attribute to contentment. Of course the other part is the ability to be content with less. Very few companies are content with less, so let’s talk about the other side….

If profit is a derivative of revenue and I need profit to invest in solutions then “If I could sell more today would I?” I think we would all say “yes”. Then if we want more revenue in our companies today, why don’t we just do it? It’s because it’s not that easy. Growing incremental new revenue is difficult at best, near impossible at worst. I know businesspeople who believe “If I haven’t done it yet, it’s because it can’t be done.” It’s not that they think they are overwhelmingly smart in general. It’s just that they believe that no one understands their particular business better then themselves. They don’t know what they don’t know (The ugly description is: unconscious incompetent).

Let me suggest an approach that should help virtually any businessperson find a way to generate not only more top line revenue, but bottom line profit. It is a systemic approach to looking at revenue. Systemic means “affecting the body as a whole”. There are several components that must work together. These components reside throughout your organization, not just sales and marketing. Here are some of them with a brief description of their impact on revenue:

Product Development: It all starts with deciding what is the best product or service to take to market? This doesn’t mean that you have to actually develop the product or service yourself, but someone must. You might just resell it for them. The key issue is “What business problem does it solve for my prospective customer?” Does the value of the solution cost more than the problem? It is a “must have” or a “like to have”? Does it dilute my earnings or enhance them? Is the market big enough to support the investment, initial and ongoing?

Accounting: Accounting? Yes one of the biggest overlooked elements in a good revenue engine. Are there KPI’s (Key Results Indicators) in place to tell you what products make money and which ones don’t or which clients make you money and which ones dilute your earnings? Do your credit and collections policies support or detract from your ability to attract quality prospects? Does your pricing methodology support your prospects ability to pay (capital outlay verses expense outlay, lump sum verse payments)? Do you have a discount policy and corresponding methodologies? Does the salaries, commission and incentive plans support the goals of the corporation (remember that this doesn’t just apply to sales)?

Marketing: On the surface this seems obvious, but there are deeper concerns. Every businessperson knows that marketing is important. Does your marketing department (person) work with accounting to determine the right product mix and customer profile? Does their lead generation programs target these products and prospects? Do they have metrics in place to measure the ROI on each program they run? Is information that is gathered through the marketing process feed back into accounting, product development and sales to improve their involvement? Is marketing not only targeting new products or new customers, it is trying to increase the average value of a sales by promoting ancillary or corollary products (product bundling)?

Sales: This is the assembly line of revenue and income. In a well oiled revenue engine; sales simply works through a process with predicable results; easier said than done. There needs to be a sales methodology that accelerates prospects through the pipeline. Each step in the process should be easier for the prospect. Every wasted effort needs to be removed. Think of it as an assembly line. You should be driving down the cost of manufacturing. Look at the risk associated with the potential gain. Don’t have such a laborious proposal approval process or credit approval process that it drives way business. This is especially true if you haven’t really experience a financial loss due to business polices. Get accounting involved to determine the true downside of speeding up the system. Be prudent, but not paranoid.

Support: I am going to define support as both post sales support and any production process required to deliver the product. It cost more money to get a new customer than it does to keep an existing one. We all know this, yet we act differently. Get feedback from your support function on the ideal customer. You can also get feedback on feature improvements and pricing or credit policies. Once you get this far in the relationship, use it. Constantly gather information on ways to improve the revenue generating process. These are people who have made a decision to do business with you. Make sure you know why.

Executive Management: Always a sticking point in my conversations. There are very good executives that understand revenue generation and are a major assets. I’m sure you are one of them. But I have worked with senior executive that have had a less than stellar opinion of sales and marketing people. When you don’t trust your revenue generation system, you have a problem. Use the system outline above. Understand that sales is not the sales department, it is the entire company. If sales are not where you want them look everywhere, don’t just beat up the sales group. If your career has been laced with having bad sales people call on you, learn to trust and delegate. Your personal bias may be costing your business.

Bottom line: Sell the products with the largest margins to the customer who will pay the most, through a sales methodology that will close the sale the fastest.

Obligatory New Year Resolution

The beginning of every year, we as business people are obliged to set new goals for the upcoming year. I have gone through this process over 30 times in my career. During this time I have noticed one striking trend. Those who believe succeed; those who don’t, don’t. Brian Tracy in his Psychology of Achievement spends a great deal of time helping people reset their subconscious so that they can achieve the success they have always wanted. His story is that you have to concretely believe you can succeed before you can actually do it. There is a lot of data to support that this is fundamental to individual success. What about corporations?

Thirty years of business planning has taught me that it’s very true of corporations as well. If the annual plan is a hope and a prayer, it will not succeed. Many companies have a top down planning approach. Those in the know determine the cash requirements of the corporation to survive and meet expectations for the coming year. They then extrapolate the revenue number taking into account cost of goods and cost of sales. The revenue number is then passed down to the individuals responsible. Sometime, like when I work for British Telecom, the number is inflated as it is passed down to assure each management group is successful. The final number given to each sales person is a result of this process and doesn’t reflect the reality of their market. The people at the top “believe” in their number because it makes sense. The people at the bottom find the number arbitrary at best and will strive to do their best.

A deviation to this strategy is a top-down, bottom-up approach. While the executive management is forecasting from above, the sales force is forecasting from below. They meet in the middle and develop a compromise. Sound better doesn’t it? Heisenberg taught us that this isn’t necessarily so. My experience collaborates this. The people at the top assume the people at the bottom are going to sandbag (low ball) their numbers and the people at the bottom assume that the top is going to inflate the numbers. Everyone knows it’s a negotiation, therefore it’s best to build in some level of compromise. In this case neither party”believes”. Both have had to compromise and assume the other is not being fully honest in the process. This by the way is true.

So, how do you get everyone to believe? The answer is to take a more systemic approach. If you haven’t ever done this it won’t happen for 2008, but it can happen in 2008. The object is to align the entire company toward a single goal. Everything is tied to achieving that goal; from product development, to marketing, to sales, to legal, to accounting, to procurement, to support. Everyone knows their responsibility for achieving that goal and believes they can do their part. No one is part of the “sales prevention” team. The sum of the parts becomes greater than the whole. What’s the systemic approach?

This takes some thinking. It is not intuitively obvious. If you are a glass half empty type of person, you may not see how it will work. Every activity must be tied directly to revenue and carry a specific expense associated with that activity. Some will be profit centers and some will be cost centers. But they are all tied to the final objective. Deciding how this will work within your specific corporation may take a lot of thought. Many departments don’t like this thinking because either they don’t truly understand how their department impacts revenue or they do understand and they would just as soon you don’t. A good place to start is to map out the process, cradle to grave. Apply your vision and mission to the process, you do have one right? Make sure everything aligns, and then start doing the math. Always seek input from those responsible for implementation.

Reprogramming the human subconscious to succeed is a consistent, repetitive process. The same is true of corporations.

The corporation that believes…. Succeeds.

Change is inevitable, but it’s the speed of change that determines success.

I am constantly trying to find ways to accelerate performance without burdening the process or people. The first question that comes to mind is “If performance is accelerated how can the process be burdened?” To find that answer, let’s start at the very beginning. At some point a need within the company is recognized. Something is not being done as well as it could be to the benefit of the company. A new process is defined, new job descriptions are developed, compensation equal to the effort is determined, and extensive search for the right employee is undertaken. A business ecosystem is developed that like all biological ecosystems is based not only on the inhabitants of the local system, but also the interaction with the contiguous systems surrounding it.

In James Moore’s book “The Death of Competition” he talks about the difference in the biological ecosystems of Hawaii and Costa Rica. Hawaii is an island that is somewhat sheltered from outside biological influences. Costa Rica is a virtual highway of migrating plants and animals. Costa Rica hardly notices a new entrant into its ecosystem, while Hawaii is devastated by every variant. So it is with business ecosystems. A business process that is virtually independent of other process within the business has less tolerance for change than business processes that are heavily dependent on external processes. The dependent process is constantly being pushed to and fro with changes from the co-dependent processes. Employees are so use to change that they notice lack of change more than change. Someone is always doing something to disrupt their karma.

Highly independent processes are more rigid and inflexible. They change only when the inhabitants want the change to take place. Homeostasis dictates that change is hard to accept, so given an option, it won’t happen. When change is thrust upon this independent process it is very disruptive. People fight back. They intentionally or unintentionally sabotage the desired results. Wayne Anderson wrote an article “People Performance: Can you believe what you see?” In it he discusses Heisenberg’s Uncertainty Principle which says the very act of observing performance changes the performance while it is being observed.

So, when an opportunity arises to make a change that will theoretically improve performance, a close eye has to be kept on whom it affects. A highly dependent process will adapt much easier than a highly independent process. The performance improvement that is expected from the change may be eroded or eliminated in an independent process by the disruption to the system. While a more dependent process may take it in stride, make the adjustment and reap the benefits more easily.

Change is an inevitable and desired aspect of running a business. To constantly evolve is to continue to grow, but at what cost? Before diving into even obvious change, determine the ability to absorb the change. Change is inevitable, but the speed is dependent. Engage all the stakeholders. If they appear to be a fairly homogeneous group get buy in up front, take the time to paint a clear vision of how things will be better after the change is complete and implement the change in well documented stages. If this sounds familiar it’s because it follows Gleicher’s Formula for Change. Gleicher doesn’t have a time element. But timing is very important.

Getting an early Start on New Years Resolutions

With New Year’s Day 2008 just around the corner it’s not too early to set those all important New Year’s Resolutions so that we can be prepared to break them earlier than we did last year. For those folks who are reading this and this is your goal, or at least forgone conclusion, save yourself some time and stop reading now…..

For the rest of us let’s look at what we can do to not only reach our goals for 2008 but accelerate through them. To truly be successful we need to understand why we aren’t. Keep in mind that humans, as a whole, are very complex. We may feel in general that we are not successful based on our own measurements. If we break down our activities we will find that we are very good at some things and poor at others. The real question is, are we good at the right things? Congratulate yourselves because no matter who you are, you are successful. You just might not be as successful as you want to be at the things that matter most to you.

Let’s fix that. First of all we have to agree that success is in the mind, literally.

“The greatest barrier to achievement and success is not lack of talent or ability but…. Rather… the fact that achievement and success, above a certain level, are outside of our self-concept, our image of who we are and what is appropriate to us.” – “The Power of Self-Esteem”, Nathaniel Branden

We are constantly changing in the direction of our self image. - Abraham Maslow

A man becomes what he thinks about most of the time. - Emerson

Becoming something different takes a concerted effort to change the inner self. The inner self is made up of three important components; the conscious mind, the subconscious mind and the reticular cortex. As we know, the conscious mind takes in new information, makes calculations and decisions and can only handle one thing at a time (serial processing). We can listen at over 450 words per minute and talk at around 150, so it sometime seems like our brain is parallel processing, but it not. It’s simply multitasking or wandering because it has extra unused cycles. The subconscious mind is much the opposite. It runs on a set of rules that are fairly hard to change. Most of them are formed before we are five. Its job is to move us from a position of discomfort to a position of comfort (pleasure-pain principle). It does this by comparing all new information with its existing database and moving away from anything that conflicts with what it deems is its world view. This is a form of Psychosclerosis, hardening of the mind. It does this very quickly and in parallel. It operates much quicker than the conscious mind.

The fun part is the reticular cortex. It’s about the size of your thumb and sits at the base of the brain at the top of your neck. It “wakes up” the brain. Because of all of these unused cycles in your brain, the reticular cortex uses them to scan the environment. It hears conversations your conscious mind does not hear. It sees things that the subconscious does not process up to the conscious. It pushes all this information to the subconscious that then filters it through its little database and helps the conscious mind move you from situations that are uncomfortable to ones that are more comfortable.

All of this just to help explain how to be success with your New Year’s resolutions. Here’s how. You want to reprogram your subconscious to allow through information from the reticular cortex that will improve your chances of achieving your new goals. To do that you need to reprogram your subconscious. You do that by being very purposeful in what you think about. First your goals need to be in the first person, present tense and positive. The subconscious can’t stop things from happening, it can only help make things happen. It’s only interested in “I”. It will not try to help someone else do something, and it’s not overly interested in tomorrow. So if I say “I have lost 10 lbs. on June 1, 2008”. The subconscious will say to itself “No I haven’t, I’m uncomfortable with my weight.” When you look at food the reticular cortex will zoom in on things that will help move toward a more comfortable position. This will work for almost any goal you set, money, relationships, health (doesn’t cure already experience deceases, but will help you live a more healthy life), anger….

It’s not that easy to change the subconscious. You need to write and rewrite your goals every day for as long as it takes to achieve them. Write them the same way every time. Repeat them to yourself several times a day for at least 21 straight days. This is the conscious mind reprogramming the subconscious mind. The reticular cortex is the scout that feed reaffirming information to the subconscious. As you eventually reprogram your subconscious you will be amazed at the opportunities to succeed that the reticular cortex comes across. The opportunity has always been there, but was filtered out….

Moving with the Top 3%

The last few months have been busy to say the least. I had an opportunity to reassess where I was going and how I planned on getting there. It’s nice when you get to that point in life when you can throw away all of the artificial constraints of living and really focus on what you want. I am very fortunate to be at that very place. It’s scary from the standpoint that there aren’t any excuses for not succeeding. Fundamentally everyone is driven by only two emotions; passion and fear. If I consider Gleicher’s Formula for Change, and fear and passion are the drivers, I must have enough passion for my vision to overcome the fear of change. Of course that assumes I have a vision in the first place. Without vision I am blind and fear becomes the predominate emotion.

So how do I feel? Great… Scared… mostly just excited about what the next 10 or so years will bring. It seems odd to me but chasing someone else’s vision, or lack thereof, never seemed too risky. After all it’s not my vision, it’s theirs. If it fails it is not a reflection on me. My job is to bring my experience and knowledge to the table to help illuminate the situation. Don’t get me wrong I am extremely goal driven. It’s just not personal, it’s a job. I can always find a way to make it fun and successful. At the end of the day the overall success or failure will be accredited to the CEO or owner. I was just one of the tools he or she had in their bag. It was a rewarding and fulfilling vocation to have. I enjoyed it.

There was and is a bigger thing (Major Definite Goal) out there for me, a passion to truly drive optimum success, to have clarity of vision, well thought out plans and goals, and a drive to make a difference. I wanted to find people who share those traits. The Law of Attraction states that we attract those people who are most like what we perceive we are. I want to attract the top 3%. They don’t have to start in the top 3%, but they must be willing to work hard enough to get there.

Now I would have to say that perceiving I am in the top 3% and only wanting like souls to share my world may seem egotistic, narcissistic, and self-absorbed. It’s really not (says I). Who are the top 3%? They are not elitist. They are not necessarily the movers and shakers of industry. Being rich does not in and of itself put you in the top 3%. The top 3% balance the work, family, physical and spiritual aspects of their lives. They live a centered life, everything in moderation. They have written detailed goals of what they want to achieve in the next 5, 10 or 15 years. Many do not have a goal to make a lot of money. But, we live in a capitalistic society so money always plays a part. If I want more quality time with my family I have to be able to afford it. I can’t just quit work and stay at home. Interestingly, most of these people have far more money than their peers. It’s a byproduct if nothing else.

They are active, vibrant, above the line thinkers. They exude energy. They are open to new learning. They are not all happy day one. But they have a real desire to be and a willingness to take the steps required to get there. Traditionally they are “High D’s” and “High I’s”(D.I.S.C.), drivers (Merrill-Reid), type “A” personalities (Jenkins Activity Survey). Just because someone is highly motivated does not put them in the top 3%. A know a lot of people who work very hard for long hours that a) aren’t getting anywhere and b) don’t care to hear about it.

Here is what it takes to be in the top 3% in my book:

• · You have taken the time to both understand and write down your goals in life for work (money), family (fun and vacations) and spiritual endeavors (charities and volunteering).
• · You have prioritized these goals and determined your one major definite goal. It is your focus
• · You take full responsibility for your actions
• · You try to spend most of your time in a positive frame of mind (above the line).
• · You have a continuous learning mentality, constantly reading and listening
• · You make improvement is a series of 1% changes that produce outstanding results over time, not radical changes all at once.
• · You are decisive, able to set out in a direction and make coarse changes as required.
• · You have an internal locus of control verses an external locus of control. You know who you are.

These are the people I am looking for. They are the people who will make a significant difference in the world around them. Their world may be big or small, but it will benefit from knowing them. It’s exciting and scary all at the same time. I know some of these folks. I expect to meet many more of them in the future.

I get up every morning determined to both change the world and have one hell of a good time. Sometimes this makes planning my day difficult. - E. B. White