Monthly Archives: November 2012

Put Sharks & Jets to Work in Strategic Design Thinking

When we think of design, we think of products. Industrial design as a field is scarcely 10o years old. However, technology tools such as CAD (Computer Aided Design), 3-D modeling, and stereolithography catapulted design into a rapid prototyping process towards the end of the 20th century. Companies like Apple rode the crest of this wave–to an extent–but really took design to a new frontier. Rather than simply looking at features and benefits as expressions of design and product marketing, what emerged was a new way to view business problems. Many business schools have incorporated not only courses on innovation, but specific foci on “design thinking.”

Kevin Budelmann penned an article for Metropolis magazine last month discussing design thinking as a modern motif. Budelmann credits Bill Moggridge, cofounder of the pioneering design firm IDEO with contributing significantly to thought leadership in this domain. Moggridge is said to have been the genius who reengineered IDEO from a product design practice to strategic design thinking powerhouse. Budelmann notes that part of the transformation occurred as a result of asking staff from divergent disciplines to work together, requiring that they become humble in the process. 

Budelmann’s firm, Peopledesign, has amassed a team of talented contributors who may not have worked for design firms years ago. A clear distinction is made, however, in hiring MBAs who understand design and designers who understand business.  The inevitable difference of opinions pits “sharks” (MBAs) against “jets” (designers) in true West Side Story musical terminology. Here’s Budelmann’s take on the natural interaction between the two employee types in his design firm:

It’s not even clear anymore which neighborhoods are Sharks’ turf and which belong to the Jets. Maybe that isn’t such a bad thing. The gym is neutral territory, and we might be able to work something out at the dance. Clearly, we Jets could learn a few new moves from the Sharks. The Sharks need to cool their jets anyway, so to speak.

When it’s show time, it isn’t us against them. In truth, we’ve made great strides. We’re learning every day. A colleague once mentioned that when people talk about collaboration, they usually mean cooperation. True collaboration is hard. Real communication is hard. It’s not about holding ground; it’s about ceding turf.

Two decades ago I was in school at Carnegie Mellon, where everyone is a geek in their respective discipline.The least geeky and (excuse the perception) least interesting people got a business degree. General management, which we assumed was to generally manage something general. It left us scratching our heads.

Now that I own my own business, I value management greatly. Business is an engine, and we don’t go very far without it. Besides, what do designers really do anyway? How do they do it? Is it describable to a non-designer, or do you have to be part of the gang?

Today we operate in a post Sharks vs. Jets world. Our team looks different. Our projects look different. Our sketches, books, and processes look different. As for the star-crossed lovers, our children have certainly taken the best of both of us. It’s the same for our ensemble at work. This is clear: Our hybrid future is stronger than our disconnected past.

Designers focus on asking questions, but often don’t like to answer them. Business people focus on answers, but often don’t ask the right questions. The combination can be powerful. The future of business and design lies in our ability to overcome our small worlds to make room for a bigger one.

The phenomenal power of strategic design thinking is unveiled in that final paradox–designers must become better at answering questions and business folks must become better at asking the right questions. Seek to apply this principle to your own business. Challenge your concrete thinkers to think more divergently; your creatives to think more convergently. In doing so, you will experience some transformation and create a new language of productivity.

 

Sales Shifts Into 21st Century Mode

People wonder what will become of the sales profession in the new, creative economy. Some suppose that most transactions will be done online, without the interpersonal component that has existed since at least the Industrial Revolution. Few expect the demand, however, for sales folks to increase. Yet, in an article for Inc. magazine, Geoffrey James (the Sales Source columnist for the online magazine) shares some findings of a project he has conducted over a two year period with his peer, Howard Stevens. Reports on the project are available for free on the Chally website (HERE), so if you’re interested, you might want to download them (especially since there’s no guarantee they’ll be free forever.)

1. The Web will make salespeople MORE important.

Conventional wisdom says that the ability of customer to research products and buy them online should make salespeople less important. It turns out that the opposite is the case, and companies are hiring more salespeople than ever.

However, customers expect much more of the salespeople who contact and work with them. Customers now expect salespeople to have a expert’s view of the customer’s business, act as a manager of some crucial part of the customer’s business, and be effective at protecting the customer’s interests within the vendor organization.

2: Sales jobs will become further differentiated and specialized.

Conventional wisdom says that the best sales professionals are hard-driving mavericks who can drum up business, develop opportunities, and close deals like crazy. However,  according to Chally’s research, there is no “one size fits all” salesperson any longer.

While some sales jobs may demand the stereotypical “go-getter” behavior, other jobs favor employees with less showy strengths, like strong analytical skills, the ability to empathize with customer problems, or a deep understanding of complex business issues.

3. Universities and colleges will offer more courses on selling.

Conventional wisdom is that top sales professionals don’t need anything other than a high school diploma (if that) in order to sell. However, because selling is becoming more specialized, U.S. firms alone are spend $7.1 billion on sales training every year.

Given the demand, colleges are now ramping up dozens of sales-oriented business classes, many of which are producing exceptional graduates who “ramp up” 50% faster than the average candidate, and are 35% less likely to leave their employer.

4. Selling will be less of an art and more of a science.

Conventional wisdom says that sales is an art (aka “black magic”) that’s only measured by your financial results at the end of the quarter or fiscal year. However, sales-oriented technologies have now made it possible to use science to increase sales performance.

For example, using psychological assessment tests, it’s now possible to create an accurate map of a salesperson’s individual skills, competencies, motivational drivers, work habits and potential for developing new skills. Such metrics make selling (and forecasting sales) more predictable and therefore more manageable.

As you may be able to infer from the comments above, James sees the current flux in sales as monumental. He compares it, in fact, to a revolution, not unlike marketing advances in the 60s or computers in the 80s. The premise that online transactions will fuel the need for more sales is an exciting one. It will be interesting to see whether the need will be for technicians or consultants, or a hybrid. Enhanced consultative skills will be welcomed by purchasing professionals and consumers alike who cringe at the thought of having to interact with the stereotypical pushy salesperson. With a new sales training center, faculty dedicated to sales training, and a growing amount of resources being pledged to course offerings in sales topics, my MBA alma mater, Elon, is an example of a school that has picked up on the executive sales training movement.  Finally, the professionalization of sales through career development tools employed in other roles and fields is another encouraging development that should lead to smoother communication between sales teams and the remainder of corporate departments. What do you think about these trends as James has articulated them?

Are You Doing it “To” or “For” a Prospect?

Many who aspire to increase the top line (revenues) of a business know that sales can seemingly cure a multitude of other problems. With enough money to spread around for paying bills and employees, plus some for marketing, customer service or maintenance, your company can improve morale and your ability to retain top talent as well as existing customers. However, in an effort to develop new business, our sales teams often do a very poor job. Conversion rates are low, so more leads are needed than would otherwise be necessary. In turn, more time is required, more overhead expenses thereby generated, and profits eroded. If we were able to improve the way we secure new clients, our organizations would be vastly more successful!

The biggest challenge a sales (interchangeable with “business development” or “client development” in settings wherein the word is anathema) professional faces is the distrust of the person on the other side of the table. Buyers are often afraid that something is being done to them, and dig in their heels or tune out their minds. Against this type of resistance, it can be extremely difficult to secure new accounts. The conversation must, therefore, disarm the buyer (in a genuine, sincere way) so that the perception changes to one of feeling like the salesperson is doing (well) for the buyer or her organization.

With the  combination of easily accessible information via the Internet and increased competition via globalization, it is incumbent on sales teams to keep their products and services from becoming commodities whereby the only means of competition is price. This objective can best be accomplished through consultative conversations. One of the leading minds on the topic of consultative selling is Mahan Khalsa, author of Let’s Get Real or Let’s Not Play (aka Helping Clients Succeed.) Helping (prospective) clients succeed should be the goal of every sales effort, but rarely is. In fact, hard line sales methods don’t seem to to take the client success into consideration as all, so long as the selling organization’s goals are met. 

Khalsa writes often about two key concepts: “getting real,” and developing an “exact solution.” To be real is to be authentic, truthful, expressing clear intent, and speaking from values. It is a paradigm wherein the seller doesn’t accept the first response without asking clarifying questions–the purpose is to break down false pretenses, move past fears, and to get to core issues as comfortably as possible for all parties concerned. While no solution is perfect unto itself, the goal of creating an exact one is to have a strong urge to leave few stones unturned in order to reduce ambiguity and partner on both identifying problems and the methods of resolving them.

With the right mindset, a salesperson can overcome the following (* taken from Let’s Get Real, chapter entitled “We Both Want the Same Thing”)  inhibitors of client success:

Our issues:

  • we don’t listen
  • we make assumptions
  • we have preconceived solutions
  • we need to make the sale
  • it takes too much time
  • we don’t understand their business
  • we know what they need better than they do, and
  • we don’t talk to the right people.

Client issues:

  • they don’t know what they need
  • the can’t articulate what they need
  • they don’t agree on what they need
  • they won’t give us good information
  • they don’t let us talk to the right people
  • they are unrealistic about time, money, and people needed
  • politics count more than business sense
  • they procrastinate, and
  • they can’t make decisions.

Taking time up front to either determine (jointly with client) that a solution does not exist or create a solid business case is critical for better sales success. When we match client expectations to those of our organization with regards to the people, time, and money needed to achieve success with regards to a given opportunity, we demonstrate shared interests and feasibility. Knowing how decisions are made, by whom, and the timetable removes guesswork and allows us to offer a solution that exactly meets the client’s needs.

Don’t Business Plan Before Test Marketing

 

Take a look at the programs available to start-up businesses and you will certainly find that many offerings are based on a business plan. Governmental and educational agencies in particular are often enamored with curricula that present a template for plans that is easily administered and a breeze to teach. The emphasis is usually on the various business disciplines that can be found in a larger business, but applied to a small business. Instructors generally come from corporate or academic careers and are most comfortable with this approach. Yet, most entrepreneurs, when “equipped” with the suggested program, are unable to reach the five years in business anniversary–a full 50%+ fail according to the U.S. Department of Labor’s Bureau of Labor Statistics.

Observe the chart below, used by EntreDot to illustrate how an idea should become a commercially viable business:

 

Business planning is an outgrowth of three prior steps: ideation, conceptualization, and creation. What occurs in each of those steps that better prepares the entrepreneur to actually write a business plan? “Ideation is the process for structuring an idea into a well explained business idea that has enough information for the entrepreneur to decide whether it has commercial potential and whether or not it should be pursued any further. Conceptualization is focused on developing an understanding of the market the entrepreneur intends to pursue, and gathering enough information about it to be able to decide if there is commercial value in the business idea. Creation provides the details of the products and services from the point of view of what capabilities the customer will have and how they will see quantifiable benefit. The focus is on what it provides the buyer and the description has to be from the customer’s point of view and what will be delivered to them.” (courtesy, EntreDot)

Every viable business needs to address the following five issues:

o What is the opportunity (premise)?
o What are you offering (solution)?
o Who will buy it (market)?
o Why will I win (Advantage)?
o How do I make money (Business)?

Ideation is the step in which the issues are raised–not Evaluation (Step 4, where business planning occurs). By wrestling with these questions early, the entrepreneur hones a business idea into an elevator pitch that can be “test marketed” to potential buyers. The key advantage to having a story to tell and people to whom it can be told is the opportunity to collect key data during Conceptualization. The feedback is incorporated into the Creation step. As a result of this improved process, entrepreneurs are able to refine the product offering and message to become a more powerful resonator with a specific target audience. 

The other process, the more prevalent one described in the first paragraph, is faulty by comparison–and not just because it is being carried out by people who have next to no small business experience (launching their own enterprises.) By beginning with a business planning process, the typical entrepreneur is making a series of assumptions. The vast number of assumptions that have to be made to construct a business model from which a plan can be developed is likely to be the proverbial “house of cards.” Assumptions built upon assumptions that lead to projections about assumptions is a presumptuous risk, the outcome of which is likely to be business failure in one out of every two businesses started by the five year mark.

It is way better to eliminate as much of the guesswork as possible so that, when we arrive at Evaluation (Step 4, including the business plan), the planning is focused. The discipline of determining buyer needs–rather than simply looking at internal capabilities and developing products in an isolated manner–yields a recipe for improved business success as risk is eliminated through data verification. 

Do your homework before business planning and your ideas will meet with greater implementation success!

 

Smarter Family Business Via Communication

Having grown up in a family owned business, I have experienced a thing or two in common with many of my clients. Even when I was yet in middle school, I would be recruited to help out in the business, much to my own dismay at times when I would much rather be doing something (anything?) else. However, a little bit of pay went a long ways to making a young man very content. As I grew older, however, the conflict between what needed to be done in the business and what I wanted to do became greater. My goals, dreams, and ambitions had less and less to do with staying in town, working alongside my dad, and us building something together. As you can imagine, this difference of opinion caused a bit of a rift in our relationship. So it goes with many family businesses.

The mismatch between the expectations that a founder has in terms of the involvement of children in the business and their actual desire to be involved is one of the leading problems encountered in family businesses. The parent (substitute other type of founder, but effect is similar) wonders why the child doesn’t put forth the same effort, see the same vision, realize the potential, etc. I delivered a talk for Harley Davidson University on this subject a few years ago, “Why They Don’t Ride With You.” In my session, I spoke with dealers about their frustrations with family members who seemed disinterested in working in or taking over the business. My encouragement to them was to do three things:

  1. Hold the opportunity with an open hand. Instead of making up your mind that there is only one “right” scenario for family members to take part in your business, be flexible! Determine that, while you may have preferences, you will corral your opinions and keep them in check as you attempt to find a common ground.
  2. Communicate often, specifically, including listening. Far too often, a patriarch will squelch the input of a child, spouse, etc in the home–and at work–particularly if work and home blend as in the case of a family business. Rather than honing in on what the other person has to say, we can easily insist on getting our point across before seeking to understand the other person’s view. Ask open ended questions about what the family member enjoys doing, what role they see themselves in, and how those choices affect the business. Create an open dialogue-constantly.
  3. Distinguish between ownership and management. An heir may work in the business or out of it, but still function as an owner. Sometimes, it is best for all if it’s known to be a safe choice to be just an owner or just a manager, rather than both as the founder has been. Realizing that such options exist can diffuse tension, lead to productive conversations, and aid in succession planning. Quite often, outsiders are better successors to founders because they can be objective about the contribution family members make to the business.

There are many other issues that, seen operating in a family business, look and feel different than their counterparts in other types of businesses. Everything from performance measurement to compensation, perks to preferences, psychology to sociology, and very much in between can be seen at work and become a spark for emotions. By far, family businesses are more emotional than others. Whatever your situation, think about tools that help create objective conversations about business issues so that you can lessen the impact of emotions in decisions that are being made. Your business and your family will be better off for it!