Category Archives: Entrepreneurship

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!

 

Entrepreneurs Need Pilgrim Character and Gratitude

Thanksgiving is upon us. As a small business owner, think about the traits that make you successful…can you trace them back to the spirit of the Pilgrims whom we commemorate with gluttony once per year? What was it that set these pioneers apart and made them successful? Alan Hall, a columnist for Forbes, wrote a blog post about 9 behaviors our forefathers embodied that he thinks are significant to remember:

  1. Take Risks: The Pilgrims took a huge risk: they left their homes, got on a ship with few belongings, and set sail for the New World with little idea as to what would happen to them when they got there – if they got there at all.  While we might never take a chance as big as that one, every new business comes with significant risk.  Did you quit a full-time job?Risk. Bootstrap your business with credit cards maxed to the limit? Risk. Hire family members to cut costs? Huge risk. Bet the bank on a previous successful entrepreneur with potential in hopes of leveraging his/her expertise, no matter the costs? More risk. 
  2. Sacrifice: was a key characteristic of the early Pilgrims–homes, relationships with extended family members, money they would have earned in their jobs back home, or in worst cases, their own lives or those of their children. They believed in what they were doing and prayed that they’d be successful. But as William Bradford, the second governor of Plymouth Colony, once said: “All great and honorable actions are accompanied with great difficulties, and both must be enterprised and overcome with answerable courage.”
  3. Set Goals: someone had to make plans and set goals for success. Writing down the goals – and referring to them often – is critical to reaching them. 
  4. Be Flexible: As the Pilgrims quickly learned, though, they had to be flexible.  Their intended destination was (the) Hudson River. As we all know, rough seas and storms moved them far off course near the shores of Cape Cod… If you’re steadfast in your goals (yet flexible in how you reach them), you can overcome most any challenge.
  5. Be Persistent: Those that made it through the first winter were diligent..strong..(and) didn’t give up..You might feel like your struggling business can’t survive another day, but unless there’s really no hope, come back tomorrow and try again. 
  6. Work Hard:  Unfortunately, after the leaders organized a collective farm, without free enterprise, many of the men were unmotivated to work. The crops suffered.. (but) the leaders decided that the land could be divided and each family grow its own corn..Within two years they had a surplus and began trading it with Native Americans and other small settlements for furs to export to England in exchange for supplies. Corn became currency as entire families worked on their own patch of soil.. (E)ntrepreneurs!
  7. Form Partnerships: The Pilgrims learned to partner with each other and with the Native Americans to survive.. (P)artner up with an expert.
  8. Be Teachable: If the Pilgrims hadn’t been willing and humble enough to accept help from the natives, they would never have learned to live off the new land.  As entrepreneurs, we need to be willing to ask for help and be teachable enough to learn and apply the new direction. 
  9. Be Thankful:  After arriving at Plymouth Rock, Governor Bradford wrote in his journal, “Being thus arrived at a good harbor, and brought safely to land, they fell on their knees and blessed the God of heaven who had brought them over the vast and furious ocean and delivered them from all the perils and miseries thereof.”

What a great list! Take the time between now and Monday to thank those who have made your choice of entrepreneurship possible. Be reminded of these character traits of the Pilgrims and use them to develop into the entrepreneur you’d like to become.

 

 

Innovating Words Make Healthy Corporate Hearts

 

Cheryl Heller, Board Chair of PopTech, a laboratory for disruptive innovation focused on technology and social change, says that,

The wealth of jargon used to describe intrapreneurship (itself a bit of jargon), innovation and corporate social responsibility is more exhausting than enriching, and as their importance becomes more evident, the labels and complexities grow. What’s the difference between corporate social responsibility, cause branding, cause marketing, and a triple (or sometimes lately double, as if we can just decide to leave the environment out of it) bottom line? Should companies now stop all their work on sustainability in order to focus on resilience? Has all independent thinking, or even perhaps all generative thinking inside big organizations become intrapreneurship?  What’s the difference between social innovation and innovation? What’s the relationship between design thinking and innovation? What’s the difference between disruptive innovation and incremental innovation? Is some innovation more innovative than others and is more innovation always better? And does anybody else see this as a silly and dangerously circuitous trap of our own devising?

The significance of the debate about the proper terminology is to find a means to communicate disruptive breakthrough ideas as a valuable corporate asset–without simultaneously creating anarchy! Words cited in Heller’s comment (above) evoke values and desired activities that can help an organization create–or sustain competitive advantage.  Yet, if innovation is perceived as an altogether separate category than “ordinary business,”  then it can be argued that no one will want to do what is methodical if they can be celebrated and rewarded for dreaming over practical execution of existing initiatives. Most organizations and their leaders would prefer that employees see the process of introducing initiatives as a normal part of their positions, rather than stand alone activities that become the topic du jour and are jettisoned when times get tough in favor of “that’s the way we’ve always done it here. (TTWWADIH)” 

TTWWADIH can be a pervasive attitude that implies that we can add to what exists, but should not be expected to improve what exists. In this scenario, positions and/or departments are launched rather than tackling sticky, often political issues. Star studded teams are put together many times to represent cutting edge thinking, only to exempt the teams from performance, which ultimately leads to demotivated executive management.

Yesterday, we looked at Scott Anthony’s HBR article about Medtronic, a company well known for innovation, and their efforts to become even more adept at broad scale innovation. The Healthy Heart For All product has been launched towards the rural Indian population target market. Medtronic is large, smart, connected, positioned and incentivized enough to out-hustle upstart competitors. Though they brought in a key intrapreneur, the company was effective in changing the corporate cultural stance on what it takes to be competitive.

No one wants an unmotivated workforce. Nor do we want idealists who are not well grounded. The concept to “innovate properly” is a core value of a former employer of mine who understood that creativity and innate personal responsibility for the benefit of others must work in concert. By including this core value in position descriptions, the leadership team recognized the need to challenge employees to see advanced initiatives as the responsibility of every employee–not an isolated activity. Furthermore, when innovation becomes the expectation, we don’t have to “stop the presses” to encourage innovative thinking and actions.

Find a way to articulate your expectations for intrapreneurship (or innovation if you prefer) (or corporate social responsibility if you are a part of a grandiose cause) inside your environment. Ask people to define what they mean when using these terms. Expect all employees to take initiative!