Tag Archives: consulting

Focus on EQ Rather Than IQ

While one may not be able to improve IQ, the ability to improve one’s Emotional Quotient has been shown effective in enhancing management decision-making.     EQ Mentoring is most successful when directed management team members who support an organization’s executives.

“Emotional intelligence isn’t a luxury tool you can dispense with in tough times. It’s a basic tool that, deployed with finesse, is the key to professional success.”

~Dan Goleman in The Harvard Business Review

What is Emotional Intelligence (EQ)?

Effective and timely decision-making is at the heart of good performance. To improve performance, we need to understand how to make better decisions. At the most basic level, our ability to make good decisions and, in turn, perform well is captured by our competencies. Competencies are the things we know how to do and what we are good at are capabilities. Most performance management processes are built on the concept that competencies are the direct antecedent or predecessor to good decision making and high performance. What determines our competencies?

Preceding our competencies are our behaviors. Behaviors include our day-to-day activities that determine where we focus our time and where we focus our energies. Cognition precedes behavior. Slightly oversimplifying this concept, cognition refers to one’s intellectual capacities, thoughts, knowledge, and memories. This is the rational part of our brain. What finally precedes cognition in this physiological sequence to high performance is one’s EQ—a body of personal characteristics and social abilities that are closely tied to success in both our professional and personal lives.

How is EQ Improved?

In order to establish a baseline, an EQ Assessment is taken at the inception of the competency improvement process by each team member individually. The mentoring process is explained to the group and some recurring group meetings are held (minimum of once/month) to reinforce concepts in a team environment. Primarily, however, the mentoring  occurs individually and the scheduling of weekly meetings with each team member (half hour ea.) creates an environment for concepts to “grow legs” and become implemented.

The mentoring is administered by a professional certified in the process and competent to interpret the assessment results into a personal development program. The five competencies (self-awareness, self-regulation, motivation, empathy and social skills) that constitute one’s EQ scores are evaluated and a plan created to improve the mentee’s lowest area(s) first.

During the weekly sessions, hypothetical scenarios are discussed between mentor and mentee to identify thought processes, offer alternatives, and learn better decision-making styles. After six to eight weeks, the hypothetical gives way to actual work examples and on-the-job learning occurs. Generally, it is at this point that executives can see early signs of improved management skills.

As the mentee becomes more enlightened, additional tools and assessments are introduced to keep the free flow of information positive, eye-opening, and stimulating. Generally, a follow-on assessment is administered at the six month point and a joint decision is made as to how to proceed.

NOTE: For EQ improvement to become part of the culture, it is generally advisable that the owner/CEO/etc also submit to the process and go through their own mentoring. After such, there is opportunity to learn new methods of interaction that reinforce principles and better habits learned.

Consultative Solutions Beat Hard Closes

In times past, “good” salespeople  had a method to close out a meeting with a prospect that was successful in getting them to “sign on the dotted line.” In some industries, the sales function is described as business development because of stereotypes of sleazy salespeople who use high pressure techniques to cajole an uncertain buyer into a (sometimes regrettable) decision. This is especially true in business services firms, where there is a stigma in many cases about seeking out new business at all.

The biggest development of the past few decades has been the consultative selling approach. Yet, even this shift is not satisfactory for people who just do not like the word “sales.” When I have been working alongside attorneys and CPAs, for instance, the terms “client development” or “business development” are much preferred. In general, these practitioners provide offerings that have long sales cycles or are perceived as commodities. So…to unlock the motivation of my clients to do the development that is needful for practice growth, I usually have a series of conversations and trainings around the concept that client service requires a similar approach. Few argue that client service is needful.

Rich Grehalva writes and speaks about the array of sales/business development models:

CLOSING SALES MODEL
The 1950’s introduced this model, which concentrated on the product being heavily emphasized.
Key Elements:
✗ Presentation Skills
✗ Trial Closing
✗ Overcoming Objections
✗ Final Close
This model is still in use today, usually in high-pressure sales.

PRODUCT/SERVICE PUSHING THROUGH
PERSONALITY, PERSISTENCE AND PRICE
➲ The salesperson is tenacious, persistent and usually has a low-cost item and works on a numbers game.
➲ The natural born salesperson enjoys interfacing with people and usually has an engaging personality.

RELATIONSHIP SALES MODEL
➲ The salesperson builds a relationship, over time, with repeated visits.
➲ The buyer and seller get to know each other on a personal and professional level.

PROBLEM-SOLVING SALES MODEL (1960’s)
Focusing on:
➲ Open-ended questions – Role-playing is used with students to get them to understand how to get clients or prospects to talk about the things that are important to them.
➲ Closed-ended questions – Closed-ended questions require a yes or no response.
➲ Listening skills is a key component.
➲ The salesperson takes the information and then presents solutions.

VALUE ADD SALES MODEL (appeared in late 1960’s).
Price objections raised by the “Problem-Solving Sales Model” can be countered by adding additional services. In this way, adding these services to the base product/service gives a perception of the value received versus the price.

CONSULTATIVE SALES MODEL (surfaced in early 1970’s)
➲ Determines how to lower the clients costs and/or
➲ Determines how to increase the client’s revenues The company requires a depth of understanding of their clients’ business, as well as a solid track record in delivering proven results. Start-ups find it difficult to compete in this
type of sales model.

PARTNERING
This model became the buzzword used by salespeople–not in creating a legal entity, but in building a joint plan for
creating an opportunity. The sale is conducted at the highest level of the company and an output is a business plan
targeted at a niche within the clients’ market. The term partnering became highly overused and misused. Clients and
prospects soon tired of hearing the word.

TEAM SELLING MODEL
Though not new, the Team Selling Model became increasingly more integrated into the sales model. The salesperson
in this model must coordinate all of the activities within the organization and external to the organization, in order to
win the business.

COMPLEX SALES MODEL
✗ Large ticket sales
✗ Multiple decision makers
✗ Extensive coordination, both internal and external
✗ Long lead times
The role of the salesperson involves taking on a strategic role in developing win themes, internal politics, competitor
analysis, and legislation, as examples.

It is important to think about your client base, your reputation and brand, your team–whether they are salesmen or technical people who happen to need to bring in business, and what your goal is. (Hint: a sale that is undone a year later when the client is not retained is not an accomplishment.) In general, it is best to educate and involve the prospect, help them feel good about choosing your company, and guide them through letting the current provider go. When we consistently approach prospects with consultative solutions rather than hard closes, then we are developing business rather than selling.

Getting Entrepreneurs Unstuck

So many businesses start with grand visions and hopes, only to miss the mark along the way. In our home state of North Carolina, 26000 businesses are started each year; but, 23000 fail each year as well. Without getting into the dynamics of how many survive for three or five years, we can at least ask the question “why?” Why do so many businesses fail each year?

Mismanagement, making mistakes others have already made, inadequate capitalization, and poor knowledge of systems and process resources are all contributors to business failure. The reason many of these mistakes are made is the lack of a sounding board for many entrepreneurs–someone to whom they can turn for ideas, resources, and encouragement. For centuries, there were very formalized apprenticeship programs in many industries that helped new workers become business people. In modern times, we use the term “mentor” to describe someone who is willing to work with an apprentice.

Management of a business is tough work. Having a mentor can make a big difference. Some of the things a mentor can offer include:

  • Business strategy and planning to make sure their business is focused on a viable market with a winning product and/or service that has a competitive edge
  • Forecasting and financing ensuring that sales plans are realistic and that cash is well managed
  • Operational discipline and judgment to increase the chances of success by making fewer mistakes
  • Industry connections that can help accelerate the business and its operations
  • Start-up company experience that can instill the wisdom of what it takes to really start and manage an emerging business

Organizations like EntreDot and incubators like the Cary Innovation Center and REDii in downtown Raleigh are but a few of the many resources that smart business owners seek out. The value is in having someone on site who can walk and talk  you through an issue that is new to you. The “someone” is often one who has more experience in business, but can also be a peer in these incubator environments.

Getting “stuck” on a tough issue is okay; staying in that predicament can put jobs, ideas, and investments at risk of loss. Regardless of whether you live in a community that has ready providers of mentoring or have to seek it from elsewhere, it is vitally important to your success to get help. Becoming “unstuck” makes life more enjoyable, fuels the economy, and builds better communities. Best wishes!

Cultural Due Diligence Breeds Success(ion)

In a blog post (“The Human Side of Due Diligence”) of October 2011, Michael Bittle talks about the challenge of sizing up a company’s culture in the midst of a private equity transaction. Even if your team is savvy in its financial analysis, interviews customers and executives, and puts together airtight LOIs, he argues, you can miss the important undercurrents that are culture.  Too many companies are dressed up for a suitor, only to prove to look to good to be true.

A recurring drama plays out wherein performance swoons, key managers leave, and morale sinks as well. The investors scratch their heads and wonder what has happened. Enter the concept of the informal culture–what values, unspoken agreements, collaborative tendencies, etc existed prior to the transaction. Bittle argues that, in the heat of getting a deal done, that the quant jockeys often have neither the time nor the training to be extra discerning about these nuances than can be a company’s undoing.

In the Research Triangle Park, we are developing a national reputation for angel or venture-backed technology and life science start-ups that all aspire to make their commercialized product/service a household name. Along the way, they receive outside investment and some matriculate to a successful revenue path that ultimately leads to a liquidity event. Very few take an approach wherein the founders want to stay with the company as it matures. This can be good and bad. In the cases where the founder brought an academic mindset to enterprise, it is often better that professional management run the company longer term.  On the positive side, emotional bonds are built between employees 1, 2, 3 …and #50, #100, etc. These bonds create stability, a sense of community that can be disrupted by the introduction of outside ownership/management.

George Bradt, in an article in Forbes on February 8, “Corporate Culture: The Only Truly Sustainable Competitive Advantage,” takes the position that competitors, given time and money, can duplicate almost anything except culture. “In sustainable, winning cultures, behaviors (the way we do things here) are inextricably linked to relationships, informed by attitudes, built on a rock-solid base of values, and completely appropriate for the environment in which the organization chooses to operate.”

Organizational development principles can be brought to bear in the due diligence process if the consultant focuses on soft issues rather than concrete, easily measured ones. Whether an EQ assessment is administered to managers, or some type of DISC or MBTI with their direct reports, it can be helpful to understand who is the backbone of the company and how they may behave/make decisions. Transparency can drive smooth transitions if the former owners/executive team is willing to give the private equity/acquiring company access to employees earlier in the process. If people are made aware of the potential transaction and given an opportunity to design their own future, they are more likely to be/remain engaged in positive behaviors and outcomes.

Eventually, the first generation leadership will have to give way to new leaders, even if there is no transaction. The succession is more likely to be successful if the culture is aligned with the company direction through thoughtful interaction with employees and casting vision for how their contributions will continue to be needed. Such best practices are more likely to reinforce trust and a desire to build something great together.