Order of Magnitude CEOs

If You’re Measuring Your Golf Handicap but Not Potential Hires – Something’s Wrong

“How did it work out with the Sales Manager you hired earlier in the year?”

I was playing golf with George, a 6 handicap, friend and business owner back in September.

“Not so good Jeff, unfortunately, we just ended up letting him go last week.”

“Really, what happened George, you were so high on him?”

“Jeff, pretty simple, he couldn’t sell.”

“What do you mean George? When we last met, you had just hired him.  You talked about his successful track record of selling.  If I remember correctly, you dug pretty deeply into his sales process and methodology and you were quite happy.”

“Yes Jeff, but he wasn’t able to get meetings with channel partners in his territory which typically leads to about 2/3 of our new business.  He has no idea how to hunt for new partners let alone win them over to our offer.”

“Were you aware of that before you hired him George?”

“I was aware of his limited channel expertise but didn’t think it was that big a deal, I thought the other areas where he excelled would compensate for his channel partner weakness.”

“How did he score on the channel partner area when you measured him?

I drew a blank look from George.

“Let’s change topics for a moment George, do you know your golf handicap?”

“Of course Jeff, you know it’s a 6, you’re lucky I let you play with me,” George laughed.

“How about, average # of putts, driving distance, and how many rounds you played this year?” I responded, shrugging off the comment about my golf game.

George was just about to answer when I ended with, “those questions were rhetorical George.  I know from previous conversations that you know all those stats about your golf game and more.”

George nodded in agreement.

“Here’s another question George that’s not rhetorical, what’s more important, your golf game or your business and, in particular, hiring great sales managers?”

“Of course my business, it is the key to taking care of my family, but, how do I measure hiring a sales manager, it’s an art not science.”

“It is George, but you can make sure to measure the important aspects of the role like hunting, domain and industry expertise, sales process and…”

“Channel partner expertise,” George jumped in.

“Exactly George, and then you can weigh each attribute which will force you to figure out which areas are more important than others and also to compare sales manager candidates.”

“You know what Jeff, if you had mentioned this in our last conversation, you might have saved me a whole lot of time and money.”

“There’s always the next hire George, it’s all about getting better every week,” I replied as George hit his wedge to five feet from the cup and my wedge ended up in the bunker.

Maybe you should take your own advice Jeff and start measuring your golf performance.

“It’s just not that important to me,” I thought to myself as we each grabbed our separate clubs for our next shots.

One of the Secrets of Why Order of Magnitude Business Owners are "Lucky" - A Great Top of the Funnel

A few days back I was listening in on a conversation between two business owners.

“You’re so lucky,” stated Ernie, a business owner who supplies services to Keith.

“What do you mean Ernie?” Keith replied, looking genuinely surprised.

“Well Keith, I love the manager you just hired.  As you know I’ve been interacting with your new manager.  He is so motivated and a pleasure to be around.  I’ve been having a hard time finding good staff and I know some other owners who have been struggling to find talent as well.”

Ernie paused a moment and then asked, “What’s your secret, Keith?”

Keith replied, “It’s the same secret, if you want to call it a secret that I have been using to increase my client base every year.  Come close and will I tell you, we don’t want anybody else to hear,” Keith smiled as he was obviously joking.

Ernie didn’t see it as a joke though and he leaned closer to hear what Keith would say, forcing me to subtly take a few steps closer to their conversation.

Keith started talking, “Well, let’s take it as a given that you already have a good offer because if you didn’t, nothing else matters.  To add quality staff and to grow your customer base, it is important that you allocate time and resources to building the top of your funnel.  It’s a numbers game.”

“Go on,” Ernie implored, “What do you mean, building the top of your funnel?”

“For instance,” Keith continued, “for my manager position that I recently filled, I advertised consistently over the last month as well as I told business colleagues in the industry that I was looking to fill this position.  I ended up getting about 100 resumes, meeting 10 people in person and hiring the manager you have been with these past few weeks.  So, although it may seem “lucky” to you, to me I made my own luck by getting 100 candidates at the top of the funnel which led to hiring one great person who is a perfect fit for my organization.”

“Wow, that’s a lot of work just to hire one person,” Ernie blurted out.

“Yes it is, creating a big top of the funnel requires work,” Keith replied, “now do you want to hear how I got lucky at growing sales these past few years,” Keith smiled again.

“Let me guess Keith, a big top of the funnel.”

“Exactly”, Keith replied, if I want to sign 10 new clients, and I know from experience that only 1 in 5 leads become clients then I need a funnel that is….”

“50 leads” Ernie jumped in and then continued, “Keith - You can be certain you won’t hear me calling you lucky again!” 

“I don’t care what you call me just don’t call me late for dinner,” Keith deadpanned.

They both laughed as Ernie replied, “I can tell you one thing, you chose the right profession - good thing you’re a business owner and not a comedian.”

It Doesn't Just Matter What Gets Said, It Also Matters What Gets Heard

“Why is there cream cheese on one of the bagels?” my wife asked me, “and where is the tub of plain cheese, I only see the vegetable cream cheese?”

We had guests in from out of town over the weekend, and I had just returned home from our local bagel store, where I thought I had ordered a mix of a dozen bagels and two tubs of cream cheese – one plain and one vegetable.

Instead, I had received 11 bagels with the 12^th bagel already spread with cream cheese and a single tub of vegetable cream cheese.

The bagel shop server must have messed up the order (or had she?)

“That’s funny, not a big deal,” my wife replied, “I went to Dunkin Donuts on Friday and asked for a coffee with half sugar and cream and as soon as I tasted it in the store, I knew it was wrong, it was way too sweet.

When I asked, I found out, the server had put double cream and double sugar.”

The Dunkin’ Donuts server must have messed up my wife’s order (or had he?)

In both cases, it’s hard to be sure what was heard, compared to what was said.

Contrast to the drive-thru experience at McDonald’s I had a couple weeks back where what was said and heard was the same yet there was still a breakdown.  I placed my usual order for my two daughters which included a small Iced Tea for my older daughter. Upon getting home and bringing the food into the kitchen, my older daughter asked for her Iced Tea.  Knowing I ordered it, having seen it on the order screen, I checked the car.  No Iced Tea.  I checked the receipt, and of course, saw the order on the receipt. With confidence I called the McDonald’s back to let them know and they proceeded to do a nice job of addressing the issue.

These are three very trivial examples for me, but I speculate aren’t trivial for the 3 owners (of the bagel shop, Dunkin’ Donuts, and McDonald’s) of what occurs every day in businesses.  Your staff is communicating with other employees, with clients, and with vendors among others, where:

1. Commitments are made (“Yes, we will finish it by Tuesday.” Do both parties agree on what “It” is and when on Tuesday),

2. Offers are made and accepted (“Happy to take that off your plate”, “Why Thank You!”   Does the person making the offer and the person accepting the offer agree on what is actually on the “plate” and have the same standard of satisfaction) and;

3. Assessments generated (“Tim’s not reliable, let’s have Rachel take care of it instead”.  Is the assessment of Tim not being “reliable” credible for the specific item required or is Tim never reliable which has broader implications?)

Commitments, Offers, and Assessments made by yourself and your staff can have a profound impact on the relationships your firm has with these very employees, clients, vendors, and other people you need in order to fulfill the ambition you have for your business.

Actively training staff to be aware of these potential breakdowns and designing systems to prevent these breakdowns can go a long way towards closing the gap between what gets said and what gets heard as well as provide additional opportunities to make your company’s offer standout in the marketplace.

If you think your only Business Issue is not having "A Few Good Sales People" you really do have a Business Issue

“That’s all well and good Jeff, but all we need is a few good sales people.”

I was speaking with frustrated business co-owners who were IT Consulting Partners with my previous firm, M5, that were stuck. Their business had not grown in years and both of them believed it was their inability to hire quality sales people.

“We have a great service, our clients love us, we just need a few good sales people.  All the sales people we have hired in the past have not worked out.”

I threw out a few questions in rapid succession:

“Have you written down and mutually agreed where you want your business to be?” 

“How is your identity in the marketplace with your partners and other interested 3^rd parties other than your existing clients?”

“Does your current business model scale as you add additional staff?”

“What new offers have you rolled out or plan to roll out?  Who knows about them?”

“How is your training program for…”

I was about to finish the sentence, when I was politely stopped by one of the co-owners….

“That’s all high level stuff Jeff, we just need a few good sales people.”

Ok, I decided on a different tact.

“Why would an accomplished sales person or an up and coming sales person choose your firm over their existing firm or other firms?”

“Exactly, now you got it Jeff, that’s our problem, we just need to hire accomplished sales people and all the high level stuff will take care of itself, can you recommend anybody?”

“No, you’re not understanding my question guys, Why would an accomplished sales person choose your firm over their other choices just like a client deciding to select your firm over other choices including, Do Nothing and stay at their current job?”

“No, you’re the one who’s not getting it Jeff, we just need a few good sales people.  After we have the good sales people we can work on the high level stuff like marketing, training, and why people should work at our firm.”

Now for the interesting part… that conversation took place around five years ago.

And what reminded me of it?  That’s right, I ran into one of the co-owners recently and after catching up briefly, I asked if he was still looking for a “few good sales people.” He replied, “Not anymore, I guess you haven’t heard, Jeff.   We had to downsize, eventually it was just the two of us with some 1099 help.  We ended up selling the business, if you can call it that, a few months ago to a larger firm in our industry. Now I have job,” he replied in a somber tone. “I am sorry to hear that, if you are up for it, would love to hear more about what happened,” I replied, “do you want to grab coffee?”  “Can’t do it now Jeff, I got to hurry back for weekly training at the office, maybe some other time.”

Building a scalable sales team is typically key in creating a valuable business but there is much more to it than just finding “A Few Good Sales People.”

Want a Great Culture for your Business? - Get Some Religion

 

This past weekend not only did I attend a Bat Mitzvah of the daughter of an old family friend, but as a bonus I got my answer to the question above.

As I sat in the synagogue taking part in this important ritual celebration, something dawned on me that I had not explicitly noticed before.

The elements of a strong religion are very similar to what it takes for a business to design its own strong culture.

Religions, as do businesses, share three fundamental elements that can lead to having its members (or employees) purposely acting by design or intention of its leaders:

Tell Stories that Matter - In religion, “the policies and procedures” for how to live our lives are not given to us as impersonal theoretical statements but rather, we learn them through stories.  Whatever bible (or bibles) your religion happens to follow, it is made up of a series of truly personal and memorable stories with people making tough decisions or extreme personal sacrifices helping us remember why the religion got started, what is important to the religion including what is acceptable (and not acceptable) behavior.

When there is an issue with a client, how do employees know what to do - through a stagnant formal written policy issued years ago or do they know compelling stories of how the company founders and early employees resolved issues with clients in the past.

(Hollywood, the leading modern creator of stories, is the first to admit that religions have great stories and even made a film about the life of Jesus Christ called The Greatest Story Ever Told.  My personal favorite bible movie is The Ten Commandments starring Charlton Heston, which I first watched as a child with my family, but perhaps I have a cultural bias – wink wink).

Create Rituals -  Each religion has its own customs, celebrations, and holidays that reinforce the stories of the religion as well as indicate whether somebody is actively involved in the religion or not.  These can be daily, weekly, annually, or by milestones.  Participation in these rituals is considered vitally important to the religion.  What gets celebrated and rewarded in your firm?  The day people start or the day people leave or when they reach a certain milestone or achievement?  Do meetings start on time with an agenda or is it expected that meetings start 15 minutes late? Do people leave right at 5:30pm or are they expected to stay late or it doesn’t matter as long as their work is completed? How are the accomplishments treated? And, what about the failures?

Invest in Training – When new people join a religion, typically children, but not always, it is up to the experts in the religion including its local leader (e.g. the local priest, rabbi, minister, imam), to teach the children about the religion, what is important, what is acceptable and what is not.  What do the experts use for material? Exactly; they use the stories and rituals of the religion so the students can learn what is valued and considered significant in the religion. The stories and rituals of your own business and why they are important should be the starting points for the critical foundational training with your own employees.

How do people end up losing their religion? They no longer follow or believe in the stories or rituals. Or in some other way the religion repels them.  If the culture of your business is strong, the wrong employees never join or end up being repelled from the organization - either leaving on their own or at some point the culture naturally forces them out.

If you’re not satisfied with the design of your business culture, I respectfully suggest you get some religion.

Nobody’s Great at Everything - Before You Make Your Next Hire Know what Matters the Most to Succeed in the Role

“I’m still not happy with my sales team.”

“What’s going on?” I asked Sherman, a relatively new, but up and coming New York City business owner.

“Well, I want everybody on my sales team to make 250 calls per week, be great at networking, be a strong closer, and handle account management for our existing clients.”

“Anything else?” I asked with a small smile.

“Yes,” Sherman continued without noticing my smile or at least ignoring it, “they need to know the industry and our offer really well and of course represent our brand in the appropriate way.”

“Sherman, you remind me of a friend who complained to me last year about his housekeeper, can I tell you about his experience?”

“Sure, although not sure of the connection.” Sherman replied.

“Well, it turns out that the housekeeper was not that great a cook, she was below average in keeping the house clean, and she sometimes forgot to do things on her list of chores, like cleaning the bathroom.”

“So why did your friend keep her?” Sherman immediately asked me.

“Well, I asked that as well Sherman. It turns out she has her own car so she could get to my friend’s house early enough to put the kids on the bus, she could do the weekly grocery shopping, and after school she took the kids to their after school activities. And the best quality, according to my friend, is that she was great with their kids. She was very easy-going, made them dinner, did the homework with them, the kids loved being with her and both my friend and his wife really trusted her with their kids.”

“Wow,” Sherman responded, “that housekeeper does a lot.” “Your friend could easily have found somebody who cooked better or cleaned better, but most likely he would have ended up hiring multiple people and maybe none would have been great with the kids. Instead your friend through one hire had somebody who did everything ok except for the quality considered the most important – taking care of his kids.”

I replied to Sherman, “that’s exactly what my friend eventually figured out, that’s why the housekeeper is still with them and that’s why my friend stopped complaining about her.”

Sherman chucked, ”guess I have to figure out Jeff what is the equivalent of ‘taking care of the kids’ is for me when hiring sales people.”