Use METRICS to Supercharge Your Sales

Earlier this month we created a series of metrics and used them to evaluate sales performance. Last week we discussed how metrics define one's productivity.  We also showed how we can view a task more clearly by breaking it up into component sub-tasks.  Each of these sub-tasks is a link representing a particular skill in the sales skill chain.

It's apparent how improving a single skill X% will increase productivity X%.   But by dissecting the sales task chain and improving several individual sub-tasks a savvy manager can dramatically improve their rep's performances.  We know from last week that overall productivity is the product of the all sub-tasks in the sales process chain. So improving many component links within this chain will have a multiplicative effect on productivity. A smart manager will strive to subdivide the sales chain into as many links as s/he can.

I’ve Measured my Reps’ Sub-Tasks; Now What?

So you're armed with your METRICS, a list of ratios for each task for each rep.  Now where do you go from here?

Train Individually

Each of your sales employee has a different set of micro-skill ratios.  You can see how improvement in each one contributes to their overall sales volume which increases your rep's commissions.

Show your reps how training and improving micro-skills in this manner will directly impact their compensation.  If you explain and share your rep’s metrics with them, they’ll be excited to discover how transparent and easy it is to improve their productivity.  You’ll be able to help them plan a roadmap to success, thereby helping them increase their earning power.  Great salespeople derive their esteem from their ability to sell so helping them achieve high performance will empower them and give them tremendous job satisfaction, a common problem of managers.

Train each rep's weakest micro-skills.  Since each ratio improved grows productivity, choose the sub-tasks with the greatest room for improvement.  The sub-tasks with the lowest ratios are the easiest to grow.

Put responsibility for your rep's progress in their own hands.  Empower them to evaluate and improve their own METRICS.  After awhile they’ll be ready during your coaching sessions to discuss their weakest areas and their plans to improve them. You’ll be surprised how invested in the process they become.

Get Expert Help

Although the concept may be simple, developing appropriate metrics for a company is an involved and specialized discipline.  Done poorly, you can do more harm than good.  To achieve the best results, you need an expert in your corner.  Feel free to contact us to customize a high-performance sales development solution for your company.  We can also show you how to use METRICs to create a highly accurate sales forecast.

This concludes our series on Ingenious Sales Management.  You can now promote a high-performance environment and culture; develop individual metrics for each rep; analyze performance and structure training to improve performance; and develop compensation that incents high performance.

Next week we'll turn our attention to financial management. Okay, I see you yawning but trust me. Reading this material might save your business. We'll discuss three common cash drains - you could be throwing away half your profit without realizing it - and easy fixes. Look for it next week. Until then,

profitable business All!

How to Combat Employee Turnover

One unfortunate aspect of management is turnover.  Many of your hires simply won’t work out.  A new worker may develop personality clashes with coworkers, turn out to be incompatible in temperament or values, or may not fit in with the rest of the staff.  Or they may not develop the required skill set rapidly enough.

You want to counsel out any employee who is a poor fit culturally to achieve a smooth running organization. Even the geniuses must go if they aren't team players. Like Netflix asserts: No brilliant jerks! But what do you do if an otherwise acculturated employee doesn’t ramp up quickly enough? Do you show them the door or continue to try and train them?

Cherish Your Acculturated Employees

I’ve written in a previous article that you want to do everything you can to retain your employees who are a cultural fit. Even those who cannot perform their job at present, you want to find a way to keep. But how do you accomplish this and still achieve the organization's objectives?  You want your people to be competent, even expert, at their jobs.  So how can you handle under-performers and lessen turnover?

Be open to change their role within the organization.  Maybe they can perform most of their duties but there are specific areas in which they are deficient.  If so, explore changing the job description and can hand off the weak areas to other individuals.  Return something else to their plate to compensate.

Good personnel managers ensure they overlap people’s skills to ensure several people are available to complete mission critical tasks.  Creative managers adjust responsibilities to assign the best person to each job.

As long as you can accomplish your objectives does it matter who does each task?  If you are willing to move people around to best suit their individual needs and the needs of the company, you will develop stronger, happier subordinates.

Also, you will be giving your staff the ability to stretch their comfort zone within the company.  If you get a reputation for stretching workers’ professional development, you may find your people taking initiative and accepting responsibility outside their own niches.

Next week we’ll discuss how to use METRICS to train your people.  And I’ll delve into another Ingenious Sales Technique called “Follow the Leader.”  It’s a terrific way to pack convention halls and ensure your seminars and presentations are standing room only.  Later I’ll talk about how to turn costly fees for things like credit card transactions into a profit center.  Look for it starting next week.  Until then,

profitable business All!

An Ingenious Way to Communicate Disagreeable Policy

If you’re in management you’ve likely had to interact with an entry-level employee who just didn’t get it.  Maybe they were young or inexperienced, or maybe just a poor fit.  For whatever reason, you had to tell this worker repeatedly, for instance, that they can’t take time off work without notice.

Managers sometimes have to relay and implement undesirable policies.  You may have to refuse the above employee’s request for time off.   Inexperienced workers often don’t realize what experienced employees take for granted.  For example, that they must give adequate notice when requesting time off.

Managing Inexperienced Employees

So how does a manager deal with an employee who expects you to explain what seems obvious? How do you reiterate basic policy? Do you tel them ‘nobody else gets time off; why should you?’ Or maybe you quote the rules in the HR handbook.

Gen Y entry-level employees are more likely to question your decisions, requiring you to justify yourself when you refuse what you deem is a ridiculous request. But there’s a painless way to explain basic company behavior. An unbiased process that minimizes conflict and demonstrates respect while encouraging employees to become self-sufficient: stoop to their level.

The Map Doesn’t Go There

Don’t fall into the trap of acting sarcastic, condescending, or surly. Your employee will just become dejected and fail to understand why you refused their request. They'll end up resenting you and the relationship will sour.

People will accept readily what they discover themselves that they would be skeptical about if told. Similar to how two people both reviewing a map realize simultaneously that a particular road won’t take them from point A to point B, lead your workers to discover for themselves that they can’t get there from here.

Collaborate, don't manage. As you mutually review the facts, ‘think out loud‘ your conclusions and pretend to discover them together. When you mutually discover the request is impossible, your worker can’t dispute your conclusion because it’s not your opinion; it’s based on facts that both of you jointly uncovered.

Don't Steal Your Employees' Problems

When your employees urge you to solve their problem for them, return the ball back to their court. Teach them to solve their problem themselves by inviting them to do research. Your sole contribution will be to suggest possible resources they might use to unearth the information. For example:

Worker: “Can I have the day off next Wednesday?”
You: “What does the schedule show?”
W: “Well, I’m on the schedule.”
Y: [Remaining silent]
W: “…but I have to help a friend move/deal with an important personal matter/attend to a sick dog.”
Y: “Hmm, bummer. What does the HR manual say about requesting time off?” (affecting curiosity)
W: “I don’t know. So can I go?”
Y: “I’m sure you can find a copy of the manual somewhere around here.”
W: [picking up manual and reads]: “Okay, here it is: ‘...employees can substitute shifts provided they obtain permission from their supervisor and arrange for the substitute.’”
Y: [Remaining silent]
W: “So can I go then?”
Y: "What's your plan?"
W: "But Bob refused to sub for me."
Y: "I'm sorry to hear that. Will you be able to leave then?"
W: "I guess not."
… and so on.

If you must impart information, reiterate facts they've already uncovered. Whatever you do, don't accept ownership of the problem or you'll rob your employees of the value of solving problems themselves. Take care to set precedents that make your people self-reliant.

After a few repetitions, your employees will take initiative and start solving their problems themselves. And this process is replicable. In the future when this worker is in a leadership role and faced with a similar situation, s/he can parrot the exact same questions to a subordinate. Because it increases the competency of the entire organization, it qualifies as an Ingenious Business strategic training technique.

We’re almost ready to migrate over to our new site. Upon going live, I’ll post the link and a short URL that you can use to get to this website. Next week we continue with applying Metrics for top performance. Then later in the week I’ll discuss how to handle an employee who is a fit culturally but lacks the proper skills for their job. Do you get rid of them or not? Just like the one explained above, the concept is simple in theory but it can be used to great advantage within the organization. It’s coming up next week. Until then,

profitable business All!

Identify and Train SuperStar Salespeople

Determining which of your salespeople are top performers is simple, right?  Add up their sales and the highest consistent earners are your stars.

But how do you gauge the productivity of new reps?  How do you account for the inevitable ramp up with hires who are still learning the ropes?  At best they're marginally productive during their probationary period.   How long do you allow them to struggle before pulling the plug?

And what about a struggling salesperson making minimal progress that you believe is going to break through any minute?  How can you be certain you're right, that you aren't just throwing away good money after bad?  And how do you assess and assist long time employees who have started to slip?  Is their drop in volume the beginning of a trend?  Or are they just going through a slump?  How do you help them?

What are Metrics?

The answer lies in formulating and applying metrics.  These are performance measurement statistics that identify skill levels for various tasks for each salesperson.  Highlighting areas of strength and weakness, I  have seen very few companies use metrics to their fullest potential.

That's a waste because properly applied metrics make the job of a sales manager much easier.  If sales management has a silver bullet, it’s knowing how to create and apply metrics.  Correctly applied, metrics provide:

✔    An objective scorecard of performance
✔    Areas of individual strength and weakness
✔    Transparency of the sales process

Metrics can also provide a mechanism for deadly accurate sales forecasting, something we’ll discuss in a future column.

Here is how you can use metrics in your company to supercharge productivity:

•    Develop individual, not team performance measurements
•    Share your reps' stats to empower them to own their progress
•    Provide individual training for weak areas and disregard all others

Assess Manager Performance using Metrics

In larger organizations, upper management can compare departmental and regional metrics to determine specialties and deficiencies of the managers.  A properly applied program of metrics can be a huge reporting and training benefit to a sales organization.

Consult Expert Help in Devising Metrics

To learn more, consult Alexander's Making the Number. Although the concept of metrics may seem simple, developing appropriate metrics for your company is an involved and specialized discipline. To achieve the best results, you need an expert in your corner. Feel free to contact us to help you develop high performance-based measurements for your company.

In the next article in this series, we'll derive a set of metrics for a hypothetical company.  Then we’ll use these to illustrate how you can improve the skill level of each of your reps to vault your department’s sales productivity.  Until then,

profitable business All! 

The Ingenious Executive- Create a Turnkey Operation

Have you been promoted lately? Most likely, your workload has increased. Employers often ask their workers to take on additional responsibility, especially during a recession where funds for extra labor is scarce. So how do you handle the additional work? With Ingenious Time Management you can hand off your overflow and preserve your relationships, all while increasing the skill level of your junior staff.

Let’s say your duties have expanded and you’ve just accepted a greater workload.  You have relationships with a select group of contacts– customers, vendors, or partners.  These relationships still need to be managed.  And you don’t want to burn any bridges.  Maybe some of them are even friends.

You know some coworkers in the same boat who just accepted the new work without transferring any of the old.  But you can see they’re now overloaded and headed for burnout.  You don’t want that to happen to you.  Because you're an Ingenious Executive you know you can grow the company. So you must find  a way to lighten the load somehow.

Last week we discussed how to encourage a customer to fire himself by gradually decreasing the value you provide.

How to Train the Organization

Ask your supervisor to allow you to delegate certain of your old contacts to junior personnel.  Suggest in this way you’ll be giving these junior workers valuable on-the-job training them while freeing up your schedule so you can excel in your new duties.  Agree to oversee the process.  Positioned this way, most bosses will see the benefit and agree to your proposal.

Start by informing your contacts of your new responsibilities and invite them to celebrate your new role with the company.  Mention that one benefit of the promotion is additional staff that can help you fulfill your new responsibilities.  Reiterate that you have always strived to provide the very best service.  Stress to your contacts that they can rely on your delegate to handle the daily routine calls but that you'll still be overseeing the account.  Afterward route through every call from these people to your staff.

In the same way you fire customers, you then delegate your old contacts.  Gradually make it less convenient for your old contacts to deal directly with you.  At the same time, ensure your delegate provides greater convenience when dealing with them.  Similar to removing value an outgoing customer receives, you gradually decrease the convenience in dealing directly with you while providing a comfortable alternative.

The key is to do this gradually, in stages.  You want your contact to feel they ultimately make the decision to deal with your subordinate, not have it thrust on them.

Initially have your delegate act solely like a receptionist, answering and transferring the call to you.  Then in the following calls instruct your staff members to engage lightly and pleasantly on the phone, perhaps letting them know how much they’re looking forward to working with them before passing the call on to you.

They for each call, delegate will increase the level of interaction with the contact while prolonging the time it takes to reach you.  Now they won't transfer the call; they'll take a message. Again gradually increase the time it takes for you to get back to them.  At the same time, during each call your delegate will offer to handle the matter in your stead.

As they prove their competence, your old contacts will start to rely more upon them.  Soon after they’ll stop approaching you and deal directly with the delegate.  Then you can manage the relationship from a high level while your delegate handles the daily interaction.

[Note: Don't make them wait long enough to irritate them, just to make them aware that you are getting busier.  And in any emergent situations, respond promptly.  Use your judgment.]

Why This Delegation Technique Succeeds

People fall into ruts.  Your contacts want to continue to deal with the same person out of habit, and to avoid retreading already covered ground.  So some contacts may take a long time to accept the delegation.  That’s fine; eventually they will.  Handled properly, at some point the contact will accept the help of your delegate. 

In this way you get your contacts to fire themselves while still maintaining the integrity of the association.  Each contact you delegate frees up a little more of your time to handle your new duties, make more sales, add more partnerships, add more staff, and build the organization.  You can scale an organization very rapidly this way.

Have you found a better way to scale?  What do you think of this method?  Leave a comment and let me know.

Later this week I’ll share Ingenious Sales Training, a way for you to institute a free training program that will improve each rep in your sales department.  And in a later article I’ll reveal how you can eliminate the headache of those annoying variable expenses like merchant card fees.  It starts next week, so stay tuned!  Until then,

profitable business All! 

Ingenious Sales Management:7 Ways to Promote a High-Performing Culture

Often, salespeople are viewed like standard employees.  They’re asked to answer the phone when it rings, handle paperwork, and do a myriad of tasks unrelated to selling.  The rationale by the rest of the staff for having the salespeople handle these duties is: “they’re already in the office; why not assign them to do it?” 

Your salespeople have only a few hours in the day to get in front of customers.  As their manager, it's your job to help them maximize their selling time.  This means implementing processes that allow them to focus only on sales-related duties.

By instituting only a few guidelines, you’ll be on your way to creating a high-performance culture and readying your organization for an inevitable spike in revenue.

Here are 7 steps to promote an environment that nurtures and creates top performers:

1. Focus on results, not activities
   When you bring in a new hire, you must supervise them to ensure they are performing at the right activity level to meet quota.  But once they’ve proven themselves, shift your focus to results, not activity.  Your best salespeople can spend a few hours on the golf course and bring in a huge win.  If a rep consistently surpasses quota, do you care how many calls he made or how much he's in the office?  Drill down to activity only when one of your reps miss his productivity goal.  Then work with him to improve deficient areas.
2. Monitor unobtrusively
   In the next post, we'll develop metrics based on your sales process.  Employ a cloud based web solution like Salesforce.com or another Customer Relationship Manager.  It will enable you to unobtrusively monitor transactions and generate metrics.  This way your reps can worry less about writing reports and maximize their time in front of prospects.
3. Individual continual improvement by drill training
   Use the results of your reports to determine weak areas and share these with your rep.  Next week I'll share how to derive each rep's performance measures. And later I’ll explain how you can use drill training to train deficiencies. Your reps will prefer this type of training because they can see how it directly impacts their pay.
4. Pay ratcheted commission on total volume
   Setup your commission percentages to escalate as they increase sales.  Let’s assume a rep’s quota is 500K per quarter.  And you pay 5% commission on sales at that level.  At 750K, increase it to 6% commission.  If you pay higher commissions on the entire volume, not just the incremental difference, you will powerfully motivate your reps to shoot for each next level.  An extra 1% of increased commission on the entire volume will drive your reps to shoot for the next level.  And the next, and the next.  They’ll be motivated to hit successive levels.
5. Delegate non-selling tasks
   Maximize selling time.  Remove anything that doesn’t contribute directly to the sales process.  Transfer administrative chores to an hourly employee.  Don’t interfere with face time in front of prospective clients.  The increased earnings your laser-focused reps bring in will more than offset the labor cost.  Minimize sales meetings: use technology to collaborate and keep meetings short and positive.  Announce new wins and offer motivating training.  Make non-urgent announcements using email or departmental bulletin board.
6. Embrace virtualization
   Your salespeople need to be out of the office, not polishing their chair with their rumps.  Create performance-based, not time-based policies.  Support their choice as to how they bring in business and make their schedule flexible unless it’s impractical to do so.  If you’re worried about giving them too much latitude, apportioning increased freedom as their sales increase is a great motivator.  Inbound call center reps can handle calls from home with a remote connection.
7. Trumpet victories
   Salespeople are ego-driven.  Announce major wins at the end of sales meetings.  Appoint “Salesperson of the Month” type awards based on productivity.  Your reps will appreciate the accolades  even though they seem cheesy.  Organize a President’s Club.  If you can afford it, present coveted awards for overachievers: a vacation trip to a great place they’ll talk about all next year.  This will set the tone for future incoming employees.

A tip: First-class travel and accommodations at a domestic resort is much more coveted than an economy trip to an exotic isle.

It's your job as sales manager to shield your people. A portion of that is deciding how you think your sales department should be run and persuading management to let you do it. Most senior managers who haven't been in sales don't know the first thing about how to run a sales department. It's your job to explain it to them. If you succeed in instituting the above items, you'll find your workplace productivity soaring and you’ll be breaking records in no time.  You’ll also notice your job will become much easier because your reps will not be around the office stirring up trouble.

In Thursday's article, we’ll discuss a great method to create a self-running organization while lightening your schedule to give you more free time.  And next week I’ll share Ingenious Sales Training to further improve the overall productivity of your office.  If you embrace the principles of these four sales management articles, you should be earning respect from your peers and supervisor soon.  It’s all coming up in the next week so stay tuned.  Until then,

profitable business All!

High-Performance Compensation to Create Superstar Salespeople

In the last columns I shared a few Ingenious Sales Techniques to reach extremely difficult contacts, to breeze past the gatekeeper straight to the decision maker, and to coax the receptionist or administrative person to help you.

I want to turn our attention now to a different direction: sales management, the bane of many business leaders. This is the first of a series of articles on managing top sales talent. In this column we will discuss how to design a sales compensation plan for your company that powerfully motivates salespeople and supercharges results.

How to Motivate (or Create) Top Performers

After decades of designing and reviewing various sales compensation plans, I've discovered a few principles that hold true for salespeople universally. Here they are:

1. Commissioned salespeople will perform to maximize their pay. This sounds simple but salespeople are creative problem solvers. These people can be quite inventive and sneaky. Ensure you are incenting the correct behaviors or your reps will game the system.

2. Provide a living wage base salary that allows them to survive, and pay a handsome performance bonus. During the probation period, add a "non-recoverable" draw to their salary as necessary.

3. Incrementally revise their compensation plan so as the rep grows her sales volume, her commission percentage rises while her base lowers. Ultimately you want to wean all your people off of salary. Being 100% commission increases their confidence, empowers them, and makes them feel self-sufficient. It has several other benefits for the employer too.

Consult an expert to determine baseline levels for wage and commission percentages for your industry.  The best plans can not only help you pay reps appropriately. Properly designed plans can also help you interview and retain better reps and identify top talent.

How valuable would it be to identify future superstars? You can do it with a customized compensation schedule.

In the next column I'll discuss how to create an effective working environment for your sales reps. And in a later post I'll share how to create a metric-oriented process that helps you manage your people effortlessly. You'll learn how to engage your reps constructively and help them identify their problem areas. Then you'll help them get better without resistance. You'll also be able to use this Ingenious Sales Metrics technique to create an incredibly accurate Ingenious Sales Forecast.

Regardless if you're a new sales manager or an old pro, you'll want to learn this! Stay tuned. Until then,

profitable business All!

How to Keep Key Employees - an Ingenious Turn-key Organization pt iv

This is the last of a four-part series of articles on Developing a Self-Running Organization.  In the last post we discussed how to develop the leadership skills of your mid-managers.  By involving them in strategic planning, you can prepare your company to run in your absence even during a crisis.

Turn Line Workers into Managers

Okay, you're regularly involving your senior execs in planning and confident they're participants in your company succession plan. But how do you provide for succession of your line workers?  These may be senior people without any formal managerial responsibility but they know the ins and the outs of the organization.  Tenured employees who might be topped out in pay and marginally challenged, they are highly at risk for leaving.  They may have special skills that would be difficult, if not impossible, to replace. If they see themselves in a dead end position the threat of departure can be great.

You realize you could fix this if you could offer them upward mobility.  Unfortunately because of the structure of the organization or their particular role, while you recognize their value, they're unpromotable.  So what can you do to prevent losing these key employees?

There is a way to provide your line employees leadership responsibility in a manner that achieves a number of benefits to the organization:

• increased productivity
• cheap labor 
• clone irreplaceable employees 
• an extended interview of new employees to determine cultural and skills fit within the organization

Can you guess what it is?  It's offering internships!

Work with the local University

By working with the career center of your local college, you can offer internships to students in undergraduate and graduate programs.  Done properly, you can achieve all these benefits and more.

Assign a new intern to a senior line employee you think may need a new challenge.  Your seasoned vet gets an additional role and becomes a manager by virtue of their supervisory role over the intern.

The company benefits from the productivity of an additional employee at a fraction of the cost of a regular worker and this intern gets to learn your business during this time.   Your labor output increases and you can assess how well a potential employee would fit your organization and perform their assigned job.

Most interns won't prove a fit, but that's fine.  Most employees don't either and end up leaving.  But by utilizing interns in your employee screening program, you won't have the expenses of a new employee.

Executed properly, an intern program can relieve you of many costly burdens.  Think of the typical expense and upheaval when an employee- even a brand new one - departs:  initial training costs, training salary, benefits, incidental issues.  Often you worry about the impact on sympathetic coworkers.  Rarely, you may have legal issues based on discrimination or other matters.

With interns, you won't have all these expenses and you don't have to worry about the affect on coworkers.  Interns are typically temporary so if they don't work out you just don't invite them back.  And done properly, you invest only time.  Regardless of the outcome, your senior employee will still have reaped the valuable experience of managing and training the intern.

Extend a Job Offer to a Promising Intern

When one of your interns proves a good candidate, you can offer them a position upon graduation.  Since they'll already know the job, they'll hit the ground running and require less supervision.  Their retention probability will be much higher than if you had hired someone without a trial period.  After all, you already know they're a cultural fit.  They'll probably get to know their direct supervisor. Since a poor relationship with the boss is the top reason an employee leaves you'll have a better chance of holding onto them.

Bonus: since your new hire interned under a seasoned employee with a valuable and possibly critical skill set, you'll have taken a giant step forward to shoring up that gap.  If you had the foresight to instruct your grizzled vet to train the intern to do their job, you have another employee on their way to adding that skill to their toolkit.

There's a lot more to structuring a successful internship program - how to supervise, how to manage the project, what to stress to all parties, how to ensure your line workers are enthusiastic and competent to manage interns, how to measure results, etc. etc.   It's way too much for this short article.  If you are interested, the author is available for consulting on how to best implement this strategic advantage.  The benefit far outweighs the cost.  For additional help, feel free to contact the author.

This is the final article of this series.  You now have the tools necessary to set up your company to become self-running.  You can add any number of staff for free by using interns; your line employees will view the upward mobility and you'll lock in retention of your key employees; your senior and line managers are practicing strategic planning and delegation which lowers the costs of the company; and you and every other leader can be content the organization will run smoothly in your absence.

And isn't that what every business leader wants?  To set up a business that throws off cash without demanding a lot of time?  Now you can take that trip around the world, right?  Write in the comments and tell me what you think.  Have you used interns?  What was your experience?

Next I'll share another Ingenious Sales Technique.  Have you ever tried to reach a top executive at a company but you were simply unable to reach them?  I used this technique to reach Warren Buffet's administrator at Berkshire-Hathaway Corporation.  It's a fantastic skill from a book that I tweaked.  Stay glued.  I'll share it in the next column.  Until then,

profitable business All!

Instituting a Learning Culture - an Ingenious Turn-key Organization pt iii

Act Strategically by Training Tactically

In the last post I wrote about delegation. Teaching your executives this one skill can increase their effectiveness measurably. I also asserted that to be a great leader you should train your employees to replace you. We'll continue talking about what it takes to develop a turnkey organization: a business or department that you run, not a job that runs you.

To achieve your ultimate goal - that of creating a self-running entity that doesn’t require your constant supervision - requires you to implement long-term strategies, not rely solely on short-term tactics.  To define the two: a tactic is giving a man a fish; a strategy is teaching him how to fish. The tactical approach requires you to perform the task yourself each time you need it done. The strategic one allows you to leave and it will continue to happen without your involvement.  Your objective is to set up as many tasks as possible so they will happen without your direct involvement.

Delegation is a tactic. Instructing your managers how to train their people in delegation is a strategy. By leading your people in top-down delegation and instructing them to copy your training methods, you encourage them to think and act strategically. This is the essence of creating a turnkey organization, one that functions in your absence.

What’s the #1 Reason an Employee Leaves?

Many research firms have studied why employees stay or leave a company. In fact, pay isn’t even in the top three reasons and often not even in the top five. The number one reason surprises most leaders. Do you know what it is?

Poor management.  

It's well known among human resource professionals that Employees leave managers, not companies. For further reading on this topic, pick up a copy of The 7 Hidden Reasons Employees Leave by Leigh Branham.

So what’s the implication? Can you keep your best people if you provide good leadership, upward mobility, challenging work, and praise? The data suggests it. Guess what? These are all things you can provide your people without added expense to your organization.
As a recent McKinsey white paper shows, larger companies are also adopting more non-monetary strategies to attract and retain the best employees.

How to Cultivate Employee Loyalty?

At the consulting firm when starting a job, we routinely surveyed the senior management of our clients. One series of questions that always drew similar answers had to do with employees.When we asked why employees departed, almost all managers listed inadequate compensation, poor or inappropriate benefits, and lack of upward mobility. When asked how they were able to retain those employees that remained, these same managers reported: good pay and benefits, good company culture, and challenging work. The managers were always very confident in the accuracy of these answers.

Why Involve Subordinates in Strategic Planning?

Here's a way to forge intense bonds of loyalty in your subordinates even if the company is small, pays below market salary rates, has high turnover, and the job and industry are very difficult.  You can continue building your direct reports’ critical thinking skills by having them practice strategic planning.

Give each subordinate a copy of your business plan and have them read it thoroughly.  Then brainstorm What If? scenarios with your people and have them devise solutions.  Write down all the scenarios and their proposed solutions in your business plan. Institutionalize critical thinking in your organization to develop action plans that your team can instantly implement in a crisis.

There’s a natural gravitas, an air of stuffiness that arises when a company starts to practice strategic planning. Many executives think that only the highest ranking employees should be let in on the future view, that the whole process should be approached ultra-seriously, ultra-secretively, that everyone should walk on eggshells, and all that failure to design the right plan equals corporate death.
Balderdash! Make it fun. Be as outrageous and childlike as you can. Encourage your people to devise their own what if? scenarios and make a game of it. Give cute prizes for creativity. The best way to cement knowledge it to play with it.

By enabling your subordinates to brainstorm and solve scenario problems, you're giving them the absolute best leadership training you could.  They'll be ready to think and act on their feet when they encounter real-world problems. They won't act paralyzed as do so many managers when confronted with a problem they haven't encountered before.

A manager confronted with a crisis is a more effective leader when s/he has a plan.  And either they'll already have solved a similar problem and have a ready action plan which they can apply or modify.  In the rare event they confront an entirely new problem, they'll be so accustomed to brainstorming because of your scenario training that they'll proceed to solve it.  Eventually you won't even need to manage the process!

If your direct reports are themselves managers, encourage them to run strategic planning groups with their people. By doing this you get everybody on the same page and start to develop a turnkey organization.

Compile all the contingent scenarios and their respective solutions into an annex of your business plan to develop a truly comprehensive strategy that can serve as a future action plan - or a great starting point during crisis.  Imagine having the wealth of brainstorming when you most need it, codified into your business plan.

Having your teams brainstorm What If? scenario planning can be a terrifically valuable and enjoyable aspect of a corporate retreat.  Employees become distant when they’re disengaged and out of the loop. By having them participate in future planning, you invite your people to see the longterm objectives of the company and encourage them to help plan its future. They’ll feel they belong to the company and their work will take on renewed meaning.  What is your most prized management technique to develop subordinates?  Comment and let me know.

In the next article, the fourth and last in this series, I’ll share a way to offer upward mobility to anyone within your organization, even your line workers who might be stagnating. This Ingenious TechniqueTM will increase your productivity while saving money.  It will also develop management skills in these workers giving them leadership responsibility. Do you have a guess what it is? Stay tuned next week to find out. Until then,

profitable business All!

Time Management for Managers- an Ingenious Turn-key Organization pt ii

Developing Leadership Ability Within a Company

Just as you need to acculturate your entry-level hires, you must also train new managers.  If you hire a seasoned manager from outside the firm (a practice I strongly discourage) you will need to acculturate your new hire too.

Your strongest practice is almost always to promote from within.  The reasons for this are numerous.  Most importantly, you'll sap employee loyalty and dull the edge of your most ambitious leaders if you give a senior role to an outsider.  But your newer managers are already acculturated to your organization; why would you want to throw away that training?  Your current employees already know your current policies and the way to do things within the company.  And they already have existing relationships that will help them do their job.  Further, an insider is always more loyal to the company than an outsider.

The only reason to hire outside the firm is if your culture is weak and needs to be shaken up badly.  Occasionally a large company board will hire from outside the company.  It weakens morale but sometimes a board feels desperate.  The strategy is tremendously risky and most outside hires leave after a short time.

Best Methods of Training Subordinate Leaders

As a manager, it's my job to train each of my subordinate managers to perform my job.  Similarly, my instructions to my direct reports is to train each of their subordinates to take over their job.

Too many managers prefer to perform a task because they claim it's easier than handing it off.  But this deprives subordinate leaders of learning and growing within the company.  The first thing I drill into my subordinates is that they must delegate.  I want them to give their subordinates the opportunity to learn as well.

A leader quick to delegate is an effective time manager.  And an effective time manager effectively manages their workload so rarely experiences burnout.  As a result they can remain calm and unfrazzled in a crisis.  This is a benefit of good leadership.

To teach delegation I issue my subordinates one instruction. For every piece of paper that arrives on their desk, or every task they're handed, I insist they ask themselves: "Who of my direct reports can I hand this off to?  Who has responsibility for or is affected by this?" 
How do I do this?   By modeling this desired behavior.

Grooming a New Leader

Assume you're the CEO of your company.  You've just hired a new sales and marketing VP.   This role oversees a sales manager and a marketing director.  They both have direct reports as well.  You need to get your new hire up to speed quickly to lead their department.

Had you promoted from within, your new VP would already know and practice these techniques I'm explaining.  But let's assume you've hired outside the company.

To emphasize the need for rigorous delegation, I assign this new manager every task and swamp them with every piece of paper related to sales or marketing.  I scan a letter or email, or review a task only enough to determine the department head directly below me to whom I can send it.  Ultimately, I want each task to be delegated down to the lowest rung that can perform it, and for that procession to happen one rung at a time.  Only after I am unable to further subdivide a task, will I own it.  I instruct her to act the same way.

If my new hire tries to keep a job that a subordinate could handle, for instance a sales-only task, then I will reinforce my instructions.  She should have delegated that task to her sales manager who then further tries to subdivide it.  Similarly, she will delegate anything related solely to marketing directly to her marketing manager, bypassing sales entirely.  I will also tell her to immediately return an item back to me if I've erred and the item is broader than her department and is thereby my responsibility.

I will continue to deluge my new hire until she gets it.  Then I can start copying her on items I send to people farther down the chain of command obviously the responsibility of that billet.  For instance, I will send a question about a California sale directly to the Western Sales manager.  And she can then start leapfrogging too.

I guide my people to act rapidly on each task to prevent bottlenecks.  They will learn to speed read emails and make quick critical judgments, they learn to divorce emotion from content.

Handling assignments in this manner, the only thing on your new hire's calendar will be those items that directly affect both sales and marketing but not either one or the other.  This means the only thing on your list will be tasks that affect more than one division of the company but not a single division.

If you train yourself and your subordinates to act this way, you will discover your daily calendar freeing up tremendously.  Delegating in this manner will end up moving responsibility and activity down the chain of command.  Let's look at what this accomplishes:

• By training your people all the way down the line to delegate, they become effective time managers.  Ensuring everything runs through your new hire temporarily will also strengthen the chain of command allowing your leaders to forge stronger bonds with their people.
• For each task, the employee on the lowest rung possible will handle it.  This empowers everyone down the line, preventing information from being sequestered, and frees up the time of senior management.  This will make the organization efficient and everyone will be learning.
• If the lowest paid employees do each task, your cost of labor will decrease.
• You free up your senior people's time to react to and plan for unexpected challenges and crises.  You essentially take your managers out of crisis manager mode empowering them to become strategic planners.
• You create a company-wide delegating culture where nobody is irreplaceable.  This means anyone can get sick, take vacation, leave the company, telecommute as needed, or get promoted.  All without throwing the organization into chaos.

In the next article we'll discuss how to develop virtually bulletproof strategy while empowering your employees.  And later I'll disclose a way you can provide upward mobility to every employee in even the smallest organizations while sharpening your peoples' skills.  It's all coming your way in the next few weeks.  Until then,

profitable business All!

P.S. One of my favorite books on time management is Morgenstern's "Organizing from the Inside Out"

Simple Marketing, pt V: Designing your Ad Campaign

Developing a Media Ad Budget

In our last article we calculated how much profit your ideal client brought into the business.  Multiplying this figure by the number of clients you expect each advertising medium to pull, you can calculate your budget for a given ad campaign.

Perform this calculation to calculate your cost-effectiveness for each medium.  You will initially test market the most cost-effective one, or the one with the highest client value per dollar spent.

Continuing with our previous example from the last column, your calculations reveal that your most cost-effective medium is a monthly print advertisement in a specialty publication read by many of your ideal clients.  Based on your estimate and rough surveying of a few of your ideal clients, you expect this ad will attract several prospective clients each run, two of whom will be an ideal client.  From our earlier calculations, we know that an ideal client is worth $500 to us.

The maximum you can afford to spend on any medium is the profit (not income) you expect to earn from new acquisitions of your ideal client type.  In this case, the value of each client ($500) multiplied by the number of clients expected per ad run (2) is $1000. Thus your ad budget for this campaign that you expect to bring in one new ideal client is $1000.  How does this information help us?

Selecting your Media

It's important to realize that all media are not equal.  First estimate the pull rate on each medium you can select.  Then by dividing the ad cost by the number of new clients expected, calculate your cost per acquisition for each medium.  The lowest one will be the one you choose as your first test medium..  For now, ignore scale: an ad that costs $50 and pulls only 1 client is twice as cost-effective as one that costs $500 and pulls 5 clients.  Why choose the smaller?  Because running the first ad brings you new clients at $50 each; the second costs $100.  Don't concern yourself with how many people are pulled by an advertisement; you only care about per client costs.  Later you can run as many ads as you like to vary scale.  But first you want to select the most cost-effective medium.

If several media tie for acquisition cost or if you're completely unsure about your estimates, choose the one with the greatest audience that make up your ideal clients.  You will exhaust a smaller pool more quickly and have to start over in your testing.  As long as you are acquiring ideal clients, pick the medium with the largest readership you can find.  You can sometimes get better pricing on media if you go through an agency, especially if you're buying a lot.

Test Marketing Your Ad

I encourage you to engage a professional copywriter.  Designing a winning ad is a specialized skill, and writing marketing copy belies the 80/20 rule.  You with your 80% of general marketing knowledge will likely get nowhere near the response than will a true marketing pro with her remaining 20% of specialized marketing knowledge.  I once had a potential client refuse copywriting assistance because she had enjoyed her marketing class in college.  Don't be that client.

To test an ad you must track it.  There are two ways I like to track an advertisement inexpensively, one for print ads and the other for call centers.  If you're running a print ad, make it a coupon or include a special offer.  To redeem this offer the buyer must provide the code or coupon on your advertisement.  Each time the discount is redeemed, you know it's as a result of that advertisement.  At the end of the campaign you add up the coupons or count the codes to track effectiveness.

If your ad urges people to call, use a separate telephone number issued by a telephone marketing service agency.  The service provider logs each call and forwards it to your normal business line.  Then at the end of the promotion they provide you a log of incoming calls.  A little research will help you find a call center marketing service provider.

Tracking Your Ad Campaign

You'll track the advertisement using a matrix chart.  You can download a call sheet template or use your Customer Relationship Management software or you can get a simple piece of graph paper and draw columns and rows.  Your objective is to keep track of the activity and its results.  Each business will use a slightly different format but basically you need to add up how much profit each ad campaign brings in.  Count your net profit before taxes, not gross sales.

Once you have a baseline then fine-tune your ad campaign budget.  If an ad pulls only half as well as you had expected and your max buy is now lower than what you're paying, revise your cost per acquisition for that medium.  If an ad turns out to cost more than it's bringing in, abandon it and try a different medium.

Only retry an abandoned medium after having exhausted every other avenue.  Your goal is to determine the best raw statistics for an unrefined advertisement.  If you try every medium you can think of and none of them pull very well, then choose the one with the lowest ad cost per client acquired and start refining it.  An advertising agency can advise you.  In this case it might be best if you contracted with one for a few hours of consulting time.  You're probably in a very challenging environment and may need specialized guidance.
The rest of us hopefully have our selected medium.  Next week we'll explore how to fine-tune your campaign and gradually improve results to ultimately develop a top drawer ad.  And in a later column we'll talk about how to formalize training within your organization so your key employees become strong empowered leaders who will stay with your company as long as you want.  After practicing this Ingenious Business Technique your attrition will decrease significantly.  And if you haven't yet checked out the podcast, feel free to download it.  More exciting stuff coming up.  Stay tuned!  Until then,

profitable business All!

Acculturate your new hires- an Ingenious Turn-key Organization pt i

New employees must be acculturated

Last week I explained how to lead your customers.  This week we’ll explore how to lead your new employees and fold them quickly into your company culture. 

What is some of the scuttlebutt that employees grumble about their managers around the water cooler?   They’re overbearing, indecisive, lazy, oblivious, etc. If you sift through all the criticisms, you’ll likely discover the complaints fall into two piles: micromanagement and failure of leadership.  Both of these traits stem from fear: fear of losing control, or fear of appearing too militant.  And they're each sides of the same coin. 

Very few employees realize the difficulty involved in being a manager until they become one.  Management if often considered a thankless, arduous, and vilifying role within a company.  But approached the right way, it can be a motivating, energizing, satisfying responsibility.  With a few tools, any manager can become expert at unobtrusive supervision and grow their position into a highly respected billet within the company.

Recognizing the challenge of leadership, many companies have tried to banish the concept, flattening their organizations, or in a supreme pacifying effort, chosen to label each individual a manager… even if they manage equipment, resources, or just their own workload.  In this article we're concerned with personnel management.  Whether you manage a department of individuals or other managers, this article is for you.

You can usually determine a manager's satisfaction by gauging how they view their job.  Do they perceive the role as mainly keeping people in line, ensuring they do their darn job so they don’t have the chance to slack off?  If so, their corporate life will be bleak.  The best managers empower their subordinates – consisting primarily of getting out of the way – and ensuring they have the support necessary to do their job.

Great Managers

Do you want to be a great manager?  Then flip the hierarchical organization chart upside down and view the true essence of leadership: that you as a boss support your people; your boss supports you; his boss supports him; and so on.  You each empower your subordinates, not preside over them.

Surprising to most managers, your job is not to ensure that your employees do their job.  A boss is not a kindergarten teacher.  Your two tasks are making sure your employees have the tools and support (including training) necessary to accomplish their job; and ensuring each employee is a good fit for the company culture.

It’s more important for an employee to be a good fit culturally than be skilled at their job.  As a manager, your first priority is ascertaining whether your new hire will fit in with and preserve the company culture.  We're assuming you hire individuals with the best ability, especially in today's job employer-skewed market.  So assuming you did a decent job of hiring, if an individual is a good cultural fit for your organization, she can always be taught or, if necessary, be transferred to a more suitable billet within the organization.

Let’s take the example of a customer service rep.  He’s dynamite on the phones and gets results.   However, it turns out your new hire is a maverick, not a team player, and your organization embraces team culture.  You’ve just discovered the disconnect after hiring him.  What should you do?

If he doesn't fit in with your culture and you’re sure you can’t indoctrinate him, terminate.  Conversely, a customer service rep who is struggling with the skills of the job but has the right attitude you must continue to train and support until he progresses enough to do the job.  Will he become a star?  Maybe not, but the question is will he become better than your least competent employee?  If the answer is yes, then keep him and terminate the least competent or find another place for them.  If the answer remains no after a suitable ramp up time, then consider a related position within the company where he will be a better fit.  Do your best to retain an employee who is a cultural fit with your company.

A manager is like the captain of a ship.  It's easier and less chaotic when everyone's rowing the same direction.  You can individually upgrade each person's rowing skills over time.  But it would be bedlam to make a dramatic course correction because one guy's rowing the wrong way, no matter how strongly he rows.

Netflix has a hiring slogan: “No brilliant jerks!”  It’s more important to have the right attitudes in your people than the right skill sets.

Next week I’ll discuss how to correct an employee's behavior so neither the manager nor the employee wind up with hurt feelings.  And we’ll continue exploring the market plan.  Until then,

profitable business All!

An excellent tool that discusses cultural fit: "StrengthsFinder" by Gallup 

Salespeople Should Never Receive Payments

In the corporate world, sales managers often assign the responsibility of receiving payment to their salespeople.  One of our portfolio companies paid commissions out upon receipt.  They had no receivables support and they encouraged their reps to collect payments.

On its face the idea seems sound.  A salesperson gets paid for the sale, so why not have her collect payment?  When a rep collects payment, it even provides an excuse to stay connected.  However, this policy has unintended consequences and can result in huge customer service fallout.

Your reps act as client advocates.  By contrast, debt collectors are bearers of bad news.  By putting a rep in the roll of debt collector, the company has removed a valuable buffer.  A rep can play mediator to quickly resolve misunderstandings and settle frazzled nerves to ensure the business relationship endures.  If the rep must also act as bill collector, he cannot feign detachment; he must include delinquencies in the sphere of the relationship.

People want to keep their dignity so they'll often ignore sales calls if they are unsure whether a rep is calling as sales advocate or debt collector.  The cumulative effect?  Reps focused on billing divide their sales efforts and customers duck their calls.  This decreases sales department efficiency which lowers productivity and resulting commission.  This also increases bad debt which leads to even lower commissions.  And this can cause a drop in staff morale, crippling the company's profitability.

Case Study: Advertising Agency
We suggested our customer hire receivables clerks to encourage their reps to focus on selling.  Billing clerks could then handle receivables and note in the system any customers that were in default.   On average, a sales rep is better compensated than a billing agent.  So, we suggested it makes sense to delegate these tasks to a lower paid employe.  In a later column I’ll explain an easy way to optimize each employee's duties throughout the organization to achieve maximum efficiency.

The result?  Because the reps ignored billing issues they had more time to sell.  Reorders increased.  The extra revenue on additional sales that reps could make more than compensated the company for the salaries of the new billing personnel.

When a rep happened upon a client delinquency,  he ignored it until the client's credit line was restricted by the credit department.  If the client addressed it with the rep, he recommended the client call billing to resolve it as a prerequisite to reordering.  The rep deliberately feigned ignorance instead of addressing it directly with the customer.  In this way, he played the advocate and preserved the client’s dignity. 

Managers and organizations need to realize: the best sales reps are not mere order takers.  They’re client advocates, subject matter experts, and executive advisers.

Yesterday I explained how to eliminate those nasty typos from expensive commercial printing jobs and save on your printing expense.  Next week begins the first of a series of articles on a novel step-by-step approach to developing an integrated marketing strategy.  You can use this as a basis to plan your most cost-effective advertising methods.

This will take a little bit of time but you’ll find it’s worth it.  Upon completing the process, you’ll calculate your ideal cost-effective advertising and know exactly how to spend your budget.  You’ll never question whether you should spend money on a particular newspaper, coupon, flyer, or yellow page ad again.  Stay tuned.  Until then,

profitable business All!

Avoid Conflict with Conversational Judo

The Japanese say: "Once you lose your temper, you've invariably lost [the conflict]."

Recall a lousy customer service experience.  You felt disrespected and powerless.  Maybe you responded by walking away in disgust or slamming down the phone vowing never to buy from that merchant again. But you lost your cool without resolving the matter and that still nags at you.   Plus you still feel aggrieved.  You could exact revenge - maybe by warning others of your experience - but retribution is cold comfort indeed.  Instead, why not keep your cool and get what you want?

The next time you're confronted with an inflexible person, don't get angry and make a rash decision.  Use conversational judo to reframe the conflict.  Invite them to solve their own problem.

As in the last post, asking "Is there anything I can do or say..." invites your opponent to sit on the same side of the table.  For instance, let's consider a clerk who is being inflexible about store policy and you're at your wits' end about to walk out.  What would happen if you ask "Before I leave, is there anything I can do or say... to get you to help me?"   By doing this, you put the burden back on him to resolve the problem by reminding him it's his job to render assistance.  You do this avoiding confrontation which allows you both to keep calm.

The more closely the other party identifies with the premise of your request, the more effectively this technique will accomplish your goal. If it resonates with them (in this example, if they sincerely believe their job is to help customers) they'll be inclined toward resolution.  By reframing the disagreement, you put them in the position of either granting your request or acting contrary to their self-image.  Most people will maintain their self-image in lieu of their need to win.  And because you check your ego and ask for help instead of demand action - you substitute cooperation for confrontation

By setting forth a mutual goal of resolution, you welcome the other party to participate in the process.  Once you've communicated the appropriate objective, you can be the passenger, not the driver.  This allows you to conserve your energy. 
 
Then if the other person remains inflexible or becomes emotional, calmly choose how to respond later or deal with someone else.

Are you worried your prices are too high?  In the next entry I'll explain why they are probably too low.  And in a later post I share the Grandfather Discount, an ingenious way to raise prices without raising your customers' hackles.  I appreciate your questions and comments letting me know how these techniques are working for you.  Until then, 

profitable business All!