Author Archives: Jack Malcolm


Where’s the Problem?

A man goes to a doctor for advice, because he’s concerned that his wife is losing her hearing. The doctor says, “The first thing we have to do is find out how bad it is, so when you go home, stand in the doorway and say something. If she doesn’t hear, move halfway into the room and say it again. Then, stand next to her and say it.”

So the man goes home and looks into the kitchen. “Honey, what’s for dinner?”

No response.

He walks halfway into the kitchen and says, “Honey, what’s for dinner?

Again no response.

Finally, he gets right behind her and says, “Honey, what’s for dinner?”

She turns and says, “For the third time, CHICKEN!”

I liked this joke when I first heard it earlier this week, and it especially resonated because of a speech I delivered on the topic of creating an ethical sales culture. What’s the connection?

One of the points that I made is that often when a sales leader is unhappy with sales behavior, their first instinct is to figure out what’s wrong with the salesperson. Maybe they need a little more motivation, or need to be counseled on ethics, or maybe they’re just the wrong person for the position. But, how often do they look within for the causes of the behavior? How often does it even enter their minds that maybe the fault lies within themselves?

The example I used in my speech was Wells Fargo. After their scandal broke, they touted the fact that they had fired 5,300 employees for unethical behavior. I wonder how many of those employees were actual perpetrators, versus how many were victims? By that, I mean victims of an ultra-high-pressure culture in which they were monitored up to four times a day and “hounded, berated or demeaned” when they were inevitably short of impossible quotas. Under such conditions, is it any wonder that many saw no recourse but to cheat and open unauthorized accounts?

But it does not have to be as egregious in scale or degree as Wells Fargo to be a potential problem. I’ve seen it on a much lesser scale in so many ways. The sales VP who stresses the value of long term relationships but rewards and punishes short term results; the sales manager who wants her reps to take initiative but immediately steps in to rescue a sale; the director who overlooks a little white lie about delivery dates because it salvages a big deal.

My point is not to deny the importance of personal accountability, but to affirm it. Someone should definitely be held accountable—but look within first. This is not only right, but practical. If the behavior is caused by something you’re doing or not doing, it’s not going to go away just because you counseled or fired the rep. It will likely infect the rest of the team, and anyone you hire to replace the “bad apple.”

Maybe the first rule of sales coaching should be: “Check your own hearing first.”

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Sales - Uncategorized

Lean Communication for Sales and The New Sales Imperative

One of the tenets of lean is constant and continuous improvement, and in that spirit I have modified my model slightly, thanks to a new Harvard Business Review article by Nick Toman and Brent Adamson, The New Sales Imperative.

As I’ve written before, your purpose—in fact, the only reason salespeople are relevant—is to help your customers make effective buying decisions. Complex decisions can’t be made without investing time and effort to gather, understand, analyze and apply a lot of information, but salespeople often make it much harder than it should be. To that end, the goal of Lean Communication for Sales is to improve your buyers’ RoTE, or Return on Time and Effort. In lean terms, you provide useful information that helps improve their outcomes, and express it concisely and clearly.

To a great extent, their article reinforces what I’ve been saying about the importance of making it easier for people to decide. As their research shows, making buying easier results in a 62% increase in the likelihood of winning a high-quality sale.

But as new research that Toman and Adamson adduce shows, there is another hidden form of waste that needs to be removed from the buying journey: uncertainty. Their research shows that customers are “deeply uncertain and stressed”, and second-guess their decisions more than 40% of the time! This uncertainty can be paralyzing, and paradoxically it’s the good intentions of the salesperson that exacerbates it. That’s because they try to be responsive and attack uncertainty with even more information. But unfortunately, beyond a certain point, more information and more choice actually increases uncertainty, as you can see in the figure above.

This is a useful reminder, but most of us already have at least an inkling of this. The real difficulty is figuring out where the bottom of that curve is so that you can get uncertainty as low as possible but then stop. That’s where their article is particularly helpful. They lay out a four-step approach for being less responsive and more prescriptive. Out of deference to them and to HBR, I’m not going to try to summarize their ideas here—I encourage you to read it here.

What I am going to do, however, is spend some serious time thinking about how to incorporate the idea of reducing uncertainty into Lean Communication for Sales. As a start, I’m changing the goal of improving RoTE to RoUTE!

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Sometimes It’s Just Not that Complicated

I had dinner last night with a new acquaintance who owns a highly successful manufacturing operation in the Midwest. It was fascinating hearing his story of how he left a job running a similar operation for a Fortune 500 company in the same town, because he did not like the way they did business. After several years of trying to work within the system (the big company had bought the privately-owned operation that he started with out of high school), he left, scraped up every available dollar he had saved, mortgaged his house to the hilt, purchased some used equipment, and opened his new company seven miles away from the old.

So many customers followed him that he was profitable within two months, and within four years the corporate-owned plant had shut its doors. He has since expanded to four times his original size, and is now enjoying his semi-retirement in South Florida, where I met him and his wife.

Here’s the funny thing: the company he originally worked for is a sophisticated $23B operation, founded over 125 years ago, with facilities around the globe. No doubt it enjoys cutting-edge strategic planning and best practices, as well as strict standards for talent acquisition and management. They could have made my friend the GM of their plant and saved a lot of trouble for themselves, but he was ineligible for the job because he hadn’t gone to college.

I asked him what his competitive advantage was that made him so successful. Was it low price, quality, service, some secret sauce? He immediately responded that it was not low prices at all—in fact, his prices are higher than his competitors’. He said:

“Jack, the reason people do business with us is that we do what we say we’re going to do. When someone calls us, a real person answers the phone. When they have a problem, we fix it as quickly as we can, even if we have to eat the cost. I’m old school, I never went to college, but I know what I’m good at.”

His words remind me of the Woody Allen quote: “Eighty percent of life is showing up.” Business pundits have written billions of words about what it takes to succeed, and maybe all their innovative ideas just mask the fact that there is a lot of money to be made by just doing the simple things well, and being someone that customers can rely on.

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Vision, Values and Hypocrisy

Let’s start today with a quick test:

  1. Which well-known company listed its values as,

“Integrity, Communication, Respect, Excellence”?

  1. Which well-known company said,

“Earning lifelong relationships, one customer at a time, is fundamental to achieving our vision.”

If you answered “Enron” for question 1 and “Wells Fargo” for question 2, go buy yourself a cigar.

Enron had its four values prominently displayed in the lobby of their headquarters building, right up to the day that they were shut down for massive fraud. Wells Fargo apparently thought that lifelong customer relationships were best pursued by striving to cross-sell eight accounts to every customer, even if the only way that most employees were able to achieve their sales targets was to act like “lions hunting zebras” and open accounts without authorization or to sell unneeded products, preying especially on those who were least in a positon to do anything about it.

Enron and Wells Fargo are extreme examples of the mismatch between stated values and actual behavior. I see examples of mismatches on a much smaller scale everywhere I go, and I’m sure you do too. But the problem with even small scale transgressions is that if left unchecked they can insidiously erode positive values drip by drip until one day you wake up to find that the actual culture bears little relation to the stated one.

Hypocrisy can either be intentional or unintentional. I believe that in the case of Enron it was intentional and systemic, because the people at the top were leading the charge and were immersed in fraud and criminal behavior up to their necks. If you’re one of those people, there’s not much I can say other than I hope you get caught sooner rather than later.

In the case of Wells Fargo, no one has proven that CEO John Stumpf was knowingly in on a conspiracy, and I am going to proceed from the assumption that he was not. Yet he did allow the conditions to exist that led to wrong behavior, even if he did not mean to. And that’s the important point of this post: vision and values are fragile and require constant cultivation and care if they are to take solid root and bear fruit. More importantly, it’s easy to kill the plant, so the first rule is “don’t do stupid stuff.”

Stupid stuff that erodes well-meaning vision and values includes:

Communicate, communicate, communicate

By all means, post your vision and values prominently in your lobby. When I work with a company, of course I research them and one of the first things I look for is to understand their stated vision and values—yet I’m constantly surprised when I find that many of the employees I work with can’t even tell me their own company’s vision statement, or give me quizzical looks when I mention one of their values!

But don’t stop there. Constantly be on the lookout for examples and share stories that reinforce the message. Publicly praise and reward employees who exemplify the values you cherish. Just as importantly, remember Voltaire’s quip: “It’s a good thing to shoot an admiral now and then to encourage the others.”[1] When you announce a major decision or change, explain it in terms of your values.

Most importantly, model the values yourself. Employees pay far more attention to what you do than what you say. It’s like a parent telling kids to stay away from drugs, when they down three or four  drinks every night at home.

Pay close attention to the goals you set

Continuing the theme of communication, what is the most powerful message medium a company can have? It’s the one corporate document that every employee reads: their paycheck. If you’re told to act a certain way but rewarded for acting in a different way, something has to give, and it probably won’t be the one that makes you money or keeps you employed.

In Wells Fargo’s case, their unrealistic goals and excessive pressure on results sent a far more powerful message than their stated values. For example, one of their values was:

“Our team members are our most important constituents because they’re the single most important influence on our customers.”

That’s a beautifully expressed and on-target sentiment, but what was the reality? According to the lawsuit filed by the City of Los Angeles in 2016: “Managers constantly hound, berate, demean and threaten employees who fail to meet these unreachable quotas.” That’s because the bank was targeting an astounding cross-selling target of eight accounts per customer. As their 2010 annual report said, “Eight rhymes with great.” Here’s a hint, if your goals rhyme, you may want to take a closer look at them.

As Emerson said,  “What you do speaks so loudly that I can’t hear what you say”. What are you saying by your actions?

[1] Admiral John Byng of the Royal Navy was shot in 1757 after being court-martialed for “failing to do his utmost” in a naval battle.

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