Author Archives: Jack Malcolm

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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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Productivity

How to ACE Your Next Big Project

This post pulls together several separate threads that I’ve experienced over the past few days. First, I’ve been working on a new speech about healthy sales cultures for a new client, and I’ve found that what seemed to be a straightforward and routine undertaking has gotten much deeper than I expected. Second, I  listened in on a podcast by Tim Hurson on The Sales Experts Channel, in which he introduced me to the concept of the “third third”. Finally, in a conversation with a new client this weekend, he told me that he had begun working on his first book, but abandoned the project when he got negative feedback on his first chapter.

These three separate incidents helped me to spot—or maybe just clarify—a pattern that seems to apply when you take on a difficult project that requires both deep understanding and creativity. I examined similar situations that I’ve been in before, including writing three books, creating new courses, and—of  course—major speeches. I can’t say for sure whether it applies to anyone besides me, but I’m not that different from you, so you might find it helpful.

I noticed that these undertakings seem to go through three phases if they are to succeed:

  1. Ambition
  2. Concern/Crap
  3. Excitement

Ambition: The project has to be ambitious, with just a slight whiff of “fake it ‘til you make it”, for the next two stages to kick in. If the project is comfortably within your current capabilities, the good news is that you won’t go through the concern/crap stage, but the bad news is that you won’t produce anything to get excited about either. On the other hand, it has to be close enough within reach that you have to have some sense of confidence that you can rise to the occasion. For example, for my project I knew that my experience and wide reading have given me a good grasp of the topic, although I’ve never put it together into a coherent package.

It has to be big enough and worthwhile enough to stimulate your interest and sustain it during the inevitable next stage. Even better, make a commitment so you don’t have the option of backing out when the going gets tough, because it will.

Concern/crap: This is by far the hardest but the most productive phase of the entire project. As you get deeper into the topic, you generate concern and inevitably produce crap. The concern arises because as you dig into the nuance and detail of the points you’re trying to make, you realize that you have to learn far more than you thought—and the more you learn, the more you figure out how much more there is still left to know. You discover that others have more expertise than you do, so you begin to doubt your own abilities, maybe even your right to talk about it.

The crap comes out as you start regurgitating everything you know onto the paper or your slide deck, because your concern causes you to overcompensate, and you haven’t thought through the patterns and linkages carefully enough. The less you understand something, the more words you use trying to show otherwise.

But there’s value in just getting stuff on paper, regardless of how bad it is. It builds momentum and helps you think out loud. Plus, as long as you allow yourself enough time, you’ll find that your mind is somehow working on the problem in the background. In my own case, I inevitably wake up in the middle of the night with new insights or a clearer idea of how everything fits together.

The most important thing is to keep going. As Tim Hurson says, we stop thinking before the good stuff comes. So, when my friend quit writing his book because he found out it wasn’t as good as he thought it was, he forfeited his chances of working through to the good stuff. During the concern and crap stage, remember to keep pounding the rock, because frustration can mask the real progress that’s going on underneath.

The crap stage can easily frustrate and discourage you, but here’s where your ambition comes to the rescue. If you’ve committed in some way, you can’t get out of it, so there is no way out but to keep plowing forward to produce something that won’t embarrass you and will truly add value to your audience. With a customer it’s one thing, but if it’s a personal project such as writing a book you might need to go for some type of public commitment to raise the cost of failure.

Excitement: When you break through the concern and crap stage, the glittering prize at the end is the incredible excitement you will feel knowing you’ve produced something fresh and worthwhile. As your key ideas crystallize in your mind, you start cutting out the crap and clutter—chipping off the rough edges and additional polishing makes the hard diamond sparkle through, and you can’t help but be charged up to deliver it.

You know you’re going to deliver something that others will value, and you’re going to look good in the process. You get to the point where your only thought is, like Jack Welch: “I can’t wait to get out there and do this!”

What if you get through the first two stages and you’re still not excited? Repeat steps 1 and 2.

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Sales

There’s A Person on the Other End of that Number

Sales targets are a good thing. Challenging goals, coupled with rewards for meeting them, can be enormously powerful in motivating performance and driving results. But there is a downside: fixating too much on the numbers and thus forgetting the person on the other end of that number can backfire, leading to customer dissatisfaction and lower sales.

Don’t deemphasize the numbers, but counterbalance the focus on numbers with reminders of who benefits from what you sell. I’d like to propose making the customer—not as a “target”, or a “wallet”, but as a real, living, thinking and feeling person—a major focus of your sales efforts.

First, a few examples to illustrate the power of personalization:

·         One study showed that attaching a digital picture of the patient to a medical file increased the amount of time that radiologists spent looking at x-rays, and led to them spotting more unlooked-for issues.

·         Employees in a call center dedicated to soliciting donations from alumni for scholarship money were connected with students who had benefited from the scholarships, and heard about the difference the money had made in their lives. One month later, they had brought in an average of $506 per week as compared to $186, an increase of 172%.

·         When I worked in a bank, we had targets for cross-selling additional services to increase profitability. One product was credit life insurance, which was sold to people taking out car loans or consumer loans. The average was about 25% or less per loan made, except for one lady, Rosa, who consistently had almost 100% success. When we asked her why she was so successful, she told us that a close relative of hers had died, and his spouse ended up losing the car because she could not make the payments. Because she believed so strongly in the benefit, it made it easy for her to pass on that belief to customers.

·         Here’s a negative example: in wartime soldiers usually depersonalize the enemy by giving them  a nickname (often derogatory), which makes the idea of killing them a little less horrible.

What these examples point out is the importance of personalizing the outcomes that you sell. When you can connect your sales efforts to real results for real people, you will have a much stronger intrinsic reason to succeed than just to selfishly make a number. You will be guided by a sense of purpose which can be a much more powerful motivator than financial self-interest. Which achievement would you be more likely to brag about to your friends, making your number or making a difference in someone’s life?

We all know that testimonials from satisfied customers can be useful tool to convince customers, but if you are a sales manager, you might see even better results by using those testimonials for your own people.

When you start seeing your customers as a person and not a target, they will notice the difference. Trust requires more than just competence; they must also perceive that you have a genuine concern for their welfare. I call it the grandma rule: If that were your grandma sitting across the desk from you, what would you recommend to her?

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Sales

When Does Managing Become Stalking?

It’s a commonplace in management that what gets measured gets done, and for the most part I agree with it. But when it’s taken too far it can backfire on you—sapping morale, breeding resentment, and fostering destructive sales behaviors.

I’ve been doing some research into the Wells Fargo scandal for a speech I’m delivering next week about ethical sales cultures. One of the most fascinating documents is a copy of the lawsuit that the City of Los Angeles filed against Wells in May 2016. It details the pressure-cooker management practices that branch managers and above followed to try to fulfill ambitious—some would say unrealistic—goals for cross-selling in connection with the bank’s “Going for Gr-eight” program. There is a lot of fodder in there for anyone studying unhealthy management practices, but what I found the most repellant was the extreme monitoring and measurement that went on.

In many branches, daily sales for each branch and each employee were reported and discussed 4 times a day, at 11, 1, 3 and 5pm! Some branches, doubtless run by high achievers who really wanted to impress their bosses, had hourly calls. The verb discussed is a euphemism, because the report further states that “managers constantly hound, berate, demean and threaten employees to meet unreachable quotas.”

Is it any wonder that employees resorted to cheating? And by cheating, I mean opening accounts for customers without their knowledge or authorization: 1.5 million deposit accounts and 500,000 credit card accounts. While all this measuring paid dividends in the form of a steady rise in the bank’s stock price, it also ended in congressional investigations (and what CEO would not relish the opportunity to be lambasted on national TV by Elizabeth Warren?), resignations, penalties and lasting damage to its reputation.

We all laugh at the stereotype of the helicopter parent, who can’t seem to let go when their kids go to college, constantly hovering over them to monitor what they’re doing and to step in to help them whenever they feel it’s necessary. I wonder how many people who laugh at that behavior in others might be guilty of it themselves when it comes to how they manage their sales teams?

Wells Fargo was an extreme case, but the potential for helicopter managing exists everywhere, particularly under pressure of ambitious sales quotas. When sales slip—or just don’t rise fast enough—it’s human nature for the manager to dig in and figure out what’s going on, or to lend a hand to get a deal done. But if that level of intervention doesn’t work right away, it’s also human nature to redouble your efforts and ratchet up the pressure. As psychologist Edward Deci says, “Control is an easy answer,”[1] but that constant monitoring and pressure comes with a price:

  • The most immediate and obvious price is that eats into selling time, forcing salespeople to constantly attend calls and file reports.
  • It kills trust. How do you get your buyers to trust your account managers when you don’t?
  • It drives short term thinking. I once had a client who hired me to train their enterprise reps to develop account plans meant to cultivate long-term, forward-thinking relationships with clients; but then held their feet to the fire with quarterly quotas.
  • It stifles outside-in thinking. Fear makes us inwardly focused, which makes it difficult to see things from the customer’s perspective. At the same time, you begin to see each customer as a target and not a person.
  • It stifles creativity. Pressure actually does improve performance—for routine tasks that are done the same way every time. But pressure degrades performance in tasks that require creativity and resourcefulness, which pretty much describes high-level B2B complex sales. (In Wells’ case, the pressure did make their people more creative—in finding ways to cheat the system
  • It can lead to a vicious cycle, where too much pressure hampers performance, which leads to more pressure. Like a drug that requires increasing amounts to have the same effect, it can become the monster that must continually be fed.

Keep in mind that the only reason the Wells Fargo scandal came to light is because it was so egregious, which makes one suspicious that this kind of behavior is far more prevalent than we know. Most sales managers are not that extreme, of course, but pressure does funny things to people, including turning managers into stalkers.  Ask yourself: do you hover too much?

[1] Why We Do What We Do, Edward L. Deci and Richard Flaste.

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