Peter Drucker was consulting for a CEO of a major bank in US. For every meeting the CEO used to assign Peter a time slot of 90 minutes. A highly effective person, the CEO was delivering consistent results for his bank year-on-year. During the one-and-half hour meeting the CEO refrained from taking any telephone calls Continue reading
Natasha, a sales manager from a renowned hotel in Goa interviewed a candidate called Moin, a B.Com graduate for the post of a trainee sales executive. Moin was a tall, fair and handsome guy who spoke fluently during the interview. Natasha felt he was an ideal candidate for sales. When asked about his strength, Moin replied his strength was manipulation. Save for this ‘minor’ aberration he looked OK on other fronts.
He was shortlisted for the next interview, where he repeated the same answer when asked by the GM. The considerate GM said, “young man, please go home and refer the dictionary and check the meaning of the word manipulation. You should not give such answers. Elsewhere you would have been rejected straight away.”
After joining, Moin started throwing tantrums . When asked to usher a guest in the restaurant, he said, “I am graduate, I do not do such things.” Natasha once asked him to follow up for payment from one of the regular guests of the hotel. Moin fired the guest saying that if the latter does not pay immediately, he may have to face dire consequences. Luckily Natasha, the manager overheard the telephonic talk, seized the receiver and apologized to the guest. Within two months, Moin resigned without giving any reasons.
The manager had spent her precious time of hers as well as of others including the GM. It is very rare for someone to contribute significantly during the first six months. Precious time and money of the organization were wasted. Some of the mistakes managers make while recruiting are:
- Selection Bias for common traits: The candidate revealed his interest in being a DJ which was a common interest for the manager too.
- Emphasis on external appearance: Selection of candidates is based on appearance, personality as well the hearing the expected responses. For example when asked why would you like to join our company, the typical response from candidates is: “I would like to take challenges and grow with a growing organization.”
- Ignoring the Obvious: Listen to what the candidate says and also what he does not want to tell. Here Moin went on harping his manipulation skills which was ignored.
- Mistaken Competencies of a Job Role: Most of us feel that a good talker is a good salesman. It may be true for low-value sales. However for high-value product or service like premium hospitality, the converse is true. It is not the glib talker but the effective listener who fits the bill for a good salesperson.
For more details please refer the chapter, Why do Salesmen Love to Talk in my book Contextual Selling (for more details http://www.paradigm-info.com)
“I tried to get an appointment with my client for six months, I could not succeed”, said Shashi, my friend in an Omani Company. “However the moment my Scottish counterpart sitting in the next cabin called him, he got an appointment the next day”.
Two Caucasian ladies, one French and the other a Polish, sang an average composition on peace & harmony in Bangalore for 2-3 minutes. After their recital, there were hordes of people from the audience who wanted to get photographs along with them. The singers were neither celebrities nor accomplished singers, but the colour of their skin made all the difference! Let us look at the different types of perceptual biases most of us have.
- Blind-Spot bias-: Your own cognitive bias is a bias in itself. People notice cognitive and motivational biases much more in others than in themselves. We have a positive bias towards the Caucasians but may discount brown or dark-coloured skin executives.
- Anchoring bias: People are over-reliant on the first piece of information they hear. In a salary negotiation, whoever makes the first offer establishes a range of reasonable possibilities in each person’s mind
- Availability heuristic: People overestimate the importance of available information. A person might argue that smoking is now unhealthy because they know someone who chain smoked and still lived upto 100. Quite often the information is taken out of context or only a sample is selected by ignoring the other data.
- Bandwagon effect: The probability of one person adopting a belief increases based on the number of people who hold that belief. This is a powerful form of group-think and is reason why meetings are often unproductive.
- Choice-supportive bias: When you choose something, you tend to feel positive about it, even if that choice has flaws. Like how you think your dog is awesome – even if it bites people every once in a while.
- Clustering illusion: This is the tendency to see patterns in random events. It is key to various gambling fallacies. Like the idea that red is more or less likely to turn up of a roulette table after a string of reds.
- Confirmation bias: We tend to listen only to information that confirms our preconceptions – one of the many reasons it’s so hard to have an intelligent conversation about climate change.
- Conservation bias: Where people favour prior evidence over new evidence or information that has emerged. People were slow to accept that the earth was round because they maintained their earlier understanding that the planet was flat
- Information bias: The tendency to seek information when it does not affect action. More information is not always better. With less information, people can often make more accurate predictions.
- Ostrich effect: The decision to ignore dangerous or negative information by “burying” one’s head in the sand, like an ostrich. Research suggests that investors check the value of their holdings significantly less often during bad markets
It is not possible to eliminate all the biases, but the least we can do is to be aware of them and in mindfulness the chances of our decisions going wrong can be minimized.
Why is there a gap between efforts executives put and the results they get? The linkage between the improvement in one’s skills vis-à-vis the efforts put can be termed as structure of growth.
Last two weeks I was conducting training programs on Effective Value Selling for Capital Equipments which were in the price range of Rs. 50 L to Rs. 1crore.( Approx. $100k-200K) Selling of CNC machines involves considerable technical complexity and the sales engineers need to understand the customer behaviour in a sensitive manner. For most of the participants, I perceived a huge gap between the job role and the skill set possessed.
Remember the adage, practise makes a man perfect. Generally it is assumed that the improvement of a skill is directly proportional to the efforts, time spent and the intelligence of a person which is partially true. But it also depends on the domain in which one is working. Most of the domains may have the following types of growth structure. There are a number of growth structures but the major ones are: Logarithmic, Exponential and Sinusoidal ( Please refer figure: growth figures )
- Logarithmic Growth: Here one tends to get visible results during the initial phases of activity. But the growth becomes harder as you go along. For example, in athletics running 100 metres in 14-15 seconds looks an achievable task for a beginner. Chopping off the next second or two is relatively easy. But to break the 10 second barrier only athletes at international level can achieve. One needs to be an Usain Bolt to reach a figure of 9.79 seconds where the runner up can be behind by just hundredth of a second. Same is true in cricket where a cricketer can scores a century on debut and become a celebrity but then it is only people like Sachin Tendulkar who go on reinventing their styles and techniques even after reaching a few milestones.
The first phase of logarithmic growth is steep and success comes easily. The second phase is like a plateau where the rate of growth slows down considerably. (refer figure a. logarithmic growth)
Thanks partly to media hype, you see such growth in music ( with pop stars, Little Champs in Saregamapa shows etc.) and in sports like IPL Cricket. With some talent and average efforts some people in such domain, become instant celebrities overnight. The real challenge is in phase 2 where you need to maintain your disciplined habits. You need to move away from your regular routine and break away from those habits. You can even develop a technique which may be beyond the textbook. Tiger Woods reinvented his swing in the second phase.
- Exponential Growth: There are some fields where one needs to put lot of hard work initially and the results will not be visible for considerable time. Mastering a field like Physics, computer science, music takes a hell lot of time. In the HBR Article titled The Making of an Expert by Anders Ericsson, Michel Pretula and Edward Cokely, the authors propose that to master a particular field it takes around 10,000 hours of systematic efforts. The results may not be visible initially so one needs to have lot of patience (refer figure b. phase 1 of exponential growth ). And one day, a miracle happens. Suddenly things fall in place and what you were struggling all these days and years, the obvious answers are revealed. The pieces of jigsaw puzzle get into the right place. Kekule developed the model of Benzene ring in his dreams by correlating a serpent swallowing his own tail, Einstein worked on his special theory of relativity for a number of years as a clerk in a Swiss patent office. Marie Curie had to process tonnes of pitchblende in inclement weather and in an ordinary laboratory for a number of years before extracting a few milligrams of radium. Science whether applied or pure is a typical example where the structure of growth is exponential. Einstein, Kekule or Marie Curie did not get the success overnight but had enough perseverance to sustain the phase 1
- Sinusoidal Growth: Fields like spiritual growth are neither exponential nor logarithmic. You do not start your spiritual journey as your hobby or for earning a livelihood/achieving fame. ( with the exception of fake gurus,babas & bapus ) It only comes out of genuine suffering or existential dilemmas of life. ( Refer figure c. Sinusoidal Growth ) It is said if you have not suffered a breakdown you may not get a breakthrough. Initially you start from a negative state, you may get results for some time, again you fall down and each time you raise the bar. Siddharth Gautam had to experiment with different techniques that were available in his time from the age of 30, and by 36 he realized chasing the techniques itself was a mirage and he was enlightened to realize his Buddha nature.
Each field may have either one or combination of the above growth structures. So to be an expert and an authority in a specific domain, it is not only important what traits you carry ( which is your DNA ) but to see whether there is a synergy between your traits and structure of your domain.
Remember, Vinod Kambli and Sachin Tendulkar had similar talent. Sachin could sustain in the phase 2 of logarithmic growth; Kambli could not.
As a professional remember, a formal education at the university does you no harm, provided you start learning there afterwards. It is simply beyond attending a 2-day company sponsored training program.
Usha Multipurpose Cooperative Bank (UMCB) is based in Sonagachi, North Kolkata, one of the largest red-light areas in Asia. The bank was formed in 2001 and is run by former sex workers and run for the women from the same trade. ( Deccan Herald, Bangalore 5th Feb 2015)
UMCB has been named the ‘Best Managed Cooperative ‘ in West Bengal for 2014 at the 61st All-India Cooperative Meet. The bank has recorded a recovery rate of 98% of the loans with minimal NPAs.
Now compare and contrast this behaviour and attitude a few of the ‘suceessful’ corporates!
As per the All India Bank Employees Association the top 50 loan defaulters’ total default amounts to Rs. 40,528 Crores and is headed by Vijay Mallya ( Rs. 7000 Crores+) Sterling Biotech, Deccan Chronicle etc.
I heard a Sr. Finance executive of a large petrochemical company telling me (darling of investors, shareholders etc. all these days) how the company increases its net margins by at least Rs. 100- 150 crores per year by simply delaying the suppliers’ payments for more than six months under some pretext or the other.
The page 3 celebrities get all the limelight and the glitter. But then who is more ethical and moral the Sex-workers or the ‘successful’ corporate?
The following example shared by Aparna Suresh shows how your curiosity to think beyond the obvious can provide vital information of the market and the competition:
I was a fresher from college, barely 4 months into pharma selling for Cipla in 1995-96, where meeting 12 doctors and 5 chemists per day was a must. In addition to this, collecting the sales data from the stockists/distributors/C&F agents was part of our responsibility. These agents stocked Cipla brands and also other competitor brands. Now how we collect it, is left to our ability because all these people are typical business men and never have time for representatives like us. Yet, we could definitely get it atleast end of the month for planning the next month order.
At the outset, this stock and sale statement could have easily passed off as any other statement. But the true usage of it was revealed to me by my seniors who were excellent sales men and had probably mastered the skills the hard way.
First of all the statement has the following details of all the products,
- inward stock of all the brands for the month with date
- movement of the stock to the retailer by name, area and date
- closing stock for the month
Under the sales pressure I would have just taken the details of my company brands to plan the order booking for the next month. I would have missed all the other valuable information in the same statement like –
- Identify the competitor brands
- Mark its movement area wise, date wise, track it to the retailer who has purchased it and from that identify the doctors’ prescriptions to which the retailer must have catered to
- With this I can judge the potentiality of a doctor in a particular area for – prescribing my brands; if brand loyalty has shifted from my brands to competitors; to co-relate if there were any delay in obtaining stocks by the retailers due to which the prescriptions were bounced
- Were there any bonus offers for any competitor brands which can show a sudden spurt in its sales and so on
The learning from this which I would like to share is that if we cultivate a habit of looking beyond the immediate requirements, we are bound to get more insight and a bigger picture of the whole thing. We cannot afford to be satisfied with short term benefits in sales as bigger opportunities usually come under disguise.
For more details on Contextual Selling workshops in Mumbai, Bangalore and Chennai:in February please visit www.paradigm-info.com
Can I send Salil, my Sales executive, age 23 years for the Key Account Management programs? said Jagdish,,Sales Manager of an engineering company. I had to tell him the following aspects which determines the ground rules for implementing Key Account Management (KAM)
- Needs a Different Mindset: Successful Companies who have implemented KAM look at it as a Strategic way of doing business and not a sales activity. You need to have commitment to work with priority customers differently. For example Supply Chain management can be an integral part of KAM
- Commitment from Top Management: It cannot happen at the Sales Manager’s level. The buy-in has to be at the CEO, CMO, VP-Sales level. The sr. people should sponsor at least 1-2 such accounts and interact/visit them regularly.
- Select the Right Person: Maturity is the most important attribute while selecting the Key Account Manager. It is not necessary that your top-performing salesman can become a good Key account Manager. He has to be more of a generalist with good understanding of finance, inventory, planning, influencing skills and the ability to see the big picture. A typical salesperson who is desperate to close order may be a misfit. One key competency is to understand the customer’s business beyond his immediate requirement.
- Identify Key Accounts Carefully: Lynette Ryalls in a HBR article says the number of accounts should be within 5-25. Even a company like Xerox does not have more than 100 customers as Key Accounts.
- Appoint and Train the KAM: The communication and influencing skills of the Key Account Manager has to be exceptionally good. He should be able to talk technicality at lower levels as well the macroeconomic environment, the interest rate with CFO and CEO comfortably.
- Put the right Metrics: He should not be judged on top-line results. In case of rate contracts with low margins when the cost of servicing a key account is high, the consequences can be disastrous. Performance should be judged more by the margins or net contribution. Another yardstick can be the lifetime value of the customer.
- Rework on the KAM cases every six months: All major accounts need not be key accounts. There are some unique parameters on which you should decide which customer remains in the Key account basket and those who need to be taken away. Key Account Management Workshops : Bangalore ( 16th December) & Mumbai (18th December). For more details :www.paradigm-info.com