Interpersonal Business

Vol. LX

Dear Manager,

What determines which of these “hard assets” should be considered obsolete? It comes with the conclusion that what was previously an asset no longer sustains its value. There are clear and obvious fixed costs in retaining resources that no longer represent future revenue. Warehousing, financial carrying costs, data entry, and poor use of valuable management time in their maintenance, are just a few. The closer we look, the more apparent it becomes. When an asset is no longer an asset, it is time to cut our losses and move on. When was the last time you took an inventory of all your assets?

In this instance, I am no longer referring to the hard assets in your warehouses. What is the current financial inventory of those assets your business considers to be its good will, or “soft assets?” These include current manufacturers relationships, customers, sales territories, and staff positions within your organization. Certainly there is a constant ebb and flow in each of their evaluations. While the need to take a close look at the value of ones physical inventory may be obvious, it can be much less obvious to do the same for other organizational assets. Rarely have I seen an organization define a specific and detailed financial evaluation for this equation and each of its parts.

Begin by taking a full accounting of exactly where your revenue is generated in all aspects of your business. We often have a very general idea, yet it’s not uncommon to be well off the mark. We all know the rule of thumb that twenty percent of our assets sustain eighty percent of our revenue. I have always found this concept to be much closer to actuality than I ever anticipated.

If this is the foundation, then the bottom twenty to forty percent of your assets represent less than ten percent of your revenue. If this were true, would it not be considered obsolete inventory if professionally reviewed in any other light, or by any other form of measurement? Similar to an inventory of ones hard assets, what is the true cost of retaining underperforming and value-deprived soft assets?

For many years, I made a concerted effort to minimize the number of client manufacturers our organization represented. Our top five manufacturers represented seventy percent of our sales, with the remaining ten to twelve representing the remaining thirty percent. To take it one step further, the bottom five manufacturers represented less than five percent of our total revenue. As often as I would analyze this, adjusting the mix with the addition and subtraction of manufacturers, the bottom five manufacturers would continue to maintain a very similar percentage.

There were always other considerations in retaining some manufacturers, regardless of their current revenue. A manufacturer’s future growth potential, their significance to other areas of our presentation, or simply a foot in the door of a potentially lucrative category, all came into play. These “other considerations” should also be evaluated as part of your total inventory. I believe you will find that in all but the most rare circumstances, their net value is a few hairs above meaningless, while their carrying costs continue to be very significant. (By the way, ones ego can’t be concluded as an aspect of “other considerations.”)

My own rule of thumb always came down to the following: If, as an organization, we could double or triple the sales of one of these underperforming product categories, would they then represent any value? In almost all cases the answer was no, and the chances of actually increasing their sales by this multiple were slim to none.

We once represented a manufacturer who produced a variety of products from varied artists. They were convinced that one of their artists was being “under represented” by their national sales force. The truth was that this artist represented only one percent of their national sales, yet we were asked, and expected, to promote these products to new markets outside our current customer base. When I asked this manufacturer what percentage of their total sales this artist should represent, the response was an unequivocal, “You could double the volume!” I could hardly wait to redirect the field sales force for this dramatic potential!?!

I asked this manufacturer if they had considered the corresponding impact of this focus on the much more successful ninety-nine percent of their presentation. “If sales forces across the nation were directed to double the sales in this ultra limited category of the product mix, could your company accept reduced sales in other areas, especially your best sellers?” In fact, this was not an unusual conversation over the years.

There seems to be a tendency for all of us to minimize our risk by telling ourselves we are better protected and more secure by investing valuable resources in areas with little or no potential relating to investment. Meanwhile, time, energy and, at some level, our reputation, are being squandered on what should be considered “obsolete inventory.”

In this time of both unprecedented institutional and personal investment in the stock market and mutual funds, would we consider a similar strategy with our personal investments? Would we continue to accept losses even though our investment broker was also our best friend? These same considerations should be used with regards to the continued profitability of some of our customers. How often do we hold onto a customer due to prior profitability, personal relationships, or simply out of habit, regardless of their current value to the whole?

Once again, the top customers will represent eighty percent of our revenue and probably receive, due to limited schedules, less than fifty percent of our efforts. A similar inventory can be conducted for customers by assigning a value based on the investment required to maintain them. How often are “obsolete customers” retained at the expense of developing a much more profitable customer next door? How often is time invested with a languishing customer at the expense of a new and very profitable presentation to one of our top ten clients? There are only a limited number of productive hours in the day; every decision relating to time is at the expense of a better use of our efforts!

For six years, I toiled over the development of a new division within our company, spending significant time trying to develop this category. Trade shows, the hiring process, problem solving, and hundreds of hours of staff time were invested in this endeavor. After six year’s effort, the division’s gross revenue represented less than ten percent of the whole. The division was ultimately dissolved, and the weight of the world seemed to pass in its wake. That same year, our company went on to have its largest growth year of the previous ten. The focus was back where it belonged.

There are similar situations where sales organizations try to expand into new sales regions. If, after a reasonable period of time, profitability has not been achieved, move on…quickly! You are certainly not doing the staff members in these regions any favors by subsidizing their income or sugarcoating the job’s inherent lack of potential. What we are doing is jeopardizing the balance of our staff, and their livelihood, by reducing the profitability of the whole!

Business will need to be much more streamlined than in the past. Have you ever noticed how much easier it is to increase sales at the top end of your presentation than it is at the bottom? This is certainly a very obvious statement. Equally obvious is our ability to resolve to focus a much greater investment in these areas by reducing “obsolete inventory.” Don’t the investments that we would consider to be our most valuable deserve more?
Poorly producing “assets” are historically the most time consuming aspects of our business. Could it be possible? Is eighty percent of our productivity invested in “assets” representing only twenty percent of our revenue? Sell the farm, Martha, the barn door was left open…

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. XXXXIII

Dear Manager,

Or, can simple experience pave the way to our ultimate goal? Have we paid attention to the marketplace and the fundamentals of marketing? Experience tells us that the State of California will outperform the State of Wyoming in most every facet of business. Experience suggests that a three day fishing trip will generally provide a greater return than a one day trip. It becomes the principal of sheer numbers. One of the most misunderstood marketing fundamentals is the importance of critical mass.

My wife and I at one time had four teenagers between us (now there’s critical mass!). Over the years, I watched them grow and look forward to finding their first summer job. It was a very challenging time for most teenagers, because in many ways they must put themselves on the line for the first time in order to find that first job. Presenting themselves in an adult manner, dressing the part, and showing a bit of confidence is not generally consistent with other aspects and priorities in their lives. I have seen it take weeks to muster the courage to make that first step. (The timing, by the way, is often determined by the release of the latest “to die for” CD or computer game … motivation takes many forms!)

In most cases, teens will have their eyes peeled for that magical sign that suggests a business is looking for them. “Dad, if they were looking for me they would have a help wanted sign out … don’t you know?!” Once the sign is found and their confidence has been strapped on, they march in. A sense of satisfaction has been earned and a job has been applied for. Now the wait begins. Surely, it will just be a matter of days until they are rewarded for this initial effort.

I have found a very similar tendency in business once these teenagers have grown up. A well conceived idea is developed yet never fully executed. A bad idea, very well executed has a much greater ratio for success than a very good idea poorly executed. It is the law of critical mass. If an individual were looking to publish a manuscript, would their chances be greater with a single query letter to prospective publishers or one hundred? I would bet on one hundred, regardless of the manuscript’s literary merits! With niche marketing so successful, there is a market for most anything. You simply have to have the resolve to find it.

As I have taught, encouraged, each of my own teenagers, reach for maximum visibility! If you actually want to be recognized, throw your hat in the ring and make an impact. Want a job? Then present yourself in the most favorable light, again, again, again and then again.

Working with many top sales professionals over the years has shown me the impact of critical mass. From account penetration to market saturation, the very best sales people must execute on a daily basis, or fail. These individuals are possessed with market expansion.

I once worked with an individual who opened in excess of 100 new customers her first year. Until she arrived, this was a territory that was considered a very mature and well developed region. With her efforts, all previously established standards of performance went out the window. How did she do it?

She established a goal to open 10 new accounts per month. This was then broken down into a weekly expectation and reviewed on a daily basis. It was an excellent plan, yet it is one thing to establish a plan and another to execute the plan. This is where many salespeople and managers fall through the cracks. I believe that it all comes down to “how bad do you want it, and are you willing to pay the price?”

By contrast, this individual (a former top vacuum cleaner salesperson by the way) approached her goal with the heart of a champion. With little fanfare, she simply proceeded confidently to achieve her objective. Do you really think she opened 10 new accounts per month by calling on only ten accounts? If so, let me sell you a vacuum!

Her first few attempts brought limited results, yet provided a very strong foundation. Repeated effort establishes the work habits that become a way of life. With time, her presentation developed, her batting average improved and her confidence soared. In each call it became no longer a question of if, but of when. Within “the critical mass” there is abundance available to all of us. Those who suggest otherwise are not being honest with themselves (or their manager!).

The greatest advantage of critical mass is in the number of options it brings to the table. Would we not prefer to evaluate the opportunities and values of ten options as compared to one? Each will have its own advantages, one will be a home run! Human nature often encourages us to take the easy way out, the first and only option. Perhaps it is less a result of human nature than it is of simply being too busy or too lazy.

As managers of our sales and of our companies, we must fight this tendency at every turn. Have you ever reviewed the potential of a product, individual, or service with only a surface amount of information? I have, as have many managers. We can be anxious to form a conclusion based on the information at hand, rather than explore the many options available with patience and commitment to greater understanding. Our fast-paced world challenges this premise each and every day.

The alternative is “garbage in, garbage out.” We owe it to ourselves to explore these options with a firm grasp of critical mass, and a firm grasp on reality in the decision making process.

ASK THE TOUGH QUESTIONS …

… again and again, not only of yourself but of those you manage. We
must demand this of ourselves, regardless of excuses or the pace of our
schedule. Anything less, and all of the investment we have made relating to our ideas and to the individuals that have the right to expect our best was an absolute waste of time! If we are unwilling to properly execute our plan, trusting the laws of critical mass, then it is time to fold our tent and accept all consequences. The ideas and execution will now be left to the competition.

Personal Regards,

Keenan

INTERPERSONAL7#169; is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2009. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. XXXXII

Dear Managers,

In the “new world economy” that we hear about on a daily basis, change becomes a way of life as we now embrace the twenty-first century. Change has become a necessity in order to compete, survive and flourish. Some are on the cutting edge of new technologies and the anticipated wave of change in the marketplace. These individuals will be in the forefront with a subtle smile of satisfaction. Others will absolutely be six feet under (the ultimate change!) before considering a new perspective of doing business. As managers we must embrace change enthusiastically. To do so, we must all have a greater understanding and acceptance of the dynamics of change.

Why, in so many aspects of life, do individuals maintain an aversion to change? The best explanation is that we are each manipulated by our own comfort zones. We have grown up to fear the actual or perceived risk in change. We have been taught that change is hard. The unknown strikes terror into the hearts of many.

At a very young age, confidence was developed through consistency, routine, and familiar surroundings. If these aspects of life are what felt good as a child, they must also feel good today. Understanding their roots will assist us in looking at their dynamics objectively as an adult.

We all know individuals who have held the same job since graduating from high school or college. Many of these same people would admit to having devoted their entire working career to a position defined by nothing more than chance. Why? Over the years, adult responsibilities make it seemingly impossible to justify change. At least the status quo pays the bills. Those who cannot embrace change are destined to their own fate, and that’s all that needs to be said!

Those who have consistently endured change have, in retrospect, gained confidence in the process, and faith in their ability to land on their feet. Change can indeed become a blessing in disguise. It all comes down to the uncertainty that most feel in the process. More often than not, personal victory comes through accepting change … head on.

CORPORATE TRANSITION

For example, the change in ownership of a company can create sheer panic and a worst-case mentality from management and staff alike. Regardless of their current circumstances (good or bad), the overwhelming conclusion is that the future is in jeopardy. Some mistakes will inevitably be made. I have personally found, however, that in most cases the new ownership has brought heightened enthusiasm, innovation, and a much stronger sense of opportunity. There were reasons why the previous owner chose this option. New ownership can bring renewed vitality to an organization.

The only individuals who should feel insecure in their positions are those who are incompetent, and I support their insecurity! Competent individuals will rise to the top, retain their positions or secure greater and unforeseen opportunities elsewhere. There are always multiple options for the blue chip staff member! Those who are able to accept the adventure of change will see unlimited possibilities for their life and career.

VIRTUAL REALITY IN SALES

As salespeople, we must realize that the individuals we sell to are often the least accepting of change. Even the professional buyer may be caught acting like a child. It is critical in the training of new sales staff for managers to address this issue up front. Whenever there is change, many customers will immediately form the following conclusions:

• The new sales associate will lack adequate knowledge
• I will not like this individual as well as their predecessor
• I will be expected to purchase products I don’t want
• The new individual will not be as reliable
• I will be greatly inconvenienced by this transition
• My service and product needs will be adversely impacted

Obviously, these conclusions are not a reflection of reality, or a personal statement about the new salesperson. How can they possibly be, as no relationship has yet been established? This is the “worst case” mentality associated with change. By realizing this, salespeople can begin to develop effective strategies to disarm the inherent opposition. To ease the anxieties of change, we must candidly address the customers’ concerns face-to-face. When contacted by phone (by the dreaded “new” salesperson), many customers will suggest a follow-up call … in perhaps six to twelve months! This simply won’t do.

Relationships can only be developed out of mutual need. Customers may be forced to adapt, or choose other less threatening options. As salespeople, the majority of these concerns can be addressed in a brief personal meeting. Express an understanding of the dynamics of change and a wish to live up to – and improve upon – past relationships. Suggest an openness to feedback, and the hope for their assistance in the transition.

This one-on-one commitment to mutual success is absolutely fundamental to maintaining good will and developing the future opportunities needed for growth. Begin with the key relationships in your territories. Be relentless, and at the same time subtle, in counteracting their anxieties.

AS SEASONS CHANGE

It is now time to accept, encourage and search out new opportunities available through change. Similar to the seasons of the year, change brings renewal. Change challenges us to excel. All previous comfort zones evaporate. It has the potential to bring out the best in all of us. We all want to improve upon our previous best experience!

When change is thrust upon us, it demands that we give 120% to the effort. In these circumstances, nothing can be taken for granted or accepted at face value. With each day we learn, processing and absorbing our surroundings, tasting all aspects of our new reality. Is this not an approach that would assist all of our endeavors, regardless of current comfort levels or our need for change?

If there is one constant … it is change. Regardless of our belief in this old adage, (which we may have formed at a very young age!), I think it is time for all of us to not only accept but to encourage change in our lives. The option to revert back to former ways is always available to us! How can one possibly understand and evaluate the potential in oneself without embracing the elements only available to us through change?

As a favorite quotation suggests, “Without a strategy and acceptance for change, we are destined for the same result.”

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2009. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. XXXXI

Dear Manager,

The fundamental difference between the “Haves” and the “Have-Nots” is a very positive mental attitude combined with the power to believe. Most would agree that these are, indeed, important qualities. Why do so few consistently incorporate these principals into their daily lives? Don’t expound about virtue while complaining about the ways of the world! Is it possible that some individuals cannot hear their own voice? Flipping the switch of positive and negative energy to support one’s current frame of mind simply won’t get the job done.

Over thirty years ago I had the opportunity to read a book that would forever change my outlook on the power of one’s belief system. This book (which is still in print) was given to me by a friend I greatly admired. With his writing of The Magic of Believing in the 1940’s, Claude Bristol was a pioneer in his day, long before Norman Vincent Peale, Tony Robbins, and others. This short book told the story of the author’s life and the profound impact of one’s own belief system in one’s life. With brief chapters he proved, without question, that The Magic of Believing was available in abundance to all of us! How can a story such as this maintain its relevance for nearly eighty years?

One of the foundations of this simple story is the proven fact that the mind does not recognize the difference between thought and deed. In other words, we are precisely what we think about. If we think of ourselves in the most positive terms, we are that. If we think of ourselves in the most negative terms, we are that. Thought becomes reality!

In a simple exercise, Bristol suggests visualizing a successful outcome prior to your next important meeting. Think in very specific terms of the positive energy you feel as you walk through that door. Picture being greeted by smiling individuals who appreciate your time. These individuals will be very receptive to your presentation and more than willing to give you their full consideration. Imagine feeling totally relaxed, confident and prepared for any and all questions.

Can you imagine how relaxed and better prepared you will feel under these conditions? Once again, thought is reality. Our minds cannot tell the difference between having actually accomplished the task and simply having visualized each aspect. Like a dream, it becomes very, very real. Think how much easier your meeting will become knowing it is the second time you have given this exact presentation?! In this instance, reality becomes the result of thought.

Have you ever watched a golfer, high jumper or skater visualize effort prior to their performance? The golfer will stand over his putt “watching” the course of the ball as it falls into the hole. The high jumper will mark every step in his mind, feel the breeze against his face with each stride, and watch his own form crossing the bar. The ice skater will visualize their program from the sidelines. With a bob and weave of their head, they will anticipate every jump and spin. I wouldn’t be surprised if they can even hear the applause of the crowd! Now it’s simply a matter of accomplishing the task, not for the first time in these exact circumstances, but for the second time in these exact circumstances.

In recent years, forty individuals were asked to meet at a gym to test this visualization theory. With little knowledge of the day’s plan, they were split into two groups, one at each end of the floor. Each member of the group was asked to shoot twenty free throws, making as many baskets as they could. The two groups made well below 50% of their shots.

One group was sent home, asked not to practice, but to come back again in two weeks. The second group was also asked to return in two weeks and not to practice shooting the ball. However, the second test group was asked to do one additional thing for the two week period. As they went to bed each night they were asked to visualize standing at the line and bring back the feelings of making their shots. The greater the detail in their thought, the better. They were to imagine feeling the ball in their hands, bouncing the ball at their feet, almost feeling the dampness of their hands. In their imagination, each night they would watch the ball leave their hands, spinning towards the hoop, and swish … 100% success!

After two weeks the test groups returned to make their twenty shots. Little had changed in the first group, but they did improve slightly from their previous effort. Similar to this group, no one in the second group had touched a ball in the two week period. Each member stepped up to the line to make their shots. The accuracy and success rate increased by a full 50% over their first effort, and the efforts of the first test group! Simple mental practice and confidence had provided the second test group with a decided advantage.

Have you ever walked out of a successful meeting so excited you could almost fly? Every aspect of your presentation had gone well, and far beyond all of your expectations! You could hardly contain your exuberance and enthusiasm for your good fortune. You could hardly wait for your second meeting of the day, because nothing could dampen your spirits. As you walked out the door you may have thought to yourself, “Let’s just see how hot I am.”

You very likely found out. The sense of energy and excitement rubbed off throughout the balance of your day. The sense of confidence you portrayed was infectious to all who came into contact with you. You had the walk! Our self-image and how we project ourselves is crucial to peak performance.

In contrast, have you ever anticipated having a successful meeting that very early on simply fell apart? Your preparation turned out all wrong and you left doubting whether the business relationship could even be saved. With your head in your hands, you proceeded to your next meeting. Did you allow your shattered confidence to affect your next appointment?

These examples graphically suggest the value of a positive belief system and how, with practice, we are in absolute control of thought, outcome, and our own destiny. You must learn to develop and maintain “your walk” regardless of the most recent circumstances.

Just like our successful free throw shooters, practice is required on a daily basis. Our belief system is as reliable as we allow it to be. It is not a perfect world, and never will be, yet is there any value in dwelling on something less than a positive outlook?

I am convinced that if individuals objectively listened to both their self-talk and their verbal communications, there would be no doubt which qualities manage their life. Deed and execution are the result of thought, not the reverse! We cannot be defined by what we do, we are purely and simply a reflection of our thought process, period.

The transition of our belief system and attitude can be a slow process or, for those with the desire and discipline to see it through, an exciting and very fulfilling process. Writing down one’s thoughts can be the best way to clarify and define your current thought process. It can also reflect your progress over a period of time. Perfection is an unrealistic dream. Progress can become our new best friend.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2009. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM