To Move or to Motivate

... that is the question.

If you have an employee that appears to have reached the end of their usefulness or the limits of their abilities (and really, isn't that the same thing?), you have a choice: Do you replace them, or do you try to coach them beyond their existing limitations?

If there is a large labor pool available, as is the case at the time of this writing, the current trend is to 'trade up'. It sometimes takes less effort to find someone with a higher readiness/ability quotient than it does to grow an existing employee. My opinion is that that's part of why the labor pool is currently as large as it is: Many people without jobs don't have the willingness, readiness, or ability to get to the next rung. (I would love to be proved wrong.)

Increasingly, as the education level of American high school and college graduates declines, we find ourselves off-shoring jobs simply because overseas employees have higher skill levels. (English grammar is my pet peeve. How many cover letters and resumes have you read lately that were misspelled, had poor punctuation, and sentence structure that made you cringe?) There is no sign that this downward trend is going to change, at least any time soon and, as a responsible manager, part of your job is to find the best person you can for each position.

But...

If an employee has been with you any length of time, they have acquired knowledge. Often, and especially in key roles where no one else performs the same task, this knowledge exists nowhere else in your organization. Moving that employee out means starting from scratch, and usually at some expense.

Have you ever felt like a given issue or project comes up over and over again, yet never seems to get resolved? Brain drain is likely the culprit - some key cog that had the knowledge necessary to resolve that issue or complete that project is no longer part of the organization, and you are taking two steps back for every step forward as a result.

Is that good corporate stewardship? If not, how do you solve the puzzle - especially when you have so little time to perform your own tasks, let alone mentor someone who may or may not take that next, vital step?

It helps to understand where that employee's limitations come from in the first place. It could be simply a matter of training - something you don't even have to do yourself. But as often as not, there is a deeper root that stands squarely in the employee's way - one that has dogged them their entire life. And to help them climb out of that box, you need to understand the Lifeboat Scenario.

Much smarter people than me have discovered that our reactions to potentially lethal situations (and if losing one's job over and over in this economy isn't lethal, what is?) fall into one of three camps. The scenario is a lifeboat that has sprung a leak and is going down fast, and the passengers self-divide as follows:

• 30% panic, flail wildly, and either die quickly or accidentally find a way to live
• 50% do nothing, and drown
• 20% take stock, rationally determine a course of action, and live, often rescuing others on the way

It's easy to see where this behavior came from, and even why it makes sense from a 'survival of the species' perspective: If a leopard attacks a tribe of early hominids, the ones who panic either draw the leopard's attention and die instantly (leaving the rest to live another day), or accidentally escape and eventually reproduce. The ones who do nothing either die (easy pickings), or fail to draw the leopard's attention and live to reproduce. The ones who are rational pick up a good, heavy stick or a rock, and may succeed in driving the leopard away (resulting in minimal losses, leaving more potential reproductive partners).

In essence, the lifeboat scenario is nature throwing dice in the hope that at least one of the three strategies works. But for modern humans, this genetic predisposition often gets in the way of our rational minds, resulting in a box that is difficult to escape.

It takes time and effort to assess willingness, readiness, and ability. But if at least one of those two traits exist, it may be less costly (in terms of time and money) to help the employee improve and prevent yet another loss/hiring/backtrack cycle.

For more information about readiness, I suggest this article: http://www.projectconnections.com/articles/050905-glory.html.

Equality, Part 1

There's a long-standing tradition in sales that's about as self-destructive to a sales team as it's possible to get: Treating salespeople differently depending upon their sales metrics.

You all know what I mean - making exceptions for things you would never normally allow because a particular salesperson generates high numbers. While it's great that they are consistent achievers (wait - they're not consistent? then why are you rewarding them for sporadic results?), think about the door that you've opened. These are salespeople we're talking about; it's their job to open doors as wide as possible, and you can't expect them to act differently with internal doors than they do with external doors. They will push those exceptions as far and as wide as they possibly can, and that's not their fault - that's what salespeople do, by nature, and you're the one that opened the door.

Now think about the other members of the sales team, the folks who consistently hit goal but don't soar above it. How much of a motivator is it for them to see that the fellow who occasionally hits a high note is permitted to break the rules, sending their sales even higher, while they have to rigidly observe procedure?

It's not. That's why they're sullen. That's why their results decline. That's why they leave, and go do terrific work for your competitors, taking knowledge about your company, your Customers, and how you do things with them.

There's nothing wrong with compensating salespeople based on results - that's what sales is all about, and everyone understands that. It's the arbitrariness that makes unspoken benefits evil, not the concept. If you're going to bestow privileges based on results, put them down in black and white, for all to see and aspire to. And, rather than have them kick in when a salesperson goes above and beyond just once, make them effective with consistent high results.

Salespeople are like racehorses: It's their job to run, but it's your job to clearly lay out the track and the stakes.

PTO

There are some employers in the United States today that don't offer employees paid time off (PTO), even if they're sick or there's a public holiday. Others restrict PTO to employees who have been with their organizations for 1 year or more.

I understand the reasoning: "If an employee isn't producing, why pay them?" Followed closely by: "They'll only take advantage of it."

There's just 1 problem with this line of reasoning: It's wrong.

If you don't allow paid personal time, sick time, etc., you are essentially saying that there is no defined limit to how many days an employee can be absent (with notice, of course), provided that they are willing to forgo pay for that many days. That being the case, what actually happens is not multiple days taken off in one go - it's a day or two taken off each month, every month.

That's right - you've unintentionally consented to allow employees unpaid time off that totals 12 to 24 days a year - and to resent you for making them show up for work sick (getting everyone else sick in the process).

But give even a new employee 5 personal days up front, and here's what happens (provided you hired the right person): They hoard them.

That's right - limited to just 5 days that they can have off per year, the end of the year rolls around and people still have days left that they could take off, but haven't. Why? Because they never know when their child might be ill, or their hot water heater might spring a leak, or one of their parents might die. Against the unknown, they take those 5 days and bank them. Especially since so many of them are working 2 jobs just to make ends meet.

But really, do you really want employees that haven't taken their 5 days? Think about it: 52 weeks in a row of 40 or more hours per week, without a break. How productive do you really think this employee is going to be, even if they don't get sick?

If you really want someone fresh and sharp, why not offer 5 days of personal/sick time, and 5 days for mental health (what we used to call a 'vacation').

So, for the cost of 10 days' pay, you get:

• Employees who are less likely to leave
• Higher production because no one is spreading the plague
• Sharp, fresh employees
• Few employees who actually use all 10 days
• An employee who has to work harder to pay for an even better vacation next year

In other words, if you're going to bean count, do it here only if you prefer employees that are mentally and physically unfit.

Moving Pianos

My entire career has been about moving pianos.

I did actually used to move pianos, years ago, when my back was younger than any of me is now. What I learned then has informed my work process ever since. The only time I've failed is when I didn't pay attention to the rules of piano moving, which are as follows:

The Customer gets to pick the piano
You can influence that decision, of course, depending upon whether the Customer (or the Customer's associates - i.e., spouse and/or children) plan to use the piano to noodle around on or to train the next Rachmaninoff. Ultimately, though, it's the Customer's dime. If they want a zebra-striped 21-foot grand and can afford it, it's their right to get that hideous monstrosity.

Yes, you want a lamp - and a grandfather clock
When Customers purchase a big-ticket item, like a piano or a database, payroll service, CRM, etc., sign the deal for that first. Then, once that deal is locked, suggest add-ons that go well with the original item, like a lamp so they can see their sheet music better, a certain amount of additional storage in the cloud, etc. Customers who've just made a large purchase are much more likely to say yes - after all, they've already said yes to the big, scary decision; anything after that is easy - and it's your job to fill the new needs created by their original decision.

The Customer decides where the piano goes - within limits
Customers always have interesting ideas about where the piano should go. The third floor? Sure, why not - provided that the floor is sufficiently braced to take the weight. Full-sized pianos are like full bookcases - they weigh a lot, and the Customer has a right to be angry if their floor starts to warp or sag and you didn't advise them that that was likely to happen. It might be more convenient for you to put the piano in the living room, where you won't have to take off its legs and turn it on its side to negotiate those treacherous, hernia-inducing stairs, but it's the Customer's house, and the piano goes where they want it. But I would still get it in writing that you've told them about that floor - just in case.

Do you want your piano tuned?
Pianos - real pianos, as opposed to their digital cousins - need regular tuning. You may offer a certain number of tunings for free, and possibly a package price if they sign up for a regular course of these after the fact. Unlike additional warranties, tuning is necessary if you don't want the neighborhood dogs to howl every time you play. You may not be who they choose to do the tunings, of course, so it's in your best interest to offer a fair price for that package to lock them in. Unless, of course, you don't mind your Customers tweeting or Facebooking that you robbed them.

What do your extended family and friends think of your piano?
It is a given that anyone who purchases a piano will show it off, partly to reassure themselves that they've made a good decision, and partly because they're proud to own something so cool. So call the Customer 2 weeks or so after the first tuning and ask what their extended family and friends think. Did any of them mention that they wish they had a piano? If so, let your Customer know that you would be honored to help their friends choose a piano that will be the perfect fit for their needs - and that they can get some kind of break for mentioning that they know your Customer.

The Hierarchy of Communication

In these days of social media, email, texts and on and on, it's easy to lose sight of the fact that each type of communication is more or less effective than another. We get into the rut of using one way to touch colleagues and Customers, even if it's less effective, simply because it's habit.

Remember the Hierarchy of Communication, in order from most to least effective.

For one-to-one or small groups:

1. Face to face
2. Remote videoconferencing
3. Telephone (voice not text)
4. Text
5. Email

For group communication:

1. Face to face
2. Videoconferencing
3. Teleconferencing
4. Recorded video
5. Text
6. Twitter
7. Facebook
8. Email
9. Print

There are place-changers, of course, depending on your Customer demographic. If your Customers are primarily over 55, print moves up to number 4 or higher, and Twitter likely drops to the bottom. But why in the world would you shotgun a message to every demographic using one outlet? Or use the same message for every demographic? That's the marketing equivalent of using worms to fish for marlin.

Every time you interact with a Colleague, try to make it face to face. Don't have time? Does that mean that it takes you less time to field the ping pong series of emails that it takes to convey your point - and hear your colleague's points - that way? Sounds like a hollow argument to me.

Remember: If a communication medium isn't effective, it doesn't save time, it wastes money.

Acquisitions

Congratulations! You've worked long and hard, invested in the right people, done the right things, and you're ready to make your first strategic acquisition. Now is the time for due diligence.

As part of any acquisition process, there are questions that you need to ask yourself first. If you don't have black and white answers that your management team understands and agrees with - especially your Sales Manager and CFO - the process must stop here. If it doesn't, you are making a potentially fatal mistake. What questions? Glad you asked:

• Why this company?
• Why now?
• Are there other companies that would be a better fit?
• How many people do you need to keep? For how long?
• Do they have some people that are better than yours? Does it make sense to be redundant?
• How much will it cost to let people go? Make sure that you are in chrge of the layoff package - not the other company.
• Can you afford the buyout in one go, or are you financing it? If the acquisition company tanks, can you afford the loss plus the financed acquisition cost?
• Who is going to review their books with a fine-toothed comb?

That last one, in particular, should be tattooed on your forehead. I don't care if you're buying your mom's company; business is business. They are willing to sell out for a reason. It's your job to find out what that reason is. I don't care that they told you that they're retiring; everyobody says that. Why are they retiring now? You need someone who snoops into books for a living to do exactly that, because you can't trust them and you don't know what you're looking for. At a minimum, your snoop should know this by the time they're done:

• Are their sales rising or falling? Why?
• How profitable are they - not just gross, but net?
• Are they over-comping their people?
• Who are their star performers? Can you afford to keep them?
• Have they already made written promises to any employees - or Customers - that you will have to make good on?
• Who are their best and worst Customers?
• Does their Customer list add enough new names to yours to make the acquisition worthwhile? Don't assume - find out by pulling their database and having it deduped and matched against yours.
• How do their processes work? Sit with their teams. Are there some processes that are better than yours that you should adopt? Can you make them more efficient?
• Are you stuck with a building lease that you don't need or want?
• How about vendor agreements? Are you assuming your competitor's headaches?
• How long will it take the company that you acquire to pay off what you paid for them? This should be part of not just your financing agreement, but also your negotiations with the owner(s).
• Who else are they talking to? Because it's not just you. The sooner you know who they're in bed with, the sooner you can put an agreement in place to stop all other negotiations. If they won't agree to that, it's time to walk away from the table.

That last one is a bigger issue: Never be afraid to walk away from the table. Any acquisition is a huge step, and even the biggest players get it wrong on a regular basis (just look at Time-Warner and AOL). Getting it wrong can mean not only missing a key opportunity to grow, but killing your own business in the process.

Follow the Jackrabbit Rule: If anything smells bad, run.

Pay for Value

Here's a crazy idea: Pay everyone in your organization based on what they contribute to your bottom line.

Before you call the fellows with the straitjacket or start gathering torches, slow down for a moment and really think about this. I grant you that it will take a lot of time and thought up front, but there are some important payoffs involved that may work for your business, including having a compensation system that is fair, equitable, and transparent.

When you hire someone, how do you currently determine what to pay them? Do you fall back on the age-old method of looking to see the median wage for that role and experience level, then come up with a range slightly above or below it? Why? How does what 'the average' is have anything to do with that role's value to your company? What if 'the' average is wrong, or comes from companies that are much larger or smaller than yours? Doesn't this seem awfully arbitrary for something as important as someone's paycheck - something that's probably your single greatest business cost?

Maybe you look at what the prospective employee makes in their current position, or average the highest and lowest wages from their last few jobs. Again, what does any of that have to do with your organization, their role within it, and your needs?

Nothing.

Salespeople are easy. How much did they sell? Pay them a percentage of that. Piece workers, too - how many gimcracks have they made today? Where the real work comes in is looking at every other role within your organization the same way.

Do you employ an accountant? How much money do they collect for your organization? How much do they save? Don't you think they'd be incentivized by getting a little something extra based on that?

How about your marketing department? Did their latest campaign increase sales? By how much? Do you think they would work harder or longer if they had skin in that game?

IT, HR, Customer Service... everyone has value based on revenue they create or money they save. Especially if you are just starting out, and can't afford to pay 'the average', you can build loyalty and ownership by paying people for going above and beyond the bare minimum. And I don't mean some kind of hokey award or slap on the back - I mean a culture where such things are measured and comped on a daily basis.

What's wrong with everyone knowing what everyone else makes? If the goals and their incentives are clear, nothing. How can you complain about what you're paid if you have the means and the incentive to do better? You might, but no one else will listen, and you won't last long. Everyone will be too busy raising their own pay.

And if they are doing what needs to be done to justify that pay, imagine how much faster your organization will grow. Do you think your employees will tell their hard-working friends what a great place your organization is? Especially if you give them an incentive to help you find great employees?

"Yes," I hear you say, "but what if they decide to work somewhere else that will just pay them more?" Folks, there is always somewhere else that will pay your employees more; that's how free enterprise works. You have to be able to show the value of your organization and its incentives in a way that makes sense to prospective employees. Do you really want someone who will leave the moment they're offered more money, or do you want employees who believe in bettering their condition by having control over their own value?

Just because you do something the way that you'e always done it doesn't make it right. In a world of constant competition, you have to question everything you do, re-examine it, and not be afraid to face change if it doesn't make sense any more.

3rd Thoughts

When your organization wants to accomplish something, and the group that will address the project, change, or issue meets for the first time, that meeting is likely to be filled with what I call 'First Thoughts'. First thoughts are all about wants and needs, and you frequently hear those words pop up during this discussion. It's all about defining what you or your organization need or want.

Second Thoughts are exactly that - the other folks that are involved ask that all-important question (Why?), then proceed to tell you why the thing that you want or need can't be done, or how much it will cost, or how many man-hours it will steal from other tasks, etc. Second Thoughts are thinking about your thinking, looking for holes in the boat and kicking the tires good and hard before investing man-hours and money.

The author Terry Pratchett - our time's equivalent to Shakespeare - takes this process one step further, to what he calls 'Third Thoughts'. According to Pratchett, "Third Thoughts are thoughts that watch the world and think all by themselves. They're rare, and often troublesome. When a huge rock is about to land on your head, they're the thoughts that think: Is that an igneous rock, such as granite, or is it sandstone?"

Once you've heard all of the 'Why' answers, Third Thoughts are what lead you to re-examine the want or need in light of the organization as a whole, using the perspective of the other meeting attendees as the dental tool that looks for cavities. For this reason, it's always a good idea to involve people from other departments in at least the first meeting, even if their department is not involved in the issue. In fact, folks not involved in the issue are most likely to have Third Thoughts, because they have no vested interest in the outcome.

Pratchett also differentiates between 'Second Sight' (seeing what you expect to see) and what he calls 'First Sight' (seeing what's actually there). As you look at your list of meeting participants, think about who is most likely to have First Sight. If you don't come up with at least one name, you aren't inviting the right people.

Decisions cost time and money. Every mistake doubles both. The way to minimize risk is to put as much or more time into tire-kicking and perspective-sharing as you do into execution. Take time between each meeting to get it all down on paper, pass out the notes, and ask people to add what they've thought of since you met.

In the end, it will take less time and money to measure twice and cut once - especially if you figure out up front whether the cutting should be done with scissors or a chain saw.

Story

What do you know about the history of Apple? That it was founded by 2 nerds in a garage? That they stood up to corporate behemoths like IBM and kicked their butt? That Apple prospered by giving people well-designed, cutting edge products? That their products reflect what people want?

Great story.

What you may or may not have heard is that, before Apple was even formed, Steve Jobs cheated Steve Wozniak out of money. Or that Wozniak was content to hang out with Apple's user groups and refine their existing computers rather than work on the Mac. Or that Jobs didn't bathe. Or that Apple has had just as many failures as successes. Or that they have a long history of treating their Customers like crap.

Because of social media, you don't have control over your message any more. It can be argued that you never did - that basic fact is just more visible now. But because of that, it is vital that you deliver content that resonates, so that your Customers become advocates. Because there's nothing people like better than a good story.

Did your company actually start in a garage? Great! Do you have photos of those days? Put'em on your press page. Got some funny anecdotes? Get those puppies out there. Remember your first big win against a bigger competitor? Tell it. What do you believe in your heart of hearts? Strip out all of the marketing-speak and say it as simply as possible.

Become a storyteller.

A great story is the difference between Apple and IBM. Do you know IBM's story? Of course not - nobody does! (And if you do, you need to get out more. Life awaits.)  But you might know Ben & Jerry's story, or Thomas Edison's, or Alexander Graham Bell's.

Granted, large parts of those stories aren't true, and there are bad sides to every tale, but that's not what people remember - give them the right ingredients, and they will believe. (Disney knows this to its bones; their whole business model is about telling this story over and over again. Only the names and costumes change.) I'm not saying lie - if you do, in this day and age, you will absolutely be found out. I'm saying deliver the ingredients that make your story sticky, so that people want to tell it:

1. Was your founder a maverick? People like underdogs. Even better if you had 2 founders who are/were pals.
2. Did your founder come up with a brilliant and original idea that was just common sense applied to a market need? The trend may be against intellectuals, but common sense sells.
3. Did your company go up against a bigger, more powerful rival and win? We all love a good fight - especially if it's long and involves hard work and sacrifice.
4. Do you employ a lot of people? If you treat your employees well, say so. People like to think of the companies that they like as big, benevolent families. If that's what your organization is, people will love you for it.

The basics don't change, of course - you still have to deliver great and timely service and communicate perfectly - but story builds goodwill, and belief can often buy you the benefit of the doubt (even if your grammar is poor).

Tell your tale. Keep it simple. Keep it concise. Keep it clear.

Humbert

At the top right of my business blog, WorkIzWar, the first thing that you see is a hamster. His name is Humbert. Humbert has a little wheel to run on, a water bottle to drink from, and you can feed him food pellets. In fact, he will follow your mouse around, watching and waiting for you to do so. Right above his head are these words: 'Waste time with Humbert?'

A digital hamster might seem like a frivolous, even juvenile, thing to include on a business blog, but he serves a very important purpose. During the course of our days, we all come across Humberts. Sometimes they are people who like to chat about non-work issues, or work issues that were decided a long time ago. Sometimes they are tasks that are urgent (just like Humbert, they want to be fed), but not important. Often, they are simply busy work that we do to put off tackling difficult or unpleasant tasks.

All of them prevent forward movement - what I like to call momentum. And all of them are career-killers. Some of them are even business-killers.

Do yourself a favor. Get out a piece of paper. Draw a line down the center, so that you have 2 columns. On the left side, write down everything that you do or become engaged in - every conversation, every phone call, email, task... literally everything that you do today. At the end of the day, in the right-hand column, put an 'X' for everything that's a 'Humbert'. It's easy to define: Did the activity or conversation move you forward? No? Then it's a Humbert.

Do this for the rest of your week. Look how many Humberts there are! If you're like most people, at least a third of what you do is no more helpful to you, your career, and or organization than feeding an imaginary hamster! Who has that kind of time to waste?

Humbert does. And he'll always be right there, waiting patiently for you to come back.

(Update: Humbert died of neglect because so many of you took this article and applied it. Good for you! So we've procured a new hamster named Harry to continue to confound and distract you. Good luck.)

Titles

If you remember nothing else about change management, remember this:

Language = Culture

I'm not a fan of what George Carlin used to call 'soft language'. This applies to titles just as much as it does to processes and departments. In fact, wherever I go, I like to sort out my Sales teams into the following groups:

• Hunters - Business Development, Outside Sales, Field Sales, etc. But their job is to hunt, right? Go out there and get us new Customers. Can't do that? You're not a Hunter.
• Farmers - Account Managers, Inside Sales, Sales Associates, etc. Once we've got a Customer, it's a Farmer's job to grow how much spend. The moment that number stops growing, they stop being a Farmer and start being an expense.
• Caregivers - Customer Service, Sales Assistants, Service Coordinators, etc. Their real job is to retain Customers, right? But it's possible to service a Customer and still not care, and that just won't cut it any more. There are dozens of other organizations out there calling 'your' Customers every day, and you'll lose them in a heartbeat if your reps don't care, and make it clear that your organization cares.

One organization that I worked for was fine with the idea of calling the folks in these groups by these names internally, but horrified by the idea of using them in front of Customers. Why? Isn't that what these folks do? Isn't this what we do and should expect from them? What's wrong with Customers being aware of that? Where's the harm in honesty?

Think about this: Every organization that you work for in your career has an org chart. The org chart's purpose, at least in theory, is to show your organization's reporting structure - the chain of command. This is supposed to help make it clear whom you go to for what. But isn't your first 3 to 6 months in any organization as much about learning what that org chart really means as it is about learning the job? What a waste of time!

If the titles of the people in your org chart include mouthfuls like "Vice President in Charge of Customer Advocacy", you're guilty of soft language. Guilty is the right word, too; you should be ashamed of making it so hard for people to figure out that this person is your Head Caregiver!

I know, a lot of you use titles to avoid paying people more money; calling someone 'Executive Director of Competitive Intelligence' certainly makes them feel good, doesn't it? If they were just a 'Competitive Intelligence Coordinator' before, a fancy title like that sure sounds like a promotion, doesn't it? Although the money won't change. It's all about perceived value; squeeze enough titles in there, and you can get away without a comp increase for at least 2 or 3 years, maybe even longer.

Or you can use titles to reward people you really like. They've hit the top of the pay scale for 'Internal Communications Officer', but if you change that to 'Internal Communications Manager', you can pay them an extra 10%. And isn't good management all about cronyism?

Or you can call people what they do, make it clear what their responsibilities are, and motivate them by sharing that information far and wide.

Here are some ideas. Please feel free to share your own:

• Boss
• Bean Counter
• Penny Pincher
• Maker
• Hunter
• Farmer
• Caregiver
• Fixer
• Crier
• Artist
• Whip (oh, we're gonna get comments about this one)

'Awareness'

Hey! How are you? How's your organization doing? Really? Hm. Yeah. Well, you probably won't be interested in this, but I've got a great way to make people more aware of your brand. Lots of people. Oh, you are interested? Okay, great. I mean, are you sure you want to do this? I don't want to push you into something that you're not 100% sure about, because I'm on your side. Okay... if you're sure...

Give me $25,000 and we'll get the ball rolling.

What? Well, brand awareness costs money, and this level of brand awareness isn't cheap. I'm making nothing on this, you know - this is all overhead for the camera guys, the web developers, the talent, plus purchasing the ad spots. I'm only even doing this for you as a favor - normally this would cost twice as much...

What's that? How many sales will you get out of this? Well, that's hard to say, exactly. I mean, this campaign will go out to about 25,000 people, so a buck a person, that's pretty good, isn't it? What? You want to have some kind of way to tell how many of these people come in and buy because of this campaign? Well, you don't want it to be too sales-y, you know. This is brand awareness, we're talking here. If it's too much like a pitch, it will turn people off. Huh? What's the point of awareness if it doesn't generate sales?

Excellent question. The answer is: none.

'Awareness' is used by some ad and PR agencies to pay for vacations to Cabo when winter gets on their nerves. From their perspective, there's no downside: They've gotten your message out to the number of people they said they would, you have no way of proving them wrong, and they've made a tidy sum without having to deliver a single sale, because that's your job. Is it their fault if you have a message that doesn't stand out, or isn't clear, or the people who saw the spots aren't ready to buy yet, or or or?

Yes. That's what you pay them for, isn't it? If they can't deliver new Customers, what good are they?

To avoid setting your money on fire, awareness should always and only be this: The top of your sales funnel. Because of this, making certain that your message is clear, stands out from your competition, and is sent to the right demographic at the right time are all key. Web stats are a great way to measure this, because they are collectible and fairly straightforward. Print, radio and television are disappearing because they have a much harder time proving reach and Return On Investment. And if something can't prove ROI, why are you wasting your money on it?

Once you are confident that your campaign will reach the right audience at the right time and the reach has been verified (by someone other than your agency; Alexa is great for online stats, the Radio Advertising Bureau will help you figure out frequency and schedules for that outlet, and TV information can be found here and here.

So now that you've got the top of your sales funnel defined, what comes next?

• Awareness - Potential Prospects know who you are, what you stand for, and what makes you better than your Competition.
• Consideration - Potential Prospects compare measure you against your competition.
• Preference - Your message has convinced potential Prospects that, if and when they need your product(s) or service(s), you are where they'll go (unless, of course, they see a more convincing competitive message between now and then).
• Purchase Intention - They call, look at your website, or stop by your place of business. From then on, it's up to your Sales staff to record them as a Lead, get them in the door, and close the sale.

Like all sales funnels, every stage contains fewer potential Customers. This is why knowing how many people you're starting with - and verifying that number as many ways as possible - is key. Your agency should be able to provide you with a fairly accurate estimate of the conversion rate for each stage. If they can't, you need someone with more metrics expertise.

The idea that your message should not contain some means to identify whether or not the campaign is what brought a particular Prospect to your door, website, Facebook page, or phone is nonsense. Just because someone came in doesn't mean they did so because of your campaign - unless your agency can prove otherwise, these folks probably would have come in, anyway. Again - you should only ever pay for what you actually get.

The easiest way to do this is via a response tag - a special offer at the tail end of your message that is specifically trackable to a particular medium for a particular campaign. The response tag and offer for each medium should be different. This will help you determine where to spend your money most effectively next time, and where your message either didn't get through or wasn't effective.

Of course, you should be sitting down with your marketing manager, sales manager, and agency rep(s) to review the metrics and adjusting according on a regular basis, and comparing each campaign to the last one, and also to the most effective one. Your results should improve over time. If they don't, it's your agency's job to figure out why, and your marketing manager's job to take corrective action.

(This doesn't mean you can't still beat up your sales manager. We all know they expect it, and what fun would life be if you couldn't complain about sales?)

What Goes Up Can't Come Down

There is a truism about incentives that applies equally to Customers and Employees: What goes up can't come down.

When you consider an incentive program for employees, regardless of whether it's a spiff program for Customer Service, a bonus structure for Salespeople, or a shared pool for people within your organization who find ways to save money, it's always best to start conservatively, with the smallest incentive that you believe actually is still an incentive. If it turns out that the incentive is too low (depending on whether or not your business is seasonal, it can take anywhere from 90 days to a year to figure this out accurately), it's easy to lift it a notch or two down the line.

But what happens if you start too high, and have to trim back?

Even if none of your employees hit the incentive minimum, scaling it back will immediately be seen as a negative - as you 'taking away' something (even if no one ever received it). And it will be grumbled about behind your back for months and months to come. Who needs that kind of grief? Especially grief that you caused for yourself?

There's nothing wrong with incentivizing behavior; there's no doubt that, when done correctly, it works. But the 'when done correctly' part is key. Consider carefully what you are incentivizing, and start slow and small.

The same applies to Customers. The author Terry Pratchett tells a story about a bounty that was placed on rats in his fictional city of Ankh-Morpork. To curb the city's rat population, citizens were given a fixed amount for each rat tail that they brought in. The result? The rat population increased, because the citizens were farming the rats to earn extra money.

If your incentive has a loophole or a flaw, I personally guarantee that one of your Customers will find it. In fact, many of them consider it their job to do so. And you know what? They're right, and shame on you if you missed something, because getting it right the first time is your job.

It's important not to create incentives in a void; don't ever let Marketing do it alone. Run it by every Salesperson and Customer Service rep you have; they are terrific at finding holes and faulty logic. Plus, by having them take part, they will also take ownership. How can that be a bad thing? Marketing, Sales, and Customer Service all talking to each other? Fantastic!

And, again, until you know what response rates are going to be, start slow and small. It's no good ordering 500 free iPads to give away for every new Customer signed if 5,000 show up. They will blog, Twitter, and Facebook your reputation back to the Stone Age, turning a campaign that you planned as a big plus into a potentially lethal minus.

Look. Listen. Learn.

The (Lack of) Persistance of Memory

The human brain is an amazing organ. Despite our current technological expertise, it has yet to be equaled in terms of computing power per ounce, but it does have something in common with the hard drive on your computer:

Every time that you remember something, your brain re-commits it to memory, effectively playing post office with itself and fundamentally changing the memory. This has such a profound effect on your perceptions that it's actually possible to create memories of events that never happened, so vivid that your brain can't tell the difference.

Aside from how disturbing this is when applied to the idea of 'eyewitness testimony' at a trial, this has potentially destructive implications for your business. Even Customer Service and Salespeople that are 'young and sharp' remember things differently than they actually occurred.

How do you combat this? By making it part of your organization's culture to record everything in your CRM or database as soon as it happens (while it's happening, if possible, so that even the wording used is retained). If it was a phone conversation, record those and attach them to Customer accounts (in my call center experience, 95% of Customers remember a phone conversation differently than what actually occurred). If it was an email chain, make certain that those are attached to the Customer account, too.

The essential ingredient here is urgency. If a rep or anyone else who has direct communication with Customers is slow to record those communications, curb this behavior immediately. The longer anyone waits, the more that will become your culture, and the less accurate the information in your database will be. And then why are you spending so much money for it?

Transactional Fluency

In Sales, every question is a transaction. Unfortunately, more than 80% of Salespeople don't speak the language of Sales fluently. In fact, they speak it so poorly that their Prospects usually buy from the Competition. Fear, laziness, lack of education - all of the typical Sales baggage is clearly visible in the following conversation.

Here's the Customer's question: Does it come in blue?

Is the correct answer:
A) No, but the brown ones are better, anyway.
B) I'm not sure. Let me go check.
C) We don't have any blue ones in stock, but I can get you one.
D) Is it important to you that it's blue?
E) That's an interesting question. Why blue?

What percentage of your Sales team routinely chooses each of these answers? What is their close rate? Why do you keep them?

Part of being a Sales Manager is asking the hard questions. The same baggage mentioned above comes with how you address the answers. Your success - or the lack of it - rides on your team's fluency, and their consistency. Don't assume that they're doing it right - go find out, regularly, so that it becomes expected behavior.

Work Parties

There are 3 things that you absolutely must get right when it comes to work parties. Do them wrong and an event that you intend as a benefit and sign of goodwill will be universally loathed and demeaned for months before it rolls around again, distracting everyone from their work and giving them one more reason to hate you.

1. Attendance. Is your party a social function or a work function? If it's a social function, why does everyone have to come? Why can't they bring their significant other(s)? If it's a work function, abandon all pretense and pay everyone for their time. Better yet, don't have a party. They already have to put up with you all day. Aren't they allowed to have some time to themselves to berate you in private? And if you say 'Then let's have it during work hours', you are conveniently forgetting that doing so means that all of your employees' deadlines must move up an entire day to make room for a party that no one wants to go to. In other words, you suck.

2. Oversight. Here's the best idea yet: Throw a work party, but don't go. Let an employee committee plan it - venue, theme, etc. - just give them a reasonable budget and a few guidelines to keep you from getting sued. You know - like your first college mixer (are those still a thing?). They'll plan an event that they think is fun (bacon grease limbo night is my personal favorite), as opposed to the cornhole tournament at the VFW hall that you planned. Best of all, if the event is a bust, you're off the hook - everyone will blame the party committee (who are usually troublemakers, anyway, am I right?). You can't lose!

3. Booze. Okay, here we go: I know that you're scared to death of the 'L Words' (Liability and Litigation), and there is wisdom in your fear; some people just can't handle their liquor, and will do things under its influence that will likely get them a) fired, b) one hell of a reputation, or c) killed. But if you're going to go ahead and throw the party, not buying drinks for those who want them is just going to look cheap. So how do you do it right? Simple: Drink tokens. Allow 2 per person, and anything else they drink is out of their own pocket (and out of your control - there go the two L's). Lots of companies do this, and it works a treat. Employees get enough free hooch to loosen up and appreciate your generosity, but not so much that they dance naked on the bar (if you think I'm joking, you're wrong).

But better yet... If you have a budget for this, don't throw a party. Your employees don't need it. You know what they'll appreciate more? Money. Give them the money you budgeted for this, and let them decide whether to do something fun without you around (employees need to vent about the boss; it's normal and healthy - as long as it doesn't happen at work) or pocket the dough. Again, either way, you win. And what's better than that?

Sales 101

Before we get too far ahead of ourselves, it's time we start our conversation about Sales. The fact is, most companies do Sales wrong: Wrong expectations, wrong incentives, wrong communication, wrong, wrong, wrong.

Let's start with Incentives. I mentioned in a previous post that an adequate Sales rep should generate 10 times as much revenue as their total compensation. To help make this happen, goals should be based on this metric. Otherwise, you are underpaying some reps and overpaying others vs. what their value is to the company. And believe me, they know it.

Expectations: You spend a lot of money to generate leads, right? So what's the close rate for each of your Salespeople? You should know this, your Sales Managers should know this, and your Salespeople should know this, too. At a minimum, it should be reported monthly, and it should be public information. (Nothing drives performance like spectators.) Regardless of your industry, if you have effective marketing (you do, right?), your Salespeople should close at least 1 out of every 3 leads (a 33% close rate), or you're wasting your money.

Communication: If you sell a physical product, rather than a service, your Sales reps should know exactly how much gross margin each product has. This will make it easier for them to negotiate volume deals - especially since their pay should be based on margin.

Splitting Territories: Because this is often done incorrectly, Sales reps feel like they're being punished when a productive territory is split. This is exactly the opposite of what you want to convey. Generally, if you're thinking about a split, it's because there are Prospects in the territory that the original rep isn't getting to. That's how you need to explain it, and that's how you need to approach compensation: reward the 2nd rep for new business generation, and make sure that the two reps work together by giving the original rep an incentive for turning over Leads that they have not touched. It need not be a large amount - they know they're being comped for zero work; it's more the fact that you are acknowledging the fact that you expect them to be team players and reward them for it.

CANI: The important thing is to look at everything that your Sales staff does, every day, and ask yourself "Why?" It is incredibly easy to fall into the rut of doing things a certain way just because you've always done them that way. The way to keep your company growing is to constantly improve everything you do. Don't expect to fix it all in a day, but do make a list of what to change and do set deadlines and milestones for those changes. (Think CANI - Constant And Never-ending Improvement.)

Reseller or Customer?

If your organization sells products and/or services to Resellers, it's likely that the line between the two blurs from time to time. Here's a dose of reality: Resellers are not who pays your bills; End Users are. Resellers are a way to get your products/services to End Users... a transportation mechanism. If you mistake Resellers for Customers, you will begin to slant what you sell to your Resellers' needs, rather than your End User's needs. This virtually guarantees that your sales will stagnate.

"But what about Customer for Life?" you say. "Isn't the Reseller my Customer if I follow the tenets of Customer for Life?"

No. Think of it this way: Individual people within your Reseller are your Customer under Customer for Life, and your goal is to find their deep-seated needs and help to fulfill them, but the Reseller as an entity is not. In other words, companies are not people (no matter what the Supreme Court thinks).

Generational Businesses

You've got to love entrepreneurs. They're responsible for much of our Gross National Product, most of what makes America great (ie, new ideas) and almost all of the best jobs. They work ridiculous hours, often starve themselves to pay their employees in the early days, take crazy risks, fight fear with enthusiasm, and learn what they don't know by doing. Entrepreneurs are what makes the rest of the world wish they were us (that is, Americans). They may be eccentric (Steve Jobs used to soak his feet in the toilet), they may eventually become self-entitled (two words: Larry Ellison), they might be arrogant (pick your favorites here), but a certain amount of all of these ingredients are required to be the man or woman who says, "I have an idea and I'm going to make it real!"

But piss on their kids.

This isn't sour grapes. Most of us will never be founders, and that's okay. Many of us actually like being the folks who help make the vision happen; we just want someone slightly less mad than Captain Ahab to follow. It can be satisfying to be the person that figures out the 'how' without the pressure of having to come up with the 'what' or the sleepless nights spent pondering the 'why'. An entrepreneur's work is never done, but we get to go home and have lives.

But why do so many seem to mess it all up by leaving the business to their kids?

It's not that they walk into wealth (okay, maybe it is, a little). But if you work as hard as founders do and take the big risks, you should absolutely be comped for that, and making sure your kids have the best of everything that you can afford is the American Way. Send them to the best schools, buy them the best clothes, take them skiing in Whistler and snorkeling in Belize. Do it all. But never, ever leave them your business.

Let's start with the obvious: You understand your business because you had to know everything; there wasn't anybody else. You know how to handle employees, what makes an effective marketing campaign, how to negotiate with vendors, and how to keep Customers coming back.

Now let's look at your son/daughter: Their first job was probably working for you doing some kind of menial job. But they didn't technically report to you - thy reported to the head of whatever department handles shipping, cleanup, moving merchandise around or whatever. But they're your kid. How likely do you think that manager was to rip them a new one when they did something stupid that cost the company money? They probably didn't even tell you. And who else gets to set their own hours?

From day one, they are raised in an environment of resentment.

Now your kid gets older. You send them to college, they take a few classes, but nothing too stressful because they have a job waiting for them at home; their degree is window dressing. And they come back and you give them some kind of management job, their very first, and set them loose. And they suck, because they have no experience actually doing anything, because all of their lives you were the doer.

Trouble is, you don't notice, because everyone still comes to you, just like they always have. You don't know it, but your son or daughter is a joke, and nobody tells you, and they get used to making money - probably more money than anyone but you - for doing nothing very much. Until the day that they do something so monumentally dumb that it can't be brushed under the carpet.

And you fire them, right? Just like you would any manager that did that incredibly dumb thing. You fire them, because you realize that you should have put someone in that job with some experience under their belt, someone who'd worked for several other companies and could actually do what needed to be done. Right? Right?

"Of course not," you say. "This is my child, here. They are beautiful and perfect, even if they are a little dumb sometimes. They just made a mistake. I'll have a talk with them. It will be okay."

So you have a long talk, and they're really embarrassed, just like that time they cut their little sister's hair or put that baseball through the window, but you give them a couple of pointers, pat them on the back and, just so they know that you love them, you give them a promotion. (Tell me that you have not seen this happen.)

Time goes by. Things seem to be going okay. You're working just as hard as always, still making all the big decisions, but you're the president and that's what president means. Meanwhile, your kid has learned that the secret to keeping everyone happy is to let them do pretty much whatever they want, and to spend most of their day chatting with employees about things that have nothing to do with the business, or having meetings where there is a lot of conversation but no decisions.

Eventually, you get old. You spend a little less time at work because your son or daughter is now in a VP role of some kind, and they have to stretch their wings sometime. Everyone in the business seems happy, so things must be going well, right? Your business has become a Name, it's not as hard to fight for Customers as it used to be, and you stopped having to worry about making payroll years ago. And someday, probably much later than you promised your spouse, you retire, move to Costa Rica for part of the year, and your business is in the capable hands of the 2nd Generation, one or two or more of them, but of course they never fight like they did when they were kids, and things are exactly the way you dreamed they would be, with grandkids coming to visit you and afternoons spent fishing or antiquing or traveling with friends.

Until a new competitor with a better idea, better staff, or both moves in and eats your empire alive. Not right away, usually. There's time for your kids to hire expensive consultants to tell them what to do and to endlessly debate whether or not they should do it, and getting second opinions from still more consultants, trying to do what you always did because it always used to work, but the new guy does new stuff and, before you know it, Customers stop coming in the door. Then the layoffs begin, until finally there's no one left. Your kids have money, of course, and they made more on the sale of the business or the land, but you still remember the look on the faces of all of the employees on the day that you or your son or daughter told them when they would receive their last paychecks.

Not all 2nd Generation businesses die this way. Some last long enough to be passed along to the 3rd Generation - kids who want to do something other than work for their folks, who in fact work for someone else and build up some experience, and eventually realize that their parents are running a money machine into the ground. If they come into the business, they're all about numbers, and hire experienced managers to do most of the work. They're more like a ringmaster than a founder, with a keen eye on the books, and they make sure any children that they bring into the business work somewhere else first, just like they did, and walk in the door with ideas of their own.

So if you're an entrepreneur, rather than go through all of this, ask yourself a couple of questions (plus probably a few more), and act accordingly:

1. Did your kid(s) ever ask for your business, or is that your idea?
2. Did you ever ask them what they wanted to be when they grew up?
3. Can you get someone better for less money?