Is There A Shortage Of Sales Talent?

An article on the Harvard Business Review blog today talked about the shortage of good sales talent and the need for more formal sales training programs. My theory is that there's actually a lot of sales talent out there but those people simply don't want sales jobs. Here's the comment I posted.

Great post and an important topic.  I believe that in today's business environment you need a variety of skills to be a good salesperson -- it's not about back slapping on the golf course anymore.  Sales is much more complex now.  You need to have a strong understanding of finance, economics, accounting, marketing, strategy, technology, product and management to understand what makes a good prospect, what problems your prospects have, where markets are going and how your company's products can fit in.  These skills are not easy to acquire.  In my experience, they come from getting an MBA or working in a client-facing role in a very early stage company where you're forced to wear a lot of hats and figure out how to make your product work or, in a rare case, you've gained these skills on your own by educating yourself.  And I've found that people that have that kind of experience under their belt are, for the most part, uninterested in filling a typical "sales" job.  They're interested in getting into finance or consulting or strategy.  This is because sales has a stigma to it.  People with that kind of ambition and experience often don't want to tell their friends and family that they're a "salesperson".  Not because sales isn't an admirable job -- it is -- but because there's a stigma attached to it.  People that don't understand the complexity of today's sales environment think of the used car salesperson trying to sell them a lemon.

As a result, I believe we need to begin to stop using the word "salesperson" to describe the roles we're trying to fill.  And not just for recruiting reasons.  Because the word no longer describes what these people are being asked to do.  These people aren't selling knives door to door to every house in town.  They're not pitching and responding to objections.  They're seeking out and understanding business opportunities, carefully selecting the appropriate individuals to connect with, having open, informal business conversations, validating assumptions, iterating those assumptions, refining products and services, participating in internal and external strategic planning, creating mutually beneficial partnerships, negotiating legal & business terms, setting goals for the partnerships and seeing that those goals are met.

I believe that the sooner that companies create roles and job titles around this new skill-set, the sooner we'll see more professionals signing up to fill these jobs.

Retaining Your Employees

Fred Wilson had a good post a while back on employee retention. I posted some of my thoughts in a comment there and thought I'd post them here as well. One trend that I’ve seen is that employees leave companies, for the most part, for one of three reasons:

1. They don’t think they’re great at what they’re doing

2. They don’t feel like what they’re doing is important

3. They don’t feel appreciated for what they’re doing

Smart, ambitious people want to be winners. They want to be awesome at what they do, they want to be doing work that is meaningful and impactful and they want to feel appreciated for it. If an employee feels this way, it’s very unlikely that they’ll leave. But with so much going on, busy managers often forget about these things. It’s critical for managers to stop and recognize when an employee is good at something. Verbalize it, don’t just think it. Tell them they’re awesome. Say thank you. Show appreciation.

Everybody gets insecure at some point, even top performers. I remember Mike Krzyzewski, Duke’s basketball coach, explaining that once or twice a year he calls his best player into his office to tell him how much he’s appreciated. This kid is in Sports Illustrated and on ESPN and is the most popular kid on campus, but as Coach K says, everybody gets insecure. And when they do, results suffer.

It’s management’s job to create an environment where people feel awesome. They feel like they’re good at what they do, they’re doing important work and they’re appreciated by their company. When you have these three things in place,you’ll see your retention numbers soar.

As Jack Welch used to say, self-esteem is the fuel that powers great companies.

Do Your Employees Know How To Work The Projector?

I've seen a few blog posts over the last few days about the lack of innovation that exists in large companies. One of the fundamental lessons I recall from business school was this: success leads to arrogance and arrogance leads to failure. The notion was that companies that get successful and big will inevitably become comfortable with their own success.  This comfort will encourage them to stop innovating and start putting bureaucracy in place that will protect what they have -- and that will eventually cause them to fail.  It’s a natural cycle that always exists. So my professor was encouraging us to be conscious of it so our companies might avoid that fate.

Over the years, I've met with companies big and small -- from startups with fewer than 10 employees all the way up to Fortune 50 companies with hundreds of thousands of employees. A small thing that I’ve noticed is that if the company has more than about 1,000 employees you can guarantee that something will go wrong with the presentation tools in their office. You can’t get online. The projector is broken. Nobody knows how to turn the videos screens on.  The cabinet storing the CPU is locked.  Literally, 95% of the time, something will go wrong when you're presenting to a big company.

This never happens when I meet with startups. Everyone knows how things work, there’s less security and bureaucracy and even the most senior people in the room know how to work the projector.

Obviously, on the surface, this observation seems meaningless. But I do believe it’s symbolic of the arrogance that exists naturally in a large company. Employees at big, successful companies either don't believe they need to know how to do simple things like this or the company has put so much bureaucracy in place that they're unable to learn.

If you're an executive at a big, successful company ask around and see if your employees are able to work the projector. If they're not, I wonder what else they can't do.

Firing An Employee

A while back Chris Dixon had a good post on firing people. I shared a couple of my thoughts on the topic in a comment. I thought I'd post those thoughts here as well and add on a couple more. These are a few things I like to keep in mind when parting ways with an employee:

1. With very, very few exceptions the person is better off being fired. If you're considering firing someone, and you decide not to, they have very little chance of being successful at your company in the long term. And the situation is bound to get worse. It's better to get them off to another organization where they can shine. While it can be very painful in the short term, I've never seen someone get fired that didn't end up in a better situation within a year.
2. In another role, in another company, in another culture, the person you're firing could perform better than you or anyone else in your company. You're not better than the person you're firing. They're in a place where they aren't performing at their best. It could be the role, the industry, the company, even the management that's keeping them from performing at the highest level. Regardless, I believe it's always best to push that person to find a place where they can rise to the top.
3. With good management, a firing should never come as a surprise. I believe strongly in a culture of candor. If an employee is performing well they should know it. If they're not performing they should know it as well and they should know exactly what they need to do to perform better. They may be unable to perform better (either because they don't want to or they're not capable) but managers should lay out clear expectations for employees and clear consequences when expectations aren't met. So that when it comes time to make a change, it's not you telling them they're fired, it's an agreement that expectations aren't being met and it's best to move on.
4. Never, ever, ever speak ill of a terminated employee to customers, employees or anyone for that matter. For whatever reason, it wasn't a good fit. It's that simple. Leave it at that.
5. Even though I've broken this rule in this blog post, don't use the word "fire". Say "part ways" or "moved on" or "made a change".  It's a small thing but these phrases are far more elegant and professional.

Dethroning The King

I recently finished reading, Dethroning the King: The Hostile Takeover Of Anheuser-Busch, An American Icon.

The book, written by Financial Times columnist Julie Macintosh, gives the reader an astonishingly detailed look inside the takeover of Anheuser-Busch by InBev, a Belgian company run by Brazilians. Because the transaction occurred smack dab in the middle of the housing crisis in 2008, many didn't pay attention at the time.

If you like business history and have an interest in the mechanics of enormous organizations and enormous transactions, you'll love Dethroning the King.

Managing Up

I gave a short talk a few weeks ago on some of my thoughts on being effective at managing up.

 Managing up is critical.  Bosses want to be assured that you care, that you're getting results and that you're contributing to moving the business forward.  With that in mind, here are the three tips I gave on managing up:

1.  Have a Point of View.  That is, have an opinion, hopefully a strong one, on how you should grow your business, both for your group and the company as as whole.  You may not get your way, that's life, but you should always have a point of view.  Be interested and passionate and opinionated.  Don't be annoying and try to push all of your ideas through but have an opinion and advocate for it.

2.  Drip Your Insights.  I like to say that "insights are just as important as results".  Obviously results are what everyone wants and they should be the primary tool for measuring success or failure.  But when you get results, you should be able to tell your boss exactly how you did it.  You should have insights that are repeatable and scalable.  Of course, the opposite is also true.  When you're not getting results, you should be able to tell your boss exactly why.  It's ok to not get results in the short term if you're showing that you're making massive gains and getting smarter every day and closer to success.  As you gain these insights, be sure to "drip" them to your team, your clients, your boss.  Send emails, share them in meetings, write them on a whiteboard.  Sharing your development and how you're getting smarter is critical to managing up.  Show that you're obsessing over figuring out how to hit your goals.  And that you're getting smarter everyday -- when you're getting results and when you're not.

3.  Build Trust.  This one is the hardest and I'm reluctant to give too much advice on how to build trust.  People do it in their own way and you should build trust with your boss in a way that works for you.  But one thing that's clear is that you're never going to be the lynchpin in your organization if you aren't trusted.  One way I've built trust in the past is to effectively walk the fine line between being a complainer and being a trusted advisor that speaks up when it's needed.  In short, you have to learn to not sweat the small stuff.  Your boss has a lot to worry about -- likely a lot more than you.  Taking problems on yourself and not complaining upstream makes your boss's life easier.  But, when a problem is important enough, raising it up the ladder is also critical.  When you've proven you can balance what's important and what's not your boss will be inclined to shift the more important projects in your direction.

The Business Model Test

A simple way to think about the viability of a new business idea is to use the logic test and the economic test:

1. The Logic Test: does the business make sense?  Is it easy to explain the value it will provide and how it will make money?  You can't understand its viability if you can't understand these things.
2. The Economic Test: once you've established that the business idea makes sense, now consider whether it can work profitably.  Space travel is a good example of a business that passes the Logic Test but not the Economic Test.  Certainly there would be a lot of people that would like to travel to space for the weekend, but with the current technology it simply can't be done profitably.  Kozmo.com -- the famous dot-com bust -- that promised free, one-hour delivery of things like CDs, DVDs, candy and magazines is another example.  It's just not possible to deliver a pack of gum to someone within an hour at a profit.

Once these two tests have been passed, there are of course dozens of other factors to consider.  But I've found this framework to be helpful in discussing a new idea's viability.  

Bottom's Up Management

Joel Spolsky had a great post the other day laying out his unique approach to management at startups.  I’d recommend reading the entire post when you get a chance but I’ve re-blogged some of the key excerpts below.

Most TV management is of the “command and control” variety. The CEO makes a decision, and tells his lieutenants. They convey this important decision to the teams, who execute on the CEO’s decision. It’s top-down management. All authority and power and decisions flow from the top. How could it work any other way?

This system probably works very well when you are trying to organize a team of manual laborers with interchangeable skills to sweep up the ticker tape in the street after the Giants parade BECAUSE THE GIANTS WON THE SUPER BOWL IF YOU DID NOT NOTICE.

The “management team” isn’t the “decision making” team. It’s a support function. You may want to call them administration instead of management, which will keep them from getting too big for their britches.

Administrators aren’t supposed to make the hard decisions. They don’t know enough. All those super genius computer scientists that you had to recruit from MIT at great expense are supposed to make the hard decisions. 

Think about how a university department organizes itself. There are professors at various ranks, who pretty much just do whatever the heck they want. Then there’s a department chairperson who, more often than not, got suckered into the role. The chairperson of the department might call meetings and adjudicate who teaches what class, but she certainly doesn’t tell the other professors what research to do, or when to hold office hours, or what to write or think.

And yes, you’re right, Steve Jobs didn’t manage this way. He was a dictatorial, autocratic asshole who ruled by fiat and fear. Maybe he made great products this way. But you? You are not Steve Jobs. You are not better at design than everyone in your company. You are not better at programming than every engineer in your company. You are not better at sales than every salesperson in the company.

A couple thoughts:

This is a great post.  I love the idea of flipping management on its head in a knowledge organization.  Your most junior employees are highly paid and extremely intelligent.  They should have lots of authority over how they do their jobs.  But often what works in theory doesn't work in practice.  Employees need a strong vision from the top and often need to be motivated to push through the challenges that inevitably come up.  While I agree that "management" can come from the bottom up, strong "leadership" from the top remains critical.

One final note:  I see Joel's point on this, but the analogy of a university isn't a good one.  Most universities are extremely inefficient, particularly compared to a tech startup.  I wrote a post a while back on the inefficiencies of the university system.

Success at Work

On Friday I was asked to walk a small team through some of my thoughts on what makes individuals successful at work.  After the session the team was asked to send me their key takeaways.  There were some interesting trends in what they sent back.  I'm posting their takeaways here – in their own words.

• real failure is highly valuable
• strive to be the lynchpin
• make boss’s job easier
• always bring energy and positivity
• insights are just as valuable as results
• consistent habits are important (going to the gym at the same time everyday)
• always add insight, value, be interesting
• biggest takeaway – the importance of becoming a “lynchpin” for the company, and for your boss.
• results and insights are equally important; always search for insights on how to improve next time, even if the results aren’t really there this time
• in conversation, try to make the majority of it insights; always aim to add helpful/interesting things to increase value
• simplify the goal; break it down into more achievable parts
• 3 things that ensure added value: be good at what you’re doing, like what you’re doing, and make it worth paying for
• become the lynchpin – work towards becoming indispensable to my boss
• reflect on the work that I have done and think about whether or not someone/something else can do the same or better at a lower cost
• simplify the goal – this will allow me to focus and create a clear path towards actually achieving it
• communicate with insights not empty words – always think about how I can add value to a conversation rather than just fill in space
• key to career growth isn’t necessarily being the smartest/ most intelligent person. Core values such as Trust, Collaboration, and willingness to work towards manager’s goals are some of the key attributes that help in career growth.
• always remind yourself to be on the learning curve – to better yourself + add value to the company
• always ask yourself – Why am I best suited to do the job that I am supposed to do? What can I do to better myself in order to do that job better?  If you don’t know the answer to both these questions your career path is probably not on the right track

Some Thoughts on the Super Bowl

Being from the Boston area, I'm a pretty big Patriots fan.  So watching last night's game was miserable.  Though, being objective, I have to admit it was a great game to watch.

A few things came to mind while I was trying -- unsuccessfully -- to get some sleep after the game.

Rob Gronkowski's ankle injury had a huge impact.  When a big tight end can't make quick lateral cuts, it's almost impossible for him to be an effective receiver.  Brady's interception was clear evidence that Gronkowski's ankle had an impact.  I don't recall ever seeing a linebacker defending a receiver that far down the field.  The ankle injury allowed a slower defender to cover him and freed up the corners and safeties to cover the Patriots’ receivers.

On the last drive of the second quarter, Brady ate up the Giant defense with his typical quick, short passes.  He was 10 for 10 on the 98 yard drive, virtually neutralizing the Giants' pass rush.  The Giants made a big adjustment at the beginning of the second half by rushing only 3 linemen; putting one man on Gronkowski and a tight zone on the rest of the receivers.  Brady had plenty of time to throw but nobody was open.  The Patriots couldn't adjust to the new scheme quickly enough and as a result could only put up 7 points in the second half.

Making quick adjustments is critical in business and sports.  The game you’re playing in today is going to be much, much different in six months or a year.  

Check out James Surowiecki’s New Yorker column this week on RIM and the fall of the BlackBerry; a company that, much like the Patriots on Sunday, couldn’t adjust until it was too late.

My Favorite Interview Question

This changes over time, but here’s my favorite question to ask a job candidate:

How do you see yourself adding value to a company?  That is, when you get a job, a company is going to invest in you and pay you (hopefully a lot), so, ideally, what would you like to be doing on a weekly, monthly, quarterly basis to ensure a high return on that investment? 

Typically, you can learn several things from their answer:

1. What they like to do
2. What they’re passionate about
3. What they’re good at
4. What differentiates them
5. How they see themselves fitting into an organization 

Of course I would never qualify or disqualify a candidate based on the answer to one question, but the answer to this question usually tells me a lot.

The Razorblade Strategy

Yesterday I wrote about how I'm long on Amazon. One of the reasons is that they’re in the process of aggressively implementing the Razorblade Strategy.  The Razorblade Strategy is when one item is sold at a low price in order to increase sales of a complimentary good.  It was made famous by Gillette -- they sell their razors for next to nothing and the blades at a high premium.  This creates a profitable recurring revenue stream, and recurring revenue is generally better than one-time revenue.  Printer companies also do this very well.  Printers cost almost nothing and Hewlett-Packard, as an example, makes nearly all of its profits on the sale of the toner (again, recurring revenue).  I remember reading that one ounce of HP print toner costs more than one ounce of Dom Perignon...

The price of Amazon's Kindle has nosedived over the last several months -- you can get one for $79.  Rumor is that they’re even losing money on manufacturing the devices.  They're hoping that by lowering the price more people will buy a Kindle and then buy the profitable digital media to put on the device.  This is a perfect example of the Razorblade Strategy at work and exactly why I believe they’ll compete well against Apple in the digital media space.

Typically, the major risk involved with the Razorblade Strategy is when the price of the complimentary good falls.  But with Amazon's scale and dominance in media there's relatively little risk for them there.

Amazon should race as fast as they can to get a Kindle in the hands of every consumer.  Good execution of the Razorblade Strategy, and a price of $79 versus Apple’s cheapest iPad at $499, is a critical and promising step in that direction.