Posted by: Bill von Achen | August 5, 2011

How Not to Drown Out the Opinion of Others

As companies expand beyond their entrepreneurial roots, effective leaders must break out of the habit of making all of the decisions, and find ways to share leadership with the other talented people they’ve hired. But that’s tough to do, especially when you’ve called the shots from the beginning. And helping others to get comfortable with expressing their own views, particularly when those views are different from yours, can be tricky.

In a recent interview with the New York Times, Alan Trefler, founder and chief executive of Pegasystems, shared his secret for ensuring that he hears the opinions and ideas held by the members of his company’s leadership team.

“It’s only as the company grew that I began to realize that I needed to change some of the ways I managed,” says Trefler. “Listening better was something that required some conscious thought and discipline. I also had to make sure that my tendency to have strong opinions was not drowning out the opinions of others.”

“The way I handled that was to start formalizing the idea that it’s important for everybody to have opinions,” Trefler continues. “As a company grows, you have more capacity to have opinions, and you need to make sure that you’re fostering that or you’re not really getting real value.”

Trefler’s solution? “I tell everybody that it’s their job to have an informed opinion. And, by the way, it had better not be the same opinion as everyone else’s. And you obviously need to be able to listen if you’re going to actually hear those opinions.”

You can read the complete text of the Times’ interview with Trefler by going to our Resources page at www.bestpracticesforbusiness.com/resources, and clicking on the first link under “Leadership.”

What’s your approach for fostering the sharing of ideas and opinions among the members of your team? What steps do you take to ensure that your voice doesn’t drown out those of others? Share your thoughts and ideas here. Thanks!

Posted by: Bill von Achen | August 1, 2011

Succession Planning: A Cautionary Tale

Charles Sarkis, the eponymous owner of Charley’s Eating and Drinking Saloon and the Back Bay Restaurant Group, has built a formidable restaurant empire here in the Boston area over the past 40 years, with 33 restaurants and 3400 employees. Sarkis is reportedly one smart, tough business owner, but it appears that his unwillingness to address succession planning issues may lead to the demise of a company that has been his life’s work.   

According to a recent article in the Boston Globe, Sarkis is negotiating the sale of a large portion of his legendary restaurant chain to a private equity firm, in part to pay a $10 million debt owed by Sarkis’ other major holding, the Wonderland Greyhound Park in Revere. The Globe reports that the deal is contingent on getting Sarkis’ grown children who have been active in the company to sign non-compete agreements.

So what’s the problem? Despite the fact that Sarkis’ children Charles, Paul, Patrick and Amy have been involved in the business for most of their adult lives, and are credited with much of the company’s success over the past 15 years, Sarkis reportedly doesn’t believe that his children are “serious enough” to run the company. He rebuffed at least one offer five years ago from Charles and Paul to buy the company for $70 million. Of the current deal, Sarkis’ son Paul, who left the company in 2002 after 12 years, says that the entire process “was a charade, so that he (Sarkis) could say he offered us a chance to buy (the company).”    

To make matters worse, according to the Globe, “his children balked at the non-compete provision (of the agreement to purchase the company) because it meant giving up their chosen careers without compensation for the loss.” Under pressure, Charles walked away from his job as operations manager this February, and Amy was suspended without pay when she refused to give up her restaurant career as a condition of the sale. Only Patrick, who serves as the company’s recruiting director, remains employed by the company.

According to the Globe report, Sarkis’ deal with Tavistock was expected to close sometime this month.

A strong-willed, first-generation business owner builds a successful company. He brings his children into the business, and they build their own careers by making important contributions to the company’s growth and success. But the father fails to acknowledge their contributions, and doesn’t engage in constructive discussions about the future leadership of the company or map out a strategy until pressing circumstances cloud everyone’s judgment. It’s a sad case, made all the more unfortunate because it is so common.

You can read the complete text of the Globe article about Sarkis and his family by going to our Resources page at www.bestpracticesforbusiness.com/resources, and clicking on the first link under “Succession Planning.”

 

Posted by: Bill von Achen | July 18, 2011

The Best of 2011’s Best Practices in Q2

Believe it or not, 2011 is already more than half over.  So, I’d like to share with you excerpts from the five most popular Best Practices postings from the second quarter of 2011:

It’s Not Always About Price: The Value Proposition in Pricing Your Products (posted April 22nd)
“Perhaps no competitive issue raises greater concern among business owners than the pricing of their products and services. Charge too much and you risk losing business and market share to competitors. Charge too little and you might win more business in the short term, but you’ll reduce your profitability and potentially put your company at risk. No wonder setting and maintaining optimal pricing is such a balancing act.”  Read more…

The Importance of the “Important” in Business (posted May 26th)
“The distinction between the important and the urgent was articulated most forcefully for me years ago by Stephen Covey in his milestone book The Seven Habits of Highly Effective People…Yet, for many entrepreneurs, focusing on the important issues that will have the greatest long-term impact on their businesses remains the single biggest challenge that they face.”  Read more…

A Great Source for Potential Employees (posted April 19th)
“With our stubbornly high unemployment rate, you’d think that the task of finding qualified candidates to fill open job positions would be easy.  Yet, at our monthly Best Practices group meetings last week, the common concern expressed by a number of our members was the continuing challenge of finding good people to fill critical positions.  Then, on Thursday, I received the following note.”  Read more…

Lessons in Entrepreneurship from Glen and Ira (posted May 6th)
“My first exposure to real entrepreneurs was in the late 1980s, when I met Ira Barry and Glen Dash, at the electronics testing laboratory, Dash, Straus and Goodhue (DS&G). I worked for Glen and Ira for five years and, although I didn’t know it at the time, my experience at their three-time INC. 500 company laid the groundwork for my life-long fascination with entrepreneurs.”  Read more…

The Importance of Story Telling (posted July 4th) 
“It’s a shame, really, when smart people with so many important things to say end up reading the content on their PowerPoint slides.  We have important stories to tell.  But our use of conventional presentation tools reduces the power and resonance of those stories, and lulls our audiences to sleep in the process.”  Read more…

What are your favorite Best Practices postings from the past few months?  Let us know by posting your comments here.  Thanks!

Posted by: Bill von Achen | July 8, 2011

Fatal Mistakes That Salespeople Make

Let’s take a break from innovation (my theme in these messages over the past few weeks) and talk about something a bit more tangible and immediate to most business owners and executives. That is, how can we help ourselves and our salespeople to win more new business without giving in on price.

The adage “nothing ever happens until someone sells something” is a reminder of the critical importance of selling in building a successful business. Unfortunately, for many professionals charged with winning new business, the “art” of selling is too often reduced to a single variable, price. That’s because most of us firmly believe that price is the most important factor in every single buying decision, and we position our pitch to effectively address that concern.

Focusing solely on price diminishes the value of what we’re selling. If our only appeal to the buyer is the price of our product compared with competitive offerings, we effectively take our product’s most important assets off the table for consideration. This action has the effect of reducing our product to a mere commodity in the mind of the buyer, a commodity that’s readily interchangeable with seemingly similar products.

Focusing exclusively on price also narrows the conversation with the buyer. Instead of exploring and understanding the buyer’s needs and wants, and their real reason for buying, making pricing the centerpiece of the discussion cuts short the discovery process. It also curtails the potential opportunity to expand the scope of the sale beyond the initial customer inquiry.

Of course, there are many products in the marketplace for which price is the only significant differentiator. For example, gasoline that’s a dime per gallon cheaper at the service station a block or two out of our way is usually all the incentive most of us need to justify a slight inconvenience. But when it comes to most of the purchasing decisions we make in business, price is only one of several factors, and it’s almost never the most important one.

In his book, The Secrets of Power Selling, sales consultant and trainer Kelley Robertson talks about the misconceptions about price in buying decisions, and identifies other key mistakes we make when engaged in the selling process.  Here’s a brief list of the most important ones:

1. Falling prey to the myth that all of your competitors are cheaper
2. Not asking enough high-value questions
3. Failing to establish the value of your product, service or solution
4. Negotiating with those who aren’t empowered to make buying decisions
5. Making too many assumptions about the buyer’s needs and motivation
6. Not listening enough
7. Talking past the sale
8. Making concessions without getting something in return
9. Failing to determine your walk-away point
10. Allowing your ego to get in the way

What mistakes do your or your salespeople make in your business development efforts? How do you communicate the value of your products and services with customers in competitive situations? And what steps do you take to avoid engaging prematurely about price in discussions with prospects? Share your thoughts and ideas by posting your comments here. Thanks!

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