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Archive for May, 2011

I believe much of what is expressed about incentivizing the salesman emanates from underestimation, condescension and even contempt for that person and her profession.

I don’t read sales books. They make me mad. From my own experience as an executive salesman, I believe most sales managers approach the whole subject of sales incentivization ass-backwards.

In my case, this judgment comes from being an unexpected, untrained and accidental success as an entrepreneur in elite sales outsourcing. My intent as a company founder was to build a happy life and create a community of peers who shared my values. While I wanted to make a comfortable living, money was not my business raison d’etre. And over the years I have managed to assemble a coterie of sales executives who, to one extent or another and in their variegated ways, are compadres in the realm of service, morals, humor and fierce independence.

After 17 years of accidental sales success emanating strictly form my own sales intuition and longings to be part of an ethical sales and service community, I have begun to discover I am not as odd or alone in my approach as I had always assumed.  And even more amazingly there is an increasing body of scholarly research that supports the instincts of my life experience and of conducting my business in a manner I damn well felt like. God bless entrepreneurship.

This is particularly true in the realm of sales incentivization. My core assumption has always been that happy people don’t fundamentally work for money because I don’t fundamentally work (or want to work) just for money. They work for satisfaction, happiness, a free life and other non-quantifiables.

Dr. Edward Deci, Director of the University of Rochester’s Human Motivation Program says:

“When people say that money motivates, what they really mean is that money controls. And when It does, people become alienated–they give up some of their authenticity–and they push themselves to do what they think they must do.” (Why We Do What We Do: Understanding Self-Motivation, G.P.Putnam’s Sons, 1995, p. 29)

In the realm of incentivization, I have always felt that salesmen are particularly misunderstood. Sales hires fail 80% of the time within the first year. That is a phenomenal statistic. While the reasons for this are complex, I believe the overemphasis on monetary reward is a large part of this statistic.

People want to be part of an organization that imbues quality and meaning to their lives.  Yes, they need to make money, but I don’t believe it ever activates their ardor and deep commitment. It does not inspire full use of their internal resources, their full being, their passion.

As CEO of my virtual executive sales outsourcing firm Corporate Rain International, I genuinely try to start with the assumption that every person I hire should be better than me, that every person I hire can teach me something, that each person I hire can comfortably grow the extant values of my company as a corporate companion.

To quote Edward Deci again, “[In speaking about motivation] the proper question is not, ‘How can people motivate others?’ but rather, ‘How can people create the conditions within which others will motivate themselves.‘” (Ibid, p. 10)

I agree. Thank you, Edward Deci.

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Much as I hate it, I am deeply convicted of the entrepreneurial mandate for constant change. That is, change should be a value unto itself, not just a reaction to periodic business challenges.

As I see it, a corporate culture is a defensive construct erected to ward off and control chaos and the impact of existential business randomness, while generating a consistent and predictable profit. The dialectic of stability and creativity should ideally result in a vital organization that is both dynamic and stable. But if one is to err, my preference and personal instinct is to err on the side of the dynamic, on the side of change and creativity.

As you may know from past blogs, I was an actor for many years. That has had a seminal, if ineffable, effect on my instincts as a small businessman. One of my favorite acting stories was recounted to me by character actor and teacher Paul Austin. I never tire of sharing it. Paul was doing a Eugene O’Neill play with the actor Rip Torn. Rehearsals were going well, but, with two weeks of rehearsal remaining. Paul felt he had fully realized his character and was ready to open. He was in a quandary about what to do with himself for the last two weeks of rehearsal, so he went to Rip Torn and asked his advice. Paul recounts that Rip Torn thought for a moment, shrugged his shoulders and said, “Fuck it up.

On the same theme, Mihaly Csikszentmihalyi, of Claremont Graduate University, recounts a story told him by Canadian ethnographer Richard Kool, describing one of the Indian tribes of British Columbia.

(Flow: The Psychology of Optimal Experience, p. 80, Harper & Row, 1990)

The Shuswap region was and is considered by the Indian people to be a rich place: rich in salmon and game, rich in below-ground food resources such as tubers and roots–a plentiful land. In this region, the people would live in permanent village sites and exploit the environs for needed resources. They had elaborate technologies for very effectively using the resources of the environment, and perceived their lives as being good and rich. Yet, the elders said, at times the world became too predictable and the challenge began to go out of life. Without challenge, life had no meaning.

So the elders, in their wisdom, would decide that the entire village should move, those moves occurring every 25 or 30 years. The entire population would move to a different part of the Shushwap land and there, they found challenge. There were new streams to figure out, new game trails to learn, new areas where the balsam root would be plentiful. Now life would regain its meaning and be worth living. Everyone would feel rejuvenated and healthy.

Essentially, the Shuswap Indians elected to “fuck it up” every few decades. It kept their business culture (if you will) healthy, thriving, and imbued with aliveness and meaning. They elected to culturally and institutionally discipline themselves to see existence through perennially fresh eyes.

The reason I am in business is to be happy and whole. Profitability and personal wealth, if they come, are useful and satisfying in this, but profitability disengaged from meaning and spiritual growth is a dead thing. Change is an essential palliative to summon meaning, aliveness, and salvation into any business culture.

Thank you, Dr. Csikszentmihalyi.

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On Friday morning my eye caught this headline in the New York Post (May 13, 2011, p. 2): Empire’ Exodus–36% of under 30 New Yorkers plan to flee state. Goodness me.

Now, I like living in New York. I like having part of my company here. But, increasingly, there seems to be no good reason for small business to locate here or in any of New York’s business loathing, fellow-traveling states like California, New Jersey, Illinois, or Michigan, to name the most obvious. God bless all these states, but avoiding them is simply prudent common-sense, particularly for the parvenu entrepreneur.

Readers of this blog sometimes think I am a wailing Cassandra, but I say with Jack Webb on Dragnet, “Just the facts, ma’am.” And the facts are these: Businesses and ambitious youth should go and will go where they encounter fertile, fecund, ROI rich soil–free of excessive bureaucracy, de-incentivizing taxation, inefficient government, high living costs and intransigent unions.

The Post article cites the NY1/YNN-Marist survey, which finds almost a third of NY State residents, over all age categories, are making plans to exit for greener pastures right now. Such grim statistics bode no good for the economic future in NY and similar states. For it’s business salvation NY needs radical change.

Entrepreneurs are by nature optimistic and sunny and positive people. I love being one and I love being around them. However, successful entrepreneurs are also clear-eyed realists, and not all states in this wonderful US of A offer equally business-friendly environments for spawning small business success. (If you’re interested in other thoughts on this topic try posts of 4/26/11, 12/21/10, 4/13/10.) So good luck to NY from the depths of my worried, but well-meaning, small business heart.

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In this fast paced world, I am increasingly sensitive to the lurking, insidious danger of creeping commoditization for any product or service.

The President of my firm, Corporate Rain, has been kicking my ass lately about not moving quickly enough with the times. He’s right. I know I am not alone in wanting to rest on my laurels and assumptions of the status quo ante, but I’m realizing that long-term reputation and past successes are less relevant (though still important) in a rapidly changing, ROI intensive, technology-driven, chaotic, flat earth business climate.

Even though mostly I’ve had the good sense to accept change despite myself, I don’t like change. I don’t like the unknown. I want to reject it like a small child having a foot stomping tantrum. But for the healthy entrepreneur, just as for democracy, the price of ongoing success (or freedom) is eternal vigilance.

I finished Howard Schultz‘ memoir, Onward, last week. One of my favorite passages in his book is his very useful discussion of the dangers of commoditization.

Schultz reports that, in the spring of 2007, Starbucks’ stock kept bouncing to new highs and there was intense pressure from Wall Street to continue increasing profitability and velocity of sales. At one point Starbucks was opening as many as six new stores per week. This growth was taking a toll on quality control and service.

But Starbucks also was adding new items to the menu, which, while highly profitable, filled Schultz with foreboding. He felt his firm was increasing profits at the cost of its identity and its soul. For example, Starbucks had introduced breakfast sandwiches which often left the smell of burnt cheese in the air, rather than the signature aroma of roasted coffee beans. He felt Starbucks, in its rush to coruscating profit, was losing its essence. He states, “…negative incrementalization, like one thread after another pulling at our seams, could be the company’s undoing.” (p. 38) He did not want Starbucks to become more like McDonald’s. He recognized the threat of long-term brand dilution and commoditization. Accepting an initial loss of company revenue and internal company distress, he set about uncommoditizing Starbucks and restoring Starbucks traditional trope of quality and specialness from top to bottom. He sought to restore Starbucks soul, no matter the price. He was right.

Increasingly, I believe, commoditization is a real bete noire for business. You can’t sell everything, even if it is temporarily profitable. In a large sense, if you sell everything you may ultimately sell nothing. Long-term business health requires a constant honing of the identity and essence of any firm. With pressure to meet profitability and payroll goals, it is so easy to take on business that blurs your image. Certainly sales must be based on clear differentiation.

Otherwise you become, to paraphrase Winston Churchill, a pudding without a theme.

Thank you, Winston.

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No. Not that “F” word, potty mind. Failure.

The Harvard Business Review, that white-shoe paragon of scholarship in successful corporate management and analysis, devoted it’s entire April edition to the most un-Harvardlike of subjects: Failure. HBR is on to something here. It’s April issue is particularly applicable to the entrepreneur in the contemporary world and our current unstable business environment.

What the Harvard Business Review is on to is neatly summed up by Adi Ignatius, the editor-in-chief, in his introductory column titled, “When We Fail at Failure.” He describes his issue as “examining the art and science of failing well.”

I recommend the April magazine, if you can still buy or access it, and I will not go into a listing of its many topics here, except to say that anyone who hasn’t explored failure and its variegated lessons is missing an essential tool, not only for entrepreneurial success, but also for fully living life. (I’ve already blogged very personally about this on 1/19/2010 and 1/26/2010, if you’re interested.)

One of the things I find common to entrepreneurs is a joi de vivre in the high-risk creative business process, a sense that the joy of the journey is as spiritually nurturing as the achievement of the business goal. So, the psychologically healthy entrepreneur must accept and grow from failures.

I in no way mean to say that failure, per se, is good. It is so painful and frightening. I’ve been through it a lot. Rita Gunther McGrath sums this up neatly in an essay called “Failing by Design” in the previously mentioned HBR issue. She says, “[Failure] can waste money, destroy morale, infuriate customers, damage reputations, harm careers, and sometimes lead to tragedy. But failure is inevitable in uncertain environments, and, if managed well, it can be a very useful thing.  Indeed, organizations can’t possibly undertake the risks necessary for innovation and growth if they’re not comfortable with the idea of failing.

Friedrich Nietsche famously said, “That which does not kill us makes us stronger.” Not a bad mantra for the entrepreneur, but I prefer the simple sanguine confidence of Babe Ruth on the subject of the “F” word. He said, “Every strike brings me closer to the next home run.”

Thanks, Babe.

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