Cancer in the Workplace

It was my first ownership of a business. I had moved to California to take over a failing auto parts distributor, and the deal came with a minority share in the business. I was just 30 years old.

The housecleaning that preceded my arrival included the entire sales team, and I needed knowledgeable parts people fast. I found one in New York, a dealership parts manager who had been fired. Another was from Florida, and a third in New Jersey. All of them worked hard, and we were pretty successful.

After a while, however, I had a new problem. My staff didn’t seem to take me seriously. I knew my stuff technically. Although my management skills were limited, I had trained with a large corporation just a few years before, and understood the basics of working with people. They just didn’t seem to listen to me. Every new process took multiple iterations to get in place, and then they seemed to evaporate again as soon as I turned my back.

It took a long time to learn what the problem was. My business had a cancer. The new York salesman was doing everything in his power to undermine me, but was smart enough to keep it out of sight.

He had purchased a house not far from the business, and every afternoon was a free happy hour at his place. The warehouse workers, salespeople and administrative team were welcome for beers and snacks. Many nights it turned into a BBQ dinner.

While the employees drank beer in his backyard, Mr. NY would hold court. He was a typical salesperson in that he knew how to tell a story, had a great sense of humor, and a keen eye for sarcasm. Unfortunately, my company and I were the target. He could do impressions of me, and scathing analyses of every minor problem in the business, which of course all traced to my incompetence.

It took a long time to find out what was happening. In the workplace he was my most productive employee and, on the surface the most loyal. He was always willing to help, and would pitch in on any job. Once he left the office, however, he became Mr. Hyde, pouring venom on the day’s activities in an hour-by-hour recitation.

Did I fire him? No. I was young and inexperienced. I kept looking for a way to “catch” him doing something wrong at work. I told myself that what he and the other employees did on their own time was none of my business. I was afraid to lose my top producer. He outlasted me at the company, although he never got my job (possibly his objective,)

This is an extreme illustration of a cancerous employee, but milder versions are widespread. It’s not just the employee with a “bad attitude,” the one who doesn’t quite get along with anyone else. It’s the jokester, the stand-up comic, the wit who sees a kind of nasty humor in everything. He raises an eyebrow behind you in a meeting, or stifles a laugh when reading a memo. He (or she) plays to the crowd.

It’s difficult to keep people excited about their work, and easy to drag them down. One cancerous employee can ruin an entire company if left unmolested. It can’t be corrected by warnings or penalties, that only drives it further underground. Like a cancer, it can only be cut out of the system, and the sooner the better.

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Big Brother is So 2000, but…

Big Brother is Old News

This could easily be a post about technology invading our lives. How we are watched and examined and manipulated through out electronic connectedness. But why? If you aren’t aware of the erosion of your privacy and risk to your financial security by now, this blog isn’t going to help you.

I wanted to mention some really cool, or really worrisome (depending on your viewpoint) uses of tracking technology that I’ve discovered recently. I may be on the trailing edge when figuring some of this stuff out, but I’ll bet you weren’t aware of all four, or at least not to the point of thinking how they might affect your business.

The first is using your web visitor information for business intelligence. Hopefully we are all tracking how many visitors come to our sites and what they look at. What I didn’t realize is that the technology now allows us to drill down to the individual visitor level, and to identify who that visitor was.

So what? Well, I have a client who is pitching a large multinational on a new program. He is getting a good reception from the folks he’s dealing with, but he knows that it has to go further up the ladder for approval. In back tracking his visitors’ URLs, he noticed one that traced to the prospect’s European headquarters. A little further digging showed multiple and lengthy visits by a corporate officer. That’s a handy thing to know when it’s negotiation time.

Another neat piece of business help is in digital documents. There are two examples here. The first is online document storage. You can place electronic documents in a secure online file, and only those authorized can gain entry. These services have been improving over the last 5 years. Where you formerly just gave a password to a user and hope they respected it, now you can demand digital ID from each individual on every entry.

Another up-and-comer for easier business dealings is digital signature via phone. How many of you are near a fax right now? How many are near a mobile phone? If you don’t have a fax handy, you probably aren’t near a scanner either. Document signing services like Echosign (www.echosign.com) allow you to execute legal documents with your finger on the phone’s touch screen.

But He Keeps on Coming

Moving a bit further into big bro’ land, we must consider the bounties being paid by the repo man. Used car repo companies now sign up hunters to take photos of license plates and upload them to their web portal. The hunters include a description of where the car was seen (WalMart Parking lot on Main.) Computers process the plate pictures, and send a notification when one is identified as “hot.” No word on what happens to the thousands of license plate pictures that the computer doesn’t care about.

OK, I have to say it. This last one is really, really big brotherish, even if the technology is widespread and not even unusual anymore. Allstate is offering a new version of Good Driver discounts. They will track you with GPS, and give you a reduction in rates for driving at the speed limit, or driving only limited miles, or only in good neighborhoods. Their pitch is “Why pay for insurance you don’t really need?”

Of course, insurance companies exist to make money. Might this technology also be used to identify fast drivers or those who park in dark palces at night? I don’t know, but I’m not signing up for that one any time soon.

Are there any other cool tech uses for small business out there? Add them on in comments.

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Why Business Owners Shouldn’t Cold Call

The Owner as Salesperson

If your business employs salespeople, then you’ve probably had them bring an account challenge to you. “You need to talk to this customer, Boss. You can (fill in the blank) better than anyone else.”

The fill-in-the-blank part may be convincing, explaining your product, negotiating or being tough. Whatever is needed, it’s likely that your employees think you do it better than they do. In most small businesses, the owner is the best salesperson. Why is that?

In some companies it’s because the owner started out as a salesperson and built the business that way. But that isn’t true in all cases. Even in situations where the owner is the best technician, the best analyst, or the best designer, he or she is usually still the best salesperson.

That’s because owners have gravitas, the weight of ownership attached to their words. If they promise something, the customer freely (and correctly) assumes  that such promises carry the reputation and resources of the company behind them. If the owner says something can’t or won’t be done, there is no court of appeal. The owner’s word is final.

The owner is usually better able to reach an understanding, because the party negotiating for the other side is more accepting of the owner’s positions. There are fewer things to negotiate, and more acceptance of the facts as presented.

So why do owners hate cold calling? I mean, everyone dislikes cold calling, but all the business owners I know hate it with a passion. Even those who grew their business with cold calls (and most did) steadfastly refuse to do it today. What makes it so loathsome?

The Owner’s Sales Identity

The issue lies with the owner’s ego. I don’t mean an ego that says “I’m too good to do this,” but rather the entire sense of self-worth that drives your personality. 

When you started out, you didn’t expect new customers to take you at your word. After all, your business had no track record, so why should a stranger believe you when you promised something? You probably weren’t too certain that you could actually deliver everything you promised. But as the business grew, you established your reputation for quality, dependability, integrity, and any other feature you take pride in. You carry that reputation with you as an owner. It is part of you.

It comes along whenever an employee introduces you to a customer. There is always a little bit of pride in hearing “This is my Boss.” or “This is the Owner of our company.” or “This is the President of ABC Corp.” It’s  a position you earned- no one bestowed it upon you. It is part of you, of your gravitas.

All of that disappears when you make a cold call. To begin with, you are probably trying to make an entry through a gatekeeper who doesn’t know your company, and doesn’t care what you have to offer. His or her job is to deal with people like you, so that the real decision maker doesn’t have to.

Further, your aura of ownership is left at the door. Your words carry no more weight than anyone else’s. For all they know, you’re just another lyin’ salesman. It’s hard not to respond to their skepticism with “Do you know who I am? Do you understand the commitment that stands behind what I say?” They don’t, and they won’t.

Negotiation Strategy- Matching Levels

The underlying problem with owners making cold calls isn’t that they are uncomfortable. No one likes making cold calls. It’s not that they result in rejection that bruises the owner’s inflated sense of self, either. It’s that they aren’t an appropriate use of an owner’s time.

A basic tactic of negotiation strategy is that you match levels of negotiators. If their final decision maker isn’t in the room, your final decision maker shouldn’t be there either. Negotiations (and all sales are negotiations) can only take place between equals.

So it is appropriate for someone else to make the cold call. Teach them that it is their job to only put you in front of your opposite number- someone with the same ability to commit as you have.  Then the work you put in to earn your stripes brings value into the room with you.

What do you think? Do you still cold call? How do you set up your gravitas before a meeting? Let me know.

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3 Responses to Why Business Owners Shouldn’t Cold Call

  1. Roy Banker says:

    John,
    The difference between the Industrial Age and The Information Age…is just that.
    Information……found through numerous avenues.
    I truly believe “cold calling” is a waste of time (not only for business owners ) but sales people altogether.
    The cold calling era is dead….here is why.
    We don’t call a decision maker and expect them to say great…..come on in for a cup of Joe and show me what you have to sell.
    Cold calling involves coercion, several calls back, emails, voice mails, rescheduling and you know what….?
    We as salespeople have given away our control!
    People love to buy but they HATE to be sold.
    What’s the definition of insanity?
    Trying the same thing over and over with the same results. Ludicrous!

    • John F. Dini says:

      Great points Roy.

      I met a business owner two weeks ago that said the problem was people had become rude and discourteous. Asked to elaborate, he told me that he “dropped in” on 20 businesses a week, and asked for 15 minutes with the CEO. Over 90% refused to come out and see him immediately!

      Obviously, he is stuck in the wrong century.

  2. Bobby says:

    This blog was… how do I say it? Relevant!
    ! Finally I have found something which helped me.
    Kudos!

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Black Swans and Small Business Plans

The term “Black Swan” has become immensely popular on Wall Street and in the media to designate a rare occurrence. Google “Black Swan Japan earthquake” (which is popular enough that Google will fill in the last 11 or 12 letters for you) and you’ll find hundreds of articles comparing that seismic event and the rare bird.

The term “Black Swan” comes from Nassim N. Taleb’s bestseller of the same name. Like most ideas popularized in the media, they got it wrong. Taleb’s point is that Black Swan events, those that are considered highly improbable, actually happen all the time.

Black Swan upon Black Swan?

So is a 9.0 earthquake all that improbable? They happen regularly in history (every few hundred years). There hasn’t been one in almost 200 years. Just because we haven’t seen one since the early 19th century doesn’t make the modern world immune to them.

Nuclear accident? With over 500 reactors either in operation or under construction, and a planned life of at least 30 years (many going beyond their scheduled life), that is well over 15,000 years of operation. With their huge water requirements, most are near the ocean. in 15,000 operating-years, how weird is it that something might go wrong?

Swans and Small Business

My point isn’t to prove Taleb’s theory. I am more concerned about my client who owns a motorcycle dealership. After suffering through a recession that closed the doors on 50% of the motorcycle franchises in America, he is seeing a comeback. Now he has supply chain issues. Will an earthquake and nuclear melt down cripple a small business in the Texas Hill Country?

Taleb’s hedge fund strategy is to bet against everything, in the belief that a Black Swan will occur somewhere with regularity. He has been enormously successful. One reason for this is the fact that, in a global context, huge events occur regularly. If you can cover all the bets, one will pay off. There will inevitably be a financial crisis, a sovereign default, a commodity bubble or a natural disaster somewhere.

Should the inevitibility of a disaster make it part of a small business owner’s planning process? Probably not. The motorcycle dealer could spend time and money preparing for a supply chain disruption, but it wouldn’t have been a wise use of his resources. If he started his dealership in 1980 and sold it after 30 years in business, the issue would have never come up.

The Boy Scout Strategy

The Scout’s motto is “be prepared.” While planning around a Black Swan event is beyond the capabilities of the average small business owner, it doesn’t mean that you should ignore the evening news. Too many owners think that nothing outside their own market will affect them. They think that because they are dependent on a large corporation for a critical part of the business, the big company will do the risk planning for them.

If there has been anything proven by the events of the last decade, it’s that the big corporations aren’t ready for these events either. Where were the strategic planners when Japan embraced sole-sourcing and Just In Time inventory? They were driven by profit. Apparently that trumped having a plan B.

Small businesses survive by being nimble. Global connectedness means that an event on the other side of the world can, and does, have an impact on a small local company. You may not be able to prepare in advance, but you also can’t assume someone else is going to take care of the problem for you.

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Your Fault. My Consequence.

My friend Larry Linne, the author of “Make the Noise Go Away” has a great saying about employee mistakes.”Your Fault. My Consequence.” A good employee will accept responsibility, and be accountable for screwing something up. Unfortunately, it is still the owner’s consequence. As the owner, you have to spend the time, the money, and the effort to resolve an error you didn’t make, and probably wouldn’t have made.

“Your fault, my consequence” is felt by owners universally. It often leads to anger and frustration. You just worked your butt off to close a new account. It will finally give you a little financial breathing room this month. Then you return to the office, where your manager informs you that the plant supervisor forgot to schedule that rush order you promised last week, and a top customer has taken his business elsewhere.

Any business owner, whether or not you manufacture, felt the pain in that last paragraph.It has happened to all of us from time to time. What is the appropriate reaction? The supervisor can’t pay you back. He is sorry. He does his job well otherwise. Do you fire him, and go through the learning curve with another employee? Do you chalk it up as an expensive  “learning experience?”

His learning- your expense. You can’t make the employee feel it the way you feel it. You know that even the best employee’s pain is limited to going home and saying “Gee honey, I really screwed up today. I feel bad.” He doesn’t feel as badly as you, however, because he isn’t going to see the results of that lost customer in his paycheck next month, and the month after that, and the month after that. You will continue to pay for his mistake long after he has forgotten it.

What if you blew up six months from now? When he says that he needs another employee, can you say “We could afford that, if we had the revenue from that customer you lost 6 months ago!” You would be considered petty and vindictive. His reaction would likely be “Hey, give me a break! I said I was sorry. What about all the good things I’ve done in the last 6 months?” Then he would go home and tell his wife what a jerk his boss is.

People make mistakes; that’s how they learn. As a friend of mine says, “When I look back, I’ve learned so little from my successes.” You can accept it. You can ignore it. You can make it into a learning/training/educational opportunity. You can yell. You can penalize. You can fire somebody.

But you can’t avoid the consequences. They are yours, and usually they are yours alone. Keep that in mind the next time you are wondering how much profit to distribute.

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