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Archive for the ‘Random Thoughts’ Category

Discounting as a Pricing Strategy: A 100 Year Old Story

October 1st, 2016

I’m inviting you to Boston MA 1891. In that year Edward and Lincoln Filene took over the management of their father’s retail store called Filenes. At the time it was quite a successful business that specialized in women’s fashions and accessories but the two brothers built it into one of the world’s leading retail companies by implementing a non-traditional business model. Read more…

Managing Working Capital Is Key to Growth and Survival: Hard & Costly Lessons

September 1st, 2016

In this post I want to share a story with you. It arises from a chance conversation with a member who is working with a client who has an inventory management challenge which came on the back of an article another friend of mine sent me about a report on the failure of the Dick Smith retail group in Australia. Read more…

A Couple of Things We Could Learn From Sam Walton

June 1st, 2015

The richest family in the world – The Waltons, estimated total wealth $150 billion – owe their fortune to the genius of Sam. From what I have read about his he would be the first to say he was nowhere near the vicinity of genius but if seeing what others don’t see and persevering in the pursuit of a vision is genius then he most certainly was. Read more…

Non-creativity is a learned trait and the good news is, so is Creativity

January 15th, 2015

In 1993 George Land, who is a US general systems scientist (whatever that means) undertook a longitudinal study of 1,600 children of various ages in which he administered a modified standard creativity test that had originally been developed by him for NASA to help in the selection of engineers. Read more…

Why technology is not necessarily the answer

November 29th, 2014

I had a conversation with a leader in the media recently during which he mentioned that a software vendor had told him his company’s product could help accountants perform in 15 minutes a task that typically would take 3 hours when done in a traditional manner. Read more…

Nothing is forever … take Kodak for example

July 28th, 2014

In the mid 1970s Steven Sasson, an employee of Kodak, demonstrated a prototype of a device that weighed 8 pounds and needed a suitcase to transport. It was the world’s first digital camera. The photos were stored on a cassette tape, they took 21 seconds to raster and boasted quality of 0.01 megapixels. Read more…

If not excellence what? If not excellence now, when?

July 6th, 2014

The first business book I picked up and enthusiastically read, because it was inherently readable and extraordinarily interesting, was In Search of Excellence by Tom Peters and Bob Waterman.  In a sense it changed my life because it was the catalyst that led to my moving out of academia into the “real” world of public accounting. Read more…

Service Positioning When Your Prospects Are Human

June 1st, 2014

When you put a service proposal in front of a client she will make a decision to go ahead with the proposal or reject it. If she was acting as a rational economic agent she would assess the potential payoff against the expected cost of the proposal and she would go ahead with the proposal if the payoff exceeded the cost. In the real world it’s more complicated than that and the way you frame your proposal can have a dramatic impact of whether it is accepted or rejected.  Read more…

You’ll absorb more when you take notes in longhand

May 27th, 2014

With the full force of Harvard’s authority I can now confirm that the advice I gave in my post on Journaling is correct! Read the brief note that was referencing a Princeton study that addresses this issue. Sure, they are referring to student note-taking in lectures but at the end of the day we’re all students and the lecturers are the books and other sources of knowledge that we have the opportunity to tap into. Longhand writing serves to improve cognitive processing and retention. The saying “in one ear and out the next” is correct.

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Your clients want to be in control

May 26th, 2014

One of the most important psychology experiments of all time was conducted by Yale Professor, Stanley Milgram. It is called the “obedience experiment” and was carried out in the 60’s.  It was very controversial at the time for obvious reasons but it has implications for the way in which you present and position your business advisory services.

Milgram wanted to see whether people in authority would be able to influence human behavior under circumstances where that behavior would “normally” be considered reprehensible. To do that he asked 40 men recruited from newspaper ads as volunteers to participate in a “very important pioneering research project” (emphasizing the importance of the experiment to the subjects was a key part of it.)

The volunteers were required to ask a series of questions to another person who we will call the “student” and who was located in another room.  The subject did not know that the “student” was a member of Milgram’s research team. The volunteers were supervised by a person who was dressed in a white Lab coat and smacked of great authority.

If the student got the answer wrong the volunteer pressed a button that administered an electric shock to the student.  The shocks started at 30 volts and increased in 15 volt increments up to 450 volts. The switches were labeled “slight shock” up to “Danger: severe shock” and the last two switches were labeled “XXX”.

The volunteers were required to continue to shock the students with increasing intensity as they got more questions wrong. As the voltage was increased the students would start to scream out in pain and ate 300 volts, bang on the door to be released and finally beyond that shock level there was silence suggesting to the volunteer that the student was either dead or unconscious.

If a volunteer wanted to abandon the experiment the supervisor would respond with four sequential instructions:

  • Please go on.
  • The experiment requires that you to continue.
  • It’s absolutely essential that you continue.
  • You have no other choice, you must continue.

What Milgram discovered is that despite expressing concern when students “screamed in agony”, 65% of volunteers still inflicted the maximum voltage. But, and here’s the kicker, when the volunteers were given the last prod – i.e. “you have no choice … ” not one of them continued.

Milgram’s experiment has been replicated in various forms many times so there is very strong support for the conclusion that people will voluntarily tend to do what they are told by someone in authority if they believe it is a worthwhile cause as long as they believe they have a choice.

This is an important finding for many aspects of interpersonal behavior not the least of which is the area of “selling” business development services. The process I engaged in when in practice to position our business development services is called an Initial Consultation – not a very original name I admit and it probably should be called an Initial Conversation because everything starts with a conversation.

I was unaware of Milgram’s work at the time but I now understand why certain certain elements of the process actually worked. They are firstly, I always positioned myself as someone who had “authority” to successfully help a client achieve the results we posited – to do that you simply need to exhibit considerable passion and confidence.

Secondly, I always had a “gut” feeling that what clients want is a sense of control over their lives, their business and the process we were talking about. That’s why certain key elements of the process  are so important to its success. For example, a key element of the Initial Consultation is The Mutual Commitment Statement, the last point of which deals with a Referral System (but it’s actually a sales system in drag) says “you will give consideration to referring us to at least two other people who you believe would benefit from the work we do.”

MCP_ringbinderstandingThe conversation that takes place around that starts with “….. the results we get when doing this with clients are such that they often tell us they’re glad we’re not working with their competitors … so we have decided to give you control over who we work with by asking you to identify or future clients …. etc.”  That is a powerful sales statement, believe me!

Furthermore, the process gives us “authority” that comes from the confidence that “… the results we get for you will drive the future of our business.” One way to look at that is “you (the client) will play a large part in our destiny as well as yours” which is another way of giving your client a sense of control.

Finally, a critical component of our business development solution is the provision of a Management Control Plan. Clients who want to run a better business have an acute sense of the need for them to have more control over the business. This simple binder is a no-brainer way to show them that this is a logical outcome of the process.