A 35K guy is a 35K guy…

Posted on November 20, 2009 by John F. Dini

I had breakfast with a client this morning. He was planning a new training initiative for his sales team.

“How much do the make now?” I asked. “About $30,000 to $35,000 a year.” he replied.

“What are you trying to accomplish?”

“I want them all to get up to between $50,000 and $60,000 a year.”

“Stop,” I said. “You are wasting your time.”

Now I expect all those who specialize in sales training and motivation will send me emails telling me that I’m all wet. I’m sorry. I’ve watched sales people for 40 years, and one thing is plain. A $35,000 guy is not a $60,000 guy.

I know a company that sells heavy equipment. They had several lines, but not the best one in the industry. The owner chased it for years, and finally landed a distribution contract. When I asked him how he was going to change his sales team he said “The only change will be that my salesmen who have been making around $60,000 will now make $120,000 to $150,000.”

He lost the line within 2 years.

All employees have comfort zones, and salespeople are no different. Although most will claim to have no limits on their financial ambition, most do. They have a lifestyle with a cost of living attached. Within that lifestyle and cost are the restaurants they like to frequent, the friends they feel comfortable with, the stores they shop, and their role in their family.

Success to most people is measured by a 10% or 20% income increase. They can get accustomed to that after a while, and of course then they want to do better. But if you give them unlimited opportunity, the majority of folks will taper off efforts at about a 20% improvement in their lifestyle. Beyond that and they have to start thinking about leaving their comfort zone. Most won’t do it.

That’s why owner after owner comes to me in frustration saying “I hired a guy and gave him the opportunity of a lifetime. He could have made $100,000 a year, and he just isn’t doing it. He’s never had an chance like this before and he is blowing it.”

Yup, and maybe next time he’ll be more ready to take advantage of it, but not now. He isn’t a $100,000 guy.

Posted in Leadership, Management | Tagged , , , , , , | 2 Comments

2 Responses to A 35K guy is a 35K guy…

  1. Paula Waxman says:
    April 25, 2016 at 4:56 pm

    John- Hope you and the family are well! I love what you wrote and it is absolutely true.
    I recently promoted someone to “take over” running the parties for my business which as a caterer, is a pretty significant move for me and for “him.” I am sharing 30% of the net from each party plus he receives pay for the party as well (about $120 bucks for each party). I have asked him to pursue bringing in business as well. He will receive an additional bonus for each gig he brings in. I can see that is where he will fall short, unable, uninterested or uncomfortable going out and selling. I think I offered way too much between the 30% and salary and now the incentive of an additional bonus isn’t really having an effect because he is making enough and certainly more than he has made before.
    I can’t afford to bring a salesperson in to this small business, that means it still falls on my shoulders.

    Reply
    • John F. Dini says:
      April 26, 2016 at 6:36 am

      Good to hear from you, Paula. I hope you are all doing well. Yes, there is really no motivational technique other than self-motivation. Those who have it look constantly to improve and do better (although it isn’t always money.) Those who are satisfied are satisfied. You can’t make them unsatisfied.

      Reply

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Attrition Opportunities

Posted on November 6, 2009 by John F. Dini

A client of mine used a great term in a conversation last week. Someone asked him if he had instituted any reductions in force (layoff, for those on the receiving end) in his company. “No,” he replied “but we’ve had a reduction in force via performance attrition.”

Performance attrition. Now that’s a GREAT euphemism for “Fired- for not doing the job.” It also serves as a reminder of something every business owner knows. Not every employee departure makes us sad. There are a number who we are happy to see move on, and a few to whom we have to give the final push.

One problem I see in smaller companies, however, is the tendency to replace people, rather than recruit to a need. When someone leaves, you have an opportunity to do much more than just “get someone better.” You can recast the position and duties to have a greater impact on your business.

In a small business most employees have to wear multiple hats. Over time, each employee winds up wearing the hats that suit him or her best. there are bookkeepers who double in customer service, or inside salesmen that handle the basic day to day computer set up chores. One of the attractions of a small business for many employees is the flexibility of the job description. People have more latitude to stretch. If you want to give something a try, it’s usually available.

But when that person leaves, we often have a job description that was custom built to that individual. Our current “receptionist” (I use that term only because she answers most of the phone calls and greets visitors) has a talent for graphics and writing. She has become the publisher of our newsletter. If she leaves, it would be a tremendous temptation to recruit another receptionist who can handle graphics and copy writing.

That would be foolish. We would not only be severely limiting the pool of candidates, but we would probably end up paying too much for the basic skills of the position. In truth, we’d probably either get a great newsletter editor or a lousy receptionist. Soon we would be customizing the job around the new person’s skills.

The departure (whether voluntary or involuntary) of an employee in a small company should be cause for examination of the position and its duties. What was assigned to that job because it was necessary, and what was assigned just because the person could do it, or liked it, or because someone else didn’t want it?

Start your new job description by peeling away all the duties that should or could be done by someone else. Ask what parts of the job other employees might like to give a try. Think about which tasks might once have been assigned elsewhere, but were picked up because the former employee volunteered when they became available.

Once you’ve stripped the position of its “optional” elements; you can see how much of a job remains. Is it a skilled position? Is it full time? Does it require a hire at all?

The best small business owners I know restructure their organization with every hire. Doing so spreads the opportunities, resets priorities, and increases profits.

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Jerry West on dealing with tough times

Posted on October 26, 2009 by John F. Dini

Sorry I’ve been away. Actually, I wrote this to post last week and forgot to publish it.

Lately I’ve been telling business owners a story from an interview I did with Jerry West during his tenure as GM for the Los Angeles Lakers.

Jerry said that he had been through good times and bad times. The good times were great; championship rings, parades, media. The bad times were tough. His wife hated to go shopping because strangers stopped her in the supermarket aisles to tell her what an idiot her husband was.

During either extreme Jerry received fan mail, some of which was quite articulate. When they won a championship, he was the genius GM. When they got ousted from he playoffs early (They didn’t MISS the playoffs from the time he became a player in the early 60’s until he left the team in the late 90’s- over 30 years) the letters would go into excruciating detail about his errors as a coach or manager.

Jerry saved the fan mail. He showed me two folders in his desk file drawer; one of great letters and one for really really bad letters (not the sickos- the intelligent “Let me explain why you are an idiot.” ones.)

When times were bad- a long losing streak or a big trade or a draft choice not working, Jerry took out a letter that proclaimed him a genius, to remind him that this too, shall pass.

When they won a championship, he’d make the time to read a few of the bad letters- to remind him that that getting to the top had a few bumps along the way.

In 2006 (seems a long time ago. doesn’t it?) many of us were buying into our own hype. I wish I had a list of all the business owners who told me “I’m making more money than ever before. I know exactly what I’m doing. Why would I need any advice or help?

Now the feeling of genius has dissipated for most of us. We have been reminded that we are all too human.

A business owner doesn’t need to pull out old letters. The reminders of the good times are all around us. A falling sales chart. Empty desks where we used to have busy employees. Idle trucks.

Turn the tables mentally on those reminders. Instead of brooding on what you don’t have now, look at them as reminders of what things can be when it’s all going right. You got there before, so you know that you can get there again. Then start planning on how to make it happen.

Posted in Entrepreneurship, Leadership | Tagged , , , , | 2 Comments

2 Responses to Jerry West on dealing with tough times

  1. Cheryl H says:
    November 9, 2009 at 5:19 pm

    Very poignant post. I agree that globally this seems to be the age of re-evaluation. With technology moving as fast as it does, the topics on which we are experts today could very well be irrelevant by tomorrow. You make a good point about not brooding, all we can do is rethink and move forward. Thanks again for a post, looking forward to your next!

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Serendipity and Strategy

Posted on October 24, 2009 by John F. Dini

This is kind of an unusual posting. It is more philosophical than most, and more personal. This blog tends to practical comment and advice. While I stray a bit with this, it has a business objective.

I have a coach. She is an accomplished professional in her field, whereas I’m more of a practical businessman who happens to coach business owners. She reads coaching books, and studies coaching as a discipline. She speaks, writes, and belongs to coaching organizations.

She told me a few weeks ago that the International Consortium for Coaching in Organizations (ICCO) was holding a lab in San Antonio. She had to be out of town, but suggested that I might be interested. I registered, but also held a few alternative schedules open in case I left after the first hour or so.

It turned out that this was a meeting of top Executive Coaches. I capitalize the term, because to them it is very well defined, and quite distinct from business coaching (which I do) personal coaching, life coaching or the other flavors currently popular. They coach leaders on how to lead. It was an interesting and very talented group.

It also turned out that the meeting was to discuss the future direction of ICCO. The discussions were confidential, so I won’t discuss them in more than the general context of the conversations as they apply to my point here. I really didn’t belong there, but they were willing to have me and I was willing to stay. (That’s the serendipity.)

Much like my colleagues in the Alternative Board®, these were talented folks who had real lives and real experiences before deciding to coach leaders. One woman had helped negotiate the Romanian break from the Soviet boycott of the LA Olympics. Another was a former intelligence agent who was the technical consultant on a major action thriller. One fellow coached people who were newly famous; one coached political appointees in the Federal government. Another employed almost 200 people in a side business in Viet Nam, while another was Tennessee William’s former bridge partner. You get the idea. They were interesting folks.

What was more interesting was their perspective on their business. They held a fascinating discussion about the future of coaching. They were considering how their service offerings might need to change. The discussion included a world where the American economy and dollar were no longer preeminent. Coaching a new generation of leaders who wouldn’t commit the same hours to business the Boomers found acceptable. Multicultural leadership- both in the US and the need to understand the tenets of leadership in other cultures. Coaching in an environment of chronic high unemployment, where employers might be tempted to invest less and replace faster in a buyer’s job market.

I live in a world of small business. Like my clients, things happen fast and the margin for error can be thin. I can (and have) been summarily fired by a client the day after he tells me that I am the most important factor in his business and life. I try to help business owners look at their world strategically, but too often “strategic” means not only this year, but next year too. Beyond that is too far out to worry about.

I realized how seldom we have truly strategic conversations. It was a pleasure, and I came away determined to be more strategic in my work with clients.

Then I realized that while we discussed all those macroeconomic and social trends, the really smart people in that room had no more idea what to do about it than I did. In the end, they were small business owners too. But at least they are thinking about it.

Posted in Entrepreneurship, Leadership | Tagged , , , , , | 1 Comment

One Response to Serendipity and Strategy

  1. Laura Ali says:
    October 27, 2009 at 1:03 am

    Another great post John! Thank you!

    Reply

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No instant replay in small business

Posted on October 17, 2009 by John F. Dini

There was a great play in the Yankees-Angels game last night. I’m not a huge baseball fan, so relax, this is really about business.

Alex Rodriguez rounded third on a base hit and headed for home. The throw beat him there, and he plowed into he catcher head-on in an attempt to dislodge the ball. The catcher held on, and Rodriguez was called out.

There is no instant replay in baseball. If there was, it would have shown two interesting things.

First, the catcher never tagged Rodriguez. It wasn’t a force, so he needed to clearly put the glove and ball on the runner. He didn’t.

Second, Rodriguez never touched home plate. In his intense effort to cream the catcher (a legal play- the one time MLB looks like NFL) A-Rod never completed his base run by stepping on the base.

The correct call by the umpire would have been to stand silent until one of the two figured out what he needed to do. Until then, the runner was neither safe nor out- the play continued indefinitely.

This may be stretching a metaphor, but not by much. A lot of small business owners I know are neither safe nor out right now. The play continues, but they aren’t aware that they still need to do something.

I need to review the recession facts. This is short, but if you want detail read my long posts on the Triple Threat in January and October. Here’s the gravity:

  • The economy needs to grow at 5% plus to absorb unemployment. We do not have Chinese-level expansion in our foreseeable future.
  • Consumers’ use of credit as disposable income has stopped, and can’t start again until they pay down debt.
  • Real Estate is not going to recover 30% or more of it’s value for a while.
  • Monetary policy can’t get much looser than tripling the deficit and zero interest.
  • If health care reform passes, it will include a substantial tax effect on those who are working

You don’t want to hear it. Hell, I don’t want to say it. But if your business is going to survive the next couple of years, you’d better be doing more than waiting to see if you’re safe or out.

I am referring to the tendency of many of us to trim our businesses to the break even level, with the idea that a rising economy will return us to decent profitability when it comes. What if it doesn’t come for a while? If you are running at break-even, how do you finance growth? It won’t be via easy credit; that time has passed.

If you aren’t making a decent profit, what happens when your equipment needs to be replaced? New computers? A new truck? News flash- banks aren’t lending to small businesses that don’t have cash flow.

I’m not Henny Penny. The sky isn’t falling, but neither does the S&P 500 reflect the true state of the economy. A couple of difficult years are in store for us. They are survivable, but only if you are very good at what you do, and pay attention. You need to be making the right call now. There’s no instant replay.

Posted in Leadership, Thoughts and Opinions | Tagged , , , , , | 1 Comment

One Response to No instant replay in small business

  1. Joe Zente says:
    October 27, 2009 at 8:24 pm

    I've played a tremendous amount of baseball in my life and I continue to see infinite parallels that can be drawn between winning a baseball game and winning the game of business.

    The ecomomic reality you've described is not pretty and, as you descrbied, paralysis WILL result in failure.

    A World Series played in Phillie and NY will NOT be stable. It will have its share of ugly weather, insane fans and rotten calls. Welcome to the big leagues. The team that can understand its critical success factors, adapt quickly to changing conditions, manage emotions, stay focused and continue to execute no matter the odds will emerge victorious.

    Go Yankees…

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