Management Lessons [No Charge]

The job of many business consultants, in addition to invoicing their clients and collecting, is to appear to write management lessons for a substantial hourly rate. But I have rebelled against the practice and offer the following management lessons to you at no charge. Use them and prosper.

Lesson One

An eagle was sitting on a tree resting, doing nothing. A small rabbit saw the eagle and asked him, "Can I also sit on my ass like you and do nothing?"

The eagle answered: "Sure, why not."

So, the rabbit sat on the ground below the eagle, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Management Lesson:

To be sitting on your ass and doing nothing, you must be sitting very high up.

Lesson Two

A turkey was chatting with a bull. "I would love to be able to get to the top of that tree," sighed the turkey, "but I haven't got the energy."

"Well, why don't you nibble on some of my manure droppings?" replied the
bull. "They're packed with nutrients."

The turkey pecked at a lump of manure, found it actually gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, he was proudly perched at the top of the tree.

Soon thereafter he was promptly spotted by a farmer, who shot the turkey out of the tree.

Management Lesson:

Bull Shit might get you to the top, but it won't keep you there.

Lesson Three

A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground in a large field. While it was lying there, a cow came by and dropped some dung on it. As the frozen bird lay there in the pile of cow dung, it began to realize how warm the dung was, actually thawing him out.

He lay there all warm and happy, and soon began to sing for joy. A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung, promptly dug him out and ate him.

Management Lessons:

(1) Not everyone who shits on you is your enemy.

(2) Not everyone who gets you out of shit is your friend.

(3) And when you're in deep shit, it's best to keep your mouth shut.

I hope this helps. Seasons Greetings.

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Edited from an unattributed source as much management consulting dicta, only I admit it.

Your People Inventory

Whether we like to admit it or not, we are you are in the sales business. Professional sales people know that there is something called the sales cycle. Think of the sales cycle as a circle that begins and end with prospecting. If you already have a client base, we are going to take an inventory. If you are just starting and looking for that first customer or client, we are also going to take an inventory.

Successful businesses maintain customer databases of various degrees of sophistication. The only difference between a customer and a prospect is history, a customer being someone who bought from us in the past. Satisfied customers make the best prospects. The more we know about our prospects, the better our opportunity for successful selling, and selling is the business we are in.

We want to create a prospect database that contains both quantitative and qualitative information. We will start with some initial questions about our prospects and work from there. We can always add more layers of sophistication as we develop our inventory. If you have existing customers, be as detailed in your answers as you can. If you do not have a customer base, look at who buys from your competitors.

· Who are your prospects?
· Where are your prospects?
· How many prospects are there?
· What do your prospects want from you?
· What do your prospects know about you?
· How much will prospects pay you?

Who are your prospects?

A prospect is anyone who needs what you are selling and can afford to buy it. Suppose you own a commercial cleaning company that does offices and retail stores. Prospect characteristics might include: people who own or manage buildings, have a budget for janitorial service, employ at least 5 inside people, have three lavatories, a kitchenette, a reception area, and a sales floor. They are serviced once a week after 7 P.M. by two people who and take 45 minutes on the job. Less than 10% are government accounts and about a third of them are retail operations.


Where are your prospects?

Prospects may be anywhere if we are selling online or by catalogue and delivering products by transportation we provide. Otherwise they usually live or work with a defined geographical service area, whether you go to them or they come to you. Assume you own a health club. Prospect characteristics might include: able bodied men and women, aged 35 to 55, who live within 13 miles of the club. Half of them want some training. Half of the men and a quarter of the women use free weights.

How many prospects are there?

This is referred to as market size. Do your homework and keep your estimates conservative because your projected sales will be based on your estimate. Whether your business is land based and dependent on traffic or it is web based and dependant in page views, you can search for and find data on the Internet. Another source of such data is your competition.

What do your prospects want from you?

Prospects want what you sell and they want satisfaction after they purchase. Regardless of product or service, prospects want quality, value and service. However, they want price as well, especially now. Warranties and guarantees enhance value and your prospects’ perception of quality. Sears Roebuck and Company understood the balance of perception by making the claim, “Satisfaction guaranteed, or your money back.”

What do your prospects know about you?

They know either what you tell them or what some else they know has told them. Professional sales people rely on an organized sales presentation to varying degrees. Such presentations contain facts about a product or service and the benefits to the prospect. The objective of the presentation is to build value and to get the prospect to start asking questions. When a prospect starts asking, they start owning.

How much will prospects pay you?

Prospects will pay exactly what they think the product or service is worth and not a penny more. Remember that price is relative to perceived value and to what similar products and services cost. That is called “what the market will bear.” Additionally, you want to be sure that you are not selling for a penny less than your product or service costs you. If a pizza costs you $10 to make, you do not want to sell it for $8.50. If that is all that the market will bear, find a way to make an $8 pizza.
Speaking about payments, prospects pay by check, cash or credit card upon receipt of your invoice or based on agreed, written terms. Otherwise they do not qualify as a prospect.

A sale is the process of turning qualified prospects into satisfied clients. The purpose of performing a people inventory is to be able to identify qualified prospects. Such identification helps us focus our efforts, streamline our marketing, and increase our sales – the business we are all in.

Make Your Message Clear

My hat is off to the entrepreneur who saw the intersection guy with the cardboard sign that said “Will Work for Food” and turned it into a business. Nowadays what intersection does not have the sign-waver with a professionally produced sign? “Mattress Sale,” “Liquidation Sale,” “Condos For Less” and the like must be working. They are everywhere. The messages are short and clear.

Let’s consider our “Will Work for Food” example. The message is clear. It is exposed to a lot of views. The prospect is well defined – people stopped in cars that have change or a couple of bucks to spare. The location is important, facing the driver’s side of temporarily stopped vehicles. The sign holders likely look as if they can do some kind of work. The “for food” bit suggests barter is acceptable and looks better than begging.

“Will Work for Customers” is our message. We can apply this message to finding customers and clients: a clear message, frequent exposure, clearly defined prospects and an organized presentation. I am concerned that many business owners make this more difficult than it needs to be. They think that their message has got to be more messagey, whether it is their business card or website, which is a digital business brochure.

Here are some tips on getting your message across.

Less is more

You do not need an hour long documentary when all you need is a half-minute commercial. If you start with five hundred words to describe who you are, what you do and how to get ahold of you (and I hope you do start with 500-words), whittle them down to fifty.

Use a pro

Unless you, your spouse, child, sibling or in-law is a professional – i.e., gets paid regularly for their expertise – do not think you can save money having them create your cards, brochures, websites, logo or signage. By all means let them help with the 500-words but that is it.

Organize your presentation

The key elements to keep in mind here are that you sell what you show and that you want your prospects to ask questions. When a prospect starts asking, they start owning. Do not interrupt them.

Expose your business

Carry extra cards with you at all times. The person standing behind you in a line, the person checking you out at a counter, anyone you speak to is one of two people: someone who is a prospect now or in the future or someone who knows another person who just might be a prospect now or in the future.

Remember your name

Unless your business is named “My Company,” always refer to your business by its name. In fact, go out of your way to repeat your business name at least three times when it comes up in conversation and you offer your card. Make repeating your business’s name a habit. Rehearse it.

Share some enthusiasm

With whom do you want to do business – someone who has got a job to do or someone who enjoys their work? While you are rehearsing your business name, do it with a smile. If it seems silly to practice in front of a mirror, my advice is Get over it.

We are all in the sales business whether we hire salespeople or not. That is why it is of utmost importance that we have a clear message and get it across to people as often as we can. The effort takes practice and consistency, to be sure, but the rewards are gratifying when we do. You will see them on your bottom line.

Practice or Business: What’s the Difference?

I have met many business consultants who are either working on a book or at least thinking about writing a book. I have known several who actually have a manuscript they tote with them from client site to client site. These consultants have two problems in common: having manuscripts does not necessarily make them writers and books do not sell themselves. The mental exercise of putting experience into words can be its own reward, but what it reveals is a personality trait that says those consultants would prefer a consulting practice to a consulting business.

There are two kinds of consultants: financial oriented people and management oriented people. Financial folks love spread sheets and can write love letters in Excel. They tend to have finance and accounting backgrounds; many are CPAs, others have MBAs, some have both. Management folks love organizational charts and can write sonnets as PowerPoint presentations. They tend to have corporate backgrounds; many have business degrees, some have MBAs. Others have been business owners and are former entrepreneurs. All are familiar with the relationships between finance and management.

Regardless of their orientations, consultants share one common trait – they dislike, or at least distrust, sales people as a group of slick-talking, promise-anything-to-get-the-deal, glad-handing, tap-dancing liars and thieves. What sales people think about consultants is similar, but that is not my point. The use of professional sales people to acquire clients characterizes the difference between consulting practices, which do not, and consulting businesses, which do. Neither approach is better than the other. The significance is the difference in overhead.

Other differences in overhead include advertising, depth and size of support staff, and location. They may have large corporate structures to serve corporate customers, such as publicly traded companies, that employ hundreds to thousands of people, generating many millions of dollars in annual revenue. Consulting businesses have greater resources than many consulting practices and may offer layers of specialty in the services they offer, such as proprietary software, IT, tax consulting and financing.

Consulting practices are more entrepreneurial in nature and structure. They may be highly specialized themselves, depending upon the orientation of the consulting staff they employ. They may also be general practitioners whose services range from QuickBooks to websites. Because of their nature, consulting practices serve entrepreneurial clientele, most often privately held firms, who employ less than a hundred people and generate less than twenty-million dollars in annual revenue.

From a consultant’s point of view it is not about the money. It is all about the work. As I have previously written, when I worked for consulting companies my clients ranged from restaurants to general building contractors, from convenience stores to slaughter houses, from liquor stores to RV dealerships. For anyone who wants to become a professional consultant, I recommend the experience with the caveat that the travel can be torture.

From a client’s point of view it usually is about the money, what they think they need and they think about the work that is performed. So what is the difference between a consulting practice and a consulting business? The difference is in the overhead and in the specialties. Change is the product that the client buys or is sold.

While the Tide Is Out

I do not know about you, but I am fed up with excuses and the fear those excuses are reinforcing. There are two biggies right now in the excuse department: the Recession and the Holidays. They are getting in the way of everything we think and contributing to a bigger lie – which is that no one is buying anything. Codswallop, I say. What if I replaced the word Recession with Low Tide and the word Holidays with New Moon? What big lie could that engender? After all, they are just words.

Granted the moon and the tides are related in that the periodic rise and fall of the sea level has to do with the gravitational pull of the moon. That relationship is not equal to the cause and effect of a holiday and an economic cycle. But making such a relationship is not my purpose. My purpose is to support two three-word ideas: Stop Saying It and Get Over It. Besides, there are a lot of things we can do while the tide is out and we do not need a lot of reflected light to do them. But let’s consider first things first.

Stop Saying It. Quit indulging in the blame game that the economy is somehow gypping everyone. It is not. There is just less money in circulation. It is nothing more than that. The gyp is the pernicious notion that economies are static, like water in a concrete pool. Granted such changes require some getting used to. At this time the paucity of cash in circulation has undermined some of our previously held, perhaps unfounded, political and market ideas. That is not my point. If you believe that something is bad, it probably will be. If you allow yourself to believe that something is good, it definitely can be. When prices drop, we call that a deal. Where is the gyp in opportunity?

Get Over It. All right, already, Merry Christmas, damn it! Besides, you know I mean well. It might be nice to have more cash or perhaps more credit, but other than consumption, what do cash and credit have to do with customs that were conceived and enjoyed in utter poverty? Now is the time to re-evaluate how we celebrate our hallowed days. While we are at it, we might as well start planning for next year in our homes and our businesses.

So what can we do while the tide is out without a lot of reflected light? We could scrape barnacles off the bottom of our boats. We could fix the dock. We could do some crabbing. The operating word here is We. In business, for example, we can readjust our business plans. We can rethink our pricing. We can reconsider our advertising and sales efforts. If people are not buying, it is because we are not making it easy for them to do so. When we do, they will. That is worth celebrating.

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This posting also appears on my other blog, The Premise Loft, which focuses on commentary and public opinion.

Stranger From Afar -- But How Far?

When I worked for the big dollar consulting companies, I began to believe that travel was a form of hazing. As a Project Director for one of those companies, I could be found in an airport at least three times a week. I picked up and delivered three rental cars. I drove an additional average 250 miles a week. I checked in and out of three or more hotels.

As a Senior Executive for another company, if they had no assignment for me on Saturday afternoon, I reported to the airport on Monday afternoon to call the office every fifteen minutes beginning at 5 pm, bags in hand. No assignment meant checking into a hotel near the airport and performing the same ritual the next afternoon. Of course, I thought the arrangement was better than the first since I only had to fly twice a week. Less was more better.

I said that travel was a form of hazing because it is in addition to working a ten-hour day. As a Project Director, I averaged 4 to 5 hours of sleep per night. As a Senior Executive I probably averaged 6 hours per night. Those are considerations for you, should you decide you, too, want to become a “road warrior.” These people are easy to recognize. They wear suits at the airport, schlep at least two wheeled suit cases in addition to a laptop, and fall asleep in the airplane as soon as it reaches cruising altitude.

What does it mean to a business owner? It means an additional expense to a consulting project – 12% to 15% on average. The expenses are round-trip air fare, rental car and gasoline, lodging, per diem and incidentals such as printer cartridges and project binders. Take it from one who has served up a healthy $15,000 invoice for two days with three people on the project -- you can do the math. As a radio engineer of my acquaintance once wryly said, “A consultant is a salesman that lives 500 miles out of town.”

None of what I am writing is to impugn the quality of the consulting performed by “road warriors” from out of town. In fact such experience is worth the hazing for the person who wants to choose consulting as a career. It is a better credential than holding MBA or CPA credentials alone. However, for small to medium sized business owners the cost does not necessarily assure the best quality. The consultant you get may be just the next person on the bench or at the airport being hazed.

The consulting business is about selling consulting hours, just as Coke’s and Pepsi’s business is about selling bottled and canned products. The product itself is another issue. I have often said of the consulting business that when times are good, our business is good. When times are tough, our business is better. To a large degree that has been true. But today, times are hard. Just ask Detroit, where GM cannot borrow money and sales are puckered.

A similar effect is occurring in business consulting because the industry is not immune from the impact of this recession. Sales are down for their prospective clients who, as a result, are becoming more reluctant to avail themselves of consulting at a time when they need it the most. Consequently, sales are down for the consulting business. It is truly a vicious cycle.

However, this recession provides small to medium sized business owners, especially family-owned business, an incredible opportunity to reorganize themselves so that they can reap the benefits that will be realized in our economic recovery. The question then is not if they should retain consulting help from a stranger from afar. The question is “How Far?” and the closer to home, the better.

Stuck in Stupid?

As a business management consultant, I would describe a lot of what I see in business families are people "stuck in stupid." They are not stupid; they're just stuck in it. The primary reason they are stuck is their lack of flexibility, which inhibits change. Change, incidentally, is why people hire consultants in the first place.

I ask people "What do you do for a living?" Generally, they explain about some functionality or process they perform. I repeat the question until they to stop. "You make decisions," I say. Then I ask, “If someone is stuck in stupid, what kind of decision could they expect to make?”

Learning to ask questions is the first step out of the stickiness. For example, let’s say our Company is expanding its’ scope of work and over the next 6 months it wants to add 50% to its’ gross revenue. The questions are:

• Does the Company have the qualifications to expand? That should not be a problem if the company is currently performing in these areas.
• Does the Company have sufficient capital or credit to expand? A projection showing a Cash Flow would provide insight into what the cash requirements would be with the expansion.
• Does the company have the staffing required to make such a move? Are additional employees required, are they available, how much training will they require, and what are the costs?
• How much competition does the company have and will the expansion enhance or hurt the Company’s position in the community?

Another issue with being stuck is what I call “breathing your own ether.” By “ether” I mean the things that business owners say like “we’re doing just fine;” and “I don’t need to write it down. I’ve got it all in my head;” and “I’m an idea person.”

The best “ether” I heard recently came from a client who told me, with a straight face, that his spouse’s working in the company without pay or job description was “saving us a lot of money because I don’t have to hire someone.” Actually, the spouse does have a job description – Owner’s Spouse.

Let’s ask some more questions:

• Doesn’t such a situation have the net effect of putting all of their “eggs in one basket?”
• Is the spouse qualified to perform the duties of her functional position, e.g.: book keeper or sales manager?
• Have the owner and spouse established clear boundaries, e.g. at what point do their business and personal lives begin and end?

The fact is that few people ever want to admit that they do not know what they don’t know. They claim that they have been so busy working they haven’t been able to take the necessary time to make that discovery. Fortunately, there is “ether.”

Here are available choices.

• Keep doing what you are doing.
• Stop what you are doing and go back to school.
• Hire a competent business consultant to help you.

There are sub-sections of those three choices, but I am trying to keep this short and to the point. Part of the stickiness is not admitting that some outside advice might be helpful.

Ego saying “I can do this better” is what starts business ventures. Ego saying "I don’t need anyone telling me what to do” is the glue of being stuck in stupid.