Example #1 - Unsuccessful Sales Team
A medium-sized company had developed and patented several significant innovations in their industry. These innovations had the potential to give the company a dominant position in their market. Despite this promise, for the first few years, the company struggled to produce sales. Why were they failing?
First, the company’s product used a highly sophisticated technology to deliver customized solutions. Salespeople had to master this complicated product knowledge and be able to explain it to potential customers. In addition, the sales strategy was to offer an integrated solution that touched many areas within each customer. This meant that multiple individuals within the prospect must each be persuaded to make a buying decision. The company felt that this approach gave them a competitive advantage over their competition. What was not apparent at that time was the extent to which this strategy challenged the job capabilities of the sales team.
This was a complex sale, and learning the necessary product knowledge demanded the ability to learn and process information very quickly. Persuading several different buyers required a high level of assertiveness and the willingness to deal with confrontation and objections of different kinds. DATA was used to inventory the relative strengths and abilities of the sales team. The charts below show the distribution of the company’s sales team on the two critical factors of learning speed and assertiveness.
Four of the salespeople (red squares) learn slowly, which means they are not going to be successful in a role that requires learning quickly. The next chart shows the remaining six salespeople on a scale of persuasiveness.
Four of these salespeople are not persuasive (red squares), and therefore cannot be successful at closing sales.
The DATA strengths inventory clearly shows that only two of the ten salespeople have any chance of being successful. It is important to note that the eight unsuccessful ones were educated, hard working, and likable employees. They received considerable training, including specialized sales training. Yet the inability of the company to recognize that only 20% of their sales team could sell their products almost led to their complete failure. The good news is that once the DATA revealed the cause of the problem, effective solutions could be seen and implemented.
Example #2 Small Training & Consulting Company
After a successful career in a large chemical company, one of the senior executives started his own business doing what he loved best, training and consulting. He bought a license for an outstanding program of training materials and went through the appropriate certifications with top marks. A few of his close friends engaged his services, and his work in helping them was exceptional. Unfortunately, as the next two years went by, new engagements were not realized, despite the fact that he regularly attended networking events and followed up with many leads.
DATA was used to map his hard-wired strengths and abilities so that they could be compared to those that were critical to the training and consulting business. In terms of operating the business and delivering excellent training and consulting services, his strengths were perfect. However, training and consulting engagements must be sold. That requires strong levels of assertiveness and the ability to deal with stalls and objections. The chart below shows exactly why his small business was failing. It represents a normal bell curve with extremes of behavioral strengths on either end. This type of sale typically requires a level shown by the yellow squares, and this entrepreneur level is shown by the red square with the asterix.
In his small business, he had no one to bring in engagements but himself. No matter how hard he tried, he did not have the ability to do that.
It is important to note that in each of these examples, the business idea or model was sound. The cause of the struggles and in the second case, the failure of the SME’s was the lack of people to perform the critical jobs within the businesses. Other examples of this have been:
The importance of having the right people in the right roles is paramount for both small and medium-sized enterprises. DATA can certainly be used to diagnose the cause of many business challenges, but it can also be invaluable as a starting point with any business evaluating how well its human resources match the needs of the business strategy.
Written by Chuck Russell, CEO
SME’s are a powerful economic force around the world. They usually form the greatest percentage of businesses within every country; the greatest percentage of employment; and a significant percentage of the GDP. Unfortunately, SME’s are also subject to a disappointing failure rate. Those failures are not caused by government regulations, and few are the result of economic circumstances. The majority of SME failures happened because the salesperson could not sell the product or service, or the manager could not manage the business effectively, or the production manager could not recognize quality. Essentially, the businesses did not have the right people in the right jobs.
IBM can hire a thousand poor performers and there is little effect on the whole enterprise. If a small business makes one bad hire, or if the founder or one of the key people is a bad fit for their role, that business is unlikely to survive. It will never flourish. If a medium-sized business makes two or three bad hires, or if one of the key executives cannot perform their role, that business is unlikely to survive and will never flourish.
There are many factors that affect the life of an SME: the economic environment, government regulations, competition and the operational effectiveness of the enterprise. The only one of these that is within the control of the SME is operational effectiveness. People are the heart of this. Every business demands a wide range of operational behaviors to be profitable. Products and services must be sold. Financial affairs must be handled efficiently. Customer service must be provided. The performance of the employees must be managed. Each of these roles requires a somewhat different set of strengths and abilities. No one person can perform them all. The challenge for small businesses is that often each person must fill more than one role. Some of these roles are good matches for the individual, and some are not. It is vital for the small business owner to know what strengths are available and what gaps exist. When small businesses start, it is generally family or friends that fill the jobs needed. Unfortunately neither family nor friendship is a guarantee of job performance. DATA can easily identify whether or not the current team has the necessary strengths and abilities. Once that is known, the solutions become clear.
Written by Chuck Russell, CEO
A rally word is exciting. It is inspirational. It speaks of a desirable characteristic. It is a word that people want to rally around. “Innovation” is just such a word. The world is changing rapidly. The pace of business is quicker. New things are appearing every day, and some of these new things seem to explode into financial success. It is easy for “Innovation” to appear to be the battle cry for all entrepreneurs around the world. Yet, the role that “Innovation” plays is different for every business. That role, and how it impacts each part of the business, must be clearly understood in order to have “Innovation” be the positive factor that is needed.
First of all, how a person interprets the idea of innovation depends upon specific hard-wired personality traits and abilities. One third of the population loves new ideas, and in fact, seeks out change. An entrepreneur of this type is more likely to innovate in bold, new ways. They can also change directions too often and chase the newest idea instead of working through the problems they have in their current business.
Another third of the population has a more incremental view of innovation. Preferring to stick with what already works, they avoid changes and make careful and considered adjustments to existing ideas. Once a business is established, consistent processes and procedures must be developed in order to ensure its sustainability. This group of people does that part very well.
Successful businesses need both ends of the innovation spectrum. Without new ideas and the ability to change, they become stagnant, and soon left behind by more agile competitors. Without the persistency to work through the inevitable obstacles of entrepreneurial businesses, creative owners can be distracted and spend their time and resources chasing new ideas that seem to promise an easier road to success. It is critical that small businesses understand what kind of innovative strengths they have and what kind the business needs. That knowledge will lead them to make better decisions as they move through the various stages of growth in their enterprise.
Written by Chuck Russell, CEO