Uncomfortable Conversation #1: “We need to shut down a business line”

 

Empty interior of building

Making the Tough Call isn’t Easy

“A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have.” Tim Ferris

The Situation:

Your team, after doing your research, running the numbers and looking at a challenge from every angle has come to the conclusion that a business line or project needs to be closed.  This will impact staff, facility leases, and even some customers who have come to rely on the services or products of that team.  You need to present the information to the Sr. Leadership team, two of whom made their careers by working in the very business you are proposing to close, and some of their protégé’s are working in that division right now.

What you wish would happen:

  1. Someone else would do this. Anyone else. Maybe that external auditor could suggest it.
  2. You could just drop the anonymous suggestion in a suggestion box.
  3. A recruiter would call you with the job of the century this morning so you could skip the conversation entirely.

Things to have with you:

  1. A clear, simple visual of financial projections that can be viewed at a glance, along with much more detailed information in a separate package. Graphs or charts are a good option for the overview.
  2. A plan showing the impact of keeping the line open, vs. the costs and impact of closing the line. Do one for best case, worst case and average scenarios for each option.  Be sure to incorporate your country’s or state’s requirements for staff reductions etc., in your projections (i.e. legal notice, severance. Also include the non-staff costs – leases, equipment etc).
  3. A clear proactive plan for notifying staff, customers and media (if applicable) along with a budget and timeline for the wind down effort.

Having “The Conversation”:

  1. Pick your spot. Don’t just slide it in during a random meeting or a regular staff meeting. This calls for a special meeting to just focus on this issue.
  2. Line up your sponsors beforehand.  This means having lots of one-on-one small, private meetings with discreet senior people to serve as advocates.  If everyone at the meeting is grappling with a new idea at once, the normal response would be to shoot it down or delay it.
  3. Expect that there will be delays.  Most executives will want to do a deep dive on your methodology and your numbers. (That’s what the supporting details in Item 1 of “things to have with you” are for.) However, make sure one of your exhibits shows the costs of delaying the decision by more than a month.
  4. Be sure to acknowledge the human costs involved as you discuss the topic. This is a fine balance; do not recount every detail of every family that will be affected (“Of course we’ll have to cut Mike Smith, and he’s the sole provider for his widowed mother, her six children and he has a disabled son at home”) but don’t go to the opposite extreme either, treating staff as widgets that need to be offloaded.  That will make people question your judgment. Suggest areas of opportunities for the people in the affected unit, by pointing out growing units that require similar skill sets or staffing. If there truly is no internal option, suggest an outplacement strategy.

What will happen next (most likely):

  1. Understand that once you have “dropped the bomb” you lose control of how the information is absorbed and acted upon. Don’t be so strongly wed to your proposal that you devalue attempts at compromise or restructuring. Simply stay firm, polite and open to input. Use your alternative case scenarios to help look at various options that may be proposed.
  2. Once the decision has been made, having the clear communications and action plan ready is imperative.  If you have executives who argue for delay, and it appears that even with delay, the company will have to cut the unit, you will want to point out that doing it sooner rather than later may allow the company to allot a greater amount of resources towards the displaced staff than waiting will.
  3. Take the heat. No matter who makes the final call, you and your team will eventually be “outed” as the architects of the plan. That means you’ll have some team members, even those who get to stay, looking at you in a different way.  Respond to inquiries with a firm, compassionate response and rehearse other team members as well. This is also not the time to upgrade to a better car (even if you’ve been saving forever for it) or take a long exotic vacation.  Low key empathy is the best response.

This post is part of our “Uncomfortable Conversations” series. Our next Uncomfortable Conversation: The project budget has cost overruns. Big Ones.

Have you ever been the “lucky” person who got to deliver this piece of bad news? Share how you did it and what did or didn’t work in the comment section!

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What if the Government is your Biggest Customer?

government shutdown business impact

You may be more vulnerable than you realize to a government shutdown

Today’s U.S. government shut down will have ripple effects on many types of businesses.  While projects at some agencies and businesses may see an immediate impact, other change agents will also need to take the impact of the shutdown into their plans.

Those of you who work for a government funded agency, where either your largest customer or funding source is the government have no doubt been following the news carefully and planning accordingly. But for many others, the impact may be more of a surprise. You may think you have no government funds affecting your particular business, but if it affects your biggest customer, your biggest supplier or even causes those that are guiding your project to have to wait to see the way the wind blows, you will see an impact. Are you prepared?

Today’s events are a great reminder of the need for diversification, of customers, funding sources, and even the ability to shift your plans when necessary.  Regardless of your politics, look at today’s events as a chance to “go deep” in your business and your plans to see where your vulnerabilities are, and begin addressing them today. Beyond the government shut down look for any area where you have more than 30% of your “chips” invested. Is it in one customer, one project sponsor, one marketing strategy? one referral source? Where are you vulnerable and what can you learn from today’s news?

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Thinking about making a move? Size up your Corporate Landscape or any other company you may be thinking of moving to by using our free guide, Reading the Terrain. Get your copy today by putting your email address in the subscription box. And no, we won’t spam you, you’ll just get our weekly update of articles.

 

What are you NOT seeing? And what is it going to cost you?

 

people with blinders on

Are you stuck in your confirmation bias?

Years ago I would periodically attend senior staff level meetings for my boss when he was out of town. This would happen only a few times a year, but inevitably, my boss would be surprised at the insights I would give him from the meeting. Not the notes on what was said, but my take on the changes in the internal politics. Just by observing the meeting I could tell which departments were in favor, which were jockeying for position and which had fallen out of favor.  Often before he had even noticed.

Why?

When we’re in the middle of something on a constant basis we don’t always catch the subtle signs of impending change.  The details of our day to day existence distract us so we don’t step back and take a look at the big picture, and even when we think we do, we look at it through a filter of what we think is happening. We look for things that will reaffirm what we believe to be true and ignore those that invalidate our truths, there’s even a term for it, “confirmation bias”.

Test yourself today.  Are your assumptions about what’s working (or not working) true? Answer these questions off the top of your head… then go run some tests to verify.

Your revenue generators:

  • Who are your key clients?Are they the same people as previous years?  
  • Any changes in buying patterns? Do you know why? Would they cite the same reason?
  • What about payment patterns? Anyone now a slow payer that wasn’t?

Your Customers or End Users:

  • What questions are your customers asking?
  • Do they indicate movement towards a new product line, a new technology or a new need?  
  • Are they finding you the same way they used to? (Think of the days of yellow pages vs. internet, vs. mobile technology). Can they find you using the method they’re using?
  • If you have a physical location does it show up on Google maps?
  • Does the name of your company, department or group actually indicate what you do or sell now?

Your Team:

  • Morale up or down? Why? 
  • Are you attracting better talent to join your team than the talent you’re losing to competitors?
  • Is your team all from the same background? Schools, geography, ethnicity, gender, age, economic background? Any chance that’s hurting you?  
  • How long have they been in the same roles? Is there an incentive for them to move out if they can’t move up? What will you lose if they move out?

External factors and competition:

  • Is your competitor’s market share shrinking or growing?
  • Is the overall market for what you offer shrinking or growing?  
  • If the market is shrinking, what’s taking the place of what you are offering? Is there a new technology or is someone else promising a “magic bullet” solution to your customer’s needs? What’s attractive about that “magic bullet?”

Find any surprises?  We’re so busy trying to “make it all work” that tectonic shifts can be taking place beneath

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our feet without our noticing. Consider today a starting point, a new commitment to seeing the whole playing field.  For even more things to take a look at, download a copy of our free field guide, Reading the Terrain, by subscribing at with your email address. It will help you look at your playing field with fresh eyes.

Have you ever missed a key change in your industry? How did you catch up? What opened your eyes? Discuss in our comments section.

 

Five For Friday! Business Development Expert Julie Fleming

The Building Blocks of Business Development

The Building Blocks of Business Development

Ever landed your dream job and then found you had to raise the funds to get yourself paid? Some of us are natural entrepreneurs; while others may have had business development added their job responsibilities along the way.   Julie Fleming coaches lawyers  (many of whom entered law school never fully understanding the “rainmaking” aspect of attaining partnership level) to new heights of business development. I asked her to share some of her thoughts on business development best practices for this week’s Five for Friday!

1. What are the key activities of a great rainmaker?

To bring in new business, you should focus your time on four key activities:

    • Client or customer service is your top priority, because great service can get you repeat business and referrals… Plus it keeps your customer base happy.
    • Lead generation calls on you to identify the kinds of people you want to meet and where they spend time, and then spend time in those meetings or places regularly.
    • Developing your professional reputation will give you the credibility you need to demonstrate that you can solve your client’s or customer’s problem.
    • Building relationships is the activity that links the other four. No matter what else you’re doing, ask how you can use the opportunity to initiate or deepen a relationship.

2.  What are the most common mistakes?

I see two common mistakes: lack of persistence and mistaking luck for success. It takes time to build relationships, and visiting a networking event once is unlikely to pay dividends. Select your activities strategically, and stick with them long enough to see results—usually three to six months at a minimum. Random actions lead to random results, not repeatable success. Don’t give up too soon, and don’t judge overall success based on one or two lucky breaks.

3. How should someone prioritize their targets?

First, divide your contact list into A, B, and C priorities. Who’s most likely to deliver business to you, either directly or by referral? Those are your A-list contacts, the ones you should be courting most regularly, with contacts every 4-6 weeks at a minimum. Your B list merits contact about once a quarter, and your C list gets contact twice a year, usually through holiday cards and one other touch. (Note that having a content-rich newsletter or blog allows you to stay in front of all of your contacts on a frequent basis by delivering useful information.) As you meet new contacts, categorize them in the same way. Make sure that your A list doesn’t get too large for you to keep those contacts’ specific needs and interests in mind as you craft your follow-up communications. Most people max out around 12-15 “A” list contacts.

4.  Why do people resist taking on the responsibility of business development?

Most of us receive no training on business development. We know what to do, but we don’t really know how to find the clients or customers. Some people worry that great rainmakers are born with some secret skill or attribute. No one wants to fail (and many take any setback as a sign that they’re missing the golden touch), and resistance is natural until you discover that sales and marketing are a personalized combination of a finite group of skills, not a golden touch. There’s also a negative connotation to sales, and no one wants to be perceived as manipulative or unscrupulous. Both of these short-circuit and stop would-be rainmakers in their tracks.

5.   What are some great resources to learn about rainmaking very quickly?

One of my current favorite books is Daniel Pink’s To Sell Is Human. It dispels the myths I mention in point 4 and offers easy-to-implement steps toward making a sales, whether you’re selling products or services. I also like Harry Beckwith’s Selling the Invisible for professional services sales.  Most importantly, find a successful rainmaker (preferably more than one!) and ask how they succeeded, then get a mentor to help you put your unique strengths to work.

Julie Fleming

Julie Fleming

Julie A. Fleming, principal of Lex Innova Consulting, teaches lawyers and other professional services providers to use innovative and effective measures to build a strong book of business and a lucrative practice. A former patent litigator, she is the author of The Reluctant Rainmaker: A Guide for Lawyers Who Hate Selling and Seven Foundations of Time Mastery for Attorneys, as well as numerous articles focusing on topics such as business development, practice management, work/life balance, and leadership development.  Before launching her consulting business, Julie practiced law for over a decade in firms of 3 to more than 2100 attorneys, specializing in patent litigation. A graduate of the Emory University School of Law, Vanderbilt University (B.A.) and Georgia State University (B.S.), Julie is a Fellow of the American Bar Foundation and currently serves as Vice Chair of the ABA Section of Science and Technology Law. Her website is at www.lexinnovaconsulting.com

What’s your biggest challenge around business development? Share in the comments box!

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Rule# 6: Build a Measuring Stick.

Find a way to measure the benefit of your plan, bonus points if you can tie it to costs or revenues!

Find a way to measure the benefit of your plan, bonus points if you can tie it to reducing costs or increasing revenues!

I was raised to be “of service” to others. My mother is the first to volunteer for any task that needs doing and we all developed a strong sense of duty towards others.  Most likely that is why I spent much of my early career in government and non-profit work before turning to the corporate world.

I was very effective in getting financial and executive support for my projects because I had a secret weapon. I majored in accounting in college, and it gave me a firm grasp of the numeric value of any activity and the importance in being able to attribute activities to the revenue or expense ledger. At a non-profit or government agency I was always the person trying to measure our results, determine the activity’s value relative to costs or expense and then find someone who would be willing to pay for it.  We were famous for having all of our employees able to recite chapter and verse how many people we had helped at what cost and with what results, preferably tied to a monetary measurement. Later, when I worked for an insurance company and had to evaluate non-profits for partnership opportunities, an instant mental “No” was rendered when they couldn’t reasonably demonstrate some quantifiable results or outcomes, and the “No” was doubly reinforced if the staff gave me significantly different answers than the director or development director.

It’s not easy to measure things, some defy easy quantitative measurement.  If I keep fifteen teenagers in an after-care program that keeps them from going home alone in the afternoon and possibly getting into mischief, how do you quantify it? Graduates of your program may not have made it to college yet, so you don’t have a warm fuzzy story for the fundraising brochure (but as soon as one of them does, put that kid in a college t-shirt, on campus, holding a bunch of textbooks and get that picture! Sells ’em every time).

In for-profit businesses there are initiatives that can also defy easy quantification. What does “deliver better customer service” translate into in dollars and cents? What about community outreach or sponsorships?  What exactly does reducing customer response time yield that will make a dent in earnings season?

Find a way to measure it. There is almost always a way.  Talk to people in similar arenas, and talk to some not in the industry.  Talk to your Human Calculator, give them all the approaches you came up with and have them get creative.

If you can measure the value it adds or the costs it saves, and if you chart incremental progress, you can demonstrate success, which keeps enthusiasm high for your project, even if there is a bobble along the way.

So how DO you measure the Teenager After-Care example?

One approach:

Studies show that kids between 13 and 15 are X times as likely to get pregnant  and Y times as likely to get into trouble that will do Z to their criminal record when they go home alone after school.

A pregnant  teenager costs the American taxpayer (or county taxpayer or city taxpayer) $___, while a juvenile arrest costs the taxpayer $____.  By funding aftercare for these 15 teenagers we are greatly reducing the odds of these things happening, and saving taxpayers $(all of the above multiplied by the results expected if the 15 kids weren’t in care) which is ten times (or hopefully some other ridiculously high number) the cost of providing funds for the program. So we save our community 9 times every dollar we spend!

How have you found ways to quantify things that defy easy measurement? Share in the comments below, you’ll be helping everyone!

By the way one of my favorite Albert Einstein quotes is “Everything that can be
counted does not necessarily count; everything that counts cannot necessarily
be counted.” Very, very true. But to sell your idea, you need to try to count it!

Want to see all 10 Rules for Beginning a Turnaround? Start here.

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Rule #4: Do the Math: Follow the Money

Like it or not, the trail of money will direct your path.

Like it or not, the trail of money will direct your path.

Make a business plan! It’s the number one rule for all new ventures. Every business book, every “get rich quick” book, every project management handbook insists upon it.

What the experts often fail to say is just how important it is to be realistic.  You can make any business plan work on paper if you’re creative enough. “We will quadruple our revenue by selling 4000 additional widgets next month!” “How many did you sell this month?” “35, but I’ve got a GREAT plan!”

It’s entirely possible that your change strategy is so brilliant, so life changing, that it’s the next Apple computers or internal combustion engine (please feel free to write me so we can interview you for our “Five for Fridays”). But more likely, you are not the exception.  And that’s where doing your math homework comes in.

What is the team doing now (selling, closing, producing, treating, turning).  What does your proposed change do to that number? What is the cost of the change? Have you factored in the opportunity costs involved (see Rule #3)?  What extra incidental costs will result (support staff, additional technology costs) if your project comes to fruition?  Don’t base it on the best month your team ever had. Base it on an average month. And if your year is seasonal, run it for each quarter, using an average per quarter.

Is it worth doing? Is the potential disruption of processes and routine worth the net result of your activity?  And even if you think so, would anyone else agree?  Get someone from outside your industry to punch holes in your strategy and to ask lots of questions. It may uncover some other areas you need to look at.

Moving results into dollars and cents, either in terms of revenue growth or cost savings, can go a long way towards advancing your strategy.  Numeric arguments that show they’ve taken all the factors into account will win every time.

And for those of you in the government or non-profit sector who don’t measure all activities in terms of dollars and cents, we’ll talk a great deal about how you can measure in Rule#6.

Want to see all 10 Rules for Beginning a Turnaround? Start here.

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