Passive Income

Passive Income is a term that is thrown around constantly and is often misunderstood by many. Passive Income is defined by Investopedia as “Earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved.”

Generally speaking I think it is understood to be money that a person makes while being uninvolved. Many people will say something like “I have this great stream of passive income where I am making money right now.” Meanwhile the individual is on the beach, on vacation, or involved in some activity that is more fun than working! Now that sounds pretty good if you ask me, making boat loads of money while sipping a corona on the beach, sign me up! But here is where the misunderstanding takes place.

To develop a solid stream of passive income takes an incredible amount of work, time, and often money. It falls under the same misbelief of get rich quick schemes or get rich over night seminars. But solid passive income is very possible and is enjoyed by millions of people every minute of the day so why not you? Whether you are a current business owner, employee, or dreamer it is possible to achieve the American dream which has become far more than simply a nice house with a white picket fence in the suburbs. Nowadays the American dream has become more about achieving wealth and becoming an every day millionaire.

Millionaire, you might be thinking “Craig, that is a big statement I don’t think I can ever become a millionaire like the people I see on TV.” Well fortunately those are not the millionaires that I am talking about, I am talking about the millionaires that are your neighbor and you do not even know they are millionaires. Millionaire is defined as having a net worth of one million dollars or greater. This dream is very attainable by just about everybody.

Many people, 32% of Americans, contribute to a 401K with every paycheck. And this number should be a lot higher considering 59% of Americans have access to a 401K. Well guess what I consider a 401K, passive income. While investing in the stock market you are making 7-10% on your investment every year, this means that you are making money even as you are sleeping. This is by far the simplest way to create passive income.

The more complex ways are to start a self sufficient business, buy real estate (Even owner occupied real estate is passive, as real estate appreciates at 3-5% on average), or some other enterprise. So no matter where you are in life you have an opportunity to create some stream of passive income even if you are not realizing that wealth today. However, in this blog post I want to specifically speak to business owners or prospective business owners.

My number one objective when working with new clients is business valuation. Business valuation is not exactly our specialty but I am talking about the term generally not about actually valuing your business. The entire point of starting a company, owning a company, operating a company is obviously to make money but more importantly to generate wealth. Your business should be the largest item on your balance sheet within your financial statement. Even if a business owner has no desire to sell you should be looking to make it worth more each an every day and thus more desirable to purchase.

Growing your businesses worth can be done through a multitude of ways; increasing sales or revenue, cutting costs, or increasing capacity by hiring more people. Although those aspects are incredibly important, the most important thing about a business valuation is how easy is it for someone to buy you and take over.

How easy is it for someone to buy you and take over, this is an ambiguous statement and what I mean is what systems do you have in place, what processes run your company, are these systems and processes commonly known, is one person largely responsible for more than 20% of your revenue, can the owner be removed from the business and it will run swimmingly?

These are the questions that you need to ask yourself as a business owner or as a prospective business owner looking to develop a business plan. The age old example of this is McDonalds, which we have talked about in our blog before. Every McDonalds has the same procedures, protocols, and manuals. This makes the business very desirable, as just about anybody can own and operate a McDonalds franchise. Your business needs to be more like McDonalds and thus making it more similar to passive income versus active income.

This means every position needs an employee manual, you need a proper succession strategy for every management member, proper CRM (To track past, present, and future clients), solid marketing plan, business plan, goals and plans for minimum 5 years out, and a process for all business operations.

This is why we stress the importance of processes because this allows for a higher valuation for the business, increases wealth on a daily basis, and creates a stream of passive income so that you can go start another business that follows that same model. Starting a business is hard work but the reward should not be working 80 hours a week making a million dollars a year but rather to create a business process that allows you to make a lot of money in a more passive nature while increasing valuation and personal wealth.

If you are a business owner or prospective business owner and you do not have this mindset it is time to change your frame. Begin to remove yourself from the business by creating processes. If you are knee deep in your business and find yourself putting our fires everyday, this process is going to take time but be patient as it will be worth it. As always if you have any questions or need help creating this structure give us a call.

Contentment does not mean Complacent

These days it seems like people jump from job to job (called spring boarding) all in the hopes for more money, benefits, prestige or a myriad of reasons. Long gone are the days when you would begin and end your professional career with the same company.

I am also not too naive to recognize and appreciate the fact that those companies that people would give 20-30 years of their life to are few and far between. Companies that truly value the employee and recognize that growth may not have happened without them.

Those companies do exist and when you find one, you can rest in the fact that if you are contributing to the growth and success of the company, you will be rewarded with some sort of compensation. That compensation could be a pay raise, promotion, additional benefits or even recognition. That fact of the matter would be simply this; You are very happy where you are working and the company you are working for values you and your contributions. You both work hard to move toward the future and it is evident. This would be contentment, you are happy. Plain and simple, no need to move on to another company and even no desire to see what’s out there.

There is an explanation why people like to hold the remote control when watching TV. Basically it has nothing to do with the current show they are watching. The reason they want the remote is so they can see what else is on TV. They may be happy with the current show but they always want to know if there is something better to watch and there is the lack of contentment and they want more or better.

Don’t confuse complacent with contentment. If you cannot stand going to work every day, the people are terrible and there is discord, do something about it or simply become complacent and do nothing. If that’s you and you are frustrated then move on to see what else is out there or figure out a way to be content where you are. Nobody wants to do something they don’t want to do. The question you have to ask yourself is whether you are content or complacent.

Read our blog about pain and pleasure here.

Are you lucky or prepared?

Many people hear and say “good luck”! You may be going to an appointment or visiting a cantankerous relative and in either case you hear good luck as you walk out the door. What is luck? Is it some sort of cosmic power source that someone is tapping for you or is it a spiritual plea to God? No, luck is really not a thing. Certainly some people may have the Midas touch and all they touch turns to gold but you can’t seriously think that there is some sort of luck god that is bestowing good fortune upon you, can you?

Here’s the truth: Luck is when preparedness meets opportunity. Seriously, do you think Richard Branson is lucky? Jeff Bezos? Elon Musk? No, they are not lucky they are prepared and when an opportunity presents itself, they take action. We all hear so many success stories about many of these highly successful people but what we don’t hear is their failures.

Success and failure go hand in hand. If you can be prepared and able to recognize an opportunity, you will be able to act on that opportunity and the odds of probability will dictate that your success will be as the foundation of their success they can add layers of preparedness to enhance success.

Take a sales person for example, They are trained and seasoned in sales and closing. They know about assumptive closes and can recognize buying signs and signals. They know not to speak as much as they listen and are able to stop talking when closing questions are asked. This is trained and seasoned and acts as the foundation. Examples of the layers they can add would be researching their prospect, what are their big projects, who are their main customers and what is their competition doing. Another layer would be to research the person, look at their social media and find out some of their interests to determine if you can develop common ground. When you walk away from the meeting with a contract then I would submit that you are far more prepared than lucky.

I will agree that a broken clock has the right time twice a day and that a blind squirrel will get luck y every now and then with an acorn but for the most part, when you are prepared for what you are doing and have the proper training, you will encounter success not luck.

Creating the Funnel

Everybody is an expert at something, well, almost everybody. If you really take a minute and look at your life, you are probably really good at one thing or a string of a few things. This is how solid businesses are formed, when people turn a skill, talent, or passion into a profession. Every single day new businesses are formed over 1700 to be exact. That is a lot of people trying to turn their skill, talent, or passion into a profession, unfortunately, just over 1600 fail every day.

Generally speaking just because you are good at something does not mean that it can sustain or replace your income. Being good at something is not enough, most of the time the talent people have is not being “good” at business. Being “good” at business is the crux of it all, it is a learned skill, a skill that some people pick up faster than others but it is the learned skill of business mixed with the passion and skillset of something else that leads to the 100 or so continuing businesses every day. This basically comes down to marketing because that is the first step of getting customers. Marketing is hard. You need customers to run a business without them you just have an office, idea, and skillset. No customers, no electricity.

There is an old marketing/advertising adage that goes something like “I will always spend a dollar if it will make me 2 dollars.” Now that makes perfect sense for the most part (most people in marketing/advertising are actually looking for a better return than that but it works for this example) wouldn’t you spend $100 if you are guaranteed a return of $200 or how about $1000 to make $2000 or better yet $100,000 to make $200,000. Well, yes of course you would but I think we all know that for the average joe that it is simply not that simple. Marketing and advertising are very difficult. There are many factors that play into this: who are your customers, how much do I have to spend, what to I do when someone is interested, how do I add value, how much is a fair price to charge, is my add attractive, and some much more.

I am not going to get into how to create the perfect marketing or ad campaign in this blog post but I will touch on the basics. If you are reading this blog you have probably heard of a funnel, as it pertains to marketing. Picture a funnel and it is large at the top and very narrow at the bottom. This is what your marketing campaign should look like. For example lets spend $100 on facebook advertising, maybe we get about 10-30 people to click on the ad that we have populated. This is the top of the funnel, from here we send them to a specific landing page tailored to their niche or what we targeted them for, they spend some time on the landing page and perhaps fill out the form for their contact information, maybe they fill out the survey we have which gives us even more information. Now we are reaching the bottom of the funnel where we have good qualified leads. This is the ultimate goal.

But again, easier said than done. Here are the basic steps listed below in order:

  1. Find an advertising platform (Google, Facebook, Bing, other social media)
  • Facebook is by far the cheapest and one of the most effective
  • All of these platforms are complicated and change quite frequently
  • I recommend taking a class or spending a few weeks learning if you are going to do this on your own
  1. Targeting
  • Who are your customers?
  • Ad platforms allow you to target exactly who you are looking for (Facebook is best for this)
  • You can target 40-50 year old, stay at home moms, interested in yoga & tennis, that live in Wyoming (really is no limit)
  • Be as specific as you need to be to make sure that you are wasting any marketing dollar

  1. Setup a landing page
  • This is crucial to the success of your ad
  • You can do this many ways, either on your own or by hiring a professional
  • Allows analytics on your visitors
  • Allows you to better optimize your ad

  1. Create free value add content
  • Give some value away for free in exchange for contact information
  • Video, PDF, brochure
  • Make sure it has enough value in it that they want to learn even more
  1. Watch the leads come in

This is the crux of setting up a solid marketing/advertising funnel. It is easier said than done and the most successful ad campaigns are done by people that are considered experts in the field. With that said, if you have the intellect you can become relatively proficient after 20-40 hours of learning how the ad platforms work.

Long gone are the days of cold calling. People do not want to talk to you, they want to find something on their own and make a decision. If they see something on the side of their screen then it was their idea not yours. Remember nobody likes to be sold something but everybody likes to buy something.

Write that report or have a beer on the deck

Working from home has become somewhat of a standard these days and for many people it is a stark new reality. The discipline required to work from home is not normally something that many people are born with. The idea of waking in the morning and beginning the 1-2 hour craziness that we call “getting ready for work” has essentially acted as a switch that causes us to leave the comfort of home and enter work mode.

Once at work, everything around you fosters and screams, in the eloquent words of Bill Belichick, “DO YOUR JOB”. On the other hand when working from home, you are afforded many luxuries not available at the office like working in your underwear or your inviting deck on a beautiful afternoon. This environment is the antithesis of the office and fosters relaxation and/or a chore list. The question is how to combine the motivation that the office has with the relaxation of your home and still be productive AND relaxed.

From Business News Daily:

Many employees and business owners alike have been working from home for years, thanks to developments in tech that make remote work possible. For a growing number of Americans, this is the norm. Now, amid the recent COVID-19 outbreak, most companies and their workers are following suit, raising the question: Is this working arrangement a productive one?

A 2019 survey by Airtasker says yes. Researchers polled 1,004 full-time employees throughout the U.S. about their productivity, their commutes and other facets of their lives. Among that group were 505 people who worked remotely. The study found that working from home not only benefits employees by eliminating their daily commutes, it also increases productivity and leads to healthier lifestyles. It’s a win-win situation that workers relish for its flexibility – but often at the cost of their work-life balance.

Take a look at the following statistics from Inc. Magazine:

  • As reported in 2020, 5 million employees (making up 3.6% of the entire U.S. workforce) work from home for at least half the time.
  • The number of regular telecommuting employees (excluding the self-employed population) has grown by 173% since 2005.
  • The number of employers offering a work from home option has grown by 40% in the past 5 years. However, only 7% of all employers in the United States offer work from home flexibility.
  • By 2028, one study estimates that 73% of all departments will have remote workers.
  • Two-thirds of managers who offer telecommuting flexibility report that employees who work from home are overall more productive.
  • Larger companies are more likely to offer telecommuting flexibility than smaller ones are.
  • Employers offering at least part-time telecommuting flexibility collectively save $44 billion each year.
  • According to one study, remote employees work 1.4 more days per month than their office-based counterparts, resulting in more than three additional weeks of work per year.
  • 29% of remote employees said they struggle with work-life balance, and 31% said they have needed to take a day off for their mental health.
  • One of the most effective ways workers can stay productive is by taking breaks throughout the day. The Pomodoro Technique is one such method for employees to decompress for a moment and come back refreshed and ready to focus.

As you can see, working from home tends to allow for more flexibility and relaxation. But here’s the rub – Many people working from home tend to find themselves falling into the “work-a-holic” mode and never find an exit strategy for the day. As I wrote at the beginning of this post, the morning craziness acts as a switch that tends to indoctrinate you for your work day. Conversely that ride home and end of day activities helps decompress and allows you to enter the home mode.

When working at home, you do not have these “switches”. the day blends together and creates a very confusing brain pattern. You hear the children playing or your wife talking on the phone but yet you are in the middle of writing a financial summary and you’re brain is caught between two worlds.

Here are some tips for working at home and getting the most efficiency from your workday at home:

Allot a portion of your home for work. Perhaps a spare room or space in the basement or garage. When I started in business almost 30 years ago, I had a very small home with young children and actually converted a 6×10 shed into an office.

If at all possible, do not make your bedroom a part office. This is your sanctuary and you place of rest. If the last thing you see before climbing into bed is your desk filled with incomplete projects, you will tend to have a very unsettled night.

Taking breaks is critical. You are at home, enjoy that freedom and your space. This is your castle and your office is borrowing space from it not the other way around. Enjoy it, push away from the desk at least once an hour and go get a glass of water or refill your coffee and while you are away, enjoy and take in what’s around you – your castle. It doesn’t matter how big or small your castle is, it’s your place of rest and refuge and a spot that you and your family come together.

Be sure to make a distinction between home and office. When you walk away, whether for a break or for the day, be sure to leave it in the office. Conversely, if you are struggling with a challenge in the “office”, many times by walking away and clearing your head you may gain more clarity of mind an be able to solve that problem better because it’s far easier to find peace and clear your mind at home than at the office.

Don’t deny yourself. If the lawn needs to be mowed, go and mow it. If you come out for a refill of coffee and the kids are playing in the yard and you are yearning to participate, go and play with them. If your wife is sitting on the deck taking a break, join her. You have flexibility now and the opportunity to make up the time away. Don’t let your time away become too plentiful but just make sure that you don’t build up a resentment to all that’s going on around you.

Be very attentive and respectful to superiors and co-workers. Understand that during the workday your job is your job and when things are a bit quieter, you can also be quiet. When there are time lines and deadlines make sure that you are not operating on the Pain versus Pleasure principal that I spoke of in a previous post. Like most things in life, working from home required a balance but also a discipline to get the things done that are necessary to complete and do them in a timely manner. If someone is waiting for you to complete something before they can move to their next step, accommodate them and move things along.

All in all there is no secret to effectively working from home. Your efficiency and productivity should increase and your piece of mind should increase exponentially. If this is not the case, re-read this post several times until it clicks.

I called the Vice President but still no decision…?

Sitting at your desk ready to make some calls and land some appointments but not sure who to call, general manager sounds important right? Wrong! If you are not calling the owner or someone with true authority then you are waisting your time and theirs. Sometimes these middle level employees are tasked with finding a product like the one you are selling so it is important to impress everyone you speak to but nonetheless they are still a gatekeeper.

Oh the dreaded gatekeeper, but this one is disguised as a Vice President or General Manager…? Yes, sure you have the traditional gatekeeper that is the receptionist or the Owners assistant but you also have another level of gatekeepers. Sometimes the first set, secretaries, will transfer you to the second layer, Vice President/Manager. 

This second set of gatekeepers can be far worse than the first set as they do have some level of authority. The problem becomes that you do not know what level of authority they have. Often times in a company there are a lot of people that have the authority to tell you no but very few that have the authority to purchase or say yes. Two bad outcomes can occur when transferred to mid level management:

  1. They automatically tell you no 
  2. They graciously have you in for a meeting, many meetings and string you along only to find out they can’t make the decision

Far too often when prospecting, sales personnel get put in the “friend zone”. They go out on sales calls quite often and are very like-able people but because they are visiting prospects so often the middle management actually becomes friends with them. Not to say they are taking advantage of you but ultimately if you don’t have a decision in 3 meetings they are probably not going to buy from you. Send them a birthday card or drop by once a quarter to keep the relationship alive in case something changes but until then don’t waste your time.

A few years ago I was prospecting this decent size account that my boss had worked on a few years prior. He warned me that the owner liked to talk and didn’t like to make decisions but as the cocky salesperson I was I figured it would be different. After about 6 months of driving out there, taking him to lunch, and bending over backwards to get his questions answered he finally agreed and signed the paperwork to offer our products. The only caveat came when I returned to do the install and introduce the new products, processes, and systems none of the employees knew that the decision had been made. It was introduced with much resistance (Because there was no owner buy in) and moving forward the sales team would quote both companies (My products and the competition) and sell whichever was cheaper. Safe to say that my commissions did not equal the time that I put into the account. Some prospects are just not worth it. But I digress.

Now it is tough to find out who the true buyer is because when you are working with a small company the Vice President may call all the shots but when calling on Morgan Stanley, where everyone who owns a suit gets a VP after their name, it becomes a bit more difficult. To find out who if person is a true buyer you have to use your sales reasoning to feel the buyer out as you are conversing and more importantly after a short initial pitch or fact finding meeting be sure to ask if anyone else needs to be involved in the final decision. This question is so valuable and far too many people fail to ask it. Who knows maybe the company has a silent partner that you have never heard of. 

2 years ago I was called in to one of my accounts to do a “recap” on some material that we had gone over the month before. When I get to the account there is a gentleman there that I had never met, seemingly calling the shots (I had this account for 18 months at this time) and began to instruct me to perform a presentation. I stopped dead and said “excuse me sir who exactly are you?”. Well as it turns out he was the owner… nobody told me that the general manager (who I thought was the owner) had been given officer authority and was able to sign the documents. Always ask if there are any other decision makers involved as it is never fun to be blindsided. 

When speaking with company personnel remember that there are many people inside that are able to say no to you but very few that are able to say yes. Do not waste time trying to get to the decision maker through the middle management. If you are confident in your abilities/products then you deserve to speak to the top. Conversely, if you are self conscious regarding your ability then you will think you are not worthy of speaking to the true buyer and next thing you know you are “friend zoned” by middle management, spending a fortune on lunches for commission that is likely never coming. Next time you are about to make a sales call and you are choosing between calling the General Manager and the owner, be confident and call the Owner. 

Pain or Pleasure??

There are primarily two motivating factors in our lives and they are pain and pleasure. I know this may sound a bit risque but it’s true. We will always gravitate to either pain or pleasure depending on the circumstances.

I know you are asking yourself, “where is he going with this??”. Pain and pleasure are the most motivating factors in a persons life. We are motivated by each of them every day. It’s important to understand that both can be shrouded or disguised in a myriad of ways but the bottom line is that pain and pleasure pervade in our lives numerous times each day.

Webster defines motivation as:

The reason or reasons one has for acting or behaving in a particular way.

I am certain that I don’t have to define pain or pleasure but it’s not what you’re thinking. Being motivated by pleasure is a pretty easy concept to grasp. We are motivated to go to an amusement park because we know it will be a great time. We are motivated to be with our children because of the essence of time and often enjoy the goofiness that a child offers and inspires. We are motivated to pack for the trip you have coming up because we are excited for the new experiences that are soon to come. Pleasure is an excellent motivator and often prevails over pain. Innately, we gravitate towards pleasure as a first instinct and fall back on pain only if absolutely necessary.

With that said, pain is a very strong motivator and is the result of spending too much focus on pleasure. An example of the imbalance of pain and pleasure would be, snoozing the alarm clock until you realize that you have a meeting in 30 minutes and you will undoubtedly be late, now that pain of being late becomes the chief motivator and far outweighs the pleasure of lying in a warm comfortable bed. Another example for the golfers out there, it’s too painful to write that executive summary or blog post because it’s more pleasurable to be on the golf course. Now you are on the 18th hole and you realize that that report is due in the morning, you must now race back to the office and begin typing like a crazy person – motivated by the pain of not getting your project completed in time and suffering the consequences.

Although pleasure is magnetic and powerful it is somewhat ephemeral if not balanced with the thought of the pain. Notice I typed “the thought of pain” and not the actual pain. In a combat situation there is a phrase and it’s Left of Bang. If we consider that there is a time line in front of you and at the center of the timeline we have a large red circle. Let’s call that circle “Bang”, anything to the right of bang is very bad and not a place we want to be. It means that we are now in crisis mode, the threat and danger is now. You are now in a situation where you are implementing damage control and trying to create order from chaos. You can no longer be proactive, you can only be reactive. Let’s face it, nobody wants to be right of bang. Right of bang is pain.

The alternative to being right of bang is obviously left of bang. This is where we all want to live and operate. It is a far more peaceful, manageable place to be that allows for far more fluidity. There is a very important tactic that you must possess while left of bang, you must be aware and watchful. The closer you get to bang the more you must be aware that the balance is off as you can very quickly enter into that unpredictable and chaotic stage of right of bang. When you see that big red circle coming your way, pump the brakes a bit and refocus your attention on those things that will keep you on the left side of that circle.

Have you ever played that game Labyrinth? It is a square box with a maze in the middle and you can control the equilibrium gently moving a small ball towards your desired destination. Well pain and pleasure, left and right of bang, and Labyrinth all follow a similar strategy. Labyrinth is not that difficult and can really be completed by anyone. All they need to do is go slow, pay attention and be watchful of what’s ahead of you.

Being motivated by pain is not where you want to find yourself on a regular basis and that’s why being mindful of what’s ahead of you is important. We can create a balance between pain and pleasure and it’s that balance that creates efficiency and high productivity!

Be sure to be alert and watchful, make sure you are looking for the holes in your maze and take the necessary time to navigate each day being mindful of the pinnacle between pain and pleasure. Thats the big red circle I call bang. Each day we consume ourselves with countless tasks and projects quickly finding ourselves in the big red circle. Watch, listen and slow down. Your days will be much more productive.

The Knowing Doing Dilemma

Everybody needs training. It is not something to be ashamed of or something to shame. That is just how life goes. In fact, you are really hurting your company without implementing formal training (As I have discussed before). A recent study from the Association for Talent Development (ATD) shows that companies that offer comprehensive training programs have 218% higher income per employee. Pretty staggering statistic. So that makes it pretty clear that training is not something that should be looked down upon but rather awarded.

The truth is, it does not matter what you are doing even something as mundane as turning on the TV, someone once showed you how to do that task. Most skills are not inherent, they are learned. Sure, you may find that some people have innate skills that make them better at something but they still have to learn. Michael Phelps, for example, is an excellent swimmer and truth be told he probably has the correct body frame and special abilities that made him the swimmer he is today. With that said, he still would have drowned as a child if nobody ever taught him how to swim. Inherent skills are useless without proper training.

When we get into work related tasks the training becomes far more important, comprehensive, and beneficial (as shown by statistic listed above). After all, the success of the employees affect the success of the company. Training sessions can be long in duration and even lasts months at a time. If you have implemented training processes at your company or you work at a company where there are solid training processes then bravo to both of you. Give yourselves a pat on the back, because this is a critical step to the success of your career and your business. 

Now to get to the crux of the blog post, Is it a knowing or a doing problem. A few years ago I was approached to work with a manager at a medium sized business in Maine. The manager was directly tied to the sales flow and interacted with customers on a daily basis. After reviewing their sales process it seemed that the process and their training was actually pretty solid. I told this to the owner and he assured me that I must be wrong because the sales numbers were drastically lacking. I decided that I wanted a closer look at the manager so I put on my customer hat and role played with the manager. I could not believe how proficient he was with the material and process that he was taught to perform. Some of the best word and thought track performances I had seen. Perhaps a little shaky, definitely not a natural salesmen but nonetheless should be performing well. This illustrated to me that the issue with this business was not the process or the implementation but rather the personnel.

Allow me to elaborate. When I am asked to come into a company and work with their employees I am always looking to answer one question. This one question is not difficult to answer and is actually quite simple. It can usually be evaluated in as little as ten minutes even if I am unaware of the context or subject for which I am implementing the process. The question, “Is it a knowing or a doing problem?”. This critical step in my process was established from that training consultation just a few short years ago. This is why it is so critically important to follow the ABLE mentality, Always Be Learning – Evolve. We will be having a blog post on this in the coming weeks but I think you can garner the general message.

The manager from my story above demonstrates that the he knows the process but ignores it when with customers. This is the crux of every process implementation. When you are looking to implement change be sure to do so in a manner that allows for sufficient training. If the change is encouraged through constant training but your numbers are lacking, you can rule out the knowing problem. If it is not a knowing problem and the employee is resisting the change then it is a doing problem and you likely have a disgruntled employee on your hands, time for an Intimate Negotiation

Basically, to break down the two aspects, a knowing problem simply means that the person does not know how to perform the task. Perhaps they were thrown into the job with insufficient training, or filling the shoes for somebody who quit. This is a good problem as it is a fixable problem. Likely, with a knowing problem you will actually have a happier and more productive employee once they have received the training that they so desperately need.

The alternative to this is the doing problem. This means that the person is aware of how to do the task the way it should be performed but chooses to do it differently. This could occur for a few different reasons; upset with a manager, thinks the process you are implementing is stupid or takes longer, or thinks that their way of doing things is ultimately better. This is not the mindset that you want for an employee, they need to get on your bus. These are the employees that we have to worry about, now they may not be gone altogether but it is time for an uncomfortable conversation. I recently posted a blog post on “The Intimate Negotiation” this is what I call the uncomfortable conversations that need to be had in the workplace. This could be between Employer and Employee or vice versa and even among peers. Take a peak if you feel that it may be time to have one of these uncomfortable discussions.

Bottom line is whether you are an employee or a boss be sure to ask this simple question to see what the status is on the job being done. If you are the employee resisting change, ask yourself why. Typically, people far smarter than any of us came up with the process you are being taught.

The Intimate Negotiation

It does not matter what you do for work or what position you hold in the company, there will be a time where you have to have one of these “intimate negotiations.” There are a couple of times when these conversations occur, of course dependent upon your position within the company:

  • Salary negotiation upon hiring (both employee and employer) 
  • Conflict resolution among coworkers 
  • Dealing with a disgruntled employee
  • Dealing with a demanding boss
  • Asking for a raise 

The list could go on for a while but those are the general basics of when a tough discussion would occur during your working years. These conversations are bound to happen so no sense in trying to avoid them. If you have never had one of these conversations, then you probably fall into one of the following categories: underpaid, overworked, running a failing company, being extremely inefficient, or altogether working or running the wrong company. 

Like every good relationship you need solid communication. Without communication, you are not able to achieve win-win negotiations (See post on Negotiating a Win Win). That is all these tough conversations really are, intimate negotiations. I think often times we are comfortable with performing negotiations with our customers or when it comes to purchasing something, such as a car or house, but when it comes to people that we work with every day whether employee or employer, it is more intimate and that is where the innate problem lies. 

There are really two situations for which the intimate negotiation occurs as an employee. The first is with superiors and the second is with peers. As an employee, remember that you are a valuable commodity — you would not be sitting wherever you are sitting if you were not. You were hired because they wanted you there, now it is time to start acting like it. I am not saying to walk into your bosses office and demand a 200% raise because that probably will not work but you most definitely need to stand up for yourself. The only thing that is being hurt as a result of lack of communication is you. Eventually, of course, it will affect your work and the employer might be the one having the conversation. The phrase I like best when approaching these situations goes something like this, “If you want me to be able to perform my job to the best of my abilities I need not be worrying about money. This means that I need X, Y, and Z.” When dealing with a conflict with another employee the conversation does not go all that differently. Explain why the negative relationship is affecting your work and how, if not resolved, you will be forced to take it to a higher power. The easiest thing to remember is just be confident, direct, and calm. 

As an employer, remember that your people are your most valuable asset and you must take care of them. However, often times as an employer we think that all of our employees are altogether happy and often times that is not the case. This is why an open door policy, where you can really connect with your subordinates, is so critically important. This allows employees to be willing to discuss the uncomfortable topics with you. Without them, your organization will suffer and duties will be performed far less efficiently. As an employer, the most important conversation, as it pertains to employees, is when you notice a disgruntled employee . This employee may even be one who has simply checked out — a time card puncher, if you will. I just read an interesting book called The Energy Bus and it talks about how everyone who works for you needs to get on your bus, share your vision. When they are not on your bus you need to figure out why and if they are capable of getting on. If not, then it is time to cut ties. It has become a doing problem not a fixable knowing problem (Post Coming Soon on Knowing Doing Problem). 

Ultimately, the point is you need to have these conversations otherwise, your happiness or business could altogether diminish. Be direct and to the point by using “I” statements and always refer back to the company. Remember, this is ultimately an intimate negotiation. 

My sales department is very good… I think

Sales is not an easy profession. It requires training, diligence, patience and above all accountability. All these requirements culminate in a seasoned professional sales person. A sales department may have a handful of these seasoned professionals and some that are learning and some that are brand new. Many times the missing element to a successful sales department is a process and a structure.

I have been working with many sales departments that basically allow the sales people to do whatever they want and there is no accountability for time and process and laziness is ubiquitous. Eventually the sales person becomes fat dumb and happy meeting the status quo and there is no longer a drive or any ambition. They essentially become clipboard order takers – not good.

A company needs a hungry and ambitious sales force in order to grow and stand with or ahead of the competition. This is done with incentive programs, aggressive commission structures, contests and competitive processes. Do you have a sales board in your sales department? Do you have quotas set for the day, week and month? Are there contests sprinkled in from time to time, are you honest about the overall sales numbers? Is there accountability to the quotas with performance reviews, rewards and even discipline if necessary. Are you constantly monitoring production and sales pitches? Are there training programs in place to help educate your sales people about the product, value statements, features, advantages, benefits? Have you trained and educated your sales people on the products and companies they are selling against?

There are many elements of en effective sales department and creating all these elements into a process and then wrapping that process into an exciting and energetic program can help increase sales, commitment, loyalty and moral.