Archives For August 2010

Some follow up comments from yesterday’s meeting with VARs / security resellers in the Bay area.

1. IT people naturally resist sales people who try to move up.  Positioning your technical experts along side IT people can give them a highly valuable connection, one that will help IT people gain the insights they need to increase their own value.  If this relationship holds real value, it frees the sales person to move up.  The IT person will not risk giving up a great technical contact just to block you.

2. Higher level contacts in general, must gain IT buy-in before making strategy technology decisions.  While this is not always the case, there is always a backlash when they don’t.  An assessment does not require the same approval process, making it a better lead in.  Once completed, you have the justification to move other project related services forward.

3.  Every sale should have an end-goal that includes recurring revenue.  Cloud services, hosted services, managed services – all fall into this category.

4. Justification for the recurring revenue portion of the sale should be made through an assessment and justified by risk related issues.  For instance, managed services is presented as a way of maintaining an acceptable level of risk.  When ROI is used, the contract’s life expectancy is much shorter.  Bean counters will be watching this monthly expense closely, and it will be the first to go when things get tight.

Note: here’s a shot from my hotel window in Santa Clara – interesting how things have evolved with Yahoo and Google.  Remember when Yahoo was a hot stock?  What would Seth Godin do if he were back at Yahoo now?  Yahoo would be lucky to get him.

Looking the other way, a shot of the mountains!  You know I’m thinking about backpacking as I sit here working on business items.

© 2010, David Stelzl

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The middle man’s life expectancy is much shorter than you think!  If you are still defining your business in terms of the products you sell, you may be headed for disaster…just calling yourself a consulting a company doesn’t make you one, you’ve got to start acting and modeling yourself like one to succeed in this market.

© 2010, David Stelzl

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Character and teamwork are critical in almost every aspect of life…this past weekend in the Shining Rock Wilderness Area was a great test all around, and a lot of fun!

We started our trip at Big East Fork, west of Asheville NC with loaded packs and an excited team of young entrepreneurs.  This is most of the student body right here, along with their faithful leader (me).  It rained most of our drive up, but the sky looks pretty good at this point.

On the trail, we have about 5 miles to go, starting at an elevation of 3500 ft, going to nearly 6000.  Most of it in the last two miles.  Notice Bethany is sporting her new shock absorbing trekking poles and a new Osprey pack!  A big improvement over the old one.

This trail is full of scenic waterfalls, undergrowth, large trees, and moss.  A great place for picture taking as the trail follows the stream almost the entire way up the mountain.  One caution, the trails out here are not marked so you do need a map and compass if you plan on hiking here.  (It helps you know how to use them).

There is plenty of water as long as you have a means of purification.  Once you leave the stream you’ll need to carry it.  There is a small spring on top, but a pump is almost a requirement to get it into a bottle.  Here is Jonathan filtering through an MSR ceramic filter.

And a few hours later, we are on top!  Shining Rock has a great 360 views overlooking the Blue Ridge mountains, including Cold Mountain at 6030 ft.  We attempted to day hike Cold Mountain on day 2, but didn’t quite make it with the little ones.  The trails were overgrown with stinging nettles and lots of bee infested flowers, not to mention a significant altitude change and limited water supplies.

One great lesson we learned – when we finally reached our campsite on top, and prepared to eat, we discovered that our MSR stove pump was not working.  The gasket in the fuel system had deteriorated and would not build up the pressure needed to move gas to the burner.  Not sure what to do with our freeze dried meals we began to brainstorm.  My 11 year old son produced two rubber bands he had brought just in case we needed them – and we were able to fabricate a make-shift gasket from them.  This actually worked!  Shortly after, we were eating hot lasagna!  Who would have  thought…?

Despite hot temperatures, steep climbs, and a downpour on the last day, it was a great trip.  We learned all kinds of things about plants, stoves, teamwork, sharing, encouraging each other, and much more.  We are hoping to head out again when the leaves are in full color.

We are on day two of an intense business planning session in Kentucky – of key topic that always comes up is, “How do we create business, and do the assessments we’re currently using work for this sort of thing?”

There are three common assessments I see out there:

1.  The vulnerability assessment is most common – a technical paper that identifies as many holes in the security architecture as possible.  The resulting report is generally very technical in nature, product focused (meaning: Network, application, etc.) and appeals to the IT department.  Certainly there is a place for this.

2. The pen test – penetration that is.  A test to see if the assessment team can break in.  This is fun, expensive and obvious…at least to the team.  They can always get in if they’re good.

3. The risk assessment – this should measure the impact of a loss, but equally, the likelihood of such an issue.

The third one is always most effective in building new business.

Preparing for this week’s upcoming Teleseminar on Successful Sales Management, a few random comments from things I see almost every day… (sign up at http://www.stelzl.us/business_strategy_TeleS.asp)

1. Good sales people are entrepreneurs.  They can’t be managed like a team of factory workers.  Keep in mind – high risk, high reward.  Let let the compensation plan do most of the managing.

2. Building on No. 1 – high reward means you are willing to pay them when exceedingly great things happen, so don’t manipulate the pay plan, claiming they are making too much.  High risk (required to receive the reward part) means, when things don’t go well, they don’t make money.  It’s not your problem.

3. Complex compensation plans drive sales person into hours of meaningless research and number crunching.  They lock up the entire selling process.  Keep it simple.

4. Smart sales people are going to sell things that pay well.  Stop telling people what to sell – instead, design your compensation to drive the behavior you need.  This requires focus and a clear understanding of what needs to be sold.

5. Quota is not a tool for controlling how much people make.  It’s a gauge, letting you know if people are hitting the number required to stay.  Compute quota based on necessary performance, then design compensation to pay big on the things that are worth paying for.  E.g. Accelerators are great – but set them above quota if that’s where they need to be.  Don’t raise the quota just to make this year harder than last, instead raise the accelerator.  If people don’t make quota – send them on their way.

6. Don’t create two goals for any one person.  Selling is hard and requires focused effort.  Give a person one thing to aim at that will then drag many things.  That one thing becomes the strategic objective around which the compensation plan hinges.  This leads to successful selling.

7. Most meetings are a waste of the sales person’s time.  On the other hand, you need to know exactly where the sales are, the timing, the numbers, etc.  Let your CRM tool manage this and require your sales people to keep it up to date.  This is one area where micro management and penalties may apply.

8. Sales people are consummate negotiators.  Stability is required to create a strong sales team.  Set your “well thought out” plans in place, have a great, well constructed compensation plan, and hire people a great character.  Set things in motion and stick to them.  If a sale person isn’t making enough money, advise them to sell more or move on.  (This assumes that you really do have a well thought out plan).  Change leads to more thrashing.

9. Don’t accept a personal plan that compensates you more for selling then managing.  This leads to failure as a sales manager and is destined to lead to your own termination.  Negotiate your plan up front to focus on multiplying the sales of your team by working alongside them and relieving them of any and all distractions from selling.  Most sales people spend a solid 90 minutes a day selling.  Imagine if you could help them double this!

10. When new hires come on, ride with them, mentor them, and make sure they really know how to get started. Most won’t, but a little direction will go a long way.  If you’re too busy for this, it’s the wrong time to be hiring.

© David Stelzl, 2010

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Interesting article today related to my ongoing theme and future book on Raising Entrepreneurs.  Writer Jeff Opdyke (so close to John Updike he was destined to write!) comments on his thirteen year old getting a job.  Actually it’s a great write up as he contemplates the reality of teaching his young ones how to work and instilling some kind of work ethic.  The disconnect comes with thinking work is somehow a deterrent to having a great childhood!  Nothing could be farther from the truth.  The problem here is that we’ve associated work with jobs at a fast-food restaurant or blue collar operation.

Sure, not every child comes from a family where opportunity is readily available (although many can make it happen if they really try – most won’t)  But certainly John’s do.  Stop thinking about work as something a teenager goes out to do and start thinking more in terms of the entrepreneurial experiences available along side a parent or sibling.  The writer actually comes close to making the right connection when he references the traveling and learning experiences his thirteen year old is already engaged in.  Think outside the box.  What can he do to incorporate this child in his own work in a more profitable way?

We’ve created worldview that assumes all well-off families have children that will follow suite without experiencing the work we did to get here.  That’s just wrong.  From there, we assume that teen years should be spent playing ball, and then somehow, magically, one is transformed in their college years, into a hard working, creative entrepreneur.  This is also not true.  The time to start is now!  In those early years, finding exciting ways to make money.  My kids are bee farming, building things, creating jewelry, building blogs and websites, and writing books.  They are making money through their own creative efforts, and daily, they consider how else one might creatively start a new line of business.  It’s a game in a way.  What need can I meet, and how can make it a win/win that produces profit for me and value to my clients?  Are they somehow missing out on a great childhood?  I doubt it.

You can read John’s article here (and I do recommend reading it): http://online.wsj.com/article/SB128121678189825407.html?mod=iGoogle

IT people continue to say they are covered while SMB business owners continue to operate with little to no security.  In many cases there isn’t even a tested back-up in place, yet they assume there is no immediate risk.  They are wrong – this demonstration of the recent Blackhat ATM hack is just one more example of how the “good guys” build systems that should be safe, only to find that hackers can eventually puzzle their way into the most secure systems.  If Barnaby Jack can do this, what can a worldwide network of cooperating hackers put together?

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