Vol. 11, No. 4 – Mar. 14, 2011

March 14, 2011

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The 8020Info Water Cooler

Highlights from the latest information
for managers, leaders and entrepreneurs

1. Communicating Core Values

If you have a statement of values for your organization — or even an informal set of core values by which you try to run it — you still must translate those values into behaviour. On MichaelHyatt.com, the CEO of Thomas Nelson publishing, Michael Hyatt, outlines six ways to do that:

Live your values: Leading by example is the most powerful communication tool any leader possesses. “While values must be taught, they are more often caught as people observe our lives,” he writes.

Teach your values: Once a quarter he teaches new employees about the corporate ideology. It includes a section on core values, which makes clear what is expected.

Reward your values: Try to notice when people are living out your core values and reward them immediately. Following his firm as an example, you might establish a Core Values Award, having employees nominate and vote on five people who best exemplify your values.

Hire new people based on values: When considering a new hire, look at competence, personal character, and cultural fit, with values factored into those last two categories.

Review people based on values: Devote a section of your annual review process to assessing core values and how the employee lives them.

Let people go based on values: If someone consistently behaves contrary to your values, you have to show them the door — even if they are a star performer. Otherwise, it reflects on your credibility and commitment to your values.

2. Four Things Never To Say While Negotiating

Negotiating can be tricky. Mike Hoffman, editor of Inc.com, suggests you avoid the following words in your negotiations:

“Between”: It often seems reasonable and feels as if you’re making progress to throw out a range, such as “I can do this for between $10,000 and $15,000.” But he stresses the word “between” is tantamount to a concession, and the other party will zero in on the most favourable aspect

“I think we’re close.” Often when you hit deal fatigue, you signal you want a deal so badly that you are ready to settle and move forward. But with that announcement, the other party may realize you now value reaching agreement more than getting what you actually want. They may use that moment as an opportunity to stall, and push for further concessions.

“Why don’t you throw out a number?” It’s tempting to ask the other side to show their hand, but research has shown that often the first number proposed — if it isn’t ridiculous — tends to anchor the negotiation, with the result coming out closer to it than whatever number the other party might have suggested. So offer the first number yourself.

“I’m the final decision maker.” This could corner you at a crucial point in the negotiations, when you might want some time to think through the implications of the proposed deal. So leave yourself a tactical option by indicating that you must consult with others — a key investor, partner, or advisory board, for example.

3. The Four Ways To Capture A Buyer

Consultant Steve Woodruff, on the MarketingProfs Daily Fix blog, says there are four ways to capture him and make him a buyer forever:

Capture his attention: First, you have to be noticed, engaging his faculties and senses — his front-of-mind interest.

Capture his imagination: You need to make him think and dream, using a compelling illustration that will stick or starting a train of thought that builds its own momentum.

Capture his affections: Don’t merely explain, but tell a story, perhaps of someone like him, whose life has been changed by what you have to offer.

Capture his self-interest: All that won’t move him to action unless you also clearly explain what’s in it for him if he buys. “You need to put a spotlight on that, and point it out to me,” he concludes.

4. How To Think Like A Successful Consultant

If you play a consulting role, you might benefit from Alan Weiss’s advice on his ContrarianConsulting blog:

Be clear about your value to clients.

Never assume the client is damaged. The client is smart enough to be talking to you, after all.

Think in terms of speed and responsiveness. Those characteristics display your sense of urgency, character, and professionalism.

Your best credentials are your results. Provide a testimonial from a delighted client and it doesn’t matter what school you went to or whether you have initials behind your name.

Never believe you have the only way. Provide the client with a couple of good options, so the decision becomes “How should I do this?” not “Should I do this?”

5. Zingers

Entrepreneur Scott Scheper urges you to deal with your fears by creating a fear map. List your fears, and then apply logic to identify the worst that can happen (since often it isn’t that bad). Do it on paper, systematically mapping out for each fear what the consequences might be — which should calm you and free you to focus on the task at hand. (Source: HowToGetFocused.com)

Avoid Parkinson’s Law (work expands to fill the time available for its completion): Set a time limit for tasks like responding to e-mail. (Source: Ian’s Messy Desk)

Consultant Bruce Tulgan advises you to avoid “management on the fly,” in which directions from your boss come in the middle of a meeting, sporadic e-mails, or quick corridor conversations. Manage your boss(es) by scheduling regular conversations, once every second day or once a week, in which you can have a productive dialogue. (Source: Rainmakerthinking.com)

Open rates for e-mail marketing continue to decline, due to image blocking, increased use of handheld devices (the older ones often can’t read HTML missives), and list fatigue. Open rates are highest on Sunday and lowest on Monday. (Source: Mailermailer.com)

Consultant Allyson Lewis suggests you commit to reading 10 pages of a book every day for three months. In that time, you can read three books, and perhaps change your life. (Source: Advisor.Morningstar.com)

6. Q&A with 8020Info:
Should I Groupon?>

Question: With the success of Groupon’s online coupons, discounting seems in. Should my business consider this tactic?

8020Info Associate Harvey Schachter replies:

As more and more bargain hunters are discovering, Groupon is a “deal-of-the-day” website that strives to offer unbeatable deals on the best things to do, see, eat, and buy in your own city.

The first thing to consider is the impact on your brand. Discounting with coupons dumps you into the same category as some seemingly fly-by-night operations. Many large, reputable companies, of course, discount their burgers and pizzas, but often there is a sense of cheapness if not desperation that is signalled by coupons. Could that happen with the discounting process you have in mind, and would it hurt what your brand means to key audiences?

The second issue to consider is who might take advantage of the coupons, and do you want them as customers? Some coupon users are folks who are always out for the cheapest deal — yes, they will try you, with a coupon, but they may not be back later at full price, preferring somebody else who will offer a lower price. You probably don’t want to go after those low-price-driven customers, if your intention is to maintain your current (non-discounted) price range.

Some coupon users are novelty seekers, and similarly are poor bets. At the same time, some coupon users are loyal to your competitors, but also willing to test new offerings to see if they are better than the product or service they now use. Maybe you can win them over, for the long haul. If you think the coupon or discount can reach out to a lot of people in that group, induce trial, and potentially gain their long-time loyalty, it may be a wise move.

Two more things to consider first, however. What will be the impact of the discounting on current customers? Are they likely to know about it? If so, will they view it with equanimity, since they want to see you build your business and understand that may involve some deals for new customers. Or will they be angry you are giving preferential treatment to people who have never walked through your doors, while they are long-time, loyal customers?

Finally, what’s the long-term value of a new customer to your business and the cost of securing that customer through the discount? Usually the bottom line on this equation will be positive, but you need to think that through.

In the end, like all business decisions, there is no pat answer, and whatever you choose comes with accompanying risks. It depends on your business, and how you weigh these factors.

7. News From Our Water Cooler:
How Knowledge Gaps Drive Interest

What makes people interested? This week we got hooked on that question in Made to Stick: Why Some Ideas Survive and Others Die by Chip & Dan Heath.

The authors reference screenwriting guru Robert McKee who describes curiosity as the intellectual need to answer questions. Every scene in a story, he says, should have a turning point that hooks curiosity: What will happen next? How will it all turn out?

In 1994, Carnegie Mellon University’s George Loewenstein, a behavioural economist, suggested that curiosity and interest develop when we feel a gap in our knowledge. Movies make us wonder, “What will happen?” Mystery novels get us to ask, “Who did it?” Sports competitions grip us with, “Who will win?” Crossword puzzles challenge us to know, “What is a six letter word for ‘psychiatrist’?”

Merely raising a teaser question, however, may not be enough to drive interest. Made to Stick points out two kickers:

“If people believe they know everything, it’s hard to make the gap theory work.” Just think of a boring story where the ending is obvious or the topic is one you believe you already know thoroughly. To beat that trap, a surprising idea or question must tempt or jar us to appreciate what we don’t know. It must create a gap.

On the other hand, if you know nothing about a subject, how can you have a knowledge gap? “Loewenstein argues that … as we gain information, we are more and more likely to focus on what we don’t know.” That’s the secret behind preoccupation with the last piece of a puzzle, gossip we can’t resist about familiar celebrities, sports colour commentary that piques interest with inside information, and human interest subjects we can identify with (I’ve been in some big storms, but what’s it like to survive a tsunami?).

And if you want to power up interest, the authors say, there’s also value in sequencing information, like an adventurer following an incomplete treasure map, navigating the journey clue by clue.

So here’s our takeaway: Create surprise with unexpected ideas, questions that point to knowledge gaps, and stories that present a series of turning points. Those gaps will help drive interest in your organization, team, products and services.

8. Closing Thought Top

“A good example is the best sermon.”

— Benjamin Franklin