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Inside Sales Management

To understand sales, you need some psychology

To understand sales, you need some psychology

There are loads of books out there about sales. I was fortunate last year to have breakfast with the author of the best selling sales book of all time, Jeff Gitomer, who wrote ‘The Little Red Book of Selling‘. Jeff has an awesome ego, as one might expect, and was wonderful company. He cooked me a mean breakfast, and took the mickey out of me because I took milk in my coffee. He was exactly as I had expected, multiplied by six (as Megamind might say.)

Books on how to sell – there are a plenty. But there are few books on how to manage sales people inside a business. The best of these is Mark Wilensky’s 2006 ‘Inside Sales Management‘. Wilensky’s techniques explain how best to manage the sales manager, the team, and how they should respond to clients. Much of it is formed from the study of psychology.

Mark’s main point is that you need to grow your sales team to grow sales. Training in this never stops.

We start with a premise that we have three states – Parent, Adult or Child. We flit between these in nano seconds, and how we respond in various situations is governed (and explained) by which ‘state’ we are in.

  •      Parents say things like ‘you should
  •      Adults say ‘I think’
  •      Children say ‘I feel

You don’t want your sales people to be in the child state. A child can either be rebellious (manipulative, shrewd), natural (wants to play) or adapted (changes behaviour to fit in).

Nurturing parents are liked, but don’t close many sales.

The best sales managers know when to use their ‘critical parent’, ‘adult’, and their ‘nurturing parent’ state. If you want your sales team to grow, stay out of the ‘critical parent’.

Example – a client makes your sales person feel threatened, that sales person may fall into their ‘child’ state. It’s important the sales person stays in the adult, as the child can get stressed, whereas the adult skilfully navigates the otherwise stressful situation. There’s no such thing as a stressful situation, says Wilensky, there are only stressful or non stressful reactions.

The worst sales person blames the outside world (the economy, the competitor, the client…). It’s a childlike response. It’s commonplace. The best sales people realise they can affect change. When talking to a stressed out sales person, make the conversation adult to adult. What do you think? Keep away from emotions (child), stay rational (adult). If they get defensive, they are in their child, so snap them out of it. If they notice you getting critical (parent), then they must stop you!

Giving away discounts too easily smacks of need for approval (nurturing parent). Help them move together. Fear of cold calling is akin to a child’s fear of strangers, so reward them after they have done their cold calling. Take the emotion (fear) away.

Managing your ‘child’ sales people is a matter of identifying who is who. The ‘rebellious child’ is creative and manipulative. You can have fun with them, but there’s a limit. They are after short term wins, and will bend the rules. They could be playing you. It’s the most challenging personality type to manage. But they can get great results, although rarely long term.

Generally, a nurturing parent is better than a critical one, and a rebellious child is better than an adaptive one.

There’s a continuum from being too weak (wimp) in sales and going too far (overly aggressive, putting off clients and sales). On this continuum, you want your sales team to be nudging the ‘going too far‘ end of the spectrum, without going over the line. What seems ‘too far’ today may be perfectly normal tomorrow. Moving to the ‘too far’ end is the direction you should be taking them. Remember what you were doing 5 years ago, and where you were? What about 5 years before that? Could you have imagined 10 years ago where you’d be 5 or 10 years on? You need to keep pushing to get progress, says Wilensky.

The client will always throw things back at your staff, and you can train them to give better answers so they retain their poise when, say, the price is objected to, or the disadvantages of your solution, or the strengths of a competitor or some misinformation about your own services. Spend time in workshops talking these through.

Excuses prevent growth.

Often the client will sell an excuse to the salesperson, who in turn sells it on to the sales manager, who then sells it to top management. Excuses come from the child, not the adult.

Example – the client says they do not have the budget. Your reply is then, ‘Imagine you had the budget, would you then buy the solution?‘. This takes the client out of their child and gets them firmly into adult (thinking). From there it’s a short step to ‘Well yes, of course I’d love to do it, if I had the budget’ and your reply ‘Well, if you see value in our solution, then it’s just a matter of finding the budget and we’re there.’ Reiterate the benefits, get them thinking about the purchase having been made, and the benefits that would accrue, and the growth they would enjoy as a result. Job done.

All growth takes place in the adult state. If you’re a child, you cannot grow. It’s recognising these states, making the change, and then the sale becomes easier. Stop taking excuses, they are outside your control and come from the child. Be firm.

Run through meetings your sales members had with clients. Ask them what they think happened. What went right and what went wrong? Ask why? (how do you know?) Keep them in the adult at all times. Thinking, not critical, no excuses, no judgement. Finish with lessons learned.

Practice this with the team, use role play. How can you deal with tough questions and stay calm? In the adult. Sales people will either show real signs of growth or fade. Poor ones need to be dropped if they can’t change and grow. Medium ones might be worth the investment and time. If the C & D performers can becomes Bs and maybe even As, then morale in the team and whole company improves.

Practice has to be brutal, they have to fail in front of you, almost fall apart, and then be put back together. It will make them better for the tougher questions and clients. Role playing has to be seen as preparing to win. Let’s learn together. It’s OK to be uncomfortable. That’s why we practice. Practice leads to success. (Most will never do this, consistently, so by doing it you are already way ahead of the norm.)

When you are recruiting new salespeople, you need to find someone who can take control, knows the market and product and can prospect. Before you hire, you have to gauge their mindset. They always bring their child with them. You need to find someone who can sell with their intellect (adult), and stays out of their feelings (child). Important characteristics will be poise, strength, can handle rejection, control, dealing with excuses, and is a logical presenter.

Your sales team must has SMART goals (specific, measurable, achievable, realistic, time-framed). These must be tracked, probably within a CRM on dashboards. We can all see them; there are the KPIs around activity (calls, meetings, proposals) and results (closes). If you don’t track or measure it, it won’t get done. Goals are about the future. Forget the past, it’s over!

The most important information you can glean from clients is why they buy from you.

Every time they buy, it’s because there is a gap between where they are now and where they want to be.

When a prospect does not see a gap, they do not buy. Salespeople solve problems, they fill these gaps. So they need to know where the client wants to be, where they are going, or planning, or are wishing to go.

The client has to have a problem (step 1), and they need to be sure that they believe this problem exists (step 2) and want to solve it (step 3).

Too many sales people rush to solve the problem, being the consultant, without establishing that the problem exists and ensuring the client wants to act.

Without steps 1 or 2, your proposal will fall on deaf ears.

Your sales calls and meetings should be all about finding these gaps, and then persuading the client to act to bridge them.

Adult to adult:  (facts)

  • what’s the biggest challenge you face at the moment?
  • what’s your biggest opportunity to grow?
  • who is responsible?

Nurturing parent to adult:   (conversations)

  • how does <this> affect your department?
  • what impact would <this> have on your growth?

Nurturing parent to child:   (feelings)

  • if we implemented <this> how would it affect you?
  • that’s an ambitious target, what happens if you don’t achieve it?

Parent to parent:    (should, ought)

  • how will top management view <this>?
  • if you went for a cheaper option, would you still consider it?

You need to uncover the information in a few of these states, and the sales person does less talking than the client.

Ideally, the client asks for a proposal (you don’t ask to send them one), tells you clearly what their budget is, and when and who will be making the decision.

It’s easy to buy things. Anyone can go out and buy. And when they buy, usually all 3 ego states are used: Parent (we should buy this, it’s the responsible thing to do), Adult (it makes sense for our company) and Child (I like the idea of owning it).

When talking to buyers, it should be a dialogue (50:50 talking each) not a monologue (sales person 80 : 20 client). Often there is a trade off between price, quality and service. It’s unlikely you’ll ever get high quality, the best service and lowest price together. Find out which of these things are most important, so you can trade off the other. If your client says “I guess you get what you pay for” they are there. It’s much better than the salesperson saying it.

Why always drives what. The best salespeople uncovers the client’s why.

Prospecting never ends, and good sales people never stop topping up their pipeline. The rebellious child will put off cold calling, but the adult realises it’s the only way. And it’s not that bad really.

The ‘fear of missing out’ (FOMO) is one of the cold caller’s best lines. People may be busy, they’ve been interrupted, but can they really risk missing out on the information you might impart that could close the gap between where they want to be and where they are now?

Those on the end of line want to know 2 things

  1. What is this about?
  2. Can this benefit me (close any gaps)?

The answers you provide to these will determine whether they will spend the time with you (now or later). Don’t wimp out. Explain the benefits they would miss out on. Hone in on the gaps that will remain if they pass on this opportunity to learn more.

Don’t forget, some of your best prospects might be your existing clients. Have you provided them with all the benefits you can offer? Might there be some gaps here?

Good salespeople who operate from their adult are great at listening, not interrupting, and allow silences for thought. Child salespeople want to talk and talk, and interrupt the adult to get attention. Adult salespeople hear resistance from the client and listen, take it on board, and think. They do not try to score points, they determine what the issue is.

Resistance from prospects means they have either not understood the benefits, or something you’ve said, or are not OK with how you made your point or a combination of these. Good salespeople think ‘how did I allow this to happen?‘ and do not blame the client. They analyse what they said immediately before the objective arose, and their own body language and how they responded.

The worst thing to do is respond with ‘But’ or ‘However’.   Rather than saying, “Yes, our price is high, however…” (which is telling the client they are wrong), you could respond with “Yes, our price is high, and I bet even if price was more in line with your expectations, there would be other reasons that stand in the way, would I be right?”

We’re not trying to prove the client wrong. The client has their own reasons, values and beliefs, which we need to uncover so we can direct our efforts better. The client will resist if you get argumentative, and will feel manipulated. So get on their side, be the nurturing parent in this case. The client may even open up a bit. Once you’ve dug down on the reasons, and answered those in an adult manner, perhaps the price now does not look so bad.

The final point Wilensky makes is that everyone is different, so don’t try the same lines on everyone. Some are more open that others, some are more direct than others.

  1. Bulls (closed/direct) – are domaneering types (critical parents), so keep things concise, on message, demonstrate bottom line results. If you have a 30 minute meeting, take no more than 27. Allow questions, listen. Don’t take any brusqueness personally. Lambs (not great salespeople) can’t sell to Bulls (big ego CEOs and C-suite types).
  2. Owls (closed/indirect) – are cautious and analytical, so be rational, don’t make sweeping generalisations, don’t touch anything on their desk (they’re private), give balance, don’t force a decision, give detail, it’s OK to say you don’t know (but find out the answer and provide it in a timely fashion). Tigers (usual sales types) find Owls (usual technical buyer types) hard to sell to.
  3. Lambs (open/indirect) – are nurturing parents, so listen patiently, empathise, provide solutions that don’t ‘rock the boat’, be soft in closing and indirect (‘your entire company will benefit‘), they may compliment but still not buy, they don’t like to say no. Tell them it’s OK to say no. There are a lot of lambs out there.
  4. Tigers (closed/direct) – are natural extroverts, so make conversation stimulating, they like to talk about themselves, so stories and name dropping works better than analytical reasoning. Allow them the glory of the solution, get them dreaming, but close quickly as their concentration is limited.

So, where are we?

From now on,

  • Consider the psychology of your clients
  • Never present the same way again to all
  • Move people out of their states, as relevant
  • Don’t fall into the wrong state yourself
  • Practice, practice, practice
  • Stop buying excuses
  • Start coaching
  • Set goals
  • Turn sales meetings into psychological workshops
  • Role play constantly, and, most of all
  • Enjoy growing your sales people and your business.
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It’s about the team, not the individual

Pull together as a team

OK, I know I got the whole Chris Gayle sexism thing off my chest recently, but when one of my junior cricketers yesterday was telling me how good Gayle’s recent 12-ball 50 was (… hopefully his final innings at the Big Bash), I had to take issue.

Did his team win that game, I asked?

Err… dunno, but wow, what hitting, I mean, a 12-ball 50! he replied in awe.

But did the team win? Did the innings set up a win, or take them over the line? I said again.

The 11 year old looked at me, puzzled. He was (I think) trying to remember who won that game, and was confused as to why I had not said something like Yeah, great innings wasn’t it?

No, his team lost, I said, so what good was that innings apart from being a celebration of his individual, perhaps wasted, talent? He played 17 balls in total, but there are 120 in the innings, and if he’d faced 40 or 50 of them, do you think his side would have won? 

Now today (this boy was about to go out and open the innings for us), I want you to play for the team. It’s what I always want from my players. The opener’s job is to lay a platform for the rest of the team. To have wickets in hand for the final assault, when overs are running out. OK?

Gayle is an opener. He likes to stand and blast away. Sometimes he comes off, more than often he does not, because he plays with a high degree of risk. He has two shots – one a lofted drive down the ground (which he’ll bring out if the ball is anywhere near him), and the other, a push from the same position for a single if the ball is not in his arc. Or he leaves it alone. Invariably his sides lose. Why? Because his innings are always about him. If he cared about the team, he’d still be playing for his country, the West Indies (where he made his reputation). If he cared about winning games, he’d make sure that when he ‘got in’ and things were coming off, he carried on to post a winning score, or get his side over the line. Not just walk off after a meaningless, somewhat self indulgent thwhack which made headlines for him, but did not allow his team to win an important game.

He’s played for Sydney Thunder in the Big Bash for a few years. They’ve come last for 3 years running, then second last last year. This year they won the tournament, but Gayle had since moved to a Melbourne team, who did not make it to the finals.

Is there a pattern here?

Probably.

Play for the team. Play for the organisation. Play for your family. Play for your community. If we all do that, then we all enjoy much better outcomes.

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Prepare 3 letters

 
On day one in the new job, a CEO finds 3 letters written by their predecessor on their desk.

The first letter is clearly marked “Letter 1 – read this first!”. 

The CEO opens the first letter…

Dear sir or madam” the letter read, “Many congratulations on your appointment. I wish you all the best. I had a great time as CEO but when things got a bit bumpy I found the letters written by my predecessor a huge help. So, if you indulge me I have also written you three letters.

If you find the business is in trouble, please open the second letter (clearly marked “Letter 2″). It will tell you what to do, best wishes, etc etc”

Not long into the job, business started to deteriorate. Months went by and results were not improving.

So the CEO opened letter 2. 

It read: “Sorry to hear things are not going well at the moment. My advice is clear and simple – do what you think is right. Reorganise. Remove some people, hire new ones. Do what you instinctively feel in your gut, and more often than not this will see you through. Oh, and to buy you a little time, blame all your current ills on me. Tell the Board and staff that you will need some time to turn things around. This should work. Oh, and if things ever get bad again or don’t get better soon, open Letter 3.”

The CEO took the advice contained in Letter 2. Some changes that the CEO felt had to be made were done, and the current problems were laid at the former CEO’s door. The Board allowed some time for a turnaround, and slowly but surely things did improve. Everyone, including the CEO was mightily relieved and content.

Sadly though, a year or so later the business once again slid into financial trouble. No matter what our CEO or the team did, things went from bad to worse. Pressure mounted.

Then, the CEO remembered Letter 3. Letter 2 had worked last time, so with great anticipation, the third letter was opened.

It was much shorter than the other two.

Prepare 3 letters,” it solemnly intoned. 

~~

I’d like to draw two main points from this story. 

1. Leader as Hero

Our need to ascribe brilliance to a business leader (Jobs, Branson, Gates, …) due to the results delivered under their stewardship may provide a hero for others to emulate and neatly wrap in a bow the cause for the success. 

However, in an excellent TED talk from Bill Gross, the greatest single reason for business success was found to be timing. Not leadership, or the team, or the product or the business model or marketing or the execution. Just the happenstance of entering a market not too early, and not too late.

Surely those leaders that succeed (even if it was just to time it perfectly) deserve some credit though? Well yes, by definition, to the victor the spoils… kudos, material wealth, prestige and a lot more besides are given to leaders of a successful business. But be careful to lay all the success at the door of the leader.

In the same way a leader may not be able to prevent a collapse in their industry or market, and that’s hardly their fault, they should not be praised too highly if things go the other way. 

2. Blame the Leader

If a football team has a bad run of results, the manager comes under pressure. Eventually, the manager is sacked (few get to retire gracefully) and another one is put in their place. Often, the results improve. Why? Sometimes the change in leader shocks the team into better performances, or it could be completely coincidental (the better results may have been around the corner anyway). Is it because the new leader is a better motivator of the players, or has better plans? What if the results get worse under the new person – do you sack them as well? Or some players?

Getting rid of the leader is one sure way for the Board to say “Look, we acted.” The last person takes the blame, a fresh new approach will take us to the promised land. (Cue 3 letters!)

However, I see the same football managers (who have been sacked countless times previously) get recycled around the leagues like toilet water in Queensland. Are they suddenly better managers? If another team thought they were the answer, why did they not prove it with their former teams? Will it inevitably turn sour at the new club? At least part of this merry go round is a complete waste of time, angst and money.

Of course it happens in politics as much as in business and sport. We tire of our government or Prime Minister and blame all current ills on them. A reasonably well equipped opposition leader (or, more likely, another Minister in the same government) can be presented as positive, shiny and new with a plan to make things better. In time, the public (or party room) is duly won over and the new person “climbs the greasy pole” (as Disraeli once termed it). After a while we get bored of them as their shiny newness pales into dull familiarity. And so it goes … another new Prime Minister, football coach or CEO.

If all this sounds a bit cynical, then possibly it is. 

Of course there are good leaders and bad ones. (Goodness me, are there some bad ones! Sometimes I wonder how some businesses survive, but then again, that just proves my point about the leader not being the be all and end all.) You probably know a few. You may be working for or with one.

Sometimes good leaders are working under incredible pressure. Any CEO in a small not for profit or charity or mining company would be doing it really tough at the moment – have they become bad leaders overnight just because the business environment has turned bad or the iron ore price has tumbled? Others might be steering a plum organisation that is soaring due to a commodity price upturn or industrial popularity (think tech business in 2015) not of their making.

I believe a few things about leadership:

1. You can learn to be a better leader. Absolutely. There are books, courses and videos on the art and science of leadership. There are examples to look up to. There is also nothing like many decades’ experience of actually doing it. 

2. Timing is (almost) everything. You can turn circumstance to your advantage (which is what leadership is much about). Be careful to time your run. Know when to stop loss. 

3. Stay close to your staff, and especially your clients. They’ll tell you the most important stuff. The best leaders know this, instinctively.

4. The “3 letters” story above is an old joke, but there’s some truth in it. A leader, a CEO, a politician or a sports manager can only do so much. They can set the tone, direct the strategy, lead the ship and be a figurehead, but often the storms that happen can be all too consuming, and no matter what the leader does, things will out. Playing “Pass the Leader” may make the ultimate decision-maker look decisive, but what skills walk out the door when that happens, and what skills walk in with the next encumbent? Then again, a fresh new start can often be good for all concerned, right?

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Sexism’s about power, not sex

sexist headlines

Sexism is about power: guess which way George Clooney’s marriage was reported?

A sleazy chat-up line live on TV from T20 cricketer Chris Gayle to a female sports reporter was all the news this week, but in all the analysis, defensive and offensive, something seemed to be missing: a clear definition of the crime he was committing… Sexism.

Sexism is prejudice, stereotyping or discrimination against women, on the basis of sex.

What is missing from this definition is the background: power usually rests with the men, and they use this power to keep women down (whether deliberately, accidentally or by design). They do it in the workplace, and across many industries, and have done so since time immemorial. It does not make it right, but it’s still happening. For the past two decades, women have been paid about 83% of what men earn across the nation. Women tend to be pushed into the lower paid, usually temporary or casual ‘caring’ industries, find it difficult to climb the corporate ladder (only 17% of CEOs are women) and make up a small minority of senior management and Boards. They rarely find positions of power. And when they do, they can be subject to further torrents of abuse. Think Julia Gillard.

In the same way ageism is not about age, it’s about power, and racism is not about race, it’s about power, so sexism is all about power, and not about sex.

Gayle probably clumsily thought he was being ‘sexy’ (not sexist), and possibly funny. He laughed it off at the time (laughter probably through embarrassment at the way Mel Mclaughlin visibly recoiled to his unwanted advances) to which he then quickly followed with a “Don’t blush baby”, further demeaning his victim. Live on TV. She had the presence of mind to say strongly “I’m not blushing” and ended the interview as soon as she could. Within a few minutes, the three (always male) commentators in the box apologised to the audience for Gayle’s comments, and nobly stuck up for Ms Mclaughlin.

The following day Gayle was fined for “inappropriate comments” in what his club called a “one-off incident”. Yet within hours many other people (not only women, but also fellow male players) came forward recounting stories of similar, if not worse, behaviour from the West Indian, over many years. Others in the media felt he should be banned, at least for one game, never invited back to the Big Bash (due to the shame he brought on it) and that a $10,000 fine was immaterial to the multi millionaire player.

Gayle, rather begrudingly, apologised at a hastily arranged and very swift ‘doorstop’ at the airport that day, which Ms Mclaughlin accepted, yet he then posted an Instagram photo making light of the affair.

He clearly hadn’t learnt anything. If you want to judge the man, look at it his Instagram account… or rather don’t, as it’s just a stream of selfies of him beaming with shirt on, shirt off, in various locations around the world, bling shining. You get the picture.

Typically, a backlash then came from those who thought this was all too dramatic a reaction to what was a ‘joke’, a ‘lighthearted moment’. Are we becoming ‘too PC’ now, bleated some? Some other Gayle apologists even claimed the situation was ‘cultural’. Puhleeze. Gayle is a man of the world, and in any case, wherever you work, you have to be aware and sensitive to its own culture. You can’t impose your own.

Sadly, Ms Mclaughlin’s career will now be known for this incident, not for the work she does and the career she has carefully built to date. To be accosted in this way, live in front of hundreds of thousands, and then repeated for millions more, around the world, will define her. She did not ask for this, expect it, or deserve it. This was her place of work.

And this is where the ‘power’ bit comes in.

In demeaning her as interviewer, and someone who merely has ‘lovely eyes’ and maybe could ‘have a drink later’ with him, Gayle was treating her as someone in a pick up joint, a piece of fluff, not a serious journalist. This was not some sleazy night club. Yet he behaved as if it was. He was putting her down, he was in the position of power, and he was demonstrating that over her. It had connotations beyond the immediate situation. Context was everything. At best it was cringeworthy, at worst it was a totally irresponsible and clear sexist act, and a terrible example to set to those many hundreds of thousands of younger, impressionable cricket fans watching.

The central point is that if he’d done this to a male interviewer, it would not have had the same power dynamic. With the power context absent, there can be no sexism. Women cannot be sexist to men, unless they are in a position of power over them, and using their gender as an excuse to put them down. Sexism is usually inflicted on women, as it’s the men who usually hold the power.

People who refuse to hire or promote someone simply because they are female are abusing their power over them and discriminating on grounds of sex (= sexism), in the same way someone who refuses to hire someone merely because they are too young or old are being ageist (assuming age is irrelevant and the person is suitably qualified), or purely on racial background are being racist. This is illegal! And rightly so.

Gayle obviously doesn’t get this at all, even after all the reaction to the incident. In fact, although he will probably be more careful in interviews in future, I bet this has hardened his views, rather than taught him an important lesson. If I’d been his boss, I would have immediately banned him for a game, and put him through some training which clearly taught him what sexism was, and why people were outraged. If he’d then shown humility and understanding, I would then re-engage him for the rest of the season (although his team probably only has 2 more games left in any case). I doubt I’d ask him back the following year.

Context is King

It is clear that the women have been held back in almost entirely male orientated industry (female sports journalists are relatively few and far between) and a sport that has been almost completely male dominated for 150 years (women’s cricket is only now slowly gaining some acknowledgement). Women journalists and cricketers have to put up with incredibly oafish behaviour (again, demeaning, which is designed to keep them down) that their male counterparts would simply not have to endure.

For more excellent analysis of this situation and examples, read this from Marina Hyde or this from Russell Jackson in the Guardian this week, and this from Cricinfo’s Raf Nicholson (written in 2014).

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Promoting the positive force of business people

Australians of the Year

For the past 55 years, every Australia Day, the ‘Australian of the Year’ is announced, usually by the Prime Minister in a ceremony outside Parliament House. It’s become a major occasion, and is televised.

The Award was originally designed to bring some deeper meaning and a focal point to Australia Day itself. These days the winner is picked by the National Australia Day Council (NADC), in order to honour the Australians who make us proud to be Australian.

Glancing down the list of 59 (no doubt worthy) recipients, we see a distinct skew towards Science and Sport ~ with 15 Scientists and 14 Sportspeople honoured. That’s half the total list. 9 politicans & activitists and 9 entertainers make them quite a common category as well … then it’s a bit of a drop off to 4 business people, 3 military personnel, an artist, an author, a Bishop, a Cardinal and a judge. There are only 9 women, so it’s 85% male.

I love my sport like the next guy or gal, but surely they get enough recognition already? And not to mention their many accolades, wages, endorsements and everything else. When 4 win it in a 7 year stretch from 1998-2004 you think things have gone a bit over the top, even considering the sports mad Prime Minister we had at the time. How can you really compare the spray on skin brilliance of a Prof Fiona Wood with a tennis player, or an Indigenous leader with a cricketer?  And why so few women?

If we are trying to inspire our kids, then whose example are we trying to promote? Science is for boys and sports are so important the best ones are to be placed on another pedestal?

All hail Rosie Batty, the 2015 recipient and a campaigner against domestic violence. I’d like to see far more women, and more business people honoured too.

The first business person was Alan Bond in 1978 (oops!), then Dick Smith in 1986. Recently there has been a bit of a rush on  with Simon McKeon (2001) and Ita Buttrose (2013), who were honoured more for their post business work than what they did in business.

4 business people in 60 years? Slim pickings you might say.

Is this the tall poppy syndrome rearing its ugly head? Is it somehow ‘dirty’ to be successful in business? Are we only interested in what James Packer is up to with Mariah Carey, or Clive Palmer’s latest absurd remark? Are there no other admirable people in business who have served their organisations and communities well, creating jobs, wealth and happiness for tens of thousands? Well, yes there are, and I could name plenty. I’ve found the higher up you go and meet people, the more impressive they are. Not show offs, but working people, working hard, with the right attitude to their staff, clients and the community in which they operate. Most of them quietly get on with it. They give back in bucket loads. They pay a lot of tax, as do their companies. They pay dividends.

It’s not bad to be successful, and we should applaud those that are. Those that have worked hard over many decades, created the backbone of the economy, and have made this country the one that simply has the best lifestyle in the world. No exaggeration, even our cities get in the best places to live. And Australia gets even better when you step out of the cities!

So, come on NADC. Let’s see some positive reinforcement of the excellent business people out there. Women and men. Good people who can inspire the young of today, show them they can get out there and do it. Show them that they don’t need to settle. They can build up a  great company themselves. Yes, they can do science and maybe sport or entertain, but equally they can create a whole organisation, or go into one and transform it, building wealth for many (yes, including themselves) in the process.

Maybe not Clive Palmer. But perhaps Michael Chaney, Gail Kelly, Scott Farquhar, Jack Cowin, Stan Perron, Janine Allis, Radik Sali, Carla Zampatti … and many more besides. If you look, you will find thousands to choose from.

0

Being slightly behind can be a winning situation

Churchill

So it’s half time. You are behind by a goal (or a basket, or a stroke …). You take a breather, reassess your situation and fire yourself up for the second half. And what happens? More than likely, you end up winning.

Much has been spoken of the emotional half time Churchillian speech from the coach, an inspired substitution or reorganisation… but the simple fact is that if a team or a group or an individual believes it is just behind, but with enough time left (such as half the game) they can refocus and be motivated to play better and get over the line.

It doesn’t work if you’re way behind. Invariably, people give up – it’s just too hopeless. 5-0 down isn’t much fun. It’s demotivating. But if you’re just behind, there’s a chance, and things can be turned around. You can sense victory, within reach.

Intuitively, this makes sense. We’ve all been in situations (or seen them) when teams have come back afresh in the second half, 1-0 down, to win, say 2-1. There have been (rarer) instances of teams being 4-0 up at half time and then losing it. Ouch. Although I read that Man City has not won a game in 20 years having been down at half time. (Quiet hurray!)

So, the theory is that a team is more likely to be motivated, play better, and end up winning if they are only just behind at half time. In other words, you’d almost prefer the team to be in this situation. Unless their opponents are hopeless or the gap in abilities too wide, teams that are just ahead can stutter, their nerves a-jangle, they make mistakes, play too defensively, and forget what put them ahead in the first place.

So what does the research say? It concurs. Jonah Berger (he of the ‘STEPPS’ Contagious findings) and Devin Pope found in 2011 that if teams thought they were just behind at half time they had a slightly higher chance of winning in the end. Studying 18,000 professional basketball games, they found teams that were 1 point behind won more games that teams that were 1 point ahead. They found that being behind at half time was only half as advantageous as playing at home. And we all know playing at home can be a massive advantage.

Berger found the same results when he put people into a competitive typing situation telling certain groups they were slightly ahead, another they were even, and another they were slightly behind. It did not matter where these people were in fact. What mattered was where they thought they were, compared to the other groups. Those told they were slightly behind massively increased their keystrokes per minute (their increase was higher by a factor of three.)

So, here we are near the end of the calendar year, half way through the Australian financial year. If you’re slightly behind to budget, be fired up for the second half. Spend some time relaxing, getting away from things, and then come roaring back in January to June.

Merry Christmas.

1

No recession for Australia, say the experts

Alan Oster

On Friday I attended an Economic Outlook breakfast, hosted by RSM, with NAB chief economist, Alan Oster. Here are my notes… it’s more positive than you might have guessed (which was the main take away.)

The headline is that there will be no recession in Australia in 2016, continuing an amazing 24 year run for our economy. Basically, mining (9% of the economy) is worse than people think, and everything else (especially services, 50% of the economy) is better than people think.

Globally, world GDP growth should be around 3%, which is short of the long term average of 4% that “the world needs”, but it’s not terrible. Things “are OK” in China and US, and this is important as these two nations drive the world economy.

In the US, interest rates will (finally) rise, slowly, and “it’s about time”. They can’t be zero forever. US inflation is at 1% unemployment is down to 5% (both inside target range).

China industrial output and steel are both down, but services are up. Iron ore and commodity prices are falling as demand is dropping and supply is rising. Iron ore prices are set to go to $33/t (but they were $23/t 10 years ago). China is not about to blow up; the tertiary sector (50% of economy) is growing at 8% a year and rising.

Meanwhile, India is growing at 7%, Japan has slipped back into recession, Latin America is in recession, the Asian tiger economies exhibit weak growth, and Europe is OK but not great.

Here in Australia, “there will be no GDP problem”, as LNG exports are set to add 2% to GDP growth on their own. Growth is switching to services away from mining services. Housing is OK but apartments market is over supplied. The RBA will not cut rates, and are unlikely to be able to raise them in 2016 as they don’t want to worsen the Sydney and Melbourne and property booms.

Mining investment is falling as we move to the export phase. The Aussie $ is moving to 63 – 73c range. The labour market is doing better than predicted, and most of the currency adjustment has already happened. The lower A$ is helping mining exporters (receive a better price).

When we ask businesses about their confidence (“how do you feel?”) we see that it is OK, not terrible but not great either. When we then ask “how are you going?” businesses are actually doing much better than major media reports. ‘How are you going’ is what businesses have done and are doing, not just ‘how they feel’.

The strong sectors are personal and recreational services (30% of economy) and are doing very well. The consumer has money. The Aussie consumer has ability to buy a house, get a lawyer, take a holiday in Australia … and is doing so.

Retail is actually quite good, and we’re in for a good Christmas. WA has good conditions but low confidence. Health and social assistance has added 370,000 jobs in Australia. Manufacturing has lost most ~ 100,000 jobs.

Australia did not save up to GFC but since has been saving and will continue to do so. Their spending “should be” at 4% growth but is at 2%. Property is strong in Syd/Melb and weak everywhere else; which means controlling it with interest rates is impossible. The Chinese are buying apartments that we might think are small but they think are fine, and it’s a safe place to put their money so the Chinese government can’t see it. Expect a marked slowdown but no crash in property in 2016. Perth has already lost the most in the property market in 2015, compared to any other Aussie capital city.

So, there will be no recession in Australia as exports are going to be strong; domestic demand is growing; non miners are doing better than everybody thinks. Unemployment will fall below 6% – the services sector is employing everybody.

Inflation is low – as forecast; which gives room for RBA to cut rates if they need to. But RBA does not want to fire up Syd/Melb property markets. Interest rates rise may rise, but not til 2017 and then only slowly to 3.5% from their current 2%.

Agriculture is a growth industry but is only 1.5% of economy. The “dining boom will not replace mining boom”. It cannot, it’s not big enough.

What would derail this positive view? If unemployment somehow gets to 8.5% we are in trouble. Our debt is serviceable as long as we have jobs; we have 3rd largest super in world; if you counted super (“which I know I can’t!”) then we have no debt. Debt will be an issue if we get into recession, but I don’t think we’ll get there, so we’re fine.

China is the least likely country to run out of cash; so whatever happens they have ability to keep going. It’s hard to think of a scenario that could make China fall over.

For all the slides to accompany his talk, click here

2

It’s Startup Week!

{ View from the panel at Techboard's inaugural meeting: How to get Publicity for your Startup }

{ View from the panel at Techboard’s inaugural meeting: How to get Publicity for your Startup }

We’re in the middle of ‘startup week’ in Perth, with an incredible array of start up events, conferences, hackathons, demo days, meetups and even reports being published (one is already out.) The media, MPs and Ministers are all over it. There’s a bit of ‘bandwagon jumping’ going on, but that’s OK, as long as something now happens to solve the problems inherent in the sector, which have prevented many startups being funded and scaling up.

Perhaps for the first time, you can sense a growing appetite and attention for the sector.

It all kicked off on Thursday night at PwC in the city, where Techboard (the local startup ranking site which, of course , is itself a startup) held its first ever meeting (see photo above), attended by 100+ people listening to a panel of startup folks talking about publicity and promotion. I spied local MP Peter Tinley plus our wonderful Chief Scientist Prof Peter Klinken in attendance, the latter getting up to say “What an amazing sense of relief has come over the country recently… (since our change in Prime Minister)… now everyone is talking innovation”.

Friday night was a get together of the recent Startup Weekend crew, and tonight it’s the pre-OzAPP/West Tech party down in Nedlands at Larry Lopez’s house.

Monday is the full day, of West Tech conference incorporating the OzAPP Awards. Silicon Valley types who love to kite surf have winged their way to Perth and brought with them a bit of Californian fairy dust and cool, with various panels and keynotes on stage at the Perth Town Hall. The ever effervescent US Ambassador (who famously  welcomed people last year at the historic building with a cheerful ‘Welcome to Hogwarts!’ line) will be taking centre stage again this year with a whole morning session entitled ‘The Ambassador’s Innovation Roundtable’. In the afternoon the final 5 in the Asia-Pacific wide OzApps comp will pitch to the judges (including me) and a winner will be announced at the after party that evening.

As if that is not enough, Tuesday heralds a Unearthed demo day showcasing great ideas for the mining industry, which the WA Premier Colin Barnett will be attending and that night is the mass gathering (350 are expected) at the West Tech Assemblage at Government House ballroom, which brings together (for the first time) eGroup, WAITTA, Australian Computer Society and OzApps. I’m privileged to be MC’g this event, with Liberal State Attorney General and Minister for Commerce Michael Mischin addressing the throng, as well Opposition leader Mark McGowan, Chief Scientist Peter Klinken and others. That very night, there is also an Innovation Bay pitch night and dinner taking place.

It’s still not over, because on Weds, Startup WA will officially publish their new report into WA’s startup scene, which will update the excellent report produced by Boundlss (who are also producing this one) in 2013.

And after a week of events, Startup WA have the Assistant federal Minister for Innovation Wyatt Roy over in Perth on 15th December for a Q&A session with Senator Linda Reynolds and Matt Taylor. Wyatt Roy is not just a seriously cool name for a politician, but he is also the youngest ever MP, having won election in 2010 when he was just 20. The ‘baby of the House’ is seriously interested in tech startups, and it’s good to have someone like him so close to power at the top levels in this land.

You can sense that startups and tech and innovation are the flavour of the month, and one wonders if politicians and leaders can grab this opportunity. Will the drastic shortage in funding for the sector be significantly eased? Will we see some tech success stories emanating from Perth? Will would-be angels and investors take the sector seriously and start loosening their pockets?

Can we create a place where people flock from around the world (tick), get funded (errr…) and then see us develop a regional centre of excellence for tech and innovative companies? Maybe this week will be an important step in the road… let’s hope so.

1

Snatching victory from the jaws of defeat

Truman 1948

Last week I spoke about catastrophe theory, and the way things can go belly up pretty quickly, from a seemingly impregnable position. It can happen in business (think Kodak, Blockbuster, Australia Post..) and sport (countless examples – including the French golfer who blew up in the last at Carnoustie in 1999).

It can happen in reverse. From adversity comes salvation. Harry Truman was supposed to lose the 1948 Presidential election, so much so the papers had already printed the front cover giving the election to his Republican opponent Thomas Dewey (see pic above). It was the 5th straight win for the Democrats, after Roosevelt won 4 times then died in office handing the Presidency to a simple Missouri ex-haberdasher. Analysis post victory, put the win down to Truman’s personable and vigorous ‘old-fashioned’ campaign style, which rang true with the Democratic base.

A few weeks ago I played 9 holes of golf at my local public course, Wembley. I’d not played for a few weeks so was not expecting anything. It was a gorgeous spring afternoon, and for some reason the course was half empty. With no one holding us up ahead nor pushing us from behind, we played at our own pace. I relaxed, and shot the best round there, beating 40 for the first time. It was capped off with an outrageous putt from off the green down a slope and smack bang into the hole. The beers tasted good that evening. A week later I was back at the course and could not get within 10 shots of that record. It’s a frustrating game – it keeps me coming back!

Last week my U-12 cricket team, coming off an amazing 335-4 score in the previous game scrambled to 9-76 against a team that I thought was no better than any other team we’d played against. Over confidence perhaps? The opposition were 7-75 after day 1. Yesterday, we continued our innings with only one wicket remaining. I implored the team to bat responsibly, and probably helped by a week off and chance to think about priorities, they applied themselves and added another 51 runs for the last wicket to get us up to a respectable 127. Our opposition therefore had to score 53 with their last 3 wickets to win. We managed to bowl them out for 124, to win by just 3 runs, with a smart gully catch to complete the game. What had seemed hopeless a week ago became possible.

Snatching victory from the jaws of defeat is the most amazing feeling .. in sport, in business… it’s the art of the possible. One important ingredient is never to give up. If you give up, then there’s absolutely no chance.

1

Falling off a cliff

coyote

There’s no doubt that most of business, sport and life generally is played in the mind. What fascinates me are those moments of madness, when what has gone before is seemingly irrelevant, and pressure leads to craziness.

Take the incredible implosion of French golfer Jean van de Velde at the last hole of the British Open in 1999 at Carnoustie. He’d played the hole brilliantly on the 3 previous days. The only difference now was he was playing the last of 72 holes for a major golf crown, and he was 3 shots ahead of all rivals. On a par 4, he could have taken a 6 and still won the title. Maybe that thought crept into his mind as he took a driver on the tee. (A simple 5 iron might have been a better option.) As he put his driver off into the semi rough, the sensible 2nd shot would have been to chip back onto the fairway, chip again onto the green and (at worst) 2 putt for a 5, to win by 2 shots. He chose instead to go for the green over the rough, a pond and various bunkers. His second roared up into the grandstand and ricocheted nastily into some heavy rough, still short of the green. The pond was now directly in front, and those nasty bunkers lay between it and the sanctity of the dance floor. Again, the wiser choice would be to chip to safety, chip on, 2 putt and still win. Sadly, again, he went for an almost impossible flop chip and put it in the pond. Dropping out, and with a penalty shot he was now playing his fifth shot and put it in the green side bunker. He chipped out from there, and putted in for a 7, to go into a 3-way playoff which he duly lost.

What makes someone collapse like this, right at a crucial moment? Why do sporting sides suddenly collapse, in near panic, seemingly snatching defeats from the jaws of victory? On Friday night I watched live as English keeper-batsman Jos Buttler went almost trance like to a hundred off 46 balls, the fastest ever one day 100 (beating his own record by 15 shots). Try as they might the Pakistan bowlers could not put the ball anywhere into a position from which he could not score a boundary, and the harder they tried, the further the ball sailed over the boundary. ‘The wheels have fallen off’, remarked a commentator.

Many a sports psychologist has analysed these situations, and offered expensive advice. Sport is mainly played ‘between the ears’, and those that can get through these crucial, tough moments can be in high demand in a sporting and (post sporting) business life. For in business, calmness when under fire, deftness of touch when all those about you are simply losing it, is perhaps the greatness skill. No one makes sales in a blind panic. Just as the junior cricket team will look to their coach when things are going badly, and the wickets are clattering, so staff will look to the executives and management for guidance and reassurance when things are getting difficult. It’s when the real leaders come to the fore.

Catastrophe theory (which came to prominence in the 1970s) tried to explain how some systems could dissolve to nothing from a seemingly serene equilibrium. How could stock market contagion suddenly take hold, wiping billions of shareholder value in a few hours? How could a building suddenly collapse, having been standing for years? How could Roberto Baggio miss that world cup final penalty goal (as in, miss the goal completely, kicking it into the crowd?)

In these days of fast communications, you can see how economic or business events can take hold quickly, like a wind swept forest fire. The dotcom crash in Easter 2000 or the GFC of Sept 2008 felt like there was free fall in stock markets around the world. Whatever logic had been holding them up had simply vanished in seconds. Some bad piece of news (in the GFC’s case, the Lehman Brothers collapse) had been the final straw that led to a new reality suddenly appearing and everyone running for the door. In the dotcoms’ case it was the popping of the reality bubble that had surmised that all these businesses had to do was grow their visitor traffic and revenues (no worries over losses) and all would be well. As revenues slowed and no profits appeared, the previous wisdom was now thought to be akin to the Emperor’s New Clothes. So many had been naked all along.

When things are collapsing, it is easy to get caught out in all the wreckage. Often we go too far, and markets over correct on the down side. When things are exuberant, they go too high on the upside (catastrophe in reverse). During the recent (2005-2012) mining boom in Western Australia, things got a little crazy for a while, and people got used to the crazy. 18 year olds earned 6-figure salaries right out of school driving a truck on a mine site, while you couldn’t get a tradie for love nor money in the capital city of Perth (they’d all gone up north). House prices trebled. The “cashed up bogan” (CUB) became a worn out cliche. WA people did not like to call it a boom, for bust follows boom, and liked to refer to the situation as the “new reality”. It was not. It was a super cycle of immense power, from which we are still reaping the benefits and will do for some time. Even as the mining growth slows, we are left with an industry in WA three times the size of 10 years ago. It’s not going away. People should not desert mining any more so than when they did during the 1st dotcom boom. You should look in all directions in an economy, because it is wide and varied and complex. But you should also look ahead, not get too involved in the overly short term analysis of those that over shoot one way and the next (blinded by that screaming headline).

Lest you fall foul of the next catastrophe – be in on the golf course, the cricket pitch or in business.