Tomicide Solutions November 2008: Eight Excellence Factors in Information Technology Business Development Departments

By Tom "Bald Dog" Varjan

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I've decided to write this article as a response to a discussion I had a while ago with one of the senior partners of a large law firm.

The partners of this law firm felt they had reached a plateau, and decided to hire a consultant to help to refocus and keep moving.

There was one snag. They ended up hiring a consultant who was a retail expert, and gradually started turning the law firm into a retail shop. You know, Christmas sale, monthly specials and coupon books. It is frightening stuff. This law firm wanted to grow as professional knowledge firm, but this consultant was about to turn it into a retail shop, something like the legal equivalent of Wal-Mart: "Legal services at low low prices."

Can you blame the consultant? I can't. He is a specialist at selling "things" in large volumes and with deep discounts. (Hey, Harrods of London and Wal-Mart don't use the same consultants when they need help, although they both are in retail. They are located at the opposing ends of the quality scale.)

And now he is about to do the same with this poor law firm. Holy sausage, man! The next thing is really flying pigs. Or flying lawyers. Hm.

And although we know that selling high-high in high volume at a deep discount can't build a great high-tech company, many technology business leaders are obsessed with volume. They are crying for more clients and more purchase orders.

What they fail to realise is that more clients and more purchase orders can bring only linear growth. What we should be seeking is exponential growth. For instance, increasing your fees and prices by 1% can add as much as 11.7% to your net profits. Yet, in most high-tech companies pricing is a grossly neglected topic. Most fees and prices are pulled out of thin air and have no reflection on the value the attached products and services deliver to clients.

So, in this article we take a closer look at some force multipliers for high-tech business development.

The military term "force multiplier" is a factor that can significantly change the effectiveness of an army unit.

Let's say there is an enemy with 100,000 soldiers and you have an army of 100,000 soldiers. Doubling your headcount is not a force multiplier.

But sending out a five-man commando to infiltrate the enemy's camp and kill all the generals the night before the battle is a force multiplier. There will be no battle next morning. And by the time you wake up, the enemy will be gone. Now, that's something.

So, let's get rolling here, otherwise the sun goes down on us and we achieve nothing. Not even a sausage.

1. Unparalleled Skill Building Excellence

Since the high-tech industry is changing pretty rapidly, it is very important that you seize all opportunities to build new skills, abandon obsolete ones and polish the ones that need polishing.

Just imagine a carpenter who has the best and most expensive tools in the universe but doesn't understand the principles of woodworking. He can build a great-looking chair which looks amazing and may even win a few design awards, but it will collapse as soon as someone sits on it. It doesn't serve the purpose of a chair, but looks impressive, even award-worthy.

Many high-tech companies fall into this skill-confusion trap. They almost blindly hire people with impressive technical qualifications without making certain those candidates actually have something "solid" behind the veneer of their credentials. I do agree with Henry Mintzberg that most people acquire their credentials in order to jump the queue, and get into higher positions where accountability is almost non-existent and they can only fail upwards.

It is vitally important that you constantly evaluate your people's skills and make the appropriate adjustment. And don't get bogged down with "so-called" core skills only. Technology professionals must have a width of skills too. They must understand the context within which technology operates.

That is, we must change our focus from "using better technology" to "using technology better".

Why is this important?

Look, some 63% of the unemployment lines are high-tech folks of some sort, mainly programmers. Why? Because they refuse to learn anything but new high-tech skills.

You can't send them out to discuss projects with clients because they don't understand project management.

You can't send them out to diagnose prospects' problems because they don't understand the relationship between technology and business.

Besides your core skills of programming, system analysis, etc., high-tech professionals must also learn various other social and emotional skills for better interaction with clients and colleagues. The premium high-tech world is full of one-to-one interactions. So, what to learn? Here is a short list: Listening * spoken and written communication * business development (this is everyone's job not merely a department) * coaching and counselling skill * reading people... and however much you may hate the word... brace yourself... selling skills.

And the more your people resent the S-word (selling), the more trouble the whole company has to land new clients.

Many people say they hate selling because of its manipulative nature. But if you practise the kind of selling doctors practise, which is heavy on diagnosis and gives the patient the choice what to do about it, then everything changes. In his book, Reed Holden uses it regarding pricing, but here I use it regarding selling. We have to put a touch of arrogance into our sales processes and let prospects know that giving you money does not qualify them to become your clients. There is much more to being accepted as clients.

Now some people may ask what about overcoming objections and closing the sale.

That's not your job. That's something your automated lead nurturing process must take care of. By the time prospects meet you, they must not have objections but must be ready and willing to proceed on your term and price.

2. The Eighth Wonder Of The Word: Direct Response Marketing

The other day I read an article in the Washington Post about the three car CEOs' flying to Washington in their private jets with begging bawls in hand to grovel at the government's feet in the hope of getting a $25 billion cash injection to save their companies.

Government representatives asked them to justify why they need the money. Their responses were pretty amazing...

"Chrysler really is the quintessential American car company!" Chrysler's Nardelli boasted.
"We have products that are winning car and truck of the year regularly," General Motors' Wagoner proclaimed.
"We are equal to or better than Honda and Toyota," Ford's Mulally added. "Every new vehicle that we make, whether it's small, medium or large, is best in fuel efficiency. The given is safety. And we have more, at Ford, more five-star quality and safety ratings than any other automobile."

The interesting thing is that in spite of the accolades, awards and being quintessential, they've failed pretty miserably to sell their cars. At the same time all three CEOs vehemently deny responsibility for the current states of their companies.

But if they are not responsible, why the bloody hell would anyone pay General Motors CEO Richard Wagoner $15.7 million or Ford's CEO Alan Mulally $21.7 million a year. And what are they planning to use the $25 billion cash injection for? To buy some new private jets or giving themselves hefty pay increases?

The only reason I mention this because a very similar problem is happening in many high-tech companies. The marketing department produces all the creative, although often useless, stuff, and then at the end of the month the sales folks get beaten up - again - when certain sales numbers are not reached - again.

According to a recent CMO Council report, entitled, "Closing the Gap report: The Sales & Marketing Alignment Imperative"

There is a serious disconnect between marketing and sales. Marketing, that is, the traditional image marketing is creating stuff that can win awards and look good in their creators' portfolios, while sales is busy bringing in money, so the marketing folks can get paid at the end of the month.

So, how to connect the two departments?

Unlike image marketing, direct response marketing is 100% trackable, so constant improvement is actually possible. You can set up a few (really just a few) key indicators you want to track rigorously and those numbers always tell you where your marketing is.

3. Unique Methodologies To Raise The Bar

Here we could talk about problem solving skills, but problem solvers are dime a dozen. The key is about raising the bar. This applies in two areas.

  1. Raising the bar internally within your organisation

  2. Raising the bar externally within in clients' organisations. That is, delivering solutions that go beyond the restoration of the status quo

And here I want to talk a bit about content knowledge. I recently read an ad. A local IT firm was looking for a business development manager. The minimum qualification was a master's degree in computer science, extensive knowledge of Photoshop and Flash and the ability to hand-code HTML pages.

The ability to lead people to peak performance was not even mentioned.

Here is another retarded IT firm. They have IT knowledge oozing out of their ears, but have serious client acquisition issues. So, they want to hire another computer expert, just like them, hoping that doing more of the same lunacy will solve their problem.

But I've learnt over the years of being involved in farm life that just because you double the number of horses in front of your cart and whip them twice as hard as before, you won't necessarily double your speed.

People are really their own greatest enemies. They are obsessed with the "more of the same" idiocy.

Traditional approach: To increase server performance, we have to install a larger and faster Windows server. => Practical approach: Replace the Windows server with an Apache server. It's more elegant, more cost-effective and more reliable.

Traditional approach: To increase sales, let's put more feet on the streets and increase commissions. => Practical approach: To increase profits, hire one copywriter who can use the power of words to have hordes of qualified prospects come to you ready to do business with you on your terms.

Traditional approach: To increase our productivity we have to hire some new people. => Practical approach: Let's keep the headcount as it is and change the environment and culture such that our people voluntarily give their 100%. This eliminates the tremendous cost of micromanaging and the lunacy of motivation.

Stephen Covey says in Principle Centered Leadership...

"Every breakthrough comes from a break-with."

That is, we have to break with the previous approach because our current result is the effect of a specific a cause. And this specific cause is our current approach.

But breaking with conventional wisdom is scary. It pulls us in a new direction and forces us to tread on unchartered waters. So, we are scared of sinking or having some vital parts of our anatomies nipped off by an alligator.

But also have to realise that profits come from risks. That's why it's only natural that self-employed people earn more than employees doing the same jobs. It's the risk factor.

4. Innovative Talent Attraction Methods

Technology is changing a neck-snapping pace. And to keep up with these changes, high-tech companies need fanatics more than ever. And ever since Peter Drucker coined the word "Knowledge worker" in the early 60s, these fanatics are called talents. And talents cannot be managed the same way as workers.

Using the story of the farmer and the goose that lays the golden egg, your people are the proverbial geese and the knowledge they apply to create wealth for their companies' clients, thus profits for their companies is the golden egg.

And talented people love and enjoy laying golden eggs. The problem is that most high-tech companies are hopelessly useless at creating conducive environments in which it's an enjoyable process to lay eggs. So, most of their people work with their brains in second gear with the intellectual handbrakes half-way on.

One main reason for that is that talents, that is, top-notch knowledge workers carry the means of their productivity in their heads, and they must volunteer to apply it to their employers' benefits.

Over the years it's been proved beyond the shadow of a doubt that traditional HR practices an incapable of attracting top-notch talents and can only flood companies with mediocre people.

Why?

Because they way traditional HR operates, it screens out real talents. And the relevant statistics re pretty sad too.

Here are the results, based on survey responses from 832 people, mainly from medium-sized companies:

Question: Do you think your employees trust their immediate supervisors? Answer: 80% of managers and supervisors said "No."

Question: Do you think employees believe what top management tells them about the future plans and direction of your firm? Answer: 65% of managers and supervisors said "No."

Question: "Have you witnessed a decline in employee trust in the last five years?" Answer: 66% of employees said "Yes."

Based on a CNN poll, less than 17% of Americans rate business executives highly trustworthy and respectable. After telemarketers at 6% and car salesmen at 5%, corporate CEOs are the least trusted and respected bunch in America today.

It's bloody hard to run a successful business when you know that 2/3 of your people don't trust you and your motives.

In the book Conversations on Customer Service and Sales, Ken Edmundson tells us...

"Mathematically we have a 52% chance of hiring the right person if we just flip a coin, and studies reveal that we only increase that by a whopping 8% by using our wonderful interviewing skills."

But when you look at some of the places high-tech companies are hiring from, you can easily understand the problem. Just look at most of the ads on Craigslist under "sales" and "marketing". The stupid bastards deserve the low-profile people they are getting. 99% of the job ads are pathetic with as much sex appeal as a massive car accident with a bunch of bodies torn to pieces.

While leaders and managers shout that people are their companies' most important assets, getting and keeping top-tier talents is one of their most neglected, back burner issues, usually relegated to a low-level department that is not even represented in the boardroom: Human Resources.

In an article in Fast Company, deputy editor, Keith H. Hammonds writes in 'Why We Hate HR...

"After close to 20 years of hopeful rhetoric about becoming "strategic partners" with a "seat at the table" where the business decisions that matter are made, most human resources professionals aren't nearly there. They have no seat, and the table is locked inside a conference room to which they have no key. HR people are, for most practical purposes, neither strategic nor leaders."

That is, talent attraction and retention are not important enough for executives, so they dump this role on a flunky department that doesn't even have representation in the boardroom. It seems that in most high-tech companies the "talent issue" is not a boardroom-worthy, merely flunky-worthy.

Some Talent Attraction Considerations...

...to get and keep top-tier talents and strategically repel bottomfeeders who are merely looking for secure jobs, regular paycheques, benefits and pension plans.

Respect all your company's people and regard them as knowledge workers who volunteer to apply their knowledge to the advancement of your company not the competitor's.

Eliminate retarded, hype-driven, contemptuous, obnoxious and disrespectful hiring practices based on traditional HR practices. E.g. Talent are not interested in job interviews. They want to discuss how they can contribute to your company. HR can't conduct such discussions.

Focus on creating a diverse talent pool. Most high-tech companies focus on creating uniformity to maintain the status quo. Well, uniformity is cheap and easy to manage using command and control, which even the most brain dead managers can pull off with remarkable dexterity.

Just as you build a brand to the market, build an equally attractive brand to the talents outside your company.

Create and nurture a "talent-magnet" culture and environment.

Your talent pool is 100% volunteers. In the industrial age people needed companies to work (employer's market: people sell their muscle power). In the knowledge age companies need talents (employee's market: companies sell opportunities to people).

In the industrial age recruiting was like purchasing: Go for workers with the lowest cost. In the knowledge age, recruiting must be like marketing: Go for talents with the highest ROI.

In the industrial age, companies paid for muscle power and number of working hours. In the knowledge economy, companies must pay their people for playing on the company's side and created values that can put the company on the trajectory of achieving its goals.

I'm hesitant to use the word "performance" because performance is in the hands of the top executives whether or not they use the value their people have created.

In the industrial age, HR was single-handedly responsible for getting and keeping people. In the knowledge age, every single person in the company, from CEO down, must be committed to improving the quality of the work force.

In the industrial age, companies hired on an "as needed" basis. In the knowledge age, companies must have a talent search strategy in operation 24/7, otherwise, when hiring, they end up with "leftovers" .

In the industrial age, hiring employees was about screening the living daylights out of them. In the knowledge age, it's about selling your opportunity to the best talents.

In the industrial age, most people worked for the money and the benefits. In the knowledge age, although talents work for professional fulfilment, they demand outstanding pay as a gesture of fair value exchange. They know their value and don't give it away for peanuts.

Start reading on talents and how to gain access to them.

Earlier, we talked about force multipliers.

Let's say, you have a 100-person unit with bows and arrows. Doubling headcount is not a force multiplier. But putting explosive tips on the arrows, as Rambo did in the movies, and then firing them is a definite force multiplier.

Or as CSI New York detective, Mac Taylor put it...

"Even a small mistake can be significant enough to change the dynamics of everything that follows."

Here we can replace "mistake" with "improvement". A small change in the cause and a big change in the effect.

5. Special Client Counselling Skills

High-tech companies are delivering great value to their clients. But somehow often this great value is not appreciated because a certain emotional-level connection is missing between service providers and their clients. And companies make the situation worse by pushing their people for more technical training while missing out on the soft skills, like counselling.

I've found that great clients want to get involved in the improvement process and the last thing they want is ready-made solutions handed to them on nice platters.

But in order to involve clients in the full process, your people must have great counselling skills.

Counselling skills make it possible to create an experience for clients above and beyond great technical solutions.

If you have a chance to listen to Jay Abraham as he interviews experts, listen to it many times. Jay is an expert at asking questions through which interviewees reach their own answers. Jay is not an advisor per se. He is a facilitator of self-discovery and self-exploration. If you've ever attended his seminars, you know that he's not the typical business preacher but rather a guide, helping participants to find what they're looking for.

And this is why we must improve in the area of counselling and giving advice the right way. The way I see it, "Hey man, you should do this" is not proper advice worth paying for. Besides, people are pretty allergic to this kind of "advice" and tend to ignore it. Clients must feel that we have their best interest at heart not only collecting billable hours. The interesting thing is that we cannot disguise our intentions. When we are in for the dough and not for helping clients, they can read this intention on us, and they will run very fast and very far.

So, make sure you have all the appropriate soft skills, and if you have employees require them to invest a certain amount of their professional development time to sharpen their social and emotional skills.

6. Massive And Valuable Knowledge Base

High-tech companies deliver value to their clients in the forms of brainpower not manual labour. It's vital that your clients perceive your company as a knowledge firm, but this can happen only if you perceive and treat your people as knowledge workers. Remember, people behave the way they are being treated.

In George Bernard Shaw's play, Pygmalion, Eliza Doolittle marries Freddy Eynsford-Hill because he treats her as a lady, while Professor Higgins treats her as a flower girl. At one point she says to Freddy...

"The difference between a flower girl and a lady is not how she behaves but how she is treated. I have always been and will always be a flower girl to Professor Higgins, because she treats me as one. But I also know that I will be a lady to you because you treat me as one."

Your people live up to the treatment they're receiving from you and other managers.

If you treat your folks as manual labourers, impose rigid policies and working hours on them, then they will act as manual labourers and check their brains out at the door on the way to work. They still look efficient (impressively busy) but very ineffective (accomplishing nothing).

Installing servers, security systems and other fiendish technology are the commodity ends of the business.

And in order to be treated as knowledge workers and as a knowledge company, you must manage knowledge within the company.

With several clients we've created a position called the Chief Knowledge Officer (CKO). The CKO works in close collaborations with the Chief Value Officer (CVO). During engagements CVOs can have a pretty accurate insight to what represents value to clients, and then they can exchange ideas with CKOs about the kind of knowledge that must be developed within the company and in what form.

The CKO also makes certain that the company's accumulated knowledge is really structured knowledge not merely information, which is really nothing more than raw data organised according to some categories.

The CKO also oversees the professional development of each person in the company. Every employee is on a pre-agreed and documented knowledge development path and is accountable for learning whatever she and the CKO agreed upon.

What forms of this knowledge base can take?

One is documented bits and bobs. Manuals, training materials, audio and video stuff. Some of the stuff is only for internal use and some for client use. Especially templates, processes and various "how to" stuff.

The other form of knowledge base is regular "war room" meetings during which both technical and non-technical staff can exchange information, stories and experiences which they come across during client interactions.

The problem is that these are non-paid activities, and managers tend to regard them as unproductive time-wasting. But realistically this is the time when people seriously advance their skills, so it should be encouraged.

As a result of these meetings, people can offer more value to clients and charge more for the work. And the extra you can charge more than compensates for the "wasted" unproductive time.

7. Different Approach To Different Projects

Every client is different. Therefore I have always been against the "our unique approach", which also translates into "our trademarked one-size-fits-all process".

Which also means, "We've spent a fortune to trademark our approach, and by Joe, we're gonna force everyone's problems into our structure even if it kills them."

It reminds me of a family physician in my hometown in Hungary. He asked every patient to strip naked regardless of the problem the patient had. That was his "trademarked" approach with every single patient. Once I went to see him with a shin splint, but the process was the same. He refused to examine my foot until I had stripped butt naked.

Too many high-tech companies are unnecessarily rigid in their approaches. Instead of referring in a more appropriate solution provider and accepting a referral fee for the new business, they try to use their trademarked hammers to cut down trees.

Well, it's possible, but not exactly practical. So, why do it?

Using medical language, if you go to 10 cardiac surgeons for a triple bypass operation, you'll have 10 different experiences, although the operations will be the same...

Knock patient out => cut patient open => fiddle with the necessary triple bypass bits and bobs inside the patient => stitch up the patient => wake up the patient

And while the surgery is standard, the overall experience will be different.

Also, cardiac surgeons can do other kind of heart operations too, like transplant, valve repair or replacement. So, while they are cardiac surgeons, they don't have "trademarked" "one for all" solutions. They know that the surgery itself is only one part of the overall medical experience.

8. Perpetual Research And Development Excellence

This is another vital non-paid activity, and while it doesn't bring in money directly, it should be the part of every high-tech company. This research establishes what goes into the company's knowledge base.

This is a value-creating activity, and as you can increase this value, you can charge more.

The problem is that in many managers' eyes higher volume of work is the only valuable achievement. And this is how they set up performance appraisal systems as well.

At the end of the year, when evaluating sales people's performance, we can hear comments like...

"You could have done better if you had made 2 million more cold calls every day."
"You could have done better if you had come in early and worked late."
"You could have done better if you had sent out more proposals."
"You could have done better if you had visited more prospects with more coffee and doughnuts."

Managers should ditch the "more" mentality and adopt the "better" mentality.

If you try to sell $500,000 servers or CRM systems to sales leads generated by bingo cards, then no amount of "more" on the effort side will result in more in the sales ledger. What we need is not more of the same but less of something drastically different.

And this magic drastically different requires constant research.

And just like with any other non-chargeable activity, managers should sit down with their people and organise who researches what and how the results are disseminated and assembled into usable format.

If we want to play our knowledge tune in the future, the best thing we can do is to pay the proverbial piper of research today.

Summary

So, what does really make and outstanding high-tech business?

Most people would say it is the gross revenues and outstanding technical knowledge.

I disagree. I think it is revenue per employee and both core and peripheral skills. That is, how to apply the advancement of technology to clients' businesses in a business context in the most profitable and enjoyable manner.

I also believe that if you have a neat service, well positioned and promoted, you don't need to waste your money on a corner office in a nice complex at the posh end of the city with a gigantic mahogany desk. Prospects who make good clients come to you for your brainpower not for ostentation, and if people believe you can help them, they will focus on your knowledge and won't care much about the plumage and the fluff. People create their own perceptions based more on their own character traits and past experiences than on what you present.

So, the key is not presenting, well, or doing more of the same but doing less of something completely different.

Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.