Fable Friday: How would you coach this poor performer?

A sales manager shared this problem in a seminar a couple of weeks ago.  “Phil is in his 50’s, been with us for well over 20 years and is one of my top salespeople.  He’s highly knowledgeable with all that experience and customers value his advice.  Up until this year he’s always blown through his goals.  Now this year he’s struggling. He’s a bit behind goal, but what’s worse, it’s hard to talk to him.”

Gregory at Medtronic 10-2010 CroppedThe manager had tried to have a coaching session with Phil, but it didn’t go so well. “I told him I wanted to talk with him about this year’s performance, that he was behind goal and that I hoped I could coach him through it and see what we could do to get him on track.  But he didn’t take that well. He more or less told me that he didn’t need any coaching from me, that he knew his job better than anyone on the team and that he was just waiting on some deals to come together and he’d be okay.

To be fair, he’s only slightly behind goal, but his previous performance had been so good that just meeting goal is far less than I expect of him. I’m thinking I’m not handling this well or not seeing the solution. What do you think?”

Well, I’m going to ask you what you think, then I’m going to share my ideas next Friday.

But first let me comment on interventions for improving performance. In my background in instructional design, I learned early that there are three domains of the brain that drive performance.  One of these is knowledge: what does the performer know about how to do the job?  In this case we know the salesperson is highly competent. Customers value his advice.  The second domain is skill.  Have we seen evidence the salesperson can do the job?  Again we know the salesman is skilled.  He was once the rainmaker on this team and has plenty of experience.

The third and remaining domain is attitudinal, how the salesperson feels about the job. Something appears to be getting in the way, so if you were the sales manager in this case, your attempt to coach the performer was the right idea.

So let me give you some specific questions to address before we solve this next week.

1)      What is your hypothesis about what is wrong? Have you encountered a situation like this yourself?

2)      How would you have introduced the subject to the salesman?  What would you do that was different from what the sales manager did?

3)      What might be some reasonable solutions for the sales manager?  If you were in this position, what remedial ideas would you come up with? Use your imagination.

How did Dr. Kahneman sign that email?

Thank you to those who wrote me about the Nobel-prize winning economist Dr. Daniel Kahneman and his gracious email to me.  I gave you a multiple choice question last week asking you to guess how he signed it.

I really enjoy people with a great sense of humor who are not so full of themselves that they can’t have some fun.  The eminent Dr. Kahneman simply signed his note “Danny K.”

See you next week, and meanwhile…

Think Like Your Customer

Fable Friday: Rolex watches and commercial loan price objections

Some years ago the CEO of Rolex was asked a question at a press conference about pricing strategy.  It went something like, “How do you justify charging thousands of dollars for a watch when today anyone can get one that keeps the time just as well for only a few dollars?”

This was a simple question to field. The CEO responded with, “You’re perfectly correct. But you misunderstand our business.  You see, we are not in the watch business or the timekeeping business.  We’re in the luxury business. We fairly price our products as luxury items and are quite successful at it.”

Gregory at Medtronic 10-2010 CroppedWe have another instance here of what is known as framing. I wrote about this recently in the post about how organ donors are given a choice to opt in or opt out. When asked to check a box to opt out, more people donate their organs.  Framing is a very powerful tool in communication, so you must be aware of when you are the victim of framing, and when you can frame an argument to your own purposes, as the Rolex CEO did.

Let me give you a practical example if you are a commercial lender, as many of my readers are bankers who have some familiarity with this scenario.

Your business customer continues to object about the pricing, terms and conditions of your loan offer, and you continue to respond in underwriting and credit language, explaining the importance of personal guarantees and so forth.

Your problem in this discussion is that you have allowed the customer to default to the lending frame, dragging you down in the weeds with details.  Why not try re-framing the discussion, getting it away from lending terms and taking it to a higher level or viewpoint.  Reframe this conversation from lending to managing risk.

Say to your customer, “You know, in talking about loan terms, my customers seem to view banks as strictly lenders, and that is not wrong.  Of course we lend money. But that is not really who we are. At a much higher level bankers are professional managers of risk, and as such we are most sensitive to every aspect of a loan agreement that puts any pressure, however slight, on our overall risk position.

I ask you to consider that even the best managed banks return only about one percent of assets, so when you ask me to (modify/reduce/waive) this requirement, please know that to do so will affect our overall risk position and therefore our pricing and our willingness to engage. Our offer is not intended as a criticism of your creditworthiness or integrity.”

Get away from arguing about collateral, PG’s and fees, and reframe your discussion as a risk manager.

Sing us a song you’re the econo-man

In recent posts I’ve discussed important communication and sales techniques related to anchoring, framing and understanding how the human mind solves problems, and I’ve attributed these posts to the brilliant work by Dr. Daniel Kahneman, “Thinking, Fast and Slow.”  If you are interested in learning more about how people make decisions and why they buy, as I am, please read this book.

I wrote to Dr. Kahneman to thank him for this contribution to our thinking, and he was gracious enough to write back to me with a very kind note.  So here’s a quick quiz. How do you think this Princeton Professor of Economics and Nobel Prize winner signed his letter?

A)     Dan Kahneman

B)      Danny K.

C)      Prof DK

D)     Dr. K

Answer next Friday.  Until then,

Think Like Your Customer