How to Make Great Leadership Decisions

As a leader, your career depends on making the right decisions: From what you say, to what you do, to how you delegate and spend resources.

The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way.
~ Daniel Kahneman, Nobel Prize laureate in economics.

We are quick to pass judgment and make snap decisions. The smarter and more educated we are, the more overconfident we are about our conclusions.
But let’s stop and think about it for a minute. Humanity doesn’t have a good track record for decision-making. Corporations are even more notorious for failed business decisions on product launches, mergers and acquisitions.
Clearly, our brains are flawed when it comes to making sound choices. We are easily biased, prone to influence from emotions and at times irrational without conscious awareness.
And yet, we don’t often see our own reality. Or we see it only from our limited perspective. I talk about this – view from inside our heads – with my executive coaching clients. Just about everybody I know struggles with decision making.
Researchers have long studied failed business decisions to identify common stumbling blocks. Given that we’re more irrational than we’d like to believe, how can we improve the quality of our leadership decisions?

 
Decisions: Based on Analysis or Process?
Leaders often carefully analyze numbers to make important decisions:

  • Should we launch a new product or service?
  • Should we change our organizational structure?
  • Should we expand to a new country?
  • Should we acquire another firm?

They also consider intuitive decision processes:

  • Discussion of uncertainties
  • Inclusion of contrary perspectives
  • Interviewing a range of people with other ideas
  • Exploration of alternative ideas

Business professor Dan Lovallo and consultant Olivier Sibony tracked more than 2,200 business decisions over five years to determine how they were made: analysis or process (“The Case for Behavioral Strategy,” McKinsey Quarterly, March 2010).
After examining outcomes (revenues, profits and market share), they found that “process mattered more than analysis” by a factor of six.
“Superb analysis is useless,” they concluded, “unless the decision process gives it a fair hearing.”
Yet, many business leaders are skeptical about the value of a decision process over hard-number analyses. The research is nonetheless clear: A better decision process substantially improves results and associated financial returns.
I’m curious. What has been your experience in your company with the decision making process? I’d love to hear from you.
 

How to Conquer a Bad Habit

It’s never easy to create a new habit, but you can easily choose to stop a bad one. Here’s the secret: Don’t try to change everything at once. Use the rule of three, whereby you identify only three of your bad habits and commit to stop doing them.
Review the 16 bad sales and communication habits cited in my previous post, and you’ll find that they usually indicate an excess or deficit in either information or emotion. We usually share too much information or not enough emotion (or vice versa). Where do your behaviors fit on the spectrum?
Use this four-step action plan to neutralize bad habits:
1. Gather data. Notice the kinds of casual remarks others make about you. These comments contain key information that can help you improve your communications. Ask.
2. Find or develop a “mute button”. Allow seven seconds of silence to pass during your next conversation. You may find that this gap helps you listen more carefully instead of mentally working on your response. Also use this time to observe your conversation partner’s nonverbal communication. Zip it.
3. Observe your own self-deception. Each of us denies certain behaviors to protect ourselves from discomfort. Identify what you can do – and stop doing – to achieve even greater success. Admit it.
4. Work with a trusted peer, mentor or coach. Personal change rarely happens when we work in isolation. If it does occur, it’s usually harder to sustain. Studies show that sharing plans and following up with another person lead to long-term behavioral changes. Share it (your action plan) and follow up with someone.
Follow-Up Works
While there’s no doubt that training equips today’s work force with better communication and customer-relationship skills, lasting change also requires coaching and follow-up. Professionals who received training, coaching and follow-up experienced 20 times more growth than those who received training alone.
The high-tech, low-touch approach to customer contact is failing miserably. Customers may prefer a brand, but they are loyal to people. Computerized customer-service systems may be convenient and cost-effective, but their inability to solve real-life problems is coming back to haunt many businesses.
Mastery of your job’s functional arena allows you to enter the game, but your effectiveness in the human arena helps you stay on the field – and win.
If you have questions about this, don’t hesitate to call or email me. I’d love to hear from you.

Destructive Sales Habits

Goldsmith, Brown and Hawkins in , (McGraw-Hill, 2011), identify 16 negative habits that severely damage a customer’s sales experience. Eliminating even one or two can profoundly improve your sales and influencing abilities.

  1. Failure to be present: repeated and annoying displays of behavior that indicate we’d rather be somewhere else, – some when – else or with someone else
  2. Vocal filler: the overuse of unnecessary and meaningless verbal qualifiers
  3. Selling past the close: the irresistible urge to verbalize and execute every possible step in the sales process
  4. Selective hearing: the absence of listening in the presence of a customer
  5. Contact without purpose: repeated, deliberate communication for no valid business reason (other than wanting to sell something)
  6. Curb qualifying: the tendency to judge a prospect’s means and motive superficially, from a distance
  7. Using tension as a tool: also known as “sale ends Saturday”
  8. One-upping: the constant need to top your conversational partner in an effort to show the world just how smart you are
  9. Over familiarity: the use of inappropriately intimate gestures
  10. Withholding passion and energy: the tendency to forget that people make decisions on the basis of emotion and later justify them with logic
  11. Explaining failure: behaving under the erroneous belief that simply assigning blame, fault or guilt is enough to satisfy the customer
  12. Never having to say you’re sorry: an inability to apologize or accept responsibility for personal or organizational errors/injuries
  13. Throwing others under the bus: sacrificing a colleague – often anonymous, often vulnerable and usually innocent – to cover up a functional failure
  14. Propagandizing: overreliance on organizational rhetoric and themes
  15. Wasting energy: taking part in organizational blame-storming and pity parties
  16. Obsessing over the numbers: achieving revenue, profit or productivity targets at the expense of metrics of a higher calling

By now, after reading this list, you may recognize a few of your own bad habits yourself. Whether you’re in sales or not, everyone can improve their communications skills.
What can you do about them? That’s for my next post. Tune in.

Connecting Through Empathy

Have you ever wondered why some people seem naturally quite good at sales and communications, while others struggle? It has a lot to do with the way our brains are wired.
We innately connect with others, both emotionally and physiologically, without even trying. It’s basic human nature. Yet some people are more predisposed to it than others. Empathy allows us to understand others’ feelings, thoughts and experiences.
The ability to empathize is wired into almost all human brains, and it’s a prerequisite to understanding what drives others’ intentions and motivations.
Empathy is required for all effective social interactions. So, how does it help you create a positive sales experience?
Empathy vs Ego
The intrinsic need to persuade and convince someone else – along with the resilience of ego to take the battering of rejection – has long been established as a cornerstone trait of successful salespeople. A powerful ego comes up as a strong driver of what it takes to make it in sales.
Yet ego alone is also what is failing people in sales. To get from where you are today to where you need to be in the future, you’ll need to develop a conscious maintenance of empathy.
The right balance of ego and empathy facilitates communication and boosts sales effectiveness.
The Empathy Deficit
Sometimes I wonder if we’re putting less emphasis on empathy in favor of more attention to winning. In the work I do coaching, I rarely get requests from people who want to become more empathetic. It’s usually coaching to achieve more.
Studies show, in fact, that our sense of empathy is eroding. The Institute for Social Research at the University of Michigan has collected data for more than 30 years, and researchers have found that young adults are 40 percent less empathetic than their counterparts in 1979. The ability to empathize dropped steeply in 2000, and narcissism rates have skyrocketed.
Many experts speculate that these trends can be attributed to increases in Internet usage, texting, and cell-phone and computer ubiquity. Regardless of the cause, the solution lies in regaining empathy. In other words, stop playing with your Smartphone while others are talking.
I’d love to hear your opinion on this. What do you think? As a society are we becoming less empathetic?

Your Job: The Functional vs. Human Factors

What do you need to know to improve customer relationships and communications? Even if you’re not in sales, you still need to be current on the messages you want customers to know.
“No matter who employs you or what your organization is selling or servicing, you work within two areas of responsibility; there are two sides to your job: functional and human”, write Goldsmith, Brown and Hawkins in What Got You Here Won’t Get You There in Sales!: How Successful Salespeople Take It to the Next Level, (McGraw-Hill, 2011).
This is something I talk about with the people I coach .While this concept is simple enough, it’s worth considering these two arenas on a deeper level.

  1. Your Functional Job
    The functional arena of your job involves mastery of a product or service. No matter who you are, the scope of your job or your area of specialization, you must understand what your company’s products and services represent to customers. This includes:
    o Features
    o Benefits
    o Advantages
    o Results and proof of what the company does
    Depending on your level of involvement and experience, you have a range of knowledge about your company and its customers. The functional side of your job stresses purpose, practice and utility. You must know procedures, policies, process and pricing. You also need to master the computers, software and data systems that run the business and measure results.
    Most of this functional mastery happens without customer interaction. It’s the human side of business that attracts, retains and sustains success.
    With so much product and service similarity in today’s commoditized economy, it’s critical to identify the functional requirements of your job. Master these aspects so you can focus on customer service.
  2. The Human Side of Business
    The human arena determines whether you win, keep or lose a customer. Companies turn over 10 percent of their customer base every year, on average. Replacing this 10 percent, as well as adding to it, is a constant challenge that requires employee talent.
    Every interaction with customers represents an opportunity to provide necessary information and ensure a valuable investment. View yourself as an educator who supplies everything customers need to benefit from your business. To accomplish this, you must learn to surpass their expectations.

16 Bad Habits You Can Change

Leaders seem to forget that their human assets make or break a customer’s ownership experience.
“Interpersonal interaction, though sometimes not the top reason for making a purchase, is almost always the reason for not repurchasing.” ~ Marshall Goldsmith, Don Brown and Bill Hawkins, What Got You Here Won’t Get You There in Sales!: How Successful Salespeople Take It to the Next Level, (McGraw-Hill, 2011).
Creating a positive experience for customers is every employee’s job, including those who work outside the sales department. Even if you have limited customer contact, your ability to influence and persuade others builds a foundation for effective interpersonal communications that lead to business success.
Unfortunately, training often overlooks key interpersonal skills for influencing others. I see this in the people I coach and work with.
In conversations, I’ve found that many leaders fail to understand that:
o Customer expectations for the sales experience have increased.
o Customers enjoy a broader, more competitive selection of products and services.
o Companies are falling short on customer-relationship communications by overrelying on technology and outsourcing.
o There is often misalignment between sales and service.
o The pace of customer response is accelerating, yet salesperson ramp-up is longer, more costly and more difficult.
o Workers are stressed by rising targets and quotas, but have access to fewer resources.
o Customers define value both rationally and emotionally, yet less than 25 percent of salespeople are deemed proficient in core selling competencies.
We can’t assume that what has worked before for customer services and communications will continue to be successful. And if your company outsources for customer services, there needs to be recognition of the changing nature of customer relationships. Communications need to reflect the changing nature of customer experiences.
How can your conversations with customers be improved? I’d love to hear from you, leave a comment.