Rain-Making in the Desert

Some business owners tend to sit on their hands during an economic downturn - waiting for the market to rebound before they make a move or spend a dime. But although it may seem counter-intuitive, recessions are a great time to get back to the basics of business development and marketing.

As tough as recessions can be on your pocketbook, they do free up space to think and plan - two things that most companies don't do enough of!

If you want to use a short-term lull to drive long-term success, what should you be focusing on?

Relationships. In a down economy it's more important than ever to take care of the customers you have, reconnect with customers you've lost and encourage referrals. By taking every opportunity to interact with people you already know, you can begin to fully understand what needs are in the marketplace and how you can fill them. And while you obviously want to get more money from your connections and leverage their Rolodex, you also need to focus on providing real value and gathering crucial information that will help you set your business up to succeed.

Networking, customer satisfaction calls, face-to-face meetings and hosting events are just a few ways to show your customers, suppliers, vendors and partners that you appreciate them and are concerned about providing thoughtful, personalized service.

Education. It can be hard to reconcile yourself to giving anything away for free, but freebies today drive sales tomorrow. Recessionary economies make consumers cautious, so you have to prove yourself before they will buy from you. Doling out valuable tidbits of information, offering instruction for do-it-yourselfers and having some products or services available for a free trial can create the confidence to earn real purchases.

Now is the time to do whatever it takes to build rapport and trust. Host seminars, offer low-cost classes to share knowledge with the public, allow people to sample your services for free and talk with anyone who will listen about your area of expertise. People do pay attention to companies that demonstrate that they care! Now is not the time to try and monetize every aspect of your business, rather you should be educating consumers on why they should buy from you both now and when their financial picture improves.

Education applies to your internal systems as well. Brief periods of inactivity are great times to mentor your staff, conduct training, implement better processes and upgrade equipment. That way when business picks up again - you're ready!

Market Strategically. During times of plenty marketing efforts can get sloppy. You buy any ad that a salesperson approaches you about... you send out mailers, emails and newsletters willy-nilly... budgets fly out of control as you sponsor events, join professional organizations, and take everyone you know out for lunch.

Economic downturns force companies to make responsible choices about how to spend their precious business development dollars. Go back to your strategic plan and remember who you serve and why. How can you connect with small target audiences on a personal level - and cheaply? Trim the fat from the marketing budget and drop any activities that don't get stellar results.

Most of all, don't stop marketing completely or trust your gut on where to put your marketing dollars. Tracking is the best way to demonstrate how marketing efforts pay off. In tough times many owners and managers think that the first thing to do is cut back on marketing expenses. However, providing numeric results and reporting on success stories are easy ways to underscore the importance of marketing/ business development and demonstrate ROI for the activities you keep.

Pitfalls to Creating an Online Community

Are you struggling to create an online community? Here are some common pitfalls to success...

1. You don't really care about people. This is really the kicker in creating communities... you have to care about the people who are coming in. If you are just looking at the community building process as an ego boost or way to make money you'll fail miserably. By caring whether people have a good experience, learn new things, make new friends and improve their lives you breath life into an otherwise impersonal initiative.
2. You try to make money first. The cardinal sin in community building... trying to cash in from day one is the quickest way to doom your efforts. People don't gravitate toward the idea of being sold to - they gravitate toward true communities. I'm talking about the formation phase here. You can make money off of a strong community once you have it, but you'll never get it if the whole community concept is monetized from the outset. People only come together because they see something of value in the platform you've created, not because they want to help you buy a Porsche.
3. You don't understand the importance of value creation. Ask this question, "Why am I trying to build this community?" If the answer is anything other than "I want to create value for the people in the community" you have a problem. Successful community building always comes from a sincere interest in people and a genuine concern for the value they receive from participating.
4. You are waiting for the community to come to you. Get real! There are over 150 million website out there. Just because you create something doesn't mean that folks can find it, use it or even care. One of the biggest myths about online community building is that you can create content and sit back and watch as a community forms. The required combo is to create real value AND communicate with others by reaching outside of your community. Don't wait for people to find you... go get them!
5. You don't empower members to refer and promote. Once you have some members in your online community, you have to make it as easy as possible for them to promote you. Create built-in mechanisms that encourage sharing, referrals and rewards. As your community begins to gain momentum, your existing membership is the best channel to communicate with others. And, when people do champion your cause, don't forget to acknowledge their contributions and say 'thank you!'

Steve Zaffron's 3 Laws of Top Performance

Interview by Mike McLaughlin Editor of Management Consulting News (www.managementconsultingnews.com)

The Three Laws of Performance

1. How people perform correlates to how situations occur to them. Leaders have a say--and give others a say--in how situations occur.
2. How a situation occurs to people arises in language. Leaders master the conversational environment.
3. Future-based language transforms how situations occur to people. Leaders listen for the future of their organizations, and create the conditions that allow others to coauthor that new future.

Adapted from The Three Laws of Performance, by Steve Zaffron and Dave Logan

Steve Zaffron is CEO of the Vanto Group, a global consulting firm that helps with large-scale initiatives to elevate organizational performance. He is also the coauthor of The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life. Zaffron and his coauthor, David Logan, say that breakthrough performance is possible when you apply their three laws of performance. We asked Zaffron how we can make those laws work for us.

McLaughlin: What motivated you to take on this topic?

Zaffron: I’ve always been interested in why people do what they do and also in how to energize people and organizations to perform better. Over the years, the Vanto Group has produced some extraordinary results for organizations, which encouraged my coauthor, Professor David Logan, to approach me about doing a case study. When we finished the case, we decided to write a book about what we now call the three laws of performance.

McLaughlin: Why do so many organizations’ efforts to improve performance fail?

Zaffron: It might be tempting to think that implementation of maybe a new IT or ERP system fails because people “resist change.” We don’t see it that way. It’s not that people resist change. They just want to be involved in what the change is. They want to be part of it.

It’s hard for that to happen with most organizations’ structure, which is based on the top-down, military-command-and-control model. You could say that the military was the first successful institution for human beings, and it became the model that most organizations still use. But that top-down structure doesn’t take into account what really drives people’s performance.

Incentives and punishments do produce certain kinds of behaviors, but they don’t necessarily elevate performance. The driving force for human beings is the way they see the world--their perspective on it, what they think about it, and what they emotionally connect with. And that perspective is why they do what they do.

McLaughlin: You make the point that we all have a “default future.” Can you elaborate on that?

Zaffron: The Chinese have a great saying: “If we don't change the direction we're going, we're likely to end up where we are headed.” People move forward in one direction or another based on what they think is about to happen, which is all that really matters to us.

We are always trying to figure out what’s about to happen—to ourselves, our organizations, or our team. What we draw on to determine that, of course, is the past. Our experiences in the past, what we learned, what we think, what seemed to work, and what didn’t work are projected into the future. That is our way of dealing with what we believe is coming at us. We call that the default future.

To go back to your question about why change initiatives fail, it’s because leaders don’t take the default future into account. It’s always there, determining performance. But it’s generally not aligned with what executives see as possible.

McLaughlin: Do you mean the impact that perspectives such as “we’ve tried this before and we know it will never work” have on expectations?

Zaffron: Yes. Conversations like that, even if based on real experiences, define the default future. People may not be able to articulate that future, but they live like that’s what is going to happen. These days, for example, many people are fearful, worried, and anxious. Maybe they go to work wondering if today’s their day to get laid off. So their future is bleak and depressing. Maybe it won’t happen, but they think and act like they have that kind of a future.

Until you address the default future, lasting improvement with change initiatives is difficult to achieve. Maybe an organization gets some short-term gains but then reverts back to previous levels of performance. Or maybe the improvement project never gets implemented at all.

McLaughlin: How do leaders change the default future and head everyone in another direction?

Zaffron: Well, first of all, you don’t have to be in a position of “authority” to set an organization on a new path. Leaders can exist in any position. But you do have to own the situation and take the risk to start conversations that will get others to confront the default future, particularly if it’s not the future you want.

On one client project, a middle-level manager went to the executive in charge and said I think this project is in trouble. She told him about some of our ideas on how teams can work together. This executive had 600 great scientists working for him, but they were not collaborating very well as a team.

We started an initiative that lasted a year and involved all the scientists. We helped them see where they would end up if they continued in their current direction, and then what was possible instead.

We helped them create commitments to that new future with what we call future-based language. That is comprised of declaration, commitment, promises, and requests. When people collaborate and create a commitment together, that becomes the future that they’re living into. We call that rewriting the future.

McLaughlin: You touched on the importance of language. Do you think that executives understand how powerful language is for attaining top performance?

Zaffron: No. But it’s not just executives and managers who don’t realize the power of the language they use. It’s people in general. We tend to use language only in a descriptive way. That is, we describe how something is or was.

But people have built-in interpretations of language that determine reality for them. When their interpretations are not aligned with the bigger picture, their actions are disconnected, uncoordinated, and not as powerful as they could be. Understanding that is central to rewriting the future.

Future-based, or generative, language is more than descriptive; it opens people’s minds to the possibilities. Here’s an example: In his inaugural address, Franklin Roosevelt laid out the reality of the situation the world was facing and how difficult the road ahead was going to be. Then, he made the now-famous statement that the only thing we have to fear is fear itself. He used language to create a new possibility.

McLaughlin: When we consider leaders like Roosevelt or Churchill, we tend to chalk up their success to being good orators.

Zaffron: Yes. We distance ourselves from what they do by saying things like they’re great orators, or they know how to motivate people, or they’ve got charisma. Not me, I don’t have that because I’m just an ordinary person. And so we disempower ourselves from the possibility of leadership.

In reality, leaders are ordinary people who create extraordinary commitments. Another way of saying that in terms of the three laws of performance is that leaders enable the rewriting of the future.

McLaughlin: How do leaders enable that rewriting?

Zaffron: Well, leaders can’t rewrite the future by themselves; they have to involve others. They see that they need to bring people together who don’t normally collaborate, get them to face reality, give up their interpretations from the past, and see what’s possible. That makes implementing new ideas and projects much easier because people see those projects as fulfillment of their possibilities.

Usually, if leaders want to implement a new initiative, first they work out what needs to be done. Then they try to get people to implement it. We do the opposite. We first get a group of people together for a series of conversations, meetings, and programs. They work out what the future is that they want to commit to. And then they look at the project as a way to access that future.

McLaughlin: Can you give us an example?

Zaffron: Sure. We once worked with a copper mining company that had numerous unions. The price of copper was down and the company was headed for disaster. The unions were fighting with management, and management questioned the motives of the unions.

We were invited to begin the conversations of how to implement the three laws of performance. The first question for the unions and management was, do you see where this is going? Do you really want the company to go out of business? The company’s books were opened up, information was shared, and the truth was told.

They created a commitment to work differently in the future: They signed a fifteen-year labor agreement, which had never been done in the industry before. Then the question was how do we roll out these commitments to the rest of the workforce of 5,000 people?

We worked with them to involve everybody in having a say in the company. That doesn’t mean everyone controlled the company, but that they experienced being listened to. Whatever future management and the unions wrote, the employees saw as representing their voice in the matter.

When we first started working with this company, its share price was $9. Three years later, it was acquired for $38 a share. This did not involve any new mining discoveries or new production processes. It was all people working together in a new way.

McLaughlin: Why do people respond to future-based language?

Zaffron: It’s a natural response because people want to be effective and they want their work to matter. No one wants to work from nine to five and just go through the motions every day. But it ends up being like that for many people.

When people see that they can be co-creators of their organization’s future, that’s very exciting. Most people jump at the chance to make a difference.

McLaughlin: If you could give leaders one piece of advice about improving performance, what would it be?

Zaffron: I would say invite conversations with everyone you manage and your colleagues about what’s possible. Listen for their concerns, expectations, and their interpretations. Be willing to look at the world the way they do so that whatever you create is informed by the way the world is occurring for people.

You can find out more at www.stevezaffron.com.