THE NEW GLOBAL WE.

Innovation

Posted in Big Thought, Business, People, Questions by Harsha on April 22, 2008

Jeff Bezos was interviewed by BusinessWeek for their story on Innovation. I can’t be more of a fan of Jeff Bezos. I loved reading his story a few years ago, as having gone from a quirky hedge fund manager to being the founder of Amazon. He is truly one of the sharpest minds out there having lived through the dotcom bust riding a pure -to use outdated dotcom verbiage- “clicks and mortar” play.

BW asked a very poignant question and I quote “Q: Every company claims to be customer-focused. Why do you think so few are able to pull it off?”. Jeff’s answer just blew me away. He says “Companies get skills-focused, instead of customer-needs focused. When [companies] think about extending their business into some new area, the first question is “why should we do that—we don’t have any skills in that area.”

I thought about how it goes down at my place of work and how it probably is at your jobs as well. Or maybe at your own businesses. Almost everyone’s instinctive reaction to an innovative, out-of-the-box-idea is “But we can’t do that” or “It is not part of our model” or “You’re crazy!”. Recently, I had the honor of earning the indignation of my colleagues and a boss when I suggested tagging leads to a salesperson for life – i.e., if salesperson A uses salesperson B’s lead, then A should be given a (small) referral fee for the life of the deal that B put together with that lead. You should have seen the huffs and guffaws that went around the room and I was quickly pounced on by everyone. Needless to say, the internal confusion about compensation for sharing leads remains unresolved and is going to result in a lot of disastrous meetings and confusion with a last minute solution cobbled together and put in place. The idea was to move away from an ownership model, let salespersons relax about cross-sells and focus on increasing their business.

Jeff is not suggesting that if you run a painting company to start selling flowers. No way. The point of focus in his words are “A much more stable strategy is to start with “what do my customers need?”. He says Amazon’s Kindle is a great example. He doesn’t say what prompted him to develop this new gadget but one can imagine that it might have stemmed from delivery delays that buyers might have experienced on Amazon. If you were savvy enough to buy all your books from Amazon, then you probably want to get to the book faster. And so Kindle was born.

This was the most insightful questions for me from the interview… it clearly validated my way of thinking, thank God! One of the ideas I picked up from the jokers at SearchMyCampus.com is to offer a service if there is a critical mass of folks asking for it. By that I mean, if you’re in the painting business and a certain number of your clients (say 2 out of 10) ask for spackling services then that is something you might want to review. 1 out of 10 might be a random request but 2 out of 10 signals the start of a pattern. 3 out of 10 and you should start hiring the right folks and buying the equipment and by 4 out of 10, you should be ready to do your first spackle job.

This is great for me personally as well because I clearly recognize that I do not possess all types of skills. I am good in some and suck at others. But instead of being skill based (can you make presentations? Can you train your team? Can you manage people? etc.) Jeff now makes it easy for the million of us by suggesting retaining focus on needs. If you are not able to manage people, then you can find someone. Ditto for all other skills. Seems like the winner is the person who keeps his/her ears open to client needs and orchestrates the execution to provide solutions to them. Simple? 🙂

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4 Responses

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  1. Vidha said, on April 22, 2008 at 10:04 am

    I’m sorry, did you just say we had the right idea about something? The jokers bit kind of threw me off but it seems like you’re actually saying something nice about SearchMyCampus.com here?

  2. Harsha said, on April 22, 2008 at 10:23 am

    Hi Vidha,

    Thanks for your comment. Life is rarely a zero-sum game. Adding a campus only after at least 3-4 students request it, is a good idea of conserving resources, targeting popular campuses and spreading your wings. One has to give the devil it’s due.

    Thanks for keeping the discussion alive!

    Harsha

  3. Geoff said, on April 22, 2008 at 4:10 pm

    Harsha,

    I think you answered your own question when you asked if the sales compensation model can be broken. If indeed you are proposing leads for life for the first sales person to close a specific account, it is not a challenge, it has been done in the insurance industry for decades, but only on a one to one relationship, not on an inheritance formula as you propose. THis is called an annuity in this industry, big suprise on that label.

    Is what you are saying that the client is still a client of the company and revenue is generated, who but the sales person should be compensated? Who gets the account if the sales person moves on or is promoted? Usually the company. Residual sales are just that, residual. Yes, it is easier and cheaper to sell the same client another time, but it is still the selling that gets it done unless you have a complete renewal model, like maintenaince in software contract. In many high ticket product and service companies the selling and accont management are seperate entities, using seperate skills. If we use an old analogy, there are “hunter” and “gatherer” sale positions. They are different skills to work with the client for two different processes with the same end result. So, if you are speaking to a situation where the sale person moves the client to account management, a good incentive is to allow the Hunter sales person a percentage of the account management compensation for continuity and for morale of the team for as long as the client is generating revenue to the company. So to use your thoughts, the spakeling person is not the one doing the bid for the customer, but the bid person, different skills as we both agree.

    In my opinion, you are onto a good thing, but it may not be in the form you suggest. Selling is still a combination of people, processes and tools, which means different kinds of people skills can and will be used in different sales situations though they may use the same processes and tools.

  4. Harsha said, on April 25, 2008 at 9:16 am

    Geoff,

    Thank you for the great comment and thoughts. I’d like to think it over and get back with a response, which will mostly be a new post.

    Thanks,
    Harsha


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