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October 2011

To Improve Sales Performance, Fail Faster

Michael-liebow-foretuitThis guest post is by Michael Liebow, Founder & CEO of Foretuit.

Losing deals stay in a sales pipe more than twice as long as winning deals. To be a winner, start by failing faster.

Want to win? Then make it your mission to lose quicker. It' hard not to agree that sales, by its very nature, is a highly human-centric endeavor. All good salespeople know intuitively when a deal is going to happen, and conversely, when it isn't. Yet that internalized knowledge rarely, if ever, becomes institutionalized, meaning it never gets into the system of record or CRM application. This creates a huge barrier to improving sales performance.

The data speaks for itself: looking at a knowledge base of deals assembled from a variety of companies and industries and totaling more than 10,000 opportunities, the numbers are striking. Winning deals on average took only 75 days to close, while losing deals took 175 days to close out ― 100 days longer. During those additional 100 days, management, sales ops, finance, and all sorts of other ancillary groups in the enterprise spent time/cycles on evaluating what, in essence, the sales rep knew all along. The time has come to fess up.

It can no longer be acceptable to maintain an opportunity in a pipe beyond its sell-by date. Moreover, accurately predicting sales opportunities is way too important to leave to a rep's gut or hunch, as the outcome directly affects the entire corporation. Much of a company's asset allocation, budgets, and resources are set based on their sales reps' predictions. Unfortunately, current predictions from sales are more like wishful thinking than science. Or worse, like hide and seek. The reason is simple: humans process this data intuitively and don't have the time nor inclination to open the kimono and show the proverbial powers-that-be an honest assessment of a deal’s potential outcome.

Clip_image002This culture of bravado makes cleaning a sales pipe nearly impossible. Yet what can only be described as losing fodder must be cleaned out of the pipe if an organization ever hopes to leverage its investment in the sales process. Thus, the trick to winning is to find a way to allow for a clear quantitative assessment of the pipe and clean it so that your best people across your organization are available to spend precious resources, time, and cycles on the deals with the highest likelihood of winning. Yes, you need to become Mr. Clean.  

(Mr. Clean is a registered trademark of Procter & Gamble.)

The key is bringing modern science and technologies together using big data and analytics to better predict sales outcomes far in advance of expected close dates. The goal is to create an intelligent, predictive approach to business-to-business sales by 1) determining patterns based on actual company and buyer business behavior, and 2) analyzing that information in order to increase communication between colleagues and more closely link management to sales teams with the goal of closing deals faster and more efficiently, without arduous manual effort.

Since many studies show that salespeople are spending less and less time selling, the absolute essential ingredient to success here is to ensure that any effort does not add manual steps to the sales-reporting process ― more key strokes, clicks, needless processes, or internal meetings will only result in less productivity, not more. And since the essence of the social enterprise is, well, social, then something needs to change to allow salespeople to spend more time with the right customers while capturing the very essence of a productive deal cycle ― one that yields a positive outcome.

Thus, the trick to better resource optimization is to automate the process of updating activities without entering information and give management complete visibility into the sales process without relying on a weekly interrogation. All of this empowers a sales organization to fail much faster ― and win much more.

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Selling "Selling" to Millennials

Today's guest blog post is by Dr. Bruce Robertson, an associate professor of marketing at San Francisco State University (SFSU) who has published in the Journal of Personal Selling and Sales Management, Organization Science, Leadership Quarterly, and other academic journals.

When talking to sales managers, the most frequent complaints about the Millennial generation are that they don't want to work hard (pay their dues), and they don't appreciate the opportunity a sales career can provide. These managers feel they have their backs to the wall. They know they need to hire new reps because their senior people are getting ready to retire, but they can't attract the right kind of young people to the career. One of the big issues facing sales managers today is the generational shift from the Baby Boomers and Gen X'ers who hold senior-management and sales positions to Millennials and Gen Y'ers who are entering the workforce in increasing numbers; by the time they have completed college, they will represent a cohort larger than the baby boom.

Don't Be an Eight Track to Their iPod

According to author, speaker, and consultant Alexandra Levit, Millennials (those born between 1980 and 2000) are techies whose parents taught them that they are entitled to the world. They are confident, collaborative, impatient, entrepreneurial, and socially tolerant. They work by multitasking and in real time. And they prefer e-communication and want continuous exposure to challenges and interesting people. You'd think they’d be sales naturals. Yet my correspondents tell me young people aren't interested in professional selling.

It's natural for senior generations to assume that the younger generation will measure success the same way they have. According to Kirk Hulett, senior VP of strategy and practice management at Securities America Inc., senior generations believe that younger workers should pay their dues, following the same paths to achieve the same level of success. Here are three suggestions to help senior sales managers make the sales career attractive to young people.

Sell the Steak, Not the Sizzle

One of the big differences between Millennials and those who would hire them is that Millennials are looking for meaning in their work, as well as financial reward. A DeVry Career Advisory Board Study, "How the Recession Shaped Millennial and Hiring Manager Attitudes about Millennial's Future Career," found that Millennials consider meaningful work, high pay, and a sense of accomplishment as keys to successful career, while hiring managers consider high pay to be the key to a successful career. In one conversation, a sales manager bemoaned the fact that even though it is a sales career, "the product that is being sold makes a huge difference in people's lives. We spend all of our time talking about the business opportunity with our recruits, and they want to hear about how they're going to help people."

For previous generations, the opportunity to make a lot of money and the ability to be your own boss attracted the right people to a sales career. The product itself was secondary. For Millennials, the product is primary, and the opportunity is secondary. When talking about a career opportunity with Millennials, focus on the benefit that your product provides.

Face the Facts About Facebook

Gen Y is clearly the most tech-savvy generation. According to a Pew Research Center study, "Millennials: Confident, Connected, Open to Change," as of January 2010 (ancient history), 75 percent of Millennials had created a social network profile, and 83 percent said they sleep with their cell phone nearby at least occasionally. Their willingness to share personal information can be disconcerting, especially in industries where government regulation and privacy are concerns. On the other hand, Millennials grew up using technology as a tool for finding information and developing personal networks. They come out of the box knowing how to use the Web as a tool to make their lives easier. Because they are accustomed to the intuitive user interfaces in consumer electronics and video games, they can be impatient with information systems products that are difficult to use.

From a recruiting perspective, it is important to have clear guidelines about the business use of social networks. These guidelines need to be loose enough to recognize the value Millennials bring to the table through their social activities, and at the same time make it clear that there are legal and career implications about what they share both personally and professionally. Training programs need to be online and engaging. Also, it may be time to upgrade the CRM interface.

They're Not Your Father's Next Generation

Some differences between Millennials and previous generations are simply part of their cultural identity. Our parents were shocked by men with long hair and rock music. Today, long hair is accepted regardless of gender, and rock music has become "classic." Millennials are more likely than previous generations to have a tattoo (38 percent) or a body piercing other than in an ear (23 percent), according to the Pew Research Center. While some of us fear this may detract from the professional appearance we would prefer in our salespeople, others of us are worrying about whether our sales force reflects the demographics of our customer base. While increasing costs are pushing more and more sales activity online (Web conferences, Skype) there still is a need for salespeople to meet with customers in order to develop a solid working relationship.

Rather than get hung up on appearances (72 percent of people with tattoos have them in places where they don't show), sales managers can help Millennials become productive by coaching them on social skills. Twenty-somethings are comfortable connecting with others online but may not have the interpersonal skills we would like to see in a sales rep. Part of this coaching will be the importance of personal appearance in establishing relationships and helping the young rep make intelligent decisions without having to "sell out."

On November 16, SFSU will host a panel of accomplished business leaders, who will discuss the challenges of recruiting, training, and retaining Millennials in the sales profession. (http://cob.sfsu.edu/cob/marketing/millenials.cfm

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The Three Elements of an Effective Social-Business Strategy

Paul Greenberg defines social business as "the company's response to the customer's ownership of the conversation."

After taking the audience's pulse at last week's Sales & Marketing 2.0 Conference, I realize that Paul's definition is already a traffic light behind Main Street. The rapid rate at which companies integrate social media into their business operation is astonishing. Search Engine Journal reports that in 2007, only 17 percent of companies used social media. The prediction for 2012 is 43 percent. Today, more than 80 percent of companies use social media for recruiting. One company represented at the conference reported that 20 percent of its new leads come from its social-business strategy. Another company reported that leads created through social media are three times more likely to close than leads generated by marketing.

While individual social-media tools add little value and offer no ROI, a social-business strategy leads to quantifiable results. Here is my definition of the new face of social business: the alignment of content, conversations, and collaboration with the company's business strategy.

On a tactical level, a social-business strategy relies on three core elements:

  1. Content. Ownership of a product or service is always preceded by ownership of the related content. Content is like a currency that companies share to earn interest in the marketplace. Good content leads to better conversations. Good content educates customers. Good content catches customers. For example, at HubSpot, all 100 salespeople are asked to create and maintain a blog. The results: more traffic to the company's Website, higher search-engine optimization ratings, and unprecedented sales growth year over year.
  2. Conversation. In the new world of social business, the sales pitch has been replaced by a fluid conversation between equal partners. The focus is on situational fluency. If the prospect has already completed 80 percent of the fact finding in the purchase process, it's the salesperson's job to deliver the remaining 20 percent within the allocated time frame set aside for the conversation. In their one to many conversations, smart companies have shifted their strategy from thought leadership to community leadership. Good community leaders set conversational boundaries that prevent members from going on rabbit trails or engaging in "wild west" behavior. It takes a well-managed community with clear boundaries to close more business.
  3. Collaboration. New social CRM tools, such as Jive, Lithium, or Salesforce Chatter, have given companies the opportunity to collaborate across the organization, eliminating silos while maintaining a steady focus on business at hand. Smart companies extend the collaboration pipeline to include their customers. By elevating customers to the status of equal partner, companies can co-create their future.

While the benefits of transforming a company into a social business are clear, what's not clear is the path to get there. While the Internet has the potential to replicate the agility of our mind on a screen, the number of available tools to create an effective social-media strategy is staggering.

Success doesn't depend on choosing the right program like Facebook, Twitter, or LinkedIn, but on selecting the right apps for creating and delivering content, enabling conversations, and building communities. With so many programs to choose from, companies have the luxury of creating a social-business app universe that will help them achieve their business objectives.

Here are a few tools that can help you win:

HubSpot Content Creation Kit: http://www.hubspot.com/marketing-kits/

Top 10 Social Media Blogs: http://www.socialmediaexaminer.com/top-10-social-media-blogs-of-2011

Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization, an excellent book by Oliver Blanchard: http://www.amazon.com/Social-Media-ROI-Measuring-Organization/dp/0789747413/ref=sr_1_1?ie=UTF8&qid=1319311737&sr=8-1

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A social business conference – "Sales Strategies in a Social & Mobile World": www.sales20conf.com/socialmedia

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Selling Successfully in a Down Economy

This guest blog post is by Matt Monroe. He is a senior sales leader with a national beverage company. Matt also writes about his experiences and thoughts in a new column called “The Monroe Doctrine.” In the past, Matt facilitated training for multinational companies, including advising them in their sales processes for complex selling situations.

Today, selling is as challenging as it has ever been. The good news about challenging undertakings: they usually pay off tremendously for those who succeed in the execution.

Why is selling so tough right now and, more importantly, what are the opportunities?

I believe it's so challenging because, right now, cash is king. In the '90s and early '00s, cool was king, but not anymore. Cash is now more critical than cool. And when cash is so precious, spending is scrutinized, delayed, and prioritized more than ever. This spending scrutiny is one of the reasons why many mass-media outlets and politicians accuse "awful" big business of sitting on piles of cash and not using it to put people to work. It's not so much greed as it is prudence in an atmosphere of uncertainty.

We once lived in a sales arena that called for the building of a solid value proposition that needed only provide a logical shot at a win for the decision maker; now we live in a kingdom ruled by more "sure things." This environment demands that we, the seller, shoulder the argument, the implementation, AND the results of our proposed solution. This is a very comfortable place for the holder of the decision. Based on the demands on the seller and the power and need of the decision maker, the stage is set for possibly the purest of win-win scenarios, but only the truly professional salespeople need apply.

How do we make sure we are those strong sellers who succeed? Haven't we already read all the books on the tips, tactics, phrases to use, and self-talk to ruminate on? And adding to the challenge, the margin for error, the tolerance for mediocre execution, is now microscopic. We see now more than ever that selling without effort is farce, but also that effort without meaning is waste.

The opportunities are for only those who have the skills to identify substantive points of entry into vital organizations and then to leverage that small sliver into an open door – to find a seam and exploit it relentlessly.

Below are five practical steps for overcoming reluctance to spend. As we look at them, remember that if cash truly is king, the real decision makers will be focused on strategies that protect and/or grow cash flows and reserves.

1. Know the players, starting as high up in an organization as possible. This is information is available on 10-Q forms, Websites, LinkedIn, etc.

2. Concentrate on positions that are most tuned in to – and can enable – change: the C-suite, VPs, directors, etc. While these are not the only folks who can affect change, it makes a statement if they're referring you down to executors. And they are more willing than ever to listen to outsiders (with a compelling message). They are actively looking for answers and solutions to their most obvious and critical-to-success challenges.

3. Craft a brief message that deals specifically with that role’s most likely focal point(s). It's OK to generalize here, e.g., "CFOs are watching for ways to maximize capital and minimize risk. CEOs are looking at survival, making forward moves in the current recession, and/or being positioned to take advantage of the turnaround we all await."

4. Know specifically what you will use to back up your claim of being able to help achieve positive results through change. Numbers that have occurred for others you've worked with can be very compelling. The key is to be as specific as you possibly can.

5. Look at relationships that you have and see if you can tie those relationships to your target decision makers. Here's a personal example of a successful tactic I used to engage with the president of a target public company: I researched the company's Website and saw that it used the law firm that represented us. I contacted our attorney, and he facilitated the initial contact for us. Next, the president of the target firm suggested that the person over our solution's implementation meet us. We met with him and initiated the professional relationship. Eventually we got a large contract that we service to this day. Obviously this is but one example of using strong relationships that have some connection to open a door for initial contact and targeted conversations.

The challenge for you and your sales organization: execute with passion, precision, and an eye toward improvement and results, and you will overcome prospects' reluctance to move, even in – no, especially in – today's economy.

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How Cold Calling 2.0 Added $100 Million to Salesforce.com's Revenues

Clip_image002 This guest post is by Aaron Ross, a former sales director at Salesforce.com and author of the Amazon best-seller, Predictable Revenue: Turn Your Business Into A Sales Machine With The $100 Million Best Practices Of Salesforce.com.

 

 

Cold Calling 2.0 is the outbound sales process that helped Salesforce.com add $100 million in its first few years.

Cold Calling 2.0 doesn't involve any cold calling. In fact, if you're making cold calls, you are doing everything wrong.

Cold Calling 2.0 means prospecting into cold accounts to generate new business without using any cold calls. I define a cold call as calling someone who doesn't know you and who isn't expecting your call. No one enjoys this – neither the caller nor the person being called, right?

Cold Calling 2.0 also means you have processes and a system in place to generate new pipeline and leads predictably – that is, an organization knows how "X" effort will lead to "Y" results. In fact, done right, it can be the most predictable source of pipeline at a company – as with companies like Salesforce.com, WPromote, or Responsys.

While Cold Calling 2.0 is a system with many steps, there was one original breakthrough that started the snowball rolling.

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In early 2003, I was experimenting with cold calling to see if it would work. It did but far too slowly.  Through cold calling, I found I was able to generate two highly qualified opportunities. I'm emphasizing "highly qualified" because frequently, outbound sales teams pump up their results by throwing over lots of poorly qualified demos and appointments to their account executives. So when I say high quality, I mean it.

Back to March 2003: I needed to generate at least eight highly qualified opportunities per month to hit our goals, yet I was doing only two per month through cold calling. OUCH. How was I going to quadruple my results?

Outbound Sales Breakthrough #1

The biggest bottleneck in prospecting into companies isn't getting to the decision makers/influencers/point people…it's finding them in the first place!

Often, the ultimate decision maker, such as the CEO, or VP of sales in the case of Salesforce.com, is not the best person for your first conversations. And in larger companies, there can be so many people with the word "sales" or "marketing" in their title, it's impossible to tell from the outside who does what.

I learned this through hard work – cold calling, cold emailing, plugging away. I realized I spent most of my time hunting for the right people, not trying to sell or qualify them.

If I could find the right people, I could usually have a productive business conversation with them.  But it took a LOT of time to find them, especially in those Byzantine, Fortune 5000-size companies!

In desperation, I tried an experiment.

I'd always assumed that mass-emailing executives wouldn't work. Don't I need to carefully craft each email to make it personal?

I wrote one email that was a classic cold-calling letter: "Do you have these challenges? X, Y, Z…"  I also wrote a totally short-and-sweet different email – in plain text with no HTML – simply asking for a referral to the right person at the company.   

Here was a lesson learned in the value of A) not assuming anything and B) experimenting:

On a Friday afternoon, I sent two mass emails from Salesforce.com, 100 of the classic sales emails to Fortune 5000 executives and 100 of the short-and-sweet emails to the same kind of list. The next morning when I checked email, I had 10 responses sitting in my inbox! These were from C-level and VP-level executives at large companies – just the people with whom I wanted to talk.

Response rate for the "salesy" email: 0 percent.

And at least five of the emails I received from the short-and-sweet campaign were positive, referring me to other people in the organization as the best person for a conversation about sales force automation.

Outbound Sales Breakthrough #2

Mass emailing C-level Fortune 5000 executives with specific kinds of emails can generate 9+ percent response rates. 

Those high response rates (7 to 9 percent or more) from high-level executives have held true year after year, even with my current clients in 2011, seven years later.

A 500% Increase in Results

In the next month, April 2003, I increased my results by 500 percent and generated 11 highly qualified sales opportunities that continued on in live sales cycles. (And this increase in opportunities did later lead to an equal increase in revenue.)

Hence, the tipping point of the Cold Calling 2.0 process was born: sending mass emails to high-level executives to ask for referrals to the best person in their organization for a first conversation.

This became the first step in a longer outbound sales process and created a highly predictable flow of quality leads, and thus revenue, at Salesforce.com, almost doubling enterprise and midmarket growth.

About Aaron Ross and Predictable Revenue

9780984380213 Aaron Ross is managing partner of Predictable Revenue, Inc. (www.PredictableRevenue.com).  His new book is Predictable Revenue: Turn Your Business Into A Sales Machine With The $100 Million Best Practices Of Salesforce.com. Aaron is also CEO of PebbleStorm and helps people start fulfilling businesses (www.UniqueGenius.com). 

Full disclosure: Aaron Ross is not a customer of Selling Power. 

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Did Billionaire Bullies Larry Ellison and Marc Benioff Stage a Fight to Get More Press?

Here is the transcript of a phone call that never happened (I imagined this word for word) when Larry Ellison canceled Marc Benioff's keynote speech at Oracle OpenWorld 2011.

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Benioff's iPhone ringing [Cloud music, loud music – Metallica] 

Benioff: Hi, Larry. What's up?

Ellison: I want to make you more famous.

Benioff: I'd like that; tell me more.

Ellison: I found a way to get you more publicity than you ever thought possible for your speech tomorrow.

Benioff, chuckling: What's your idea?

Ellison: Simple – I'll cancel your speech.

Benioff: What?! You want to shut me out?

Clip_image003 Ellison: No, I can get you more press by pretending to shut you up.

Benioff: Come again?

Ellison: The press loves a fight. Remember when Rosie O'Donnell fought with Donald Trump? The press covered that for months.

Benioff: You are a genius.

Ellison: It takes one to know one.

Benioff: Agreed. Remember Sun Tzu? He said, "All warfare is based on deception."

Ellison: No, Marc, it's all about perception. We make the press believe that we are fighting, and they'll cover us play by play. I throw the first punch by canceling your speech last minute, and you play the injured party crying foul.

Clip_image004 Benioff: Got it. I can have my people walk in front of your show holding up signs saying, "The Cloud Must Go On!"

Ellison: Great idea! You're catching on fast.

Benioff: And I will invite the press to the St. Regis next door and promise to deliver a strong message.

Ellison: Yes, keep on spinning this story. I like where this is going!

Benioff: Are you ok with my saying that Oracle doesn't get the Cloud?

Ellison: As long as you don't mind my saying that your Salesforce Cloud is really a farm of 1,500 Dell boxes strung together.

Benioff: Right on! You're the bad cop, you pitch your boxes, and I’m the good cop, I pitch the Cloud story.

Ellison: Sounds good to me.

Benioff: This is going to cost you a few bucks.

Ellison: What do you mean?

Benioff: I paid you a million bucks for the sponsorship.

Ellison: I'll send you a check.

Benioff: For $2 million?

Ellison: Are you nuts?

Benioff: If you want me to be your foil, you'll have to pay me something.

Ellison: Why?

Benioff: If you don't want to do this, I will bring a gaggle of reporters and walk into Oracle world with duct tape over my mouth with writing on it that says, "Silenced by Oracle," and then the joke is on you.

Ellison, laughing uncontrollably…snorting: Marc, you crack me up. I will send you two checks, one for $1 million made out to salesforce.com, the other one for $100,000 for your foundation. Deal?

Benioff: Deal!

Full disclosure: The above is a fictional account of a conversation that never took place. Below is the detailed account of what really happened, according to Marc Benioff.

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Here is what Larry Ellison said about salesforce.com in his keynote:

"Our Cloud's a little bit different. It's both platform-as-a-service and applications-as-a-service. The key part is that our Cloud is based on industry standards and supports full interoperability with other Clouds. Just because you go to the Cloud doesn't mean you forget everything about information technology from the past twenty years.

"In contrast, salesforce.com's Force.com platform is the 'roach motel' of Cloud services, amounting to the ultimate vendor lock-in, due to its use of custom programming languages like APEX. In contrast, the Oracle Public Cloud uses Java, SQL, XML, and other standards."

The bottom line: Both billionaires got their say, and the press got a great story.

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Steve Jobs: No Retrospective Can Put His Genius in Perspective

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While big-ego computer tycoons aimed at world domination, Steve Jobs said, "I want to make a dent in the universe."

A newspaper headline from southern Germany:

"The Death of a Magician. Steve Jobs created magical products, his presentations were magical, and so was his confidence."

Steve Jobs’s first TV interview in 1978:

During the sound check, a very nervous Steve Jobs said, "You need to tell me where the restroom is, because I am definitely ill. Actually, I am ready to throw up at any moment."

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New York City mayor Michael Bloomberg:

"Steve Jobs saw the future and brought it to life."

A documentary on memory and imagination: 

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"A computer is to me the equivalent of a bicycle for our minds."

President Calderon of Mexico:

"The world has lost one of the most visionary minds of our time. Steve Jobs left us an example of struggle, inspiration, and creativity."

President Barack Obama:

"By building one of the planet's most successful companies from his garage, he exemplified the spirit of American ingenuity."

Steve Jobs speaks at Stanford University in 2005:

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For the first time, Steven Jobs spoke about his private life and told the audience that he was adopted and dropped out of college.

"College was not that romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms. I returned Coke bottles for the five-cent deposit to buy food with, and I would walk seven miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on.

"It was impossible to connect the dots looking forward when I was in college, but it was very clear looking backward ten years later. Again, you can't connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will connect somehow in your future. You have to trust in something – your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart even when it leads you off the well-worn path, and that will make all the difference."

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Steve Jobs, the rock-star salesman, married science with art.  

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Apple cofounder Steve Wozniak said during an Intel Corp conference in August 2008, "Every time I designed something great from when we were very young, he would say, 'Let's sell it.' It was always his idea to sell it."

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Steve Jobs introduced the first Apple store in 2001.

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Steve Jobs and his presentation magic – a must-view for any salesperson:

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He always took the long view in legal disputes.

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The Beatles introduced Apple Records in 1978. There were a number of trademark disputes between Apple Corps Ltd. (owned by The Beatles) and Apple Computer (now Apple Inc.) over competing trademark rights. The courts handed down a judgment in favor of Apple Computer. The legal dispute dragged on for 28 years.

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After his biggest failure, he walked on the path of innovation.

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After being ousted by Apple, Jobs bought a production company from George Lucas in 1986 for $10 million. He named the computer-animation studio Pixar and signed a distribution deal with Walt Disney.

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Pixar created computer-animated movies such as Toy Story, Finding Nemo, A Bug's Life, and Monsters, Inc. In 2006, Disney bought Pixar for $8 billion.

To Steve Jobs, money was fairly meaningless:

"When I was 23, I had a million dollars; at 24, I had 10 million; and at 25, I had over $100 million. But this wasn't important, because I never did this for the money." In 2010, his salary at Apple was $1 a year. In 2010, Forbes estimated his wealth at $8.3 billion.

Apple is like a bank with $80 billion in the vault.

Douglas Kass, founder and president of Seabreeze Capital, said yesterday, "His legacy is that Apple is built to last with almost $80 billion in cash. It is an insurance policy for the company to maintain its future market-share leadership." Kass added, "No other competitor is anywhere close to being as well positioned over the next decade." 

Steve Jobs quietly enjoyed the luxuries that came with success.

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His Mercedes SL55 AMG did not have any license plates.

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His Gulfstream V plane did not display the Apple logo.

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His magnificent 17th-century French Chateau de Sannes is one of the most beautiful places in the Lubéron region of France. It sits on 215 acres…

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and has a magnificently manicured English garden, a vineyard, an olive orchard…

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an indoor pool…

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an outdoor pool…

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wheat and lavender fields…

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a windmill, and a truffle plantation.

Eleven days after introducing the iCloud, Steve Job's chateau was listed for sale by Christie's for $35 million. The property is still for sale

Apple fans are invited to share their thoughts, memories, and condolences by sending messages to rememberingsteve@apple.com

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Lack of Trustworthy Sales Forecasts Costs Billions

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This guest post was created by MIT Sloan School of Management.

 

 

 



Trust plays a big part in everyday relationships. Could it also be an important resource in business relationships?

MIT Sloan School assistant professor Karen Zheng and two colleagues set out to answer that question in a study of trust within supply chains. By conducting experiments using computer simulations, the researchers found that trust can, indeed, be an effective tool for resolving potential business conflicts.

"The message we have for companies is that contracts are not the only way to resolve issues," Zheng said. "There are many market conditions in which trust between the parties by itself is a sufficiently powerful way to resolve incentive conflicts."

The subject chosen for the study is one of the most vexing problems in supply-chain management: manufacturers' tendency to issue overly optimistic forecasts.

Manufacturers want to be sure they have abundant supply to satisfy customers. But inflated forecasts can prompt suppliers to overproduce, which can lead to costly losses. In 2001, the networking-equipment supplier Cisco had to write off $2.1 billion in excess inventory because of inflated customer forecasts.

To understand the role of trust in a forecast-sharing setting, Zheng and her colleagues Ozalp Ozer of the University of Texas at Dallas and Kay-Yut Chen of Hewlett-Packard Laboratories recruited for a computer experiment graduate students in business-related fields. The participants all had some familiarity with how manufacturers and suppliers interact. Some of the participants were assigned the role of suppliers and others, manufacturers.

"With the software, we varied two conditions: the cost of the product the supplier was producing and uncertainty in market demand," Zheng said. "Then we saw how changes in these two conditions affected trust between the parties and whether the changes affected decisions they made in the market."

The researchers found that when the cost of the product was low and the manufacturer's market was stable, trust was high and the businesses cooperated. According to the researchers, ink cartridges represent such a market. They are relatively cheap to produce, and the market for them is stable.

When cost was high and the market uncertain, trust was low and cooperation broke down. A real-life example, according to the researchers, can be found in laptop computers, which are costly to produce and face a volatile market. In these cases, parties probably need to rely on contracts to manage their relationships, according to Zheng.

When the cost of a product was low and markets were uncertain, trust remained sufficient for cooperation, the researchers found. An example is DVD movies, which are cheap to produce but are sold in volatile markets.

"Our key insight is that the risk entailed by trusting, which is influenced by the product's cost, has a greater impact than market uncertainty in affecting people's trust," Zheng said. "When that risk is low, companies will naturally cooperate with each other."

To illuminate the experiment's findings, the researchers developed a mathematical model that quantifies trust and its close relative, trustworthiness, to show how they jointly affect forecast sharing.

A company that is in a supply-chain relationship could use the model for guidance in dealing with the other firm, according to Zheng. "If a company has a rough assessment of how much its partner trusts the company, it can use this model to figure out how the partner will act and what will be the optimal decision for itself," she said.

The researchers' findings were published in the June 2011 issue of the journal Management Science in the article "Trust in Forecast Information Sharing."

Academic researchers have typically overlooked trust as a factor in supply-chain relations. Previous studies have primarily assumed the parties have either complete trust in each other or absolute mistrust, according to the researchers. "What we have found in this study is that decisions people make fall between these two extremes. Their behavior shows a continuum of trust and trustworthiness," Zheng said.

Action tips:

1. Tap into the MIT Sloan School of Management research and commentary.

2. Integrate your supply chain into your CRM solution and use predictive analytics to bring forecasting accuracy above 90 percent.

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If You Like Baseball and Love Sales Management, Go See "Moneyball"

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This is the story of Oakland A's manager Billy Beane, who meets an Ivy League econ grad, Peter Brand (played by Jonah Hill), who views players through the lens of analytics and statistical probabilities. Beane (played by Brad Pitt) always loses his best players to big-money clubs and needs to find a new way to win. Following a hunch, he hires nerdy Peter Brand, and the pair begin to change the way the club drafts and plays. The two establish a culture of measurement and make hiring decisions based on science and probabilities, which upsets scouts and greatly irritates the Oakland A's coach. The dramatic tension increases as the newly assembled team loses game after game. Beane and Brand hang tough, although Beane is carrying the seeds of doubt from his own can’t-miss-but-did career as a major baseball player. 

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As is the case with statistics and probabilities, over time, the bet pays off, and the Oakland A's see a record-breaking streak of 20 winning games in a row.

Moneyball is about the fundamental cultural shift from picking players based on hunches to looking at the game in a more rational and objective way, measuring each player's performance and displaying the results in the forms of percentages, graphs, and comparison charts. In essence, the shift from Baseball 1.0 to Baseball 2.0 allowed Billy Beane to see greater value in the underappreciated or ignored players that the old scouts considered washed out or destined for the minors. The movie has a great scene in which the good old boys chew the fat, commenting on the assets and liabilities of their draft prospects, focusing on age, injuries, and gossip trivia, such as, "If a player has an ugly girlfriend, it means he doesn't have much confidence."

I can easily see Brad Pitt in the role of a sales manager who has lost three of his top producers to the competition. It is not a big stretch to imagine Peter Brand as the new sales operations manager who teaches his boss how to match salespeople's talents to their specific job requirements. The sales operations manager is the science nerd who knows which tools can fix the sales manager’s problems.

Once the sales manager shifts the focus from chasing superstars to creating a Sales 2.0 organization that aligns people, process, and technology, the outcome can be as spectacular as the Oakland A's record-breaking winning streak.

If you are looking to hire salespeople based on science, take a look at www.calipercorp.com or www.hrchally.com. If you want to explore predictive analytics, test-drive www.lattice-engines.com or www.cloud9.com. If you want to model your sales-compensation plan and predict results, check out www.xactlycorp.com or www.callidussoftware.com. If you want to take a closer look at 30 of the most valuable and profitable Sales and Marketing 2.0 tools available on the market today, visit www.sales20conf.com/sm2011 and attend our conference. (Full disclosure: I am hosting this event.)

The actionable insight I walked away with after seeing Moneyball: Success doesn't wait for those who act only when they "have a hunch." 

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