Tag Archives: business thinking

November 21, 2016 · 11:17 am

Can Overhead Mean Profit?

I was chatting with a friend the other day and he told me about some layoffs that were going on at his place. Many of the people being cut were what we euphemistically used to call the “non-revenue generating portion of our staff.” You might term them overhead. You know – sales assistants, secretaries, accountants – the people to whom direct revenue isn’t attributed. I told my friend that I think it was an incredibly short-sighted move and in an effort to help your business not make the same sort of error, here’s why I feel that way.

First and foremost, there is a decent amount of research that tells is that salespeople – the people who bring in the fuel that drives your business’ engine – spend only about a third of their time (36%) actually selling. You know – meeting or connecting with clients either in person or virtually. 64% of their time is spent on non-sales activity, and a good chunk of that is with administrative tasks (25%) and service tasks (16%). A great sales assistant can take over much of those tasks, freeing the salesperson up to do what only they can do. Is it cost-effective? If a salesperson is making $200,000 a year and you can boost their output, making them worth $50,000 more, then you’ve paid for the assistant, right?

The same can be said of other support people. A smart accountant or lawyer can help boost profits, even if they do nothing more than find a way to say “yes” in making deals happen. That’s not always the case – I’ve worked with internal lawyers who were a bigger impediment to business than a crappy marketplace. If there is an internal awareness of revenue goals and a commitment by everyone to making deals happen, there is no such thing as “overhead.”

Selling has changed, no matter your business. Focusing on customers’ needs, not trying to sell them products they don’t want or need, and being a trusted advisor are the key ingredients in sales (and revenue) success. The more people your company can put to that task on behalf of your clients, the better. Make sense?

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November 18, 2016 · 1:40 pm

What’s My Name?

Our Foodie Friday Fun this week begins with a question. What do English Muffins, Vichyssoise, and Spaghetti and Meatballs have in common? I think if you asked many people they might answer that each is a “foreign” food that has become popular in the U.S. Actually, while the popularity piece is correct, each of those dishes was invented right here in America. You can add such “imported” dishes as Pasta Primavera, German Chocolate Cake, a Cuban Sandwich, and nearly every bit of what most Americans think of as Mexican food to the list. Each of these was created here despite their name or feel.

English: Spaghetti and Meatballs

(Photo credit: Wikipedia)

What does that have to do with business? I dine a lot at a local Mexican spot. This is not the “Mexican” food of Taco Bell, Chipotle, or Qdoba. There are no English menus and while there are certainly tacos, burritos, and other familiar sounding dishes, there are fillings such as tongue and tripe instead of the ubiquitous ground beef and chicken. There are also dishes (iguana, anyone?) that are truly Mexican. No chimichangas here.

I bring this up because we often allow our preconceptions of something to dictate how we process information. We hear “pasta” or “spaghetti” and we believe something originated in Italy. We see a spreadsheet and assume that the numbers and formulas have been vetted when in fact there may be computational errors or typos. Much worse is some people’s tendency to hear a name and assume  a lot about the person.  You know what I mean – a Jewish name means someone who will be good with money, an Asian name means they’re great with numbers. It’s a long, unfortunate list.

So the next time you settle down in front of a fajita or a nice bowl of chili and appreciate their “authentic” flavors, just remember that the flavor comes from Texas and not from Mexico. When you next settle in front of a report or a spreadsheet, spend a minute to ask about its origins as well. You can even think about what the motivations where of the person who created it. Try to keep an open mind about the interviewee in front of you as well, whatever their name, It might just change your whole perception.

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November 10, 2016 · 2:49 pm

Dead Wrong

There are a lot of lessons to be learned from the events of the last couple of days and not all of them pertain to our politics. One question I think I hear from people who fall all across the political spectrum is “how could almost every prediction be so wrong?” After all, putting aside the prognostications of loyalists on either side, none of the pollsters and data-based predictors got this right.

I’m not going to go into the politics but we can learn some valuable business lessons here. I’m not sure this was a case of garbage in, garbage out. That said, it’s clear that the legacy systems from which samples are drawn such as calling landline telephones are not accurate anymore. The real issue is one that I think we have in business, though, which is the inability to tell the difference between “good” data and noise. More importantly, we tend to rely on faulty data to the exclusion of both external factors and our own common sense. We like to tell stories that can be believed, and that happens when the stories echo popular beliefs. We focus on things that have happened already and in so doing we often miss subtle undertones that tell us what went before may not indicate what will come next.

We also suffer from the echo chamber in business. We talk to our coworkers and reinforce faulty information. We tell the tales that our tribe shares and miss those from the outside – the other tribes.

I was just as bad as many of you on Tuesday. I said more than once “unless every poll is dead wrong, it’s going to be a short night.” Well, they were and so was I. While the pollsters will have to wait 4 years to show they’ve learned how data can’t be the only thing we consider as we make decisions about the right path, you get that chance the next time some information crosses your desk. Take it!

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