A Retail Success

In 1978 Bernie Marcus and Arthur Blank were executives of "Handy Dan" part of Daylin, Inc. Their division, Handy Dan, was making lots of money, while Daylin, Inc. was going bankrupt. They were suddenly fired!

Before they were fired, Marcus and Blank, had been experimenting at Handy Dan's by lowering the prices on some items. "They observed that when they marked down items, volume increased and costs as a percentage of sales decreased." From this successful idea they developed their step-by-step plan of action. They decided on Atlanta as their store location. Then they located two large empty stores and put on the shelves 18,000 products from plumbing, hardware, electrical, paint, and lumber.

They charged close to 1/3 less for each item. Marcus and Blank selected and trained their employees to "deliver the best customer service". They chose knowledgeable salespeople who knew about their products and were able to answer customer's questions, and direct them to the best equipment for their needs. Their expert salespeople were able to tell customers how to do the work.

Their store had everything that a homeowner or contractor needed to do their repairs under one roof for the lowest price possible.

On the first day that they opened their store, Marcus and Blank gave their children $1 bills to give out to customers as a thank you for coming in. By evening, 5pm or 6pm, their children were in the parking lot giving out a $1 to each person they could convince to come into the store.

Blank said, "It was a crushing disappointment."

Marcus said, "It looked like curtains for us. My wife wouldn't let me shave for days. She didn't want a razor in my hand."

On the third day, "a satisfied customer returned" bring with her a thank you gift of "a bag of okra for Marcus" for helping her solve her problem.

She gave them hope and then "word of mouth" brought more customers into

Marcus and Blank's, "The Home Depot" store.

Today, The Home Depot has 371,000 employees' worldwide. They sell hardware, plumbing, lumber, tools, home appliances, electrical supplies, paint, flooring, building materials, and gardening equipment and supplies. In 2014, Home Depot earned $78.812 billion in profit an increase of over $4 billion from 2013.

What are the three things you can learn from Bernie Marcus and Arthur Blank about stepping-stones into success?

1) Remembering their successes with lowering the prices on certain items and saving in purchasing on volume, Marcus and Blank wrote up their step-by-step plan of action. They located two empty large buildings stores in Atlanta. On the shelves they put 18,000 products from plumbing, hardware, electrical, paint, and lumber. They charged close to 1/3 less for each item.

2) Trained employees to "deliver the best customer service". They chose knowledgeable salespeople who knew their products and were able to answer customer's questions, and direct them to the best equipment for their needs.

3) Their stores sold homeowners everything they needed in one store and their expert salespeople told them how to repair it. Contractors were able to find everything they needed in one store for the lowest price possible. It was a "Do it yourself' store.

If Bernie Marcus and Arthur Blank hadn't been fired at "Handy Dan's" they would never have created "The Home Depot" and helped employ all these people worldwide giving them good jobs to take care of themselves and their families. Their store was a how to do it store that housed all the products needed under one roof for homeowners and contractors. Their store filled a need!

Napoleon Hill said, "Most great people have attained their greatest success just one step beyond their greatest failure.

Prime Minister Winston Churchill said, "Never give in, never give in, never, never, never, never-in nothing, great or small, large or petty-never give in except to convictions of honor and good sense."

So the next time you fail at something, remember the failure of Bernie Marcus and Arthur Blank and how they responded to failure by developing a new plan of action to develop their "Do it yourself" store.

By the way, have you ever heard of "Handy Dan's" before this article?

Don't let any failure stand in your way, let it be your stepping-stone to success.

Madeline Frank, Ph.D., DTM, John Maxwell Team Member, and Certified World Class Speaking Coach is an Amazon.com Best Selling Author, sought after speaker, business owner, teacher, researcher, and concert artist. She helps businesses and organizations "Tune Up their Businesses". Her innovative observations show you the blue prints necessary to improve and keep your businesses successful. She writes a monthly newsletter "Madeline's Monthly Article & Musical Tips Blog" and a monthly radio show "Madeline's One Minute Musical Radio Show". She has just published her new book "Leadership On A Shoestring Budget" available in print or as an e-book. To contact Madeline for your next speaking engagement

Meeting Participation Pitfalls

How well are your meetings functioning? Through this series of articles I have been highlighting the many factors that must be considered for your meetings to go well. When conducting your meetings there are several participation pitfalls that your meeting facilitator should help you avoid.

Are You Seeing Your Role in the Wrong Way?

The most serious meeting participation pitfall is the leader who wants to give the answers to everyone in the room. Don't get me wrong - there are times when we need answers from the senior leader, but those times should be rare. Great leaders see that their role in the meeting is to ask the right questions and to listen to the ideas of their team. They realize there are many ways to do things, and there is rarely only one right answer. They put big ideas on the table, ask difficult questions, and get the team to debate those ideas. Once they have heard everyone's point of view, they can then combine their team's input with their own opinions to make the best decisions possible, given the circumstances. The leader's job is to access the brains of the team, not to be the team's brain.

Do You Tend To Jump Into Problem-Solving Mode Too Quickly?

Another common mistake I see in meetings is the tendency to jump too quickly into problem-solving mode. As soon as a meeting participant raises an issue, concern, or problem, everyone moves too quickly to find a solution or provide an answer. The value of having multiple people available is to first determine which is the real problem to solve. The best tool participants can bring is the ability to ask great questions. Presenters consciously or unconsciously often leave out important information that the other participants need to know. Once these missing facts are uncovered, you may find that there is a more fundamental or broader issue to solve than the original symptom that was mentioned at the onset.

Is Everyone's Contribution Heard?

Another common meeting participation pitfall is failure of the leader of the meeting to make sure that everyone gets involved in the discussion. There are a few dimensions to this issue.

Failure to Voice Your Opinions, Questions, and Concerns. If you do not contribute, you have wasted your time and everyone else's. Everyone has something to contribute. Failure to speak up begs the question "why are you in this meeting." It is important that leaders recognize the people in the room that have lower self-confidence and tend to defer to others and make sure to access their brain power. For many people, failure to speak in meetings did not mean they did not have a lot of value to bring. The leader's job is to make sure to get that value.

Over-contributing. Have you ever attended a meeting where there is person who has to have their opinion heard on every point? They hog up all the talk time! These people seem to love to hear their own voice and think that because they are talking they are the smartest and most valuable people in the room. These people need to be taught to give others a chance to speak and have limits set for the amount of time they are permitted to speak.

Active Listening. It is important to identify what is not being said. Watching people's body language, listening to tone, and understanding why they say what they do is many times more important than what they say. The words people use comprise just 7% of communication. A good leader is actively listening during the meeting. This helps ensure that when decisions are made and plans are set that everyone is committed.

An executive business coach can help you run a more effective business or become a more effective leader.

How Does a Director Define Their Role?

The fiduciary responsibilities of a director, whether they are a volunteer or salaried, are alike for the most part. It's true that almost all credit unions do not pay their directors and almost all banks do pay a per meeting stipend, giving the bank's committee members strong incentive to meet as often as possible.

In my career as a credit union CEO, I invited our legal counsel to attend one board meeting each year for the express purpose of reviewing the fiduciary duties and responsibilities of a director and reminding the board of the legal consequences of not fulfilling them. In his elegant and simple message, this is what he said are the responsibilities of a director:

1. Approve operating policies and articles of incorporation (bylaws). 

2. Hire a competent CEO. 

3. Evaluate the CEO's performance regularly and formally. 

4. Replace the CEO if results are unsatisfactory.

That is as simple as it gets. Yet, after 29 years in credit unions, plus the past five facilitating strategic planning and executive coaching in credit unions, the CEO's with whom I have the privilege to work are crooning an unchanged song. That is, their board members don't understand their role; get too involved in the daily operations; ask for too much or impulsive financial projections and are the root cause of the CEO and his/her team not advancing the credit union's vision, mission and critical goal categories. I have heard that same issue as it relates to ncua (nobody cares understands or appreciates) field examiners.

Let's get one important truth established: YOU are the CEO and if you play someone else's game, it serves only to frustrate, increase stress and divert your attention from the vision, mission and critical goals that your autonomous board approved. The board may need a gentle reminder that you are doing that which has been approved by them and your performance is evaluated every 30-days at the board meeting via the balance sheet and income/expense statement. Point them back to their role; get your own attorney and/or consultant to educate them. Here are some talking points for you and the board.

Objectives:

• Describe the fiduciary role of the board and how fiduciary responsibilities apply to specific functions in the credit union. 

• List specific responsibilities of the board. 

• Name common traps that hinder effectively meeting fiduciary responsibility. 

• Describe the key risk management functions of the board of directors.

Lead with vision and purpose:

• Discuss governance models and what works for your board 

• Cultivate a positive, cooperative relationship between the board and CEO 

• Develop a team-oriented approach to board governance.

Additionally, the credit union's bylaws and state and federal regulations/statutes specify the duties and responsibilities of a director and the board. There are resources, e.g.: BoardSource.org, CUNA, CUES, the World Council and more that provide lists of duties, skills required, roles, etc. All can provide director education and certificate programs. There is no excuse in 2015 for a director not to be trained and informed, or to act outside those parameters.

If I may condense it:

a. A director should have:

- Cognitive capacity: can the director recognize he/she is responsible for the membership and recognize clues/alerts that unsafe risk is imminent. 

- Behavioral capacities: the director not only knows what must be done and recognizes unsafe risk, but will also act. 

- Emotional capacity: able to bond with a team; empathize with others and their differing opinions.

Everything you do in a credit union involves risk. You risk or you rust. Every loan to a member and every investment choice is a transaction with risk. Every new hire is a risk. Each action step is accompanied by some risk and reward. The CEO has a role and so does the board. They are different. Respect those differences and the strengths each brings to the credit union.

An informed board of directors is the CEO's greatest partner. Invest in director development; get the board to network with other credit union boards; consider executive coaching for individual directors to develop leadership talents. Leaders are made not born.

If your board is open, get the chair to start a discussion on term limits, both for a director and the position of chairperson. Many abuses and potential problems are solved when a director may not serve indefinitely, or serve as the chairperson more than one term. You may define the length of a term, e.g.: one (1) term being three (3) years, or one (1) term being five years, with two or three terms being the maximum. Likewise, with the position of chairperson, rotate that annually to avoid having a person build power and authority that can lead to issue.

Often the best time to introduce term limits is when there is a problem director. The rest of the board is fed up and looking for a way to get him/her off the board or the chairperson's position. The dissident director is one (1) vote. If the rest of the board wants to take action and protect future boards, they can get the votes.

Likewise, if everything with the board is picture perfect, that's a great time to discuss term limits. Some credit unions have age limits for a director. Get those issues settled when everyone likes each other as a deterrent to problems in the future.

How to Turn Stale Managers Into Stars

A new report from Gallup, based on extensive polling, finds only 10% of managers have what it takes to be "a great manager."

Deep breathe before you fire the lot or cry foul.

First, Gallup didn't just make up these numbers. They measured the engagement levels of 27 million employees in 195 countries. In the US, only 30% of U.S. workers are fully engaged, and Gallup thinks managers are largely to blame (it says 70% of the engagement variance is down to them). It says there's "a clear link between poor managing and a nation of 'checked out' employees." Gallup insists that only 1 out of 10 managers has the innate talent to do just that: manage.

Second, there are clear-cut reasons. From my vantage point, managing others requires a rare blend of these talents:

* Superb communication skills that keep people informed and motivated about the future. 

* Consistently aligning actions with values and holdings themselves and others accountable for results with the right amount of assertiveness to get the results. 

* Decision-making that is for the good of the team and the company-not just politically expedient. 

* Demonstrated concern for the growth and well-being of employees. 

* Personally engaged and excited about the role they play. 

* Determined to invest in ongoing learning for themselves and others.

Third, too many managers are given this position because they were good in a previous role. This does NOT mean they have the skill or the desire to manage. My son is a great example. With a PhD in Computer Engineering, he held a position at the Super Computer Center in UCSD, working on visualizations. Then he was promoted into management. He hated it. He did NOT like managing others. Eventually, he would leave to find work that allowed him to use his skill in a way that best suited him.

Finally, the common practice of rewarding only those with a higher pay grade negates the fact that pay should be reflective of performance and not title. This practice urges employees who want to earn more to seek advancement which-like happened with my son-could actually be detrimental.

First, carefully re-examine all processes related to promotion, pay, succession planning and talent development as explained above.

Second: ask all current managers what interests them most about their role and-if they could wave a wand and reverse their career progression (without concern for money), what would they want to do. If a manager isn't engaged and enthusiastic about her role, think how that impacts a department.

Third: conduct small focus groups representing various roles and levels in the organization. Ask: How do you know a great manager from a poor one? What behavior and actions do you see, hear, experience? Ask: can you name a great manager right now?

Fourth: Bring all the identified "great" managers together and ask them to help determine hiring and promotion practices. Ask them to determine what ARE the question that should be asked? Because these talents won't show up on a resume or an employee folder, how might these potentially "great" managers be identified?

Lastly. Breathe. This is not something that can be done overnight. The larger the organization, the more layered the organization, the more bureaucratic the organization, movement will be slow. So start small. Begin with "the converted". This is a department or a team that really wants to tackle the development of management and the creation of a high performing, engaged group. Build upon that momentum, and watch the magic happen.

© 2015, The Resiliency Group. Publication rights granted to all venues so long as article and by-line are reprinted intact and all links are made live.

Professional speaker, consultant and author Eileen McDargh has helped leaders, organizations and individuals transform the life of their business and the business of their life through conversations that matter and connections that count. Visit her website to read her blog, join her e-zine and hire her to speak. If you are a leader who lacks communication skills then read her book "Talk Ain't Cheap...

Egos, Eggs, Letters and Ticklers: 4 Sales Management Tricks That Increase Sales and Improve Morale

Managing salespeople and proposal writers has been described as being like herding cats. That seems a little unfair to cats, frankly. Cats can't help themselves. Salespeople and proposal writers, on the other hand, choose not to hold management to quite the level of infallibility that management would like.

Nonetheless, management and sales reps can work together to improve sales. And, when they're not working together, management can at least choose methods that do as little damage as possible to the already fragile egos of salespeople and proposal writers. Here's some tricks that I recommend.

Trick #1: The Follow-Up

When a salesperson gets back from visiting with a prospect, the sales manager should send a handwritten letter - or at least an email - to the prospect that thanks the prospect for the courtesy he showed the sales rep. It doesn't have to be complicated. In fact, it can be the same thing every time:

"Dear Sam-

Dave asked us to thank you for the courtesy you showed him when he visited you about... "

Of course, the salesperson should be doing his own follow ups, but those should be about the prospect and what he needs. This one is designed to simply be a kind note to say thanks. And that simplicity is the key.

First, by thanking the prospect for their courtesy, the prospect sees himself as a courteous person. Not only is this flattering, but the prospect will now act consistently with that label. You open the way for the materials that follow. To do otherwise would be inconsistent.

Second and more importantly, by singling out courtesy, you signify that this is a quality you value. You also signal that your company is composed of humans who appreciate decency and who are easy to work with. All of those things help the prospect trust your more.

Third, there is an additional effect. The prospect who was courteous with the salesperson likes knowing that it was recognized and was worth enough that it was mentioned to a sales manager. This builds rapport and the prospect will be even happier to see the salesperson when he next returns.

And if the prospect wasn't courteous? This is why it should be handwritten and come from the sales manager. If it comes from the salesperson, it sounds passive aggressive. If it's an email, it's too easy to shoot back a snarky reply. But if the sales manager says it by letter, and this is a prospect you really want to pursue business with, then the discourteous prospect will be stuck recognizing the error in his treatment of the salesperson. Odds are good that, next time the salesperson calls on the prospect, the prospect will go out of his way to prove he's a good person.

Trick #2: The Tickler

Most Customer Relations Management software either includes or supports ticklers - little reminders that a customer or prospect should be contacted. But ticklers are useful for sales managers too, not just salespeople.

If the sales manager is getting reminders, then the manager can go to the salesperson and politely request a report. If, as usual, the salesperson has no report to make because he ignored his own tickler system, then the sales manager can set the system to remind him again the next day. When the next day comes, out comes the manager to politely get a report. This procedure keeps on going until the salesperson realizes it's easier to just call the prospect than to stare across his desk at his manager every afternoon, trying to come up with a fresh batch of excuses.

Trick #3: The Ego Saver

It's no secret that the egos of salespeople and proposal writers are delicate things. Not only the ego, but also the always fragile relationship between manager and salesperson can be damaged by a negative email about some trivial little detail the salesperson missed in a Miller Heiman Blue Sheet or other report. The morale deflating and resentment producing that goes along with receiving a critical email saps all his desire to sell. It can cost the company hundreds or thousands of times more than whatever the value would have been of filling out the Blue Sheet correctly. Despite this, I see managers continue to send these sorts of emails day in and day out - even at supposedly enlightened firms.

But, these managers argue, salespeople need to fill out the Blue Sheets correctly or else the rest of the organization can't do their jobs.

That's true as far as it goes, so here's the approach I recommend, for example, when salespeople are required to fill out specific forms on the customer, their needs, their pain points and so on.

The Blue Sheets themselves are easy enough to understand for the salesperson, since they've been trained in Strategic Selling. So the salesperson knows whether or not his Blue Sheet gives the information that it needs to.

Although it's possible for the manager to send a condescending email every time the Blue Sheet is filled out in a superficial way, it's not a good idea. It's too easy to harm the relationship with the salesperson, harm the company through decreased sales and so on.

Instead, the manager should just return a copy of the deficient Blue Sheet with a small star next to the questionable part. It's a symbol, which the salesperson immediately recognizes, that more depth or more information is required. If the next version of the Blue Sheet doesn't fix the problem, a copy is again returned, this time with a question mark next to the star. If a third mark is needed, then an exclamation point can be added and added and added, until there is a string of exclamation points for as many iterations of the Blue Sheet as the salesperson requires before he gets tired of the game and fills out the form correctly.

A salesperson might leave because he feels mistreated by the manager, but he can't exactly storm out because you put a lot of exclamation points on his Blue Sheet. Yet he knows he was sloppy and he knows the manager knows. The end result is much more effective than a nasty email.

Trick #4: Customer Eggs

One of the most important roles that a sales manager can do - but is rarely done - is to ensure that the company has a variety of customer types. Just as you shouldn't put all your eggs in one basket, you shouldn't rest all your revenue on one sector. If you sold only to real estate companies in the early 2000s, your company went down the drain just as fast as the realtors did. More recently, if your customer was only working class individuals, the long recession left you in as bad a shape as it did them. A "one type of customer" business is as risky as a retirement plan that only has shares in one company.

Instead, your sales manager needs to check your customers for their industries and, taking it a step further, needs to check if those industries are correlated. If your clients are in software and construction, you're safe. If they're in real estate and construction, you're looking at trouble. Try to keep a little elasticity with your goods and your sales force, so that, if one area starts to get hit, you can smoothly shift over to another.

Bonus Tip: Competitions Aren't Always What You Want

As one final trick, consider the question of whether to have sales competitions. In this case, the trick is not what to do or not do, but what to consider. The issue here is that, if you offer prizes to the best salespeople or proposal writers for a particular month, you may end up causing more harm than good. Not to the losers, which you might expect, but to the winners.

There is no doubt that competitions work. If you offer one, the salespeople will go crazy to win the prizes. You will see energy you haven't seen in months.

The problem comes once the competition is over. It can ruin the winners. The winners will be some of your best salespeople. Once the contest is complete, however, they now know they they're your best salespeople. And unfortunately it can happen that it goes to their head, creates friction with other salespeople, and their sales immediately begin to fall. They start to coast on their reputations. They frequently cannot recover psychologically from the blinding of the temporary glory.

So, before you offer a sales contest, take a long hard look at your salespeople. Can they handle losing it? Can they handle winning it?

***

Keep these tricks and tips in mind and your organization will see more sales, higher proposal win rates and a happy, efficient sales team.

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As a matter of fact, materials prepared making use of these techniques have led to over $30 billion in opportunities -- that's even more than the GDPs of Iceland and Jamaica together!

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Leadership and Compassion - A Powerful Combination

Compassion is a fundamental pillar for highly effective leadership, however, it may not always enjoy the level of importance it deserves! Let's explore some basics and the related implications...

What is compassion in practical terms?

I found an appealing explanation of the term compassion at the "Greater Good" website and they state it as the following:

"Compassion literally means "to suffer together." Among emotion researchers, it is defined as the feeling that arises when you are confronted with another's suffering and feel motivated to relieve that suffering.

Compassion is not the same as empathy or altruism, though the concepts are related. While empathy refers more generally to our ability to take the perspective of and feel the emotions of another person, compassion is when those feelings and thoughts include the desire to help. Altruism, in turn, is the kind, selfless behavior often prompted by feelings of compassion, though one can feel compassion without acting on it, and altruism isn't always motivated by compassion.

While cynics may dismiss compassion as touchy-feely or irrational, scientists have started to map the biological basis of compassion, suggesting its deep evolutionary purpose. This research has shown that when we feel compassion, our heart rate slows down, we secrete the "bonding hormone" oxytocin, and regions of the brain linked to empathy, caregiving, and feelings of pleasure light up, which often results in our wanting to approach and care for other people."

Another interpretation of compassion I like comes from a distinguished Tibetan scholar Thupten Jinpa who has a long standing collaboration with the Dalai Lama. Jinpa describes compassion as follows: "Compassion is a mental state endowed with a sense of concern for the suffering of others and aspiration to see that suffering relieved."

He points out compassion as having three elements:

A cognitive component: "I understand you"

An affective component: "I feel for you"

A motivational component: "I want to help you"

How does this relate to leadership?

To begin with, a persuasive contribution of compassion in an organizational environment is that it creates high leadership effectiveness. Highly effective leaders have managed a crucial transformation which Bill George, former CEO of Medtronic, defined as shifting from "I to We". Embracing this transition is a key element for leaders in becoming truly authentic.

Uncompromising authenticity is a basic requirement for leaders to enable them to unleash the power of their organizations and create an environment where people can find the motivation to reach their full potential. When associates are merely following the leader their efforts are limited to the leaders vision, guidelines and instructions. Another important task of leadership is the development of leaders which requires from the leader to avoid the focus on personal ego needs. In reality the emphasis must not be on the leader but always on those being lead.

Practicing compassion actually results into shifting the focus from self to others, hence compassion is about going from "I" to "We." If we accept the fact that transitioning from "I" to "We" is possibly the most important process of becoming an authentic leader, those who already practice compassion will know how and appreciate the confound impact on their leadership effectiveness.

Jim Collins identified in his book Good to Great: Why Some Companies Make the Leap... and Others Don't the fundamental connection between compassion and effective leadership very eloquently. Collins attempted to identify what makes companies and organizations move from good to great. He and his team analyzed a great amount of data going through a set of information of every company that has appeared on Fortune 500 between 1965 and 1995. They recognized companies that started out as "good" organizations which ultimately became "great" companies (by their definition as outperforming the general market by a factor of three or more) for an extended period of fifteen years or more. That way short-term successes were excluded from the analysis. The process lead them to a group of eleven "good to great" companies which they compared to a set of "comparison companies" to identify what helped the good companies become great ones.

The initial and possibly most important finding turned out to be the role of leadership. It requires a very special type of leader to transform a company from being good to being great and Collins named them "Level 5" leaders. These are leaders who, aside of being very capable in many aspects, also demonstrate an unusual combination of two important and seemingly contradictory qualities of "great ambition" and "personal humility". These leaders, while highly ambitious, focus their ambition not necessarily on themselves but are ambitious for the greater good of the organization as a whole. As their attention is focused on the greater good of the company the natural tendency to highlight their own egos eliminates itself which makes them highly effective, authentic and inspiring.

While Collins's book persuasively validates the importance of Level 5 leaders, it does not offer insight into a structure of developing them. However, it can be deducted with certainty that compassion plays an essential role in being a Level 5 leader.

Considering the two distinguishing qualities of Level 5 leaders, ambition and personal humility, in the context of the three earlier indicated components of compassion, cognitive, affective and motivational, one can conclude that the cognitive and affective components of compassion representing understanding people and empathizing with them minimize self-centeredness, consequently establishing the conditions for humility. The motivational component of compassion of wanting to help people generates ambition for others or the greater good. Maybe, those three components of compassion can be effectively utilized in developing these two distinguishing qualities of Level 5 leadership.

It might be very rewarding to consider the important contribution of compassion towards leadership excellence - it is a very potent and powerful combination!