Archive for September, 2009
One major frustration facing new entrepreneurs and managers, particularly in sales, is why a particular process that works most of the time does not work every time.
When it comes to predicting the weather (70% chance of rain today), illness (15% chance of getting the flu), or business success (50% of new businesses fail), our lives seem ruled by statistics. But statistics are only relevant after you have tried a process a significant number of times, what mathematicians call having enough “frequency.”
You may have a sales process that succeeds with more than 50% of your qualified prospects, yet a new salesperson may fail again and again only to give up in frustration. Here’s an exercise I use to teach frequency to new employees and students.
I ask the person to flip a coin 10 times and record the result. Most people think it’s going to be an even 5-5 split between heads and tails. It’s not—it’s often 7, 8, or even 9 heads. Then I ask them to continue flipping the coin 90 more times (100 total)—and it’s almost always 51 to 49 heads or tails. This is a great exercise to teach that you need to try something more than 10 times to figure out if it works.
This exercise also teaches why you must have enough frequency before scaling your business. You might develop a strategy that fails with the first 8 or 9 of your 10 initial qualified prospects, but then succeeds with 50 percent overall. Conversely, you might experience success on the first few sales calls and then expand too fast with a non-sustainable model.
[DDET Click to read more..]
As a teacher and as a parent, I am often asked by young people “how come” a particular effort didn’t lead to the expected reward. While I’ve tried to console my students, I, too, have been frustrated that although God made a world with rules and order, God also made a world in which those rules don’t generally work until you have enough frequency.
Some people think God did this because He didn’t want people to become too cocky by having things work out for them every time.
Some people think God did this because He wanted to give a chance to those who didn’t have all the qualifications that others dictated they needed to succeed.
And some people think that God did this because He wanted a world that would constantly challenge, and thus strengthen, our faith. A world where everything doesn’t work out every time, but a world where everything does work out over time—especially for those of us, like Job in the Bible, with enough faith to follow our plan regardless of how much adversity we experience.
What do you think? Why did God create a world where every thing doesn’t work every time?
The bifurcation among new college graduates, and among existing workers, is creating a new opportunity in our economy that could eventually become a major industry: The “business” of “business opportunity”–creating new functions in our economy for people displaced from traditional jobs.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all doing direct the other way.
Charles Dickens, A Tale of Two Cities , 1859
It’s amazing that something written 150 years ago so accurately describes the world economy and our own economic situation over the past 12 months.
We have certainly seen the worst economic times in our lifetime during the past year. On March 9, 2009, the Dow bottomed out at 6,547, less than half its value only a year earlier. Think about it–the entire net worth of American industry shrunk by half in less than 12 months.
Yet since March 9, 2009, we have seen some of the best of times on Wall Street as the Dow rose a meteoric 50% in value in less than 6 months.
But more importantly, most of us live on Main Street, not Wall Street. What does all this mean for us as parents, businesspeople and entrepreneurs?
[DDET Click to read more..]
One thing I’m seeing today is the bifurcation occurring among young people just entering the workplace. Looking back already at the Class of 2009, I see that most of the new college graduates I know, and know of, did not find the job of their dreams (or anything close to it).
But those students who did graduate at the very top of their class, from the most prestigious schools, with the best summer internships on their resumes, got exceptional jobs as if there were no recession. Moreover, these jobs paid very high wages for 22-year-old undergraduates (annual salaries of $60,000 – $110,000). Several of these students have already contacted me about starting their own business.
Why is this? Why hasn’t the recession affected the very top students?
Our top students have not been affected because they have extremely well-honed skills which in today’s world are enhanced by technology. In the past, a Fortune 500 company might have needed 1,000 newly minted college graduates each year to fill entry-level positions in sales or customer service. But today, thanks to the Internet, SMS texting, and automated call centers, this same company might only need 105 newly-minted college graduates for such positions: 100 “normal” graduates for traditional positions plus 5 superstar top graduates to design the systems and write the text for the websites, and the SMS texting programs, and the scripts for the call centers.
I’m seeing this bifurcation in the workplace at all levels–where one worker is permanently laid off, and his co-worker (who better uses technology) receives a 20% raise and a new PC to do both his and the laid-off worker’s job.
At all levels in industry I see another quotation from England in the 19th century coming true. In 1845, Benjamin Disraeli, the future prime minister of England, warned of the danger of his country disintegrating into “two nations, between whom there is no intercourse and no sympathy … as if they were dwellers in different zones or inhabitants of different planets.”
These bifurcations among new college graduates, and among existing workers, are creating a new opportunity in our economy that could eventually become a major industry: The “business” of “business opportunity”–creating new functions in our economy for people displaced from traditional jobs. I plan to examine this bifurcation in the workplace phenomenon further as we see the effects of the recession, and great technological change, unfold before us.
While the recession may have technically begun on September 15, 2008 with the fall of Lehman Brothers, the effects of the recession will just begin for most of us on September 15, 2009–due to 1-year unemployment benefits and several other programs that have delayed the effects of the Great Crash of 2008-2009 from reaching Main Street.
Stay tuned–and please chime in now with your first-hand experience with the Great Crash of 2008-2009.