Prominent proponents of diversity in the workplace acknowledge that the unique languages spoken within different professions (departments) can become more confusing and divisive than the differences between genders, generations, races and cultures. Maybe that is because gender, age, and race differences provide more visual cues for each of us to make the effort to understand what someone else is trying to tell us.
Some of the most volatile judgmental disagreements I have witnessed in my 40+ years as a business growth strategist have involved Chief Marketing Officers (CMOs) and Chief Financial Officers (CFOs). During one strategy clarification assignment, I witnessed pretty much the same heated discussion in English, Mandarin, German, Japanese and Yiddish. The energy and anger was similar to when people of different religions argue. Maybe that’s the way to think about it. Marketing and Accounting are different religions.
Being able to discern emotional triggers and then actually craft messages that not only sparks attention but prompts action is better than any drug for enthusiastic marketing professionals. That is the currency of marketing. When that magic happens, they KNOW they deserve their company’s sustained support. In this world of hundreds of thousands of daily marketing messages, getting attention and prompting action is fragile. Nothing is more frustrating to marketing people than achieving what feels like a miracle and then their own company doesn’t support them and doesn’t promptly offer to finance more or pick up the speed. When marketing people have experienced that intense surprise, disappointment, discouragement and rejection they can sound unreasonable, distrustful, resentful, entitled, ungrateful, unrealistic and even selfish.
Please reread the previous paragraph. Let the emotion of the words in.
Marketing professionals are not all angry, demanding or unrealistic. Cooperative interaction with a respectful CFO can prevent all of that from ever developing. The proactive CFOs with whom I have had the distinct pleasure of working, recognize that at the core, CMOs and CFOs want the same things. You both want more market share, increased net profit, a more nimble organization and more cash. (Who doesn’t need more cash?)
The perceived difference between CMOs and CFOs often lies within the areas of CONTROL (budgets) and METRICS (measurement). Too often, CEOs and CFOs inadvertently hold the CMO accountable for increased REVENUE when that is the purview of the CHIEF SALES OFFICER (CSO). As a reminder, the sales department is the primary client of the marketing department. By sparking interest and prompting action (eg. inquiries), marketing delivers warm leads and qualified prospects to SALES who then do their magic to turn qualified prospects into buyers.
Over the past 6-7 years, many corporations have made great progress because their CFOs and CMOs have been asked to have regularly scheduled focused working sessions to establish or update the values of each warm lead and each qualified prospect. That effort is worth its weight in gold. As you know, that effort also requires patience and a willingness to translate marketing-ese and accountant-ese so you understand and appreciate one another.
And now that work must go even further due to shorter attention spans and higher expectations that shrink the duration of warm leads and qualified prospects. There is a much shorter window of opportunity to step up marketing to produce more warm leads and qualified prospects &/or keep them warm…and less time for sales to turn those leads/prospects into buyers. A value must also be assigned to pacing.
It is exciting when a corporation’s CFO and CMO can agree upon metrics that will trigger immediate increased investment when/if the marketing department achieves magic … sparks attention and prompts action…delivers enough warm leads and qualified prospects. The benefits go beyond increased net profit. The effort also pays off in increased job satisfaction and appreciation for one another’s professional colleagues.
Each week, my email inbox includes several inquiries from entrepreneurs who are looking for startup or growth financing for their businesses.
Typically, the first email is polite and conveys a sense of excitement about his/her product innovation. Most of the emails include a request for a referral to appropriate funding sources.
Some information to provide CONTEXT: The Service Industry Fund that I founded in the mid ‘90s has invested over $1 Bil in scalable service firms. When a business plan comes in that doesn’t fit that FUND, our intermediaries can “shop” for funding from other sources. Plus, since one of the primary challenges to sustained growth is funding, my 35 year old growth strategy firm has helped hundreds of our midsized privately-held consulting clients to obtain appropriate growth financing.
So when I receive a financing inquiry, I provide tailored responses based on the information provided in the initial email ….and then frankly, we brace ourselves for the replies. Last week, I forwarded an email inquiry directly to a past client who is poised to invest several million dollars in the right deal. In the same email I asked the entrepreneur if he had contacted the Technology Council in his state because several have well financed startup funds or angel networks. His product concept would go over very well at NJTC’s JUMP START. You would have thought I called his mother a whore.
It is amazing how many times entrepreneurs will:
- Immediately dismiss a suggestion (no matter what it is, by the way). That behavior is insulting to the resource person who has generously taken the time to read, think and offer advice (for free)… and is a disincentive for any future interaction…let alone funding!
- Provide a detailed history of their past accomplishments that has an arrogant or defensive tone. Many entrepreneurs are quick to feel insulted, misunderstood or unappreciated. Hello! It’s an email inquiry and response between people who do not know one another. Plus, funding is about the enterprise, the potential to make money, market need or demand, etc. Investors don’t fund the entrepreneur’s ego.
- Not express gratitude for the prompt response or informed suggestion. Most intermediaries and funding sources do not respond quickly or provide tangible suggestions…partly because so many entrepreneurs aren’t polite, act entitled, or think they can demand attention.
- Make grandiose claims that their concept is “the next Google”… “bigger than APPLE”… Huge claims like that backfire on entrepreneurs. Real funding sources involve industry experts during their due diligence and will make their own decisions about the significance of the innovation.
- Declare that their unproven concept deserves millions of dollars of outside financing. These entrepreneurs are often the same people who think they can refuse the addition of investors to their board(s) and haven’t invested huge sums of their own money in the concept.
I wonder how many innovative products are not adequately funded because the arrogance of the entrepreneur gets in the way. You can tell a great deal from the second email how a funding search is probably going to turn out.
Maybe your company is within a segment that provides innovation and leading edge products so you can use premium pricing. But far more companies function around mature products and aren’t viewed as “cutting edge”. Their (maybe your?) pricing is under pressure every day.
Two businesses that contacted us recently each need to generate a minimum of 33% gross profit on their projects to cover reasonable operating expenses and produce a modest net profit. But they each keep finding themselves responding to corporate bids that provide a skinny 5-7% gross profit. That’s if everything goes well! If they win the bids, they’ll end up with a net loss of 25 – 27%. In other words, every time they go after those bids, they are unknowingly volunteering to donate huge sums of money to corporate clients.
How can bright executives of midsized companies do that? Gross profit blindness happens when folks are in survival mode for too long. These two companies are both involved with commercial facilities. The recession of 2008 impacted the commercial facility industry hard. That recession was the implosion of the financial and real estate markets. So, yes, in many ways, the cannibalization of the facility management industry is a lagging side effect of the recession of 6 years ago!
Lingering high unemployment within an industry can also fuel gross profit blindness. Purchasing agents and operations managers have increasingly taken vendors for granted. When abusive behavior becomes “the norm,” vendors can actually develop a “victim” mentality. It is a powerful downward spiral. A vendor that has tolerated verbal abuse and below reasonable pricing can also lose objectivity about the value of their products and services. When customers yell, the vendor can have a knee jerk reaction and quickly accept the blame. Increased “write offs” make low gross profit contracts even worse. Every time the vendor does that, the customer is rewarded for negative behavior…so, like a spoiled child who gets what he/she wants when he/she has a temper tantrum, the abusive behavior escalates.
We have recommended different approaches to each of these businesses. No two situations are exactly the same. In one case, we recommended that the executives start targeting their marketing and sales to a completely different industry. We suggested that they do some field trips/site visits to see how people in other industries treat one another. They have tolerated so much blame, last minute changes, screamed demands, and unreasonable pricing they have lost perspective and think everyone is awful everywhere.
The other company has connections with trade association leaders who want to spearhead an initiative addressing culture, behavior, values, ethics, shared responsibility, fairness, etc.
What would you tell a woman who lives in an abusive marriage to do? She has lost her self-esteem. She has come to believe that she doesn’t deserve any better. She has lost objectivity about her skills, abilities, and value. Business owners who become beaten down and think/act like victims also need to go elsewhere to recover!
Even when a team has over 34 consecutive wins, some jerks will question the legitimacy. Wichita State. Their game against Kentucky was as exciting and well played as any NCAA Tournament game I have ever seen.
You wouldn’t expect an organization to be motivated and succeed if its CEO keeps telling the media that his team really isn’t that good. It’s time for Jimmy Boeheim of Syracuse to retire. He has forgotten that one of his responsibilities is to build team morale, energy, and their drive to win.
Industry ranking doesn’t predetermine success. In the first round of this year’s NCAA Tournament, a team that had been ranked # 14 in its bracket (Mercer) beat the better known # 3 ranked team (Duke). And three of the four # 12 ranked teams (Stephen F. Austin, Harvard and North Dakota State) won against 5th ranked opponents.
Just because an organization was top ranked the last time around, doesn’t mean that they will continue to be #1…or even “play” that well the next time around. Louisville finally won against St. Louis in the second round, but it sure was a low scoring, uninspiring game.
Team chemistry, mutual respect and experience matters. I think that fact that the seniors had played together at MERCER for 4 years helped them beat DUKE.
It is not your imagination. Sometimes a situation is set up for one organization to succeed or for another to fail. Ask any informed fan if Wichita State had a tougher bracket than Florida.
The media headlines read INDICTED NJ ENGINNERING FIRM, BIRDSALL SERVICES GROUP, SOLD FOR $5.6 MILLION TO CALIFORNIA FIRM. The winning bidder at the auction, PARTNER ASSESSMENT, immediately pledged that it won’t make political contributions in New Jersey. PARTNER ASSESSMENT took over BIRDSALL’s existing contracts and future revenue, which include several major government funded projects. About 135 of Birdsall’s 325 employees have remained with the company. PARTNER ASSESSMENT has about 250 employees in 24 offices. 7 former Birdsall executives pleaded not guilty on “pay to play” charges.
As a resident of New Jersey, an advocate for economic development, a growth strategist focused on privately held midsized companies, and a long time board member for the New Jersey State Chamber of Commerce…the story generates mixed feelings for me. Plus FELLOW level training from the National Association of Corporate Directors (NACD) and my experience as a board member leaves me asking questions.
I can just hear many peoples’ response reading my questions. “How naïve is she? Of course they knew! Come on, the company is based in New Jersey.” Folks, I have seen many changes and a great deal of progress in New Jersey despite this state’s challenges. You cannot automatically assume that the board was fully informed or involved.
Plus, this blog is about growing companies, not NJ politics. Many privately held companies have no independent board members. Ask yourself if your board (if it exists) would have asked tough questions about how your firm is winning big government contracts? Would you have welcomed the candid discussion about the pros and cons of testing the limits of what has been “normal for years” versus fully legal and ethical? Who sits on your board? People who have agreed with whatever you want to do?
A review of a company’s ethics is in my own due diligence when I am vetted as a possible board member. When it comes to engineering firms in any state, I would know to ask how the firm approaches the role of township engineer and interacts with politicians. Those are early questions in that process.
Growth. Wealth. Success. It’s all pretty intoxicating. If the growth and success of your business led you to consider unethical or illegal approaches, would your board be able to prevent what happened to the Birdsall Group?