Thursday, March 27, 2014

How Stupid Can You Be?

“Mr. Gitou? I got blindsided.”

Tyler Gitou waved Verdi into his office. “Tell me what happened, Verdi?”

“Well, remember we closed that deal to replace all the desktops at Macro Assurance, that big insurance firm?”

“Yes, I know Macro Assurance.” Tyler said. “It was about 250,000 PCs if I remember.”

“Correct,” Verdi said. “We’re probably going to lose about $1 million on it.”

Tyler was surprised. “Really? I remember you working on that deal. You were really excited about the solution we put together for Macro.”

“Not any more. We've had to add a lot more people to meet the client’s deadline and it’s costing us a fortune.”

“So what happened?” Tyler asked.

“The plan was to install all of the software on the computers remotely,” Verdi said. “You know, just download everything from the cloud versus having someone sit at the machines. It turns out their corporate firewall won’t let us do it in some locations. So we have to send people, which costs a lot more.”

“Really? Isn't that something we should have known?” Tyler asked.

“Yes and no. There was no reason to think their security would be so different in each country so we never asked the question. We just assumed it would be like every other engagement.”

“Verdi, how stupid can you be?”

“What? Mr. Gitou, that’s a really offensive thing to say!” Verdi said.

“I’m not asking to insult you, Verdi,” Tyler said laughing. “I am asking to see how you can avoid this problem in the future. When we get in front of a client, we often have the urge to be really smart. Know all the answers. Impress them and impress ourselves. But instead of thinking how smart we can be, we should ask how stupid we can be.”

“I don’t get it, Mr. Gitou. How will being stupid help me impress my client?”

“It forces you to ask questions,” Tyler said. “Let me share with you a similar experience I had when I was new in sales. We were proposing a systems integration deal to move a client’s trading platform from an old ‘home grown’ system to a new commercial system. I quoted a price to build the system, end to end, and won the deal with the lower price. Much lower. You know why my price was so low? I assumed their hardware would support the new platform. My competitor was ‘stupid’ and asked for data about their servers and they added in the cost of new hardware. As it turns out, their servers were all out of warranty and lacked the processing capacity we needed. It was a $2 million mistake on my part.”

“What did you do?”

“We installed the system as we committed to do and lost money on the deal,” Tyler said.

“Wow. And you didn't get fired?”

“No,” Tyler smiled. “My sales manager made me the account lead and said I had 24 months to grow the account and make it profitable again. I did it in 12. And I have been stupid in every client discussion since then.”

“That’s a great turnaround story. Who was the client?”

“It was Macro Assurance, the big insurance company where you just got blindsided,” Tyler said. “So my advice to you is get back in there and finish the project as we committed. Don't lose their trust in us. You've learned an expensive lesson. Sell on your experience, but solve from your ignorance. Don't assume one client is like another until you have asked the right questions. Remember, a Deal Whisperer always thinks about how stupid he can be.”

Wednesday, February 5, 2014

You Are Unbelievable

Tyler Gitou lowered his head and shook it slowly. “And you missed that deadline too,” he said.

“Yes,” Verdi said meekly. “We got the pricing exhibit to them the next day.”

“That’s three missed deadlines. What happened next?” Tyler asked.

“Well, we were down-selected so it was us and one of our major competitors,” Verdi said. “But in the end, we lost.”

“And why do you think you lost?”

“The client said our price was too high,” Verdi said.

“Do you believe that?” Tyler asked.

“Um… yeah,” Verdi said. “They had said we were a little more than the competition all along. But that’s because we had a lot of senior people staffed to make sure we were successful.”

 “Verdi, what was the client’s primary buyer value?” Tyler asked.

“Certainty of execution,” Verdi said. “The client is in a highly regulated business and if we can’t deliver the services and file their reports, the regulatory agencies are all over them.”

“And if you were choosing a business partner for a project that was critical to your business, what would you want to be sure of before you selected that partner?”

“I guess that I thought they would be able to perform.”

“Just ‘thought’? As in, ‘greater than fifty-fifty’?”

“No,” Verdi said. “That I was certain they could perform.”

“Exactly,” Tyler said. “And to have that certainty you would have to believe in their ability to perform. That they can deliver on their promises on time, correct?”

“Absolutely,” Verdi said.

“How did you do?”

“I thought we did well,” Verdi said. “We got a lot of positive feedback on our proposal.”

“You know what Verdi? You are unbelievable.”

“Thank you, Mr. Gitou.”

“It’s not a compliment, Verdi. I mean that you lost the deal not because of price. You lost because you lacked credibility and reliability. The client did not believe you were the right company to trust with such an important program.””

“Just because we were late for a few deadlines? It was a complicated proposal! Plus the client was late on a bunch of stuff too!”

“The client is allowed to be late. They are the client! We build our reputation and trust with the client by being on time,” Tyler said.

“I think you’re overstating this,” Verdi said. “They told me it was price, not trust. In fact, the guy who told me is the head of procurement and I have a long relationship with him.”

“He was being kind, Verdi. How would you have felt if he said, ‘We didn’t choose you because we don’t trust you’?”

“I would have felt terrible,” Verdi said.

“Exactly. But you were not worthy of their trust because you didn't earn it. So you are not trustworthy.”

“That’s pretty harsh, Mr. Gitou.”

“Verdi, let me share with you a secret about how clients buy,” Tyler said. “Clients, just like many businesses, are risk averse because the client is actually made up of people who have a personal interest in being successful in their jobs. And those people worry more about not making the wrong decision than they do about making the right decision.”

“I don’t follow you.”

“When a business person makes a decision about which service provider to hire, they decide on the basis of which one is least likely to screw up. The business person does not want to answer for a failed project because they hired the wrong vendor . So to be viewed as least likely to screw up in delivering the service, you have earn their trust. Make them believe you are the low risk choice. And, frankly, being late three times on a single proposal does not generate credibility and trust. You are unbelievable.”

“I understand now,” Verdi said. “It’s a good lesson from a bad mistake.”

“That’s a positive way to think about it, Verdi,” Tyler said. “Now go look at where your process broke down on the proposal and next time get the client to believe you are unbelievably reliable in responding to the bid.”