Book Reveiw: The Fish That Ate the Whale

The Fish That Ate the Whale: The Life and Times of America’s Banana King by Rich Cohen is about building a business empire. His empire includes banana cowboys, mercenary soldiers, Honduran peasants, CIA agents, and American statesmen. Below is an excerpt from the book.


United Fruit CompanyFish that ate the whale.jpg

Zemurray employed hundreds of workers on the north coast. In the first weeks, they lived in tents, then moved into cabins, barrack, and bungalows. They worked from four a.m. till noon, after which It was too hot to linger outdoors. They wore sandals when they worked, shirts opened to the belly, straw hats, and pants with a machete hooked to the waist. The most popular machete, made in Connecticut, was a six-inch crescent-shaped blade embossed near the wood handle with the name of the maker: COLLINS. Now and then, when two or more workers got into a fight someone would flash a machete and say, “I’ll stick you all the way to the Collins.” Over time, this phrase “to the Collins” came stand for every kind of death that awaited a man in the Torrid Zone.

Three weeks after sowing, the shoots would break through the soil. A few days later, the fields were covered with banana plants. The machete men went through the rows, cutting away the weeds that were forever returning. On a banana plantation, clearing weeds are breathing. Without it, the plantation dies.

Once the plants had reached the height of small children-fourth graders, say, green and promising-the engineers would go back to work, mapping out the train tracks that would wander through the rows, so the fruit, when harvested, could be carried to the warehouse, selected, counted, and stacked into boxcars. The railroads were simple, with grass growing between the ties. (“From the day I was born I had heard it said, over and over again, that the rail lines and camps of the United Fruit Company had been built at night because during the day the sun made the tools too hot to pick up,” Garda Marquez wrote in Living to Tell the Tale.) The tracks were indeed laid in the cool before dawn. It took a few weeks, no more. The rails were torn up and reused if a particular field went feral or fallow. You can still see the remnants of many such lines in Honduras: an overgrown field in the Sula Valley, a storybook jungle of snakes and macaws, a glint of iron beneath the tall grass.

Zemurray worked in the fields beside his engineers, planters, and machete men. He was deep in the muck, sweat covered, swinging a blade. He helped map the plantations, plant the rhizomes, clear the weeds, lay the track. He was a proficient snake killer. Taller than most of his workers, as strong and thin as a railroad spike, he shouted orders in dog Spanish. He believed in the transcendent power of physical labor-that a man can free his soul only by exhausting his body. A life in an office, deskbound, was for the feeble and weak who cut themselves off from the actual. He ate outside-shark’s fin soup, plantains, crab gumbo, sour wine. His years in the jungle gave him experience rare in the trade. Unlike most of his competitors, he understood every part of the business, from the executive suite where the stock was manipulated to the ripening room where the green fruit turned yellow. He was contemptuous of banana men who spent their lives in the North, far from the plantations. Those schmucks, what do they know? They’re there, we’re here!

Seventh Anniversary

This year has been a wonderful year for my blogs. Below are my top views for the year.

  1. HBR: 5 Strategy Questions Every Leader Should Make Time For
  2. This Is How I Work – Greg Branecky
  3. DTM: Stop Trying to Make Your Customers Smarter!
  4. What I learned about customer service from an American Golf employee!
  5. HHSB: The Physiology of Sales Calls
  6. When It Comes to Performance Management, Employees Want More, Not Less!
  7. Innovators: Leadership
  8. HBR: The Dirty Secret of Effective Sales Coaching
  9. HBR: What Makes Great Salespeople
  10. The 10 Commandments of Communication to Build Trust
  11. Book Review: What If?
  12. HBR: How to Spot Hidden Opportunities for Sales Growth
  13. The Adams Differential Method of Estimating

Thank you for your support over the past year.

5 Steps for Tackling Tough Conversations

Originally posted on Blanchard LeaderChat:

Business Woman Pointing To Coworker. He Refuses TaskIn a new article for Talent Management magazine, consultants Rachel Eryn Kalish and Pat Zigarmi, coauthors of The Ken Blanchard Companies Challenging Conversations training program, share how leaders can address intense and emotionally charged discussions with open, vibrant, and direct communication.

In an article titled, Conflict? Talk It Out, they explain that while most leaders recognize the importance of open and direct communication, many are reluctant to enter into these challenging conversations. That’s a mistake, according to the authors.  Withholding information or avoiding difficult discussions tends to make things worse. Dealing with conflict always calls for more communication, not less.

To help leaders more easily succeed with challenging conversations they face, the authors suggest a five-step process that can help both parties speak up without pushing the other person away.

5 Steps for Tackling Tough Conversations

  1. State concerns directly. Communicate in a way that doesn’t alienate the…

View original 241 more words

HBR: The Best Ways to Hire Salespeople

How are you hiring salespeople? Do you use talent assessments to insure your they are successful? The Northeastern Retail Lumber Association (NRLA) has a great tool to assess your salespeople. Click on this link to get more information. NRLA/LMS Below is a blog from the Harvard Business Review by Frank V. Cespedes and Daniel Weinfurter.

The Best Ways to Hire Salespeople

Many firms talk about talent management, but few deal systematically with a basic fact: average annual turnover in sales is 25 to 30%. This means that the equivalent of the entire sales organization must be hired and trained every four years or so, and that’s expensive.

Consider these stats. Direct replacement costs for a telesales employee can range from $75,000 to $90,000, while other sales positions can cost a company as much as $300,000. Moreover, these figures don’t reflect the lost sales while a replacement is found and trained. In sectors like medical devices, big capital equipment, and many professional services, including these opportunity costs can push turnover cost to $1 million or more per event.

The challenge is compounded by the fact that there is no easily identified resource pool for sales positions. According to Howard Stevens in Achieve Sales Excellence, more than 50% of U.S. college graduates, regardless of their majors, are likely to work in sales. But of the over 4,000 colleges in this country, less than 100 have sales programs or even sales courses. And, even if companies are lucky enough to find qualified grads, the increased data and analytical tasks facing many sales forces mean that productivity ramp-up times have increased. Each hire is now a bigger sunk cost for a longer time.

Bottom line: companies typically spend more on hiring in sales than they do anywhere else in the firm. So how do you improve the returns on this investment? Here are four places to start:

Hire for the task. In business, you hear so many opinions about what makes for a good salesperson. But most are a bland summary of the Boy Scout Handbook, with traits like extroversion, assertiveness, empathy, modesty, and an “achievement orientation.” These platitudes are often reflected in firms’ competency lists and are so broad that, at best, they simply remind us that people tend to do business with people they like (but not always and not as often as many sales trainers assume). At worst, these abstractions are irrelevant to the execution of business strategy, and they make hiring, in sales and other functions, a classic example of the cloning bias: managers use these slogans to hire in their own image.

Selling jobs vary greatly depending on the product or service sold, the customers a salesperson is responsible for, the relative importance of technical knowledge, and the people contacted during sales calls. A review of hundreds of studies about sales productivity finds that “[t]he results of this research have simply failed to identify behavioral predispositions or aptitudes that account for a large amount of variance in performance for salespeople. In addition, the results of this research are quite inconsistent and, in some cases, even contradictory.” Common stereotypes about a “good” salesperson (e.g., pleasing personality, hard-wired for sociability, and so on) obscure the realities you face.

Selling effectiveness is not a generalized trait. It’s a function of the sales tasks, which vary according to the market, your strategy, the stage of the business (i.e., startup or later stage), the customers targeted by your strategy, and buying processes at those customers. This is true even for firms in the same industry. Think about the difference between sales tasks at Nordstrom, where personalized service and advice are integral to strategy execution, and Costco, where low price and product availability make sales tasks less complex and variable.

The first step in smart hiring and productivity is understanding the relevant sales tasks in your market and strategy and then reflecting those tasks in hiring criteria and a disciplined hiring process.

Focus on behaviors. Research based upon thousands of exit interviews shows that a primary cause of poor performance and turnover is poor job fit. People, especially salespeople with a variable pay component, become frustrated when they’re hired for tasks that are a poor fit with their skills and preferences. Conversely, as the saying goes, “You hire your problems.” Zappos CEO Tony Hseih estimates that bad hires have cost his firm $100 million. Famously, Zappos will pay people to leave voluntarily after a few months on the job.

The key is to focus on the behaviors implied by the sales tasks. In many firms, this means upgrading assessment skills. Managers are excessively confident about their ability to evaluate candidates via interviews. In reality, studies indicate a low correlation (generally, less than 25%) between interview predictions and job success, and some indicate that interview processes actually hurt in hiring decisions: the firm would have done better with blind selection procedures! The best results, by far, occur when those making hiring decisions can observe the potential hires’ job behaviors and use a recruitment process based on a combination of factors, as illustrated in the following graphic:

There are many ways to do this, including simulations, interviewing techniques, or (as at Zappos) providing an incentive for self-selection after recent hires experience the required behaviors. Especially in expensive sales-hiring situations, many organizations could emulate the practice used by investment banks and consulting firms when hiring MBAs: the summer job is, in effect, an extended observation by multiple people at the firm of the candidate’s abilities before a full-time offer is extended.

Then, immerse reps in the tasks they will encounter in working with customers. At HubSpot, which provides web-based inbound marketing services to businesses, Mark Roberge has sales hires spend a month in classroom-style training but also doing what their customers do: create a website from scratch and keep that site populated with relevant content. Roberge notes, “they experience the actual pains and successes of our primary customers: professional marketers who need to generate leads online. As a result, our salespeople are able to connect on a far deeper level with our prospects and leads.”

Be clear about what you mean by relevant “experience.” Previous experience is the most common criterion used by sales managers in talent assessment. In one survey, over 50% of respondents cited “selling experience within the industry” as their key selection criterion, and another 33% cited “selling experience in [an] other industry.” Driving this view is a perceived trade-off between hiring for experience and spending money on training. But because selling effectiveness depends upon a company’s sales tasks, “experience” is an inherently multidimensional attribute. It may refer to experience with any (or any combination of) the following:

  • A customer group: e.g., a banker or other financial services recruit hired by a software firm to call on financial firms; or, in health care, firms sell different products, but many sell to hospitals.
  • A technology: an engineer or field-service tech hired to sell a category of equipment.
  • Another part of the organization: a service rep moved to sales because internal cross-functional support is a key sales task and that rep “knows the people and the organization.”
  • A geography or culture: a member of a given nationality or ethnic group who knows, and has credibility within, the norms of the relevant customer’s culture.
  • Selling: an insurance agent or retail associate with experience in another sales context.

The relevance of each type varies with your sales tasks. So consider what type is, and is not (see below), relevant, and require the people doing sales hiring to clarify what they mean by experience.

On-going talent assessments. Markets have no responsibility to be kind to your firm’s strategy and sales approach. It is leadership’s responsibility to adapt to markets and develop the competencies required today, not yesterday.

As organizations confront new buying processes, required competencies are changing. The figure below, based on an extensive database of company sales profiles, indicates the changing nature of sales competencies at many firms. Competencies that, only a decade ago, were considered essential are now lower in priority.

Does this mean that developing leads, qualifying prospects, and adapting to different buyer motivations are no longer important? No. Rather, as one should expect in a competitive activity where success is ultimately measured by relative advantage, the focus of productivity improvement in sales is shifting. Yesterday’s sales strengths have become today’s minimum skill requirements.

This underscores the need for on-going talent assessments to stay in-touch with changing tasks and required behaviors. The good news is that the tools for doing such assessments, based on behavioral research findings, are more available and have more granularity and practicality for sales leaders. Conducting a skills inventory and determining the best fit for your sales tasks need not be the standard mix of folklore, various embedded biases by front-line managers, and the content-free platitudes about “selling” that populate many blogs. And it is increasingly necessary because companies must ultimately be worthy of real talent.

It’s often said that many firms maintain their equipment better than they do their people. If so, you ultimately get what you don’t maintain, especially in sales.

HBR: Everyone Says They Listen to Their Customers—Here’s How to Really Do It

Are you measuring your customers’ experience? Below is a blog from the Harvard Business Review by Ana Brant.

Everyone Says They Listen to Their Customers—Here’s How to Really Do It

Almost everyone in the luxury service industry talks about “listening to the voice of the customer.” But listening is not the same as understanding. How you listen, and to whom you listen, is critical. Even a smart, high-end business can be led astray by misunderstanding the strengths and weaknesses of different customer feedback channels.

In this piece, I’ll lay out a few of the strengths and shortcomings of a few of the more common channels, based on my experience as global director of guest experience and innovation at the Dorchester Collection of luxury hotels.

Mystery shopper ratings

One ubiquitous tool for evaluating the quality of the customer experience in service industries is the mystery shopper. The mystery shopper plays the role of a customer, evaluating service on a checklist of criteria. With these checklists, mystery shoppers measure compliance to a set of standards related to physical attributes and service delivery. Your own company or an external evaluator (such as AAA or Forbes Five Star) may set these standards. Mystery shoppers are best for measuring efficiency — but not experience.

One checklist measure in the hospitality industry, for instance, is how promptly a guest is greeted upon arrival in the lobby, and whether she is greeted by name. But in this era of heightened sensitivity to privacy, does that always make sense? Suppose we’re talking about a luxury hotel guest who is a paparazzi-shy celebrity? A mystery shopper report would never alert me to the receptionist who had the good sense not to speak that guest’s name out loud.

A mystery shopper’s report is an important tool to help us deliver efficient service. But it’s equally important for my team to remember that a checklist, which tends to reward repetitive behaviors, cannot encompass everything we hope to be.

Opinion surveys

This is the easiest feedback channel to misinterpret, for luxury businesses and others. Results are best when it’s a scientific survey built on a proven customer-engagement methodology. One survey we recently did helped us distinguish between what business and leisure travelers look for in a hotel. It told us that we needed to work on winning back a greater proportion of business travelers as leisure guests, and positioned us to increase that by 6% over the following six months.

However, beware the opposite. A quick online survey (à la Survey Monkey) can set a luxury organization into fire-fighting mode about a one-off problem that’s not a true trend. Also, this data can be interpreted — and manipulated easily – by managers, to fit any agenda.

Social media feedback

Many businesses track Twitter and Facebook as measures of how well they are doing on customer service. For luxury brands, social media posts serve one main purpose — as online postcards.

When we looked closely, we found our guests most often use these channels to brag that they have stayed with us. What can we do with that sort of feedback? A lot. These insights don’t tell us about our customer service performance, but they can inform our marketing and customer experience strategies. For example, we see meal pictures showing up frequently on Instagram. So a question we can ask about a luxury room service meal is, is the presentation Instagram-worthy?

Looking at a series of posts from customers can also remind us of what differentiates us from our competitors: afternoon tea at The Dorchester and the soufflés at The Beverly Hills. At Hotel Plaza Athénée in Paris, for instance, guests find a high-end fluffy robe and slippers – with a twist. The slippers have red soles, like Christian Louboutin shoes. We learned via social posts that guests love this touch (especially those who remember Carrie Bradshaw’s fashionable stay there during the last two episodes of Sex and the City).

Social and review posts can also deliver “aha” moments about competitors’ offerings. For example, are luxury hotels delivering the same items – say cake and champagne – to special occasion guests? If so, you can strive for something more distinctive.

Social media is best for discovering what customers really value about their luxury experience with you. This information shapes customer experience strategy. Of course, they can also provide early warning signals that service has slipped. If your social media posts read like comment cards, that’s an alarm bell.

Review sites

In our industry, it is a common misperception that the review sites are used only to find deals. That has led some luxury service providers to discount them. True, not everyone on a review site will be your target customer. However, we’ve learned that many luxury shoppers use sites such as TripAdvisor to validate their choices prior to making a final decision, and browse our reviews and those of our direct competitors. That’s a customer we certainly want to win, so our managers respond to TripAdvisor reviews. Sometimes, this also presents a bonus opportunity to turn a one-time guest into a repeat customer.

Sites such as TripAdvisor can also help identify gaps in what you think is important to customers vs. what customers say is important. While surveys only tell us what we think we want to know and social posts often showcase the best highlights of a guest experience, review sites highlight our blind spots. And when customer reviews include images, they show our products and services through our customers’ eyes, not how professional photographers pose and light them for our website. This can be a reality check for us.

They can also help you look into your competition’s customer experience. Ask this key question: What do you have that customers love — and your competitors lack?

First-hand observations

It’s also valuable to learn when your own eyes trump all. One of the most powerful and often underappreciated tools for improving service and performance is direct observation. Sit in the lobby and see how staff members greet guests, how traffic flows through registration, and how well people work together. Someone in the luxury car business could apply the same principle to seeing what really goes on in the showroom, or in the sales manager’s office.

Luxury innovations usually come from understanding and addressing new needs. For instance, while sitting in the lobby of The Dorchester, members of my innovation team observed guests walk to the theater desk to book tickets for a West End show, and then go to the Concierge Desk to arrange for dinner reservations and transportation. Why, they asked, should guests have to go to two desks to arrange one evening? Now the theater desk staff make all the arrangements a guest might need. I am not sure we would have discovered that less-than-seamless service issue any other way than by sitting in the lobby and watching.

While auditing and measuring the customer experience, remember the ultimate goal is to gather information that helps deliver a level of customer service that differentiates your business. Do not expect technology-driven and repetitive checklist-style evaluations to find it for you.

TMN: Why You Should Never Finish Your To-do List

Bryan Collins writes a great blog on Time Management Ninja. What are your thoughts about your to-do list never reach zero?

Why You Should Never Finish Your To-do List

Your To-Do List Should Always Have Something on It

Do you spend your entire workday chasing your to-do list?

It can be a constant battle between adding tasks and crossing them off as you complete them.

But, it doesn’t have to be that way.

In fact, you shouldn’t worry about finishing your list.

While Inbox Zero may be an ideal to strive for your email, you shouldn’t ever get your to-do list to empty.

The Never Ending To-do List

You should never actually finish your to-do list.

This idea stresses some people out. Especially those that want to get everything done. (Hint: You can’t do it all… no one can.)

However, I should point out that this concept is not about endless work. It is not about overload.

It’s about the fact that you should always be looking ahead to your next actions. Your to-do list is an ever evolving tool to keep your life in order.

After all, there is always something else to do.

“If your to-do list is finished, you’ve given up or are dead.”

Having things on your to-do list should be viewed as a positive rather than a negative. It is a sign that your list is doing it’s job. And so are you.

As well, your list should be productivity tools that is constantly collecting the items you need to do, while you are busy doing other things.

Here are a few reasons “Why You Should Never Finish Your To-do List:”

  • You Should Always Be Adding – You should always be capturing to-dos to your list. It doesn’t matter if they are big or small, important or trivial. Get them on your list, so that your list can remind you. If you decide later that you don’t need to do them, it’s easy to cross them off.
  • Focus on the Task at Hand – Keeping things on your list, helps prevent multi-tasking. Instead of trying to do too many things at once, let your list “hold” your next tasks so that you can concentrate on your current task.
  • Your List Lets You Relax – Getting tasks out of your head and onto your list lets you relax. If you don’t need to complete the task at that moment, writing it down lets you concentrate on something else without worrying about forgetting that task for later.

There is Always Something to Do

You should never finish your to-do list, and that should be a good thing.

Always be adding to your list.

It might be work-related. It could be something important or required. Maybe it is just something fun.

There is always something else to do.

And if there isn’t… well, what then?

The new consumer decision journey

Are you using customer journeys as a competitive advantage? Below is a blog post from McKinseys & Company and Harvard Business Review by David Edelman and Marc Singer.

The new consumer decision journey

For years, empowered consumers have held the upper hand when it comes to making purchasing decisions. But companies are fighting back.

The flare-up around advertising blockers on mobile devices is just the latest salvo in the digital-technology “arms race” that has made today’s consumer a formidable force. From social media to mobile devices, technologies have given consumers unprecedented power to compare prices, complain loudly, and find the best deals.

This tipping of the balance of power in favor of consumers has been evident for years. In 2009, we declared that the traditional “funnel” model—in which consumers began with a set number of brands in mind and whittled them down until they decided what to buy—had been usurped by what we called “the consumer decision journey.”1 See David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik, “The consumer decision journey,” McKinsey Quarterly, June 2009. This journey involved shoppers taking advantage of technology to evaluate products and services more actively, adding and removing choices over time. And it included a feedback loop, where customers kept evaluating products and services after purchase, pressuring products to perform and brands to deliver a superior experience on an ongoing basis.

We now believe the consumer decision journey needs updating.

In the past few years, brands have been playing catch-up, investing in new technologies and capabilities in a bid to regain relevance with shoppers and exert greater influence over how they make purchasing decisions. Our experience advising more than 50 companies and researching more than 200 on best practices for building digital capabilities—coupled with detailed conversations with dozens of chief digital officers and more than 100 digital-business leaders worldwide—has convinced us that brands today can not only react to customers as they make purchasing decisions but also actively shape those decision journeys. A set of technologies is underpinning this change, allowing companies to design and continuously optimize decision journeys. More important, companies today can use journeys to deliver value to both the customer and the brand. Companies that do this well can radically compress the consideration and evaluation phases—and in some cases even eliminate them—during the purchase process and catapult a consumer right to the loyalty phase of the relationship (exhibit). The journey itself is becoming the defining source of competitive advantage.


The new consumer decision journey

In fact, a recent Association of National Advertisers survey2 The survey was completed by a total of 384 client-side marketers. Participants include members of various panels, including the Association of National Advertiser’s (ANA) Marketer’s Edge Research Community, ANA members and prospects, the American Marketing Association, Demand Metric, McKinsey, and Spencer Stuart. Findings from the survey will be available in “The marketer strikes back,” forthcoming on the McKinsey on Marketing & Sales website. found top performers understood the entire customer journey much better than their peers (20 percent versus 6 percent) and had much better processes for capturing insights about customers and feeding them back into their marketing programs to improve performance (30 percent versus 11 percent). They also valued automation as a critical capability to respond to disruption and deliver both consistent and personalized customer experiences (30 percent versus 11 percent).

We’ve found that a company’s ability to deliver that value relies on four distinct but interconnected capabilities:

  • Automation streamlines journey steps. One example is letting people take a picture of a check and deposit it through the bank’s app rather than doing it in person. While automation of processes is highly technical, the focus is on enabling simple, useful, and increasingly engaging experiences.
  • Proactive personalization uses information about a customer—either based on past interactions or collected from external sources—to instantaneously customize the experience. Remembering customer preferences is a basic example of this capability, but it extends to personalizing and optimizing the next steps in a customer’s journey, such as immediately putting a valued traveler on an upgrade list.
  • Contextual interaction uses knowledge about where a customer is in a journey to deliver them to the next set of interactions, such as a retail site showing a customer the status of a recent order on the home page. Some hotels are experimenting with using their app to operate like a key when a customer gets to his or her room.
  • Journey innovation extends the interaction to new sources of value, such as new services, for both the customer and the brand. Companies mine their data and insights about a customer to figure out what adjacent service her or she might appreciate. The best companies design journeys that enable open-ended testing to allow for constant prototyping of new services or features. This may include, for example, an airline’s app that has the ability to integrate with a taxi service so that travelers can book cars to pick them up when they arrive at their destination.

Activating customer journeys to capture value requires journeys to be treated like products that need to be actively managed, measured, and nurtured. How well companies are able to do that will dictate how successful they are in making customer journeys a competitive advantage.

Read the full version of this article, “Competing on customer journeys,” on the Harvard Business Review website.