Lecture 10
13th November 2012

For reasons I have failed to understand, there was an exceptional buzz in the room tonight.  Perhaps the pre-reading generated energy?  Perhaps the fact that the room was filled beyond capacity was a contributor?  Perhaps the end being in sight represents something of a relief?  Regardless of the reason, the energy was palpable.

David had, as always, written the running sheet for the session on a whiteboard.  It too was filled to capacity with details of student presentations, final assignment reminders, guest presenters, final lecture arrangements, and on it went.  I had a sense that it was going to be a big night!

To commence, David congratulated the students on the feedback they were offering one another as part of the weekly reflection process.  Their coaching, it seems, is impressive and David is unreserved in his praise : the depth of their humanity, insight, intellectual rigour and effort exceeds that of any student cohort he has previously taught.   And whilst I have no access to the student reflections, this is no surprise for me.  They are an extraordinary group.  They are smart, and they clearly care about one another.

I recall Tuckman’s classic “Forming-Storming-Norming-Performing” model of group development, augmented in the 70’s with a fifth stage, “Adjourning”.  It is with a touch of sadness that I realise we are approaching this final stage.

Down to business…

An Impressive Student Pivot

FriendsNet took to the floor, the only presenting team tonight.  The team is down to two members, with Daniel and Alex peeling off to form a new venture, Fast Entertainment, unveiled in Lecture 9.  This late change in line up has caused the FriendsNet team to conduct further research and to reshape their direction.

Their previous offering – a web based application designed to allow users to glean purchase recommendations from people known to them – seemed to pose more questions than answers.  Where will we get revenue from? (advertising, but not profitably); Are there too many knowledge networks in users’ lives? (probably); Are users willing to pay? (there is interest, but not excitement).

On the basis of their research, the team has pivoted significantly, launching a new offering “Cumulus”. With an interface of a tagged cloud, Cumulus is a platform for collaboration and co-creation, enabling users to ‘share, create, learn, connect’.    Take a look at the video (on Start Ups Page 07 Reliable Ratings).  It’s an impressive concept, as is the journey this particular team has taken.

Selling Ice to Eskimos?

The first of two guest presentations tonight was delivered by John Williams and Ralph Muir-Morris of JHW Consulting.  The organisation provides a range of professional development services, with a focus on securing stakeholder engagement.  This evening they’d been invited to speak to the students about Selling – a distasteful topic for some of us!

Ralph and John commenced their session with a ‘warm up’ exercise, asking the students to reflect, for their particular project, on whether Sales or Marketing is of greater importance.

The customary roar erupted as teams debated the question.  And, as ever, an array of thoughtful responses emerged….initially Marketing followed by Sales in the execution process; we see it as a continuum; Sales as we have a complex solution and relationships are important; Marketing as we are still developing our product and refining our understanding of customer wants.

Take a look at the video…

As you might expect, if your offering is highly differentiated then marketing is appropriate as buyers want your offering over anyone else’s (Apple falls into this category for example). If, on the other hand, you have a complex solution, ‘push’ is not the way to close business.  In this case the selling process requires greater interactivity in order to adequately address the questions a buyer of a more sophisticated offering may have.

Ralph and John shared their definitions, elaborating on the differences between sales and marketing.  I quite liked their diagrammatic summary…

With definitions behind us, we drilled down into the sales process (to the extent that a 40 minute presentation allowed).  Again, an elegantly simple model provided a framework…

Each of these tasks is complex, but in summary…

  • Identify – who am I going to talk to?
  • Needs – what are their needs, personality, priorities, how do I engage with them, how do I ensure I’m really listening?
  • Solution – how do we define, pitch, get commitment, exceed expectations?
  • Reinforce – how do I build an ongoing relationship, secure referrals, build good will?

And while each is important, engagement is critical.  And can only be secured by establishing trust, rapport and a perception of value.  Not everyone needs all three dimensions, as individuals have different hierarchies of needs.  My own view, as I listened, is that this may also be context dependent.  When I go to a specialist physician for example, I’m willing to sacrifice bedside manner for technical excellence, a trade-off that often seems to be necessary!!

A short team exercise followed where students were asked to address four questions, thinking about their initial encounter with a prospective customer:

  1. How do we establish rapport?
  2. Is it a ‘nice to have’ or a ‘must have’
  3. How do we build trust and demonstrate integrity?
  4. How can we show that we can add value?

The students attacked the questions with great enthusiasm, reconvening at the end of a very noisy session to share their conclusions.  Their lists were impressive, and the discussion that followed interesting.

Take a look at the team who addressed the fourth question (and if you have keen eyesight, take a look at the foot note of their list!!)

I was also interested to watch the discussion of Team 2 around ‘nice to have’ or ‘must have’, possibly because it’s a view I share…

I’ve summarised what for me were some of the key observations…

  • first impressions count – you have about 30 seconds;
  • insightful questions demonstrate that you are really engaging;
  • you have a value proposition as an individual – not just as a representative of your company;
  • trust takes time to build, but time does not automatically guarantee trust;
  • people who ignore the importance of rapport tend to struggle at work;
  • if you are selling, rapport will be an important driver of success;
  • you need credit in all three ‘bank accounts’;
  • you should strive to focus on trust, value and rapport at every touch point.

It was a great session.  John and Ralph left each of us with something practical and tangible that we can incorporate into our day to day interactions with colleagues, and with potential clients.

What don’t you understand?

By way of a quick change of pace, David asked the students to scan the many posters displayed around the room, each of which summarises key concepts relating to the course.  Students were asked to identify those concepts (if any) which they do not confidently understand, and to fill the knowledge gaps by seeking explanations from fellow students.

In the event that no student understands, the concept is placed on the board.  By the end of the exercise there were four contenders on the board.   David focused on The Four Drive Model.  The model was proposed by Paul R Lawrence and Nitin Nohria, with Harvard Business School, to describe employee motivation.

In summary, the four drives are as follows:

To Acquire – external and tangible rewards, which often become a symbol of status;

To Bond – creation of positive personal relationships;

To Defend – we protect what we have acquired, created and believe in;

To Comprehend – the search for meaning, drive to satisfy curiosity.

And whilst each of these drives is independent of the other, true engagement requires a four drive approach where each is carefully considered.

If your drive to bond is weak, and your ability to empathise is poor, you will struggle to find true relationship.  An absence of the drive to bond is noted in almost 2% of the population, who often use manipulation, intimidation and control of others to satisfy their needs.  They can be intelligent and charismatic, but lack the ability to feel guilt, remorse or unease about their actions.  We refer to them as psychopaths.

And now to the twist.  It is estimated that as many as 20 – 30% of senior people in large organisations may lack an adequate drive to bond.  The learning : use your instincts and choose your business partners with care!

Whilst writing up the blog I came across this white  paper which you may find interesting.

The Importance of Pitching

The final speaker for the evening was Marc Harrison.  Marc joined the group last week, providing feedback to student teams.  As a businessman and investor, David has invited him to speak to the class on effective pitching.

Marc walked the students through a fascinating approach, referred to as neurofinance, a concept that combines neuroscience with economics.  (If you want to delve further, Marc recommends Pitch Anything  by Oren Klaff).  The essential idea is that the brain comprises three parts…

  • The ‘crocodile brain’ generates survival responses, produces strong basic emotions, primitive reasoning power, makes quick decisions;
  • The ‘mid brain’ determines the meaning of things in social situations;
  • The ‘neocortex’ has strong problem solving ability and analytical skills.

It seems that messages (in particular Pitches) painstakingly prepared by your neocortex are received and processed by the other person’s crocodile brain first.

The crocodile brain wants information in a simple, clear, nonthreatening, intriguing and novel way.   (And this is exactly how Marc’s presentation was delivered.  Needless to say, it captured the attention of every individual in the room. )

The croc brain’s rules of operation are harsh…

  • I’ll ignore you if possible;
  • I am only focused on the big picture;
  • My emotional responses are basic, and attuned to fear;
  • I have a short attention span;
  • I need concrete facts, not abstract concepts.

The key to a successful pitch is presenting information that delights the crocodile brain which will then engage the neocortex to justify the decision analytically.  And the analogy in business: the croc brain is akin to the CEO – making rapid decisions to be justified by the neocortex – the Analyst.  Listen to Marc explain…

As an aside, Marc presented some particularly interesting research on how we might change our perceptions.  Research has shown that if we think about ‘being another person’ we can change our outcomes.  Fascinating stuff, take a look…

The key message for the students is quite simply that a successful pitch must first capture the heart and mind of the CEO. There followed an invitation to revisit their draft pitches!!

It was an extraordinary session.  The energy levels remained high throughout what was essentially a four hour session, the speakers were engaging, and I have a sense that every student left the room feeling invigorated and enriched.  I certainly did.

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