Want More Leaders in Your Organization?

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As a long time student of sales I am especially interested in developing compensation plans to motivate and inspire salespeople to become high producers. That being said, I was delighted to receive my weekly Business Insights newsletter from the Stanford Graduate School of Business that summarized a new study, coauthored by Kathryn Shaw of Stanford Graduate School of Business, and  Ann Bartel of Columbia Business School and Brianna Cardiff-Hicks of Cornerstone Research that sheds light on encouraging high producers to become good leaders.

This particular study looked at a high-powered law firm founded in the 1990s, and grew rapidly for over fifteen years relying almost entirely on an eat-what-you-kill system.

In its purest from, eat-what-you-kill means basing the size of a person’s paycheck almost entirely on how much business that person brings in. Shaw and her colleagues wanted to see what happened when this law firm switched from an almost pure eat-what-you-kill approach to one that rewards work that benefits the firm as a whole.

My partner Matt Plociak is a firm believer that money, and that being on full commission should motivate salespeople or in this case, even lawyers should be compensated an eat-what-you-kill basis.

So the question in this study of the law firm is whether the shift from eat-what-you-kill improved the long-run strength of the firm by having the senior attorneys invest more effort on the organization as a whole.  The belief by some of our colleagues is that at some point, even fast-growing companies need more than big producers. They need leaders who will invest time and effort on the big picture. They need people who can bring out the best in employees, communicate a vision, or build the firm’s public reputation. And this necessarily, begs the question as to how to structure incentives that focus on the big picture, and still generate increasing revenues.

The data collected in this study may not be totally conclusive enough to offer a definitive judgment, but it does indicate that the law firm did make better use of their junior associates who had been underutilized under the old system, which ultimately resulted in a win-win for all the attorneys in the firm.

To be sure, Shaw says, companies of all types still want ambitious go-getters who dream of big paychecks, but encouraging people to work for the good of the whole organization can be a winning strategy for everyone. I’m curious as to what you think. I look forward to your comments.

“No” is Critical to Success

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A few weeks ago, my partner Matt Plociak and I got together with two of our former Netlan employees, Rick Freedman and Charles Bernard who respectively for many years are very successful business owners and consultants in technology and sales.

Of course, it was great to see them, and since we share so many similar beliefs about marketing, sales, consulting, entrepreneurship, and business, we started to talk about the books that have inspired us, and lo and behold, we each had a reading list and assignments for our next get together.

First on my list was “Never Split the Difference: Negotiating As If Your Life Depended On It” by Chris Voss. Chris is a former FBI lead international kidnapping negotiator and is the CEO and Founder of the Black Swan Group, a consultancy that brings the lessons learned in hostage negotiation to business people who need to negotiate, persuade, or influence, which sounds like just about everyone.

I’m finding the book a fascinating and very informative read, and most recently I read A Black Swan Group blog entry by Derek Gaunt, on “Why It’s Important to Embrace No’”.

As a Sandler Sales disciple, I am very familiar with “Going for the No”, and I use it as a technique quite often in my approach to sales.  I was very impressed to learn that  “Going for the No” is actually used in hostage negotiation as well.

Derek’s point is that although No in any difficult conversation may be interpreted as an insurmountable obstacle, it is in fact the first step towards, collaboration, compliance or acceptance.

The folks at the Black Swan group believe that No is used for protection, or rejection, and it usually represents confusion and fear on some level. “Another interesting psychological aspect of accepting the No, is that it triggers reciprocity. Once people feel that they have protected themselves, they are often more willing to listen. They are not worried about what they have exposed themselves to by making an unintended commitment in saying Yes.”

So if hostage negotiators have no fear of No, and actually embrace it as a means to get to Yes, one can only wonder how effective it might be in the worlds of sales and business.  I know it works, do you?