Working With People You Like

Last night we had a small event for our team leaders and employees participating in our mentor program.  We went out to an informal dinner and then to my house to get a lesson in the making of lemon-cello.  It was a very fun evening and a good opportunity to remember how important it is to like the people you work with.

Our company has been selected as one of the best places to work in Washington State in four of the past five years.  One of the main reasons we achieve that honor is that we just like being in the same room.  Sure it is important to enjoy what you do, and I submit it is just as important to enjoy who you do it with.

Life is too short, and we live a great deal of it at work.  I feel very fortunate to spend that time working with people that I like.

The Power of Why

Some time back I commented on Ric Merrifield's book: "Re:Think" where he created definitions for How and What in a business context.  Today I came across a book that ads Why to the list:  Simon Sineks's book: "Start With Why". In this book Sinek argues that if you want to motivate people to do something, think about Why your company exists.

If you are interested in the topic, I recommend going to Mr. Sinek's web site and watching the 18 minute video introducing the idea at the TEDx Puget Sound.

I agree.  Here are his ideas applied to our business:

What (the business we are in): We help large technology companies sell more through their channel partners.

How (what makes us different from our competitors):  Like our competitors, we bring our capacity to do work to the table, unlike our competitors, we also bring our experience and expertise.  In other words, our competitors want to be told what to do -- and then they do it.  We help our clients decide what to do, and then we do it.

Why (do we exist):  We exist to create a great place to work.  Many people could think of our business as a commodity.  As processes that can be standardized so each and every last penny can be squeezed out of its production.  We have unmatched passion for working together with each other and our clients to do things that make a difference.

A great place to work -- really?  I say yes.  There are many reasons to work and countless studies about why people work.  Getting paid is in there, also the challenge, and also doing things that matter.  These are mostly focused on the end result of work -- the destination.  We are focused on the journey.  Working side be side with each other and with our clients to deliver measurable results makes for an awesome job.   

Making Marketing More Measureable: Three Dos and Three Don’ts

Every year CMOs are surveyed and every year one of the top goals is to Make Marketing More Measureable.  You can read all of the surveys by searching for “making marketing more measureable” and see for yourself how the studies all say this very thing.  Sales and Marketing are like brothers that are too close together in age and skill – always competing and not really wishing for the other to succeed.  Sales has a built in advantage because of its very concrete measurements.  When revenues are up, the sales department gets all the glory (and that inflames the relationship with marketing), and when revenues are down the sales department blames marketing – and that sure does not mend fences!

We have been both participants in and observers of this conflict because the services we deliver at CSG place us right at the intersection of sales and marketing.  In some of the most interesting cases, our services are used by sales and paid for by marketing!  You can only imagine those meetings.  Along the way we have learned a great deal and have done our best to boil it down to some easy to remember dos and don’ts.  If you run a marketing department please understand that we believe you are in control of your own destiny and we don’t buy into the belief that these are intractable problems.  In fact, we believe that a great deal of the pain endured by marketing departments is self inflicted.  If you run a sales department please understand that this list is not intended as a weapon to use against your marketing department.  We believe that sales cannot be successful without marketing and the sooner everyone recognizes it the better.

Three Things to Do to Make Marketing More Measureable

Do: Measure Opportunities Delivered

The job of the marketing department is to deliver opportunities to sales.  All activities in a marketing department serve this job.  Everyone can think of exceptions to this but I would argue that the exceptions only get marketing people into trouble.  Sure there are a bunch of things to think about but the sales department only gets measured on one thing – sales.  The sooner the marketing department faces the fact that it exists to deliver opportunities to the sales department – the better.  Yes but…..and we have heard them all…measuring opportunities is a much less exact science than measuring sales.  Sales are measured according to GAAP accounting standards and there is no accounting standard for measuring opportunities.

Do: Deliver Great Tools

Indeed it is true that measuring opportunities is quite subjective and the chance that sales is going to value the contribution of the opportunities delivered the same way that marketing does is practically zero.  Sales is the customer of marketing and the only way to measure customer satisfaction is through the eyes of the customer.  Therefore, hurling the opportunities over the wall is just not going to work.  The opportunities must be delivered through a mechanism that collects granular feedback at the time of delivery.  This must be a great tool that members of the sales department actually use.  The tools must be so good that the people using them actually like to use them!  The only meaningful measure of the value of the opportunities delivered is the value the customer (sales) assigns to them.

Do: Collaborate on Process

The process of delivering opportunities and collecting feedback cannot be developed by marketing alone.  Sure the marketing department can get the thing started, but on the second day sales must be brought into the project and engaged to work towards a delivery and feedback system that works for everyone.  There is an easy way and a hard way to do this.  The easy way is to show the sales department that the marketing department understands it exists to deliver opportunities to sales and that the only accurate way to value the opportunities delivered is to accept the value assigned to them by sales. 

Three Things that Don't help Make Marketing More Measureable

The inherent complexity of measuring the value of opportunities delivered is enough to send anyone looking for other things to measure.  The marketing industry is awash with new measurements from web traffic to white paper downloads to booth badge swipes to partner referrals to Twitter followers social network mentions to event attendance and on and on.  All of these are important and require significant attention by competent people in the marketing department.  Don’t expect that anyone other than the marketing department cares about any of this.  Remember that every time you celebrate an increase in web traffic the sales department thinks you are doing so to avoid talking about the value of the opportunities delivered. 

Don’t: Mix Up Your Goals

When building a marketing budget anyone can fall into the trap of confusing things that contribute to the opportunities delivered with the actual opportunities delivered.  Great brand building is necessary, important, and does contribute to opportunities delivered.  Great brand building is not an end in itself and should not be measured as such.  If you sponsored the Indianapolis 500 last year and are going to do it again this year – don’t justify the sponsorship deal this year by declaring that it is cheaper than last year or the reach is greater this year.  Brands are built to contribute to opportunities delivered to sales. 

Don’t: Lose Your Resolve

If sales agrees to give you feedback on each opportunity delivered so you can clearly understand how and when you are delivering the most value to them  (your customer) – don’t back down until you get it.  Clearly you have to win the agreement first and get the feedback second, and clearly it is not going to happen overnight, but unless you maintain your resolve in the pursuit of the feedback, you will never get it.  So stick to your end of the deal and expect your customers in the sales department to stick to theirs. 

Despite the inherent conflict between the squabbling brothers of Sales and Marketing, we have also been fortunate to witness companies where these departments have balanced and symbiotic relationships.  In these companies the clear customer orientation and the simplicity of the measurements between departments is evident.  When done right it is an absolute pleasure to watch and the value to the organization increases by orders of magnitude.

Tallying the Impact to the Channel

The announcements in the last few days by Facebook and Twitter are very real reminders of the pace at which things are changing in our industry.

In an effort to take a step back and evaluate the impact of these and other shifts to the technology channel marketing industry, we are assembling a group to do a SWOT analysis on the Channel.  

We are going to kick this off at the Baptie Channel Focus event next week in San Diego.  You can participate even if you are not going to be at the event.  Here is what you need to know:

•  Follow us on Twitter:  You will be able to see all of the contributions and you can contribute your thoughts -- just put @CSG_Channels in your tweet and we will take care of the rest, or
• Email us at swot@csgchannels.com.  We will turn your contribution into a tweet -- so others can see it.

We will take everyone's contributions and craft a SWOT Analysis of the Channel that will be shared with the industry.   We will not be completely relying on the wisdom of the crowd in this effort however.  We will be assembling an advisory group that will steer the effort.  In the event you would like to participate as an advisor to this project, please send us an email at swot@csgchannels.com or contact me directly.

Here is the link to the announcement about this project on our web site.

Picking the Winners

I am not smart enough to pick the big winners in advance.  So I don't play the stock market, and at CSG we sell shovels to the gold miners instead of prospecting for gold ourselves.  Sure striking it rich would be a thrill, but the world is littered with hundreds or even thousands of would be Googles.  I was going to say would be Twitters, but they have not made any money yet!

This strategy has provided us with a very interesting vantage point from which to watch the show.  And it is quite a show these days.  I sure am glad I am not a telecom equipment vendor or a distributor -- it is easy to see what is going to happen to them.  It is much easier to pick the descending parts of our industry than the ascending.  Who in tech is going to do well?  

There has been so much talk about services over the past ten years that we have both lost interest, and lost track of the definition of services.  There are hosting services, IT services, software as a services, software + services -- and each time the word services means a different thing.  IBM, Dell, HP, Microsoft, and Oracle all have significant services organizations.  IBM generates more revenues from services than all of Microsoft's revenue.  What is IBM doing when they deliver services to their clients?

Business pay IBM 50 billion dollars a year for services.  And everyone in tech wants to get into services.  I propose that we could learn a bunch about the future winners by digging into the question -- what are people paying IBM 50 billion dollars a year for?

Stay tuned, in tomorrow's post I will dig through IBM's annual reports.

Our Healthcare Story

My hat is off to the Obama team for getting the healthcare legislation rolling.  I admit I have spent less time than I should following this because I did not give it much chance of getting off of the ground.  Frankly, I really do not know how this is going to impact our business or our employees, but at this moment I am willing to give the thing the benefit of the doubt and assume this is a step in the right direction.  In thinking about what value I may be able to bring to the dialog, I thought I would post what I learn as I learn it and therefore provide one real world data point for people to follow.  

With that in mind, here is a condensed overview of the current healthcare situation at CSG.  

Current Situation:  We are in our fourth year of what some people would call self insurance, and I call a do it yourself healthcare plan.  With the help of a broker, an administration service provider, and two reinsurance companies, we have assembled our own healthcare solution.  We struck out in this direction with two stated goals:  1) get control of costs and 2) prevent our benefits from sliding back any further.  Our costs (equivalent of a premium) are $414.04 per individual and $1,182.99 for a family, and we use a preferred provider network that gives our people access to a good number of doctors for a reasonable co-pay and a manageable deductible of $500 per individual and a maximum out of pocket of $2,000 per year per individual.  For this we require individual employees to pay 25% or $103.51 per month (and the company pays $310.53).  We also offer dental at $40.91 total with an employee contribution of $10.23.  For families we require the employee to pay 75% -- which is quite a burden on the employee, but we do it that way because the cost to the company is the same as for an individual.

When I started the company in 1997 we paid $129 per individual and had lower co-pays, lower deductibles, and lower max out of pocket.  We never had a year with less than double digit premium increases (by percentage) and by the time we bailed out of that system in 2004, our premiums were up over 3X to $496 per employee per month.  Our benefits were diminishing every year and our people were fighting with the insurance company over far more claims than we thought they should.  

We offer healthcare coverage on these terms to every employee that has been with the company for 90 days or more.  We do not require our employees to purchase healthcare and some elect not to because they get coverage elsewhere or perhaps they go uncovered.  Because of these variations in the number of employees electing coverage, the company's portion of the cost of healthcare has ranged from a low of 4.09% to a high of 7.40% and an average of 5.92% over the four years 2006-2009.  Because of the mix of individuals to families, the company only pays 67% of the total cost, making the average total cost as a percentage of payroll 8.83%.

I will do my best to share how the new healthcare laws impact our company.  Feel free to post your experiences.