Author: Steve Shu

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Interesting Post On Whether Selling Is Practicing One’s Profession

Ford Harding has an interesting post entitled, "Is Selling Practicing Your Profession?" He takes the side of the argument that those who sell (e.g., partners in professional services firms, senior engineers) are indeed practicing their profession. But there are those that may argue (e.g., in the case of an engineer) that such and such a person is no longer an engineer because he or she now sells.

I tend to agree with the spirit of Ford’s argument – that those who sell are practicing their profession. In management consulting firms, it may be more obvious in some of the small- to mid-sized firms where consultants get involved in sales processes as early as the manager-level (this is in contrast to principals and partners I’ve interviewed at some of the big, well-known firms where sales experience is very limited to partner-levels). In management consulting, the product is complex, and one really has to understand all aspects in order to sell. One needs to understand the methodologies that can be used, the importance of engagement structure, the value propositions, all the potential variations of situations, the client organization and capability to change, potential pitfalls, what’s going on in the industry, etc. The best people in selling consulting engagements are those that have been consultants, done many engagements, currently involved in engagements, and understand when and why a client should or should not use a consultant.

That said, I have found that many people have a hard time shifting gears from delivering engagements to selling engagements. For example during the sales process, consultants newer to sales will want to ask about a lot of details, in effect trying to solve the client’s problem during the presales process. But the purpose of the presales process is to establish credibility and rapport, identify the problems to be solved, create the link between the problem and the consulting engagement that will solve the problem, and sell the engagement. The presales process is not about solving the customer’s problem in a couple of meeting sessions. Granted it is important to offer perspectives, opinions, industry data, case studies, etc. during presales meetings, but those that have spent lots of time in delivery and little time in sales can lose sight of where one is in the sales process with a customer prospect and what questions absolutely need to be answered for the consultant to propose a scope of work and engagement structure.

Shifting focus from a delivery role to a sales role takes work. I never really appreciated the investment required until having to step into a sales role out of necessity in a startup. Of all of the sales books and sites I’ve seen and read, Ford Harding’s blog and books are some of the best things to check out if you are looking at professional services sales.

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Illusion

A wild illusion. The spinning silhouette mostly starts up clockwise for me.

Update (10/14/07): Lots of comments over here at Marginal Revolution. There is a reference to left brain versus right brain dominance, etc., but I’m not too sure … I like the comment about the person that tried filming it backwards … then when played backwards, the person still saw things going in the same direction.  🙂

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For My Diary: eBay Impairs Its Skype And Pays Founders

Close to two years ago eBay acquired Skype for $2.6 billion. Today I read the news that the synergies are not playing out (surprise, surprise) and eBay will take charges of $1.4 billion, most of which is attributed to the acquisition writedown. From Bloomberg.com:

EBay, acknowledging that Skype hasn’t performed as expected since acquiring it for $2.6 billion in October 2005, said in a statement today that it will write down the value of Skype by $900 million in the third quarter, as well as take an additional charge of $533 million to pay former shareholders under a provision of the takeover agreement.

To put things in some perspective though, Skype’s second quarter revenue is at $90 million. If you read through my past notes, 2004 revenue was $7M and 2005 revenue was projected (near time of acquisition) to be $60M+.

The Internet serves as a great record for these case studies. It it interesting to read some of stuff bloggers wrote two years ago about this deal. And bloggers like Paul Kedrosky (who seems to tip that the impairment may not be enough) and Om Malik are writing again today.

To digress a bit, I can imagine the discussions that are going on about whether the strategy was flawed or whether there was a failure to execute. I don’t know what the case was here, but I can almost hear chanting from my past colleagues and mentors that there was a failure to execute. Seems like execution failures are blamed more often than strategic failures (for better or worse).

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Delaying Decisions As Opposed To Being Indecisive

My family’s vacation was marked by an incident that led to my first 911 call in my life. I have reflected upon this incident for many days with a mixture of thankfulness for the safety of my family  (and others on the boat) and personal anguish that I could not have done more.

We were on a whale watching cruise miles off the coast of Monterey with about 40 other people on a 50-foot some boat. On the return trip back to shore, there was a malfunction that caused the exhaust pipes and roof to catch on fire. The engine was cut by the captain as it seemed it might have been a driver for the fire coming out of the exhaust. Life boats were on top of the cabin on fire. Life preservers were all in the cabin on fire (with the exception of the two preservers my two kids were wearing who had put some on at the beginning of the trip). All the fire extinguishers were spent quickly, and the flames just got worse as time passed. Shore seemed to be a long ways away, but at least we were not out 30+ miles (I’m guessing) from where we started. There were very few boats that we could see, and there was a lot of smoke coming off our boat. A 911 call was made from my mobile phone, and I handed the phone to the naturalist on the boat who was (potentially) better equipped to identify our location and condition. A number of people were panicking, and many gathered in the very back of the boat to distance themselves as much as possible from the fire and smoke. Things did not look good by any measure.

I had been in the water a few days before. The temperature was not too discernible from ice water from my perspective. I had seen seals, so I was hoping that there were not any sharks in the water.

A question raced through my mind a number of times. Was the situation bad enough that I should I pitch my kids into the water? Then there were intervening questions entering my mind … what happens if something explodes before I make a decision? The boat is rocking pretty violently … can I actually pitch them far enough from the boat that they won’t get walloped by the swaying boat? Would they survive long enough in the cold water? The questions going through my mind were endless.

I chose to delay my decision to throw them into the water. (After the trip, I realized my wife had the same thoughts going through her mind)

The fire continued to spread. Eventually the life boats were released. No sign of the Coast Guard. A small boat came alongside and threw us two fire extinguishers. The other boat was too small to take many people, and very soon the new extinguishers were exhausted. Smoke got worse. Maybe five minutes passed.

What to do?

At some point, the captain decided to restart the engine. Though I didn’t speak with her after the trip, I presume that she decided our chances were better if we tried to gun it to shore (even though speeding up the engine could have increased the fire). We gunned it towards the nearest point on shore. The increased exhaust may have served to cut some of the flames, but who knows.

We made it to shore to be greeted by the fire department and the local news (the incident was the lead story on the news that day and made the front page of the paper the next day). Coast Guard arrived 10-20 minutes later. Everyone was safe. No one needed to go into the drink.

Did I make the right decision to delay throwing my kids in the water? Was I indecisive? Did the captain make the right decision to take command and gun it to shore?

In my opinion, the captain made the right choice. We were out of options to put out the fire, and it was not clear that we were going to get any help in the near term.

As for whether I should have delayed my decision to throw my kids in the water, I am still at odds with that. True they are safe, and the direct threat at the time may not have been imminent, but in reality, I am a layman about boats, and the threat could have been imminent for all I knew. But delaying the decision to throw them in the water allowed me time to gather additional information, such as whether some other boat might come to our aid, whether the fire was spreading, or whether we would get feedback from the crew about our distress calls.

In numerous business settings, I have found that delaying decisions can be beneficial, more often in cases when one is trying to gather additional information that will make subsequent decisions more informed and definitive (e.g., you should posture yourself as ready to make a decision once information comes in as opposed to just being indecisive). Sometimes this can be counterintuitive to those in the business world, where things seem to be driven by a culture of being decisive and making decisions with whatever information is on hand.

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University of Chicago MBA Applicants Must Submit Powerpoint Charts

From an article at OrlandoSentinel.com:

At business meetings the world over, PowerPoint-style presentations are often met with yawns and glazed eyes.

At one of the world’s top business schools, though, such slide shows are an entrance requirement. In a first, the University of Chicago will begin requiring prospective students to submit four pages of PowerPoint-like slides with their applications this fall.

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Why I Dislike Microsoft Project for Management Consulting

Sort of as a follow-on to the post about project management and b-schools, I thought that I would post something (a bit one-sided) about the use of Microsoft Project in management consulting projects. I dislike the tool and sometimes even discourage the use of the tool by consultants running projects. Here’s some reasons why:

  1. While project management is a function that moves things ahead, Microsoft Project as a tool can create barriers to communication. For the average user, there’s generally not enough flexibility to do things like highlight workstreams in an engagement, create a view of danger/risk points in a project, show progress to plan plainly, and summarize a project plan on one chart.
  2. Because the tool is not part of everyone’s basic software configuration, there are additional barriers to communication because the native file format often cannot be easily exchanged with clients, colleagues, etc. who need to work and update things in real-time. Project plans in Microsoft Project need to get exported to things like PDF files, etc.
  3. Updating the project plan can become a project in of itself and prevent the project manager from doing other important things like communicating with stakeholders, managing risks, working to solve problems, and completing tasks.

Getting the theme behind my dislike for the software?

I much prefer using something like Powerpoint or Excel for developing project plans. I like Powerpoint because of its visual nature (which can be helpful in managing projects and leading people). I like Excel because of its greater structure over Powerpoint and ubiquitous availability to business people.

Am I right? Probably not entirely, but I have definitely seen the types of recurring problems described above in many engagements. The negatives often outweigh the benefits of using a more structured tool fit for purpose.

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For My Blog Diary: Whirlwind Notes On Blogs In 2007

For a snapshot of what I am sensing in 2007:

Compare this to what we saw in 2003-2004 and the rise of the blog in 2004.

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The Downside of Saving for That Perfect Occasion

My wife is quoted in a recent U.S. News and World Report feature on credit cards where she talks about a quirky aspect of consumer behavior:

Suzanne Shu, assistant professor of marketing at Southern Methodist University, says rewarding people with luxury experiences gives them permission to indulge in splurges that they might otherwise feel guilty about buying. The risk, she says, is when the experience seems so special that people wait to schedule it and end up putting it off into the future indefinitely.

"People get into the problem where no occasion is quite special enough where they feel like they’ve earned the right to use the reward," she says, whether it’s an expensive bottle of wine or a gift certificate to a high-end restaurant. Her advice is to set a specific date for the reward and then use it. "It’s the drive for the perfect occasion that really throws people off."

Note to self: Companies that can better understand systemic quirks and biases related to consumer behavior can apply such learnings to improve their sales and marketing programs.

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