Hat tip to John Shaver of Aries Technology for sending me this cartoon from this past Sunday’s Lio.
I have used this analogy for years – implementing a new ERP, CRM or HR system at an organization is akin to a human being undergoing triple bypass surgery. No one is going to do it because it is on sale this month or even free. Price is not the issue.
Recently, this has become a much more personal example for me as my Dad has had this procedure (the bypass, not an ERP implementation). I can say with certainty, if his highly skilled surgeon had offered to operate on me in a father/son two-for-one monthly special, I would have vigorously declined his offer. Price was not the issue.
The next time you are working with a prospect who in interested in ERP/CRM/HR. Remember this. Price will not be the issue.
In addition to the blood pressure pills I take from stressing out over changing the business model for professional firms (kidding, it is hereditary), I take a few vitamins and supplements on a daily basis. Since I like to take them on a full stomach, after dinner seems to work best for me. However, because I am usually doing several things at once I sometimes forget if I have taken the pills or not.
After debating about it for a few weeks, I finally broke down and bought one of those weekly pill organizers. (Shown at left.) OK, before you start with the comments, there were not many choices.
In any case (pun intended), I loaded it up on Sunday and thus far it is working flawlessly. Coincidently, it has also led to an unintended benefit – I only have to unscrew the child protection lids once a week now, and not once a day.
I got to thinking about it and there is a lesson here for professional firms. Notice that the original problem was one of effectiveness – I could not remember if I had taken the pills. In solving the effectiveness problem I also increase my efficiency – I only open the bottles once a week now. It was through increasing my effectiveness that I also increased my efficiency. I submit that this could not have worked the other way. No amount of increasing my efficiency of the original task would have increased my effectiveness.
If I have lined up the bottles and practiced open them with the least amount of effort and streamlined precision of motion, I would have not increased my ability to remember to take the pills each night.
The lesson – I am living proof of Kless’ Second Law – Effectiveness always and everywhere trumps efficiency.
What if you would refuse to accept any new customers unless they were referred to you but another customer? Would your leads dry up? If so, your new business problem is not marketing related, it is your service. FIX IT!
The lesson here is that if you are not getting active referrals from customers, your service ain’t great. The only thing more customers is going to do is put you out of business faster.
Imagine if your new customers, like my dentists, come from 100 percent referral sources. Do you think you could charge a premium? Do you at least think that discounting would go away?
It is time to take some stock and ask – Are we really as good as we think we are? If not, it is time to fix your service.
One thing I have always been impressed with from accounting firms, specifically the larger ones I have had contact with, has been their ability to create alumni networks that drive real value for them. Now, it certainly is true that this practice has caused some challenges by creating some possible personal conflicts of interest. However, I think for the most part, this is a great idea.
Too many businesses I have encountered tend to blame the person who has last left the organization for everything that has gone wrong at the firm from the creation of the world (a literary flourish, I believe in the Big Bang) to date. This is especially true if the person is fired, but it occurs with all too much frequency when the employee is leaving of the own volition.
“Oh, that Fred (I always use Fred), I am glad he left. In retrospect, he caused more problems than he solved.” Blah, blah, blah. To me this kind of trash talk is indicative of leadership. If this person sucked fowl ova so badly, why didn’t you get rid of them long ago. I think that what the person is really saying is, “Damn that, Fred, how dare he leave us. We are a great place to work.” Really? Do some soul searching.
Anyway, back to the praise.
Accountant do an outstanding job of placing people with their customers and even to some degree encouraging these types of moves. After all, if the person is unhappy, for whatever reason with your company, isn’t better to have them as a ally in the future.
If you are someone who has been critical of former employees, why not turn over a new leaf and plan an alumni BBQ at your house over the summer.
On May 12, 2009, I presented a session at Sage’s annual partner conference, Insights. The session was entitled Issue List Management (or how to replace your time sheets with something that actually matters to your customers).
The article begins, “The Group of Eight industrialized nations joined with developing countries in agreeing Wednesday that average global temperatures shouldn’t increase by more than 2 degrees Celsius in a significant new acknowledgement in the fight against global warming.” Really!
The hubris of people to think that all they have to do is vote and it shall be so is incredible. Do they really think that is all they have to do?
Global warming (or climate change as it is now known – in an obvious attempt to hedge against the globe cooling) comes down to four questions.
Is the temperature of the earth rising?
If it is rising, is that bad?
If it is rising and it is bad, is human activity the cause?
If it is rising, and it is bad, and human activity is the cause, can we do anything to stop it and at what cost?
The answers are: Probably, maybe, no one really knows, and a lot.
I would say that there is some consensus among scientists that the mean temperature of the Earth is rising, but and this is a big but, is that bad? It might be, but it might not be. Far more people, about ten times, die of exposure to cold than to heat. Warming a little would reduce the death tolls.
Despite what you hear in the media, while there in consensus on warming, there is very little to no consensus that it is attributable to human activity. It is all conjecture, there is no scientific proof.
What there is proof is that the costs would be astronomical both in terms of real dollars and in terms of keeping developing countries from emerging out of poverty.
It has been an interesting week in the world of pricing.
In case you have not heard, Chris Anderson of Wired is set to release his new book Free (the title, not the price), and before it even comes out stirs up a controversy. Surprisingly, the book does not seem to be available on Kindle. Hmmm.
UPDATE: Free is now available for free, at least in audio version. According to a video posted on Wired. Free will be available in most electronic formats for free. The exception is the three hour abridged audio version which Anderson believes has more value than the full-length edition (posted above) because of the opportunity cost trade off of listening to the longer version.
In my opinion, the camp of Anderson/Godin is right and Gladwell is wrong. I think Gladwell misses the idea that free does not mean there is not a business model. He is right that youtube and other free services (Twitter) have yet to create a business model, but that does not mean they never will be able to create one.
Gladwell uses the example of former head of the Atomic Energy Commission, Lewis Strauss’ famous late 1950’s prediction that “our children will enjoy in their homes electrical energy too cheap to meter.” To say that since this prediction has not come to fruition would be shortsighted. Gladwell is right (currently) about that fact that power infrastructure costs are larger that power creation costs, but I can foresee a time when we have personal (or neighborhood) nuclear reactors. This of course will reduce, and almost eliminate, those infrastructure costs.
I would love to hear each of your thoughts on this.
Today, we received our 2009/2010 Allen Community PhoneBook (the book formerly know as the Yellow Pages). With the proliferation of Google and the Web, these books usually make a 10 second trek through the house and land directly in the recycle bin. This one, however, had a advertisement from Al the Plumber. I can’t vouch for his work, but I sure like his pricing practices.
My thinks to Christine, my wife, for pointing this out. In fact, I have not yet actually seen this in person. I plan on tearing off the cover and depositing the rest of the book in the green bin.