Winners thrive on competition

I hate to lose.

That said, I am proud to admit that competition has made me a better businessman, a better golfer and a better person.  And when there isn’t another company or business to compete with, I try to outdo myself.  If that sounds simple, well, it is.  I always want to be at my best and show my best side.

People can exceed expectations when motivated properly.  This story, told by Andrew S. Grove, former CEO of the Intel Corporation, the California manufacturer of semiconductors, is a perfect illustration.

For years the performance of the Intel facilities maintenance group, which is responsible for keeping their buildings clean and in good shape, was sub-standard.  No amount of pressure or inducement seemed to do any good.

Then Intel initiated a program in which each building’s upkeep was periodically given a score by a resident senior manager.  The score was then compared with those given the other buildings.  Result:  The condition of all of the buildings improved dramatically – almost immediately.  Nothing else had been done.  People did not get more money or other rewards.  What they did get was the stimulus of competition.

Competition drives performance.  It drives people to work harder and dig down deeper to deliver more than they ever thought they could.

Among the many benefits of increased market competition according to the tutor2u website are:

  1. Lower prices for consumers.
  2. A greater discipline on producers/suppliers to keep their costs down.
  3. Improvements in technology with positive effects on production methods and costs.
  4. A greater variety of products from which to choose.
  5. A faster pace of invention and innovation.
  6. Improvements to the quality of service for consumers.
  7. Better information for consumers, allowing people to make more informed choices.

There’s nothing like a little competition to boost productivity.  Look at industry studies and you will consistently see that competition helped improve results.

I am and have always been very competitive.  I understand that some people don’t like competition, but you have to accept that competition is unavoidable in life.  That’s the way our society works.  And it’s my firm belief that our society improves with competition.

Some parents don’t want to engage their young children in competition.  I understand their reluctance in situations where unrealistic expectations are set.  But friendly competition is good.  It is critical to prepare children and teenagers to compete in the real world.  As they grow older, they will face competition in schools, getting a job, even buying a house.

A University of Florida study found that participating in sports is a healthy way to teach kids about the positive aspects of competition.  Playing sports helps kids understand how competition works in a friendly environment and that if you try your hardest, you have a better chance at succeeding, not to mention improving your health and self-esteem.

When I was in London at the Olympics, I heard an interviewer ask an athlete to predict the outcome of his race.

He said, “I’ll come in fifth.”

Sure enough, that’s exactly where he finished, even though he could easily have placed third, or even second, since two other major competitors fared poorly.

Contrast this with Manteo Mitchell who broke his leg midway through the 4 x 400 meter relay, but kept running to allow the U.S. team to reach the final.

I cannot emphasize enough that all my business life I have faced competition, and I believe it has made both me and my company better.  When competitors improve their products, we improve ours more.  When a sales prospect mentions service, I ask what the other company promised them and then exceed it.  We know our customers better here at MackayMitchell Envelope Company.  It’s our real leg up on the competition.  We hate to lose a customer.  We take tremendous pride in beating the competition, because that means we are serving our customers better.

There is an old saying in Africa that goes like this:  Every morning a gazelle gets up and knows that it must out-run the fastest lion or it will get eaten.  And every morning, a lion gets up and knows that it must out-run the slowest gazelle or it will starve to death.

So, whether you are a gazelle or a lion, every morning when you get up, you’d better be running.

Mackay’s Moral:  If you go the extra mile, you will almost always beat the competition.

There’s No Substitute For Integrity

A father who had been laid off from his job had been watching expenses closely for months.  But he’d made a promise to his two sons – twins – that he’d take them to a nearby amusement park to celebrate their 10th birthday.

When the day came, the father withdrew some money from his savings, and he took his two sons on the bus to the amusement park. When they reached the front gate, he saw a sign:

“General admission: (ages 10 and up) $10.  Children under 10:  $5.”

If he’d come a day earlier, the father realized, he could have saved $10 – $5 for each of his twin sons.  But with a sigh he led the boys up to the ticket window and said, “Three general admission tickets, please.”

The woman in the booth looked them over and smiled.  “How old are you boys?”

“I’m 10 years old today,” said one son.

“So am I,” said the other.  “We’re twins!”

The woman leaned forward.  “You know,” she whispered, “you could have asked for two ‘Under 10’ tickets, and I never would have known.”

“Yeah,” said the father, “but they would have.”

Why do so many executives and employees apparently go along with blatantly unethical and illegal conduct in their organizations?  The answer may be that people don’t always know what to do when confronted with requests (or demands) that aren’t on the straight and narrow.  But that’s not a good enough answer.  Organizations need to be completely clear and specific about what is acceptable and what is expected.

Here are some suggestions on how to respond when someone in your organization asks you to do something unethical:

  • Explain your concern.  Tell the other person how you feel.  Use “I” statements that describe your position without attacking the other person:  “I have some reservations about that plan because . . . ”
  • Offer an alternative.  Chances are there’s an honest way to accomplish the same goal or a similar one.  Concentrate on that, emphasizing your common interests:  “We both want to make more money on this product, and I think we can do it better by cutting some less-important features than by using cheaper materials.”
  • Go upstairs if necessary.  This should be a last resort, but if the other person insists on behaving unethically, you’ll have to protect the company – and yourself – by discussing the matter over with a trusted superior.

Careful hiring can often help avoid problems from the outset.  I have found a very reliable method that we use at MackayMitchell Envelope Company to supplement our usual background screening process called the Merchants Integrity Test, developed by Merchants Information Solutions.  The Merchants Integrity Test  will help you reduce the number of criminal records you are required to review under the new EEOC guidelines.  Using this test will speed up the hiring process and keep you in compliance, without reducing the scope of your candidate review.

It is a self-admitting “overt” test that has been validated and adheres to non-discriminatory standards required by the EEOC.  In fact, their website identifies integrity testing as an acceptable pre-employment screening tool, especially effective in identifying applicants with a propensity to commit employee theft.  The Merchants Integrity Test is proven to identify applicants who are engaged in employee theft, have a high level of hostility which can spill over into workplace violence, abuse drugs and alcohol and other high risk behavior.

Honesty is always the best policy.  You must be able to trust the people you work with.

The king visited his dungeon once a year to talk to the prisoners there.  Every year, each inmate insisted that he or she was the picture of innocence:  They’d all been framed, or treated unfairly at trial, or victims of circumstances, or otherwise completely free of all guilt.  Not one had a dishonest bone in their body.

One year, the skeptical king asked the newest prisoner in the dungeon, “I suppose you’re as innocent as a lamb, too?”

This man shook his head sadly.  “No, Your Majesty.  I’m a thief.  I was caught fair and square, and my sentence was just.”

The king blinked in surprise.  “Release this man!” he proclaimed, and the thief was promptly set free.

The other prisoners began shouting.  “Your Majesty, how can you do such a thing?  How can you free a confessed criminal while we rot in here?”

“I’m doing you a favor,” the king said.  “I can’t risk leaving that evil scoundrel in here to corrupt all your innocent souls, could I?”

 

Mackay’s Moral:  Corporate integrity begins with personal integrity.

Tie-Downs Are Critical To Sales

If you knew two little words that could improve your sales, you’d use them, wouldn’t you?

When you see your customer has some reservations, it makes sense to get the issues out in the open, doesn’t it?

And after the ink is dry on the deal, you should make every effort to make sure your customer is satisfied, shouldn’t you?

So why all the questions?  They illustrate a simple technique – sales tie-downs – that can help you improve your sales.  By getting your customers to agree with you in small steps along the way, you have a better chance of reaching agreement when it’s time to do business.

The salespeople who effectively use tie-downs are more successful.  The ones who don’t aren’t nearly as successful.  It’s that simple.

So what exactly are sales tie-downs?

They are short phrases that can be added to statements to turn them into questions that get your prospective customer to start saying yes long before you go for the close.  You ask these little questions throughout your sales presentation to engage your customer and get them used to saying yes.  Psychologically, they will then be more likely to say yes when you ask for the sale.

John Eliason, CEO of First Financial Merchant Services, a credit-card processing firm in Minneapolis, gives the analogy of Gulliver’s travels.  When Gulliver goes to the land of little people and falls asleep, he wakes up and is tied down to the ground.  Gulliver is the sale and all these ropes are the tie-downs.  John says, “If there were only one or two ropes they would not be strong enough to tie down Gulliver.”

Too often, sales reps just regurgitate their presentations and expect that strategy to work.  It doesn’t.  People tune them out because they aren’t engaged in the process.  The remedy is to ask little questions along the way, and monitor the feedback.  Doesn’t that make sense?

You know what I mean?  Are you following me?  These are tie-downs.  End statements with questions like:  Wouldn’t you agree?  Is that right?  This simple technique serves to tie a statement down.

Tie-down questions can be as simple as:

  • Aren’t they?
  • Can’t you?
  • Isn’t it?
  • Shouldn’t it?
  • Won’t they?

Perhaps you have been using these questions with your customers all along and didn’t know there was a name for this technique.

Tie-downs have to become a natural part of your conversation before you can use them in your sales presentations.  Be aware of your tone so the questions don’t sound threatening or argumentative.  Learning how to use tie-downs effectively takes rehearsal.  Practice tie-downs on your spouse or friends.  Have some fun using them in role-playing exercises with other sales professionals.  That will help you develop a rhythm that will include enough, but not too many tie-down questions.

Unfortunately many people in sales don’t ask these little tie-down questions and lose their customers at some point during their presentations.  Give your customer a chance to respond and ask questions of you.  Pay close attention to their reactions, because that will lead you to your next tie-down.

There’s another benefit to tie-downs as well.  They keep you in control and confirm that your customers understand what you are saying during your sales presentation, and that it’s okay to continue.  Are you with me?

Most often, sales people use tie-downs at the end of sentences, but they can be used at the beginning of a sentence as well.  For example, if you are selling an alarm system you might ask:  Isn’t it important for your family to have peace of mind?  Can you see how this will provide safety?

A lot of sales are based on price, so you want customers to agree that savings are important.  You might ask:  Saving money is important to you, isn’t it?  If I could show you ways to save, is that important to you?

Another benefit of using sales tie-downs it that you don’t need a big close, as many sales reps believe. You risk losing your customer when you save all the good stuff for the end.  Keep the customer actively involved throughout your presentation and watch your results improve.

Now let me ask you again, if you knew two little words that could improve your sales, you’d use them, wouldn’t you?  I think you know the answer.

 

Mackay’s Moral:  Use sales tie-downs to lasso more customers.

When Choice Outflanks Prime

Diplomacy is all about making the right choices.  When I persuaded my wife, Carol Ann, to say “I do” ages ago, we entered serious negotiations to nail down the ground rules for our marriage.  Then we hit on it.  In our family, I would make all the major decisions, and she would make all the minor decisions!  Many of my friends have asked me, “Harvey, how on earth could that ever work out?”  My answer:  “Very simple . . . There have never been any major decisions.”

Jim Collins is, without doubt, the hottest name in the hard science of business analytics.  He has dazzled C-suites coast to coast with bestsellers like Built to Last and Good to Great.  In the diplomacy arena, Jim’s no cream puff either.  In fact, I think we’re joined at the hip in how we both tackle tact.  Jim’s wife, Joanne Ernst, won the 1985 Ironman Triathlon in Hawaii.  Regarding his wife, Jim has gone on record with this analysis:  “We’ve been married 20 years and we have 50–50 ownership . . . but she holds all the voting shares.”

Smart choice is, indeed, central to any kind of success.  Jim’s newest offering, Great by Choice, written with Berkeley management professor Morten T. Hansen, is all about the power of choice in management.  The authors zero in on 10X companies which “didn’t merely get by or just become successful. . .”  The definition of a 10X company is one that beats its industry index by at least 10 times.

The authors disintegrate some colossal myths about business success.  Take the notion that, “Great enterprises with 10X success have a lot more good luck.”  The well documented finding:  Everyone experiences luck:  “lots of luck, both good and bad—in comparable amounts.  The critical question is not whether you’ll have luck, but what you do with the luck that you get.”  They even have a measure for it:  ROL – “Return on Luck.”

Another assailed fable:  “’A threat-filled world favors the speedy; you’re either the quick or the dead.”  Reality says:  “Fast! Fast! Fast!’—is a good way to get killed.  10X leaders figure out when to go fast, and when not to.”

Read Great by Choice thoughtfully.  It’s jammed with plenty of ideas.  On the other hand, you may have a tough time slowing down.  The text cruises along with real page-turner pace.  The book is sprinkled with lively anecdotes such as Roald Amundsen’s race to discover and reach the South Pole.

How did Amundsen’s team prevail against their rivals?  For one thing, Amundsen learned “as much as possible from practical experience about what actually worked. . . .  He observed [for example] how Eskimos never hurried, moving slowly and steadily, avoiding excessive sweat that could turn to ice in sub-zero temperatures.”

You might think that the heroes in Great by Choice are relentless grinds.  Not by a long shot.  Herb Kelleher, co-founder of Southwest Airlines, “understood that superb customer service naturally arises when people have fun at work. . .”  Kelleher once boasted to 60 Minutes that he was “the only airline president in America that would go over to his maintenance hangar at two o’clock in the morning in a flowered hat with a feathered boa and a purple dress.”

“The 20 Mile March” is another central lesson – this one about pacing.  Want to cross the continent on foot?  Do it at a regular sustained pace, day after day.  Don’t squander your energy in reckless bursts.  Work with “a lower bound and an upper bound.”  Collins and Hansen endorse what they call the “’Goldilocks time frame’ – not too short and not too long but just right.”

Maybe the book’s most jarring revelation is that innovation is not all it’s cracked up to be.  While 10Xers may boast important innovations, they aren’t always “more innovative than their less successful comparisons; and in some surprise cases, the 10X cases were less innovative.”  Discipline counts for more.  “For a 10Xer, the only legitimate form of discipline is self-discipline, having the inner will to do whatever it takes to create a great outcome, no matter how difficult.”

A Wall Street Journal reviewer opined:  “The authors’ conclusions sometimes feel like the claims of a well-written horoscope – so broadly stated that they are hard to disprove.”  Not in my opinion.  Great by Choice is plenty more astronomical than astrological and one sure-fire way to steer by the stars.

 

Mackay’s Moral:  Management by choice will always lick management by chance. 

Cradle-To-Grave Cuba: Poised for Rebirth?

The 1986 measures taken against South Africa surely hastened the end of apartheid.  In most other cases, embargos are a blunder.  Take Cuba. We started imposing sanctions against Cuba a half century ago.  Where have they gotten us?

The U.S. Chamber of Commerce has put a number to the impact.  It cites estimates that the embargo annually sacrifices $1.2 billion in U.S. exports and revenues.  That’s nearly twice the cost suffered by Cuba, experts contend.  George Shultz, Secretary of State under Ronald Reagan, said in 2009:  “With the cold war behind us, we should simply remove the embargo on Cuba.”

I just returned from my most recent visit to Cuba, having now been there a half-dozen times.  This visit convinced me there will be a tremendous change in Cuba in the next five years.  No one will recognize it from the paternalistic, cradle-to-grave operation that country has been since 1959.  That’s when Fidel Castro took power.

In 1976, I led a 21-person trade delegation to Havana for 5 days.  Our goal was to negotiate future trade with Castro.  That’s also when I learned he also spoke perfect English – after I struck up a conversation with him about his passion for bowling.

When Fidel checks out, Father Time will be the likely culprit.  After all, El Comandante has survived countless assassination attempts and is 85.  Meanwhile his younger brother – the modest and pragmatic Raúl – is really the helmsman.  As to speechifying, Raúl is the short-winded sort, something his brother has never been.  Fidel recently summoned sixty world leaders and harangued them for four hours.  His wife made him rest for an hour, but then the octogenarian came back and pitched for another four.

Raúl, president of the Council of State of Cuba since 2008, is a savvy problem solver.  Smoothly, and under the radar, Raúl has been dismantling Fidel’s classical communist agenda:

  • He’s released a hundred political prisoners.
  • He doesn’t assail the U.S. as the root of all Cuba’s problems.
  • He has organized grassroots feedback organizations for himself.
  • 178 categories of activity are now licensed for private-sector development and entrepreneurship.
  • In the next five years, 40% of the economy will be privatized.
  • Education is revered, and the population is remarkably well schooled.
  • And, tourism has displaced sugar as the single most important force in the economy.

Compared to Jamaica, Haiti, El Salvador, and Honduras, Cuba is a jewel for the average citizen.  The government pays all basic living expenses.  With great medical care, its life expectancy rivals that of the United States.

Life is still no day at the beach for the 11 million people of Cuba.  Raúl is reputed to be as brutal as he is tough.  Officials still get fired for dissing the government, which happened to two of them recently.  Discretionary spending is a fantasy.  The average Cuban income is a paltry $20 per month, since their essentials are basically provided.

With some of the richest soil in the world, Cuba stunningly imports 80% of its food.  When the spigot of Soviet aid was stilled as the 1990s began, a $5-billion lifeline disappeared.  Raised with a guaranteed lifetime job script, the new directive quickly became:  If you want to live, you have to work!  Getting to work is a daily trauma for many on an island outfitted with pre-Revolution 1950s American autos.

Freedom is stifled everywhere.  While many Cuban kids have a Facebook page, Internet access is restricted.  Cubans hunger for the Internet and travel freedoms we take as givens.  They also know a great deal about America.  While bewildered by some of our political quirks, their affection for us yanks is remarkably high.

With the embargo in place, Cuban importing is a do-it-yourself proposition.  Our group of 35 CEOs and spouses saw an unforgettable sight at the Miami airport:  A six-block-line of Cuba-bound travelers standing 4-abreast with shrink-wrapped goods for their relatives and friends.  Their parcels included food, medicine, clothing, blankets . . . and even a washing machine!

Despite sanctions up to a half-million, Cuban Americans fly to their ethnic homeland annually.  Speculation about a possible oil bonanza in Cuba might cause us to look at the embargo differently.  It may take something that dramatic for sanctions to end and for U.S. cruise ships to dock in Havana Harbor.  Meanwhile, one wonders if Washington realizes who is paying the real price.

Mackay’s Moral:  Sanctions rarely speed democracy . . . especially when a regime has already begun to tilt in our direction.