Wednesday, December 15, 2010
Wednesday, December 1, 2010
Coopetition For Coaches: The Synthesis Of Competition And Cooperation - II
Continuing from our previous post...
Let us now focus on a particular example.
One challenge every business faces is retaining existing customers vs. acquiring new customers. Since you don’t need to educate existing customers on your offering, the cost of marketing will be lower. Moreover, studies have shown that the success rate of repeat sales to current customers is significantly higher than the success rate of new sales to prospects. However, there will always be a certain amount of defection with existing customers and just to maintain current revenue, new customers are essential. Consequently, this is not an either/or decision – it is an example of a polarity. A business must find a way of doing both - retaining existing customers AND acquiring new customers to remain viable.
Let’s narrow our discussion to the first side of this polarity. One of the easiest things to do is to adjust the price of your offering. Price is not always the determining factor for retaining existing customers, but it would be foolhardy to dismiss it as not a consideration. In a business-to-business market with big-ticket items where contracts are the norm, a most-favored-customer clause or a meet-the-competition clause are often successful. What can be done in a mass market? There are two issues to consider if you decide to keep existing customers happy by simply charging them a low price. The first is that you’ve just lowered your profit. The second is that you risk starting a price war. The act of lowering prices is both an offensive and defensive move. Your low prices will attract some of your competitor’s customers away. While this may increase sales initially, your competitors may eventually respond by lowering their prices to lure their former customers back. After the first round of sales, you are back to square one but with lower profits all the way around. This is how price wars start and nobody wins including the customers if the entire industry is damaged. So the goal would be to lower your prices only for your current customers without at the same time threatening your competitor’s customer base. Is there a strategy for doing so?
Actually, General Motors faced this challenge back in 1992. Credit is due to Brandenburger and Nalebuff for this outstanding example contained in their Co-opetition book. The big three automakers back then were all engaged in cash-back offers, dealer discounts, end-of-year rebates and other incentive programs. Profits were low, competition was fierce and demand was flat. The solution to this challenge pulled together many of the concepts discussed thus far. GM teamed up with Household Bank, a major distributor of co-branded credit cards to offer the GM MasterCard. Cardholders would earn a rebate equal to 5% of their charge volume, which could be applied to the purchase or lease of any new GM car or truck, subject to a rebate ceiling. Household Bank in effect became a complementor to General Motors.
What does game theory predict regarding the reaction of current and potential GM customers along with competitors like Ford? If both GM and Ford are offering comparable cars at $20,000, the market will divide on the basis of personal preferences. One can assume that only customers planning to purchase a GM vehicle would accept the GM MasterCard and rack up loyalty points that could only be redeemed through a GM purchase. If the typical rebate is $1,000 GM could conceivably raise prices $500 and still keep existing customers happy since they would be getting $500 off the price of a comparable Ford. Ford is not at all threatened since a comparable GM vehicle is now $500 higher. In fact, it only took five months for Ford to team up with Citibank and offer their own credit card loyalty program. This turns out to be a win-win situation for both GM and Ford. GM and Ford are less tempted to cut prices to lure new customers, because people are reluctant to forfeit rebates in their current loyalty program. This means higher profits for both manufacturers, which solved the first of the three problems. GM effectively changed the game from lose-lose to win-win. The fierce competition between automakers to steal each other’s customers dropped dramatically solving another one of the three problems. Finally, by attaching an expiration to the rebates, consumers had an incentive to buy now since prices were going up and they would lose their rebate. This solved the last of the three problems.
This is an outstanding example because it illustrates the use of complementors, the use of game theory, how the rules of the game can be changed for advantage and how the coopetition concept can be used to craft a superb strategy. It also demonstrates how counter-intuitive strategy can be. Most people would think that a good strategy would be to charge your current customers more than you charge potential new customers, since you want to tempt the latter through the use of lower prices. However, you must always take into account how other players in the game will react.
Let’s now consider another example that should be familiar to most businesses including coaches. A request for a bid comes in from a large potential client whose current contract with a competitor is up for renewal. How do you respond? Most likely you realize that the chances of landing the account are small and the bid is likely just to be used as leverage to extract a better deal from the current coach. However, if you don’t bid there is no chance of getting the business and you risk alienating a potential customer. So it only appears to make sense to bid and do so aggressively, correct? Savvy business people have learned that the greatest success comes not from competition, but from controlling the rules of the game as GM did in the example above. How can you change the rules to your advantage? The answer will be provided in the webcast.
So how can we use this particular model of coopetition in the coaching business? What are some complements to coaching and how can these be exploited to craft an outstanding strategy that will drive up profits? The webcast will address these issues. Finally, most coaching businesses today are still comprised of solo practitioners and let’s face it – a large number of non-billable hours are devoted to filling up the marketing pipeline with the hope of converting a percentage of those names to paying clients. There are more powerful models of coopetition that can be used to tackle this challenge that the webcast will address. Please join us. Details are on our website at www.strategyforcoaches.com.
Let us now focus on a particular example.
One challenge every business faces is retaining existing customers vs. acquiring new customers. Since you don’t need to educate existing customers on your offering, the cost of marketing will be lower. Moreover, studies have shown that the success rate of repeat sales to current customers is significantly higher than the success rate of new sales to prospects. However, there will always be a certain amount of defection with existing customers and just to maintain current revenue, new customers are essential. Consequently, this is not an either/or decision – it is an example of a polarity. A business must find a way of doing both - retaining existing customers AND acquiring new customers to remain viable.
Let’s narrow our discussion to the first side of this polarity. One of the easiest things to do is to adjust the price of your offering. Price is not always the determining factor for retaining existing customers, but it would be foolhardy to dismiss it as not a consideration. In a business-to-business market with big-ticket items where contracts are the norm, a most-favored-customer clause or a meet-the-competition clause are often successful. What can be done in a mass market? There are two issues to consider if you decide to keep existing customers happy by simply charging them a low price. The first is that you’ve just lowered your profit. The second is that you risk starting a price war. The act of lowering prices is both an offensive and defensive move. Your low prices will attract some of your competitor’s customers away. While this may increase sales initially, your competitors may eventually respond by lowering their prices to lure their former customers back. After the first round of sales, you are back to square one but with lower profits all the way around. This is how price wars start and nobody wins including the customers if the entire industry is damaged. So the goal would be to lower your prices only for your current customers without at the same time threatening your competitor’s customer base. Is there a strategy for doing so?
Actually, General Motors faced this challenge back in 1992. Credit is due to Brandenburger and Nalebuff for this outstanding example contained in their Co-opetition book. The big three automakers back then were all engaged in cash-back offers, dealer discounts, end-of-year rebates and other incentive programs. Profits were low, competition was fierce and demand was flat. The solution to this challenge pulled together many of the concepts discussed thus far. GM teamed up with Household Bank, a major distributor of co-branded credit cards to offer the GM MasterCard. Cardholders would earn a rebate equal to 5% of their charge volume, which could be applied to the purchase or lease of any new GM car or truck, subject to a rebate ceiling. Household Bank in effect became a complementor to General Motors.
What does game theory predict regarding the reaction of current and potential GM customers along with competitors like Ford? If both GM and Ford are offering comparable cars at $20,000, the market will divide on the basis of personal preferences. One can assume that only customers planning to purchase a GM vehicle would accept the GM MasterCard and rack up loyalty points that could only be redeemed through a GM purchase. If the typical rebate is $1,000 GM could conceivably raise prices $500 and still keep existing customers happy since they would be getting $500 off the price of a comparable Ford. Ford is not at all threatened since a comparable GM vehicle is now $500 higher. In fact, it only took five months for Ford to team up with Citibank and offer their own credit card loyalty program. This turns out to be a win-win situation for both GM and Ford. GM and Ford are less tempted to cut prices to lure new customers, because people are reluctant to forfeit rebates in their current loyalty program. This means higher profits for both manufacturers, which solved the first of the three problems. GM effectively changed the game from lose-lose to win-win. The fierce competition between automakers to steal each other’s customers dropped dramatically solving another one of the three problems. Finally, by attaching an expiration to the rebates, consumers had an incentive to buy now since prices were going up and they would lose their rebate. This solved the last of the three problems.
This is an outstanding example because it illustrates the use of complementors, the use of game theory, how the rules of the game can be changed for advantage and how the coopetition concept can be used to craft a superb strategy. It also demonstrates how counter-intuitive strategy can be. Most people would think that a good strategy would be to charge your current customers more than you charge potential new customers, since you want to tempt the latter through the use of lower prices. However, you must always take into account how other players in the game will react.
Let’s now consider another example that should be familiar to most businesses including coaches. A request for a bid comes in from a large potential client whose current contract with a competitor is up for renewal. How do you respond? Most likely you realize that the chances of landing the account are small and the bid is likely just to be used as leverage to extract a better deal from the current coach. However, if you don’t bid there is no chance of getting the business and you risk alienating a potential customer. So it only appears to make sense to bid and do so aggressively, correct? Savvy business people have learned that the greatest success comes not from competition, but from controlling the rules of the game as GM did in the example above. How can you change the rules to your advantage? The answer will be provided in the webcast.
So how can we use this particular model of coopetition in the coaching business? What are some complements to coaching and how can these be exploited to craft an outstanding strategy that will drive up profits? The webcast will address these issues. Finally, most coaching businesses today are still comprised of solo practitioners and let’s face it – a large number of non-billable hours are devoted to filling up the marketing pipeline with the hope of converting a percentage of those names to paying clients. There are more powerful models of coopetition that can be used to tackle this challenge that the webcast will address. Please join us. Details are on our website at www.strategyforcoaches.com.
Monday, November 15, 2010
Coopetition For Coaches: The Synthesis Of Competition And Cooperation - I
This post will focus on Coopetition: The Synthesis Of Competition And Cooperation and represents a short synopsis of a much more extensive webcast on coopetition available to Strategy For Coaches members.
Traditional business strategy is organized around competition - win/lose models fueled by market share frameworks. Western culture encourages and sometimes requires competition in order to succeed, so we rarely question whether there are alternatives to competing with others.
In fact, there are three ways to achieve one’s goals. One can work competitively by working against others, work cooperatively by working with others, or work independently, by working without regard to others. We are all born with a strong instinct to survive, but research has shown that competition is a learned phenomenon.
Recent research also refutes many cherished beliefs, such as: competition is inevitable and a result of human nature, competition encourages excellence and results in increased productivity and competition builds character and gives us needed confidence.
Cooperation appears to be the opposite of competition. Cooperation may be voluntary or involuntary, formal or informal. Originally, kinship relations alone were used to explain cooperative behavior when found in nature. Further research, however, showed that cooperation is not the exception, but arises spontaneously under the right conditions. In fact, scientists now believe that the emergence of higher levels of organization happens via cooperation at lower levels, and that without such cooperation, increased complexity may not develop.
A careful examination of nature shows both competitive and cooperative behavior. It is quite common for organisms to compete and cooperate with one another, often times simultaneously. Members of a species may hunt in packs (cooperation) while also fighting for alpha status within the pack (competition). Particular behaviors exist on a continuum of pure competition on one end and pure cooperation on the other.
Ray Noorda, founder of the networking software company Novell, noticed a similar phenomenon in the business world. He coined the term coopetition to represent this concept. Coopetition, a synthesis of the words competition and cooperation, was designed to convey the dynamic relationship between the two. Business often involves cooperation to create the market (the pie) and competition to divide up the market (one’s slice). Ruthless competition is often a lose/lose proposition and has on occasion resulted in destroying the market all together as almost happened with the 1990’s price wars in the airline industry where more money was lost in a few years than profits earned since Orville and Wilbur Wright. On the other hand, no one wants to help create a market if they can’t capture a portion.
A good example of coopetition can be found in just about any section of town that has several restaurants concentrated in a relatively small area. From a traditional business perspective, it looks like a bad idea to open a restaurant in an area already full of restaurants. However, it is the abundance of places to eat that attracts customers who may visit the area without any specific restaurant in mind. The restaurants cooperate to create the concentration of culinary options and compete to snare customers after they arrive.
There are several theories about coopetition and methodologies for implementing it. One of the most popular and one of the simplest was outlined by Adam M. Brandenburger and Barry J. Nalebuff in their very successful book entitled "Co-opetition". A key concept to understand is that of complements.
A complement to one product or service is any other product or service that makes the first one more attractive, such as hot dogs and mustard, cars and auto loans or digital cameras and color printers.
Complements are generally reciprocal. Just as auto loans complement new cars, new cars complement auto loans. Some businesses can actually fail because of lack of complements. Organizations that provide complements are called complementors. Brandenburger and Nalebuff introduced the Value Net as a schematic map that represents all the players in a game along with their interdependencies. The same player can have multiple roles. We’ll employ the business-as-game metaphor throughout this discussion.
On the vertical dimension, customers and suppliers play symmetric roles in creating value. On the horizontal dimension, competitors and complementors play opposing roles in creating value. A player is your competitor if customers value your product less when they have the other player’s product than when they have your product alone. A customer is likely to value a color sublimation printer less if they already have a color laser printer. A player is your complementor if customers value your product more when they have the other player’s product in addition to your product. A customer is likely to value a digital camera more if they also have a color printer than if they had no easy way to print their pictures.
The coopetition theory and methodology of Brandenburger and Nalebuff provides a framework for crafting a strategy that will exploit complementors. We will focus on this model for the remainder of this short post, but the webcast will discuss other even more powerful models.
To gauge the effectiveness of any strategy, it is necessary to have an idea how the various stakeholders, including complementors, will react when the strategy is executed. Imagine playing a game of chess, which is often considered to be a game of strategy. Prior to making any move, a good chess player will try to anticipate their opponent’s possible counter-move and their own counter counter-move in response. How does one anticipate the reaction of your opponent or competitor? There are several tools available – game theory, behavioral psychology and history among others.
So what is game theory? Game theory is the study of rational behavior in contested environments. Game theory offers scientific principles that can be used to predict the actions of others. Real-life situations are extremely complicated and game theory only offers a model of that complexity. We lack the time to discuss game theory further in this short post, but the webcast provides additional information.
Topic will be continued to a future post...
Traditional business strategy is organized around competition - win/lose models fueled by market share frameworks. Western culture encourages and sometimes requires competition in order to succeed, so we rarely question whether there are alternatives to competing with others.
In fact, there are three ways to achieve one’s goals. One can work competitively by working against others, work cooperatively by working with others, or work independently, by working without regard to others. We are all born with a strong instinct to survive, but research has shown that competition is a learned phenomenon.
Recent research also refutes many cherished beliefs, such as: competition is inevitable and a result of human nature, competition encourages excellence and results in increased productivity and competition builds character and gives us needed confidence.
Cooperation appears to be the opposite of competition. Cooperation may be voluntary or involuntary, formal or informal. Originally, kinship relations alone were used to explain cooperative behavior when found in nature. Further research, however, showed that cooperation is not the exception, but arises spontaneously under the right conditions. In fact, scientists now believe that the emergence of higher levels of organization happens via cooperation at lower levels, and that without such cooperation, increased complexity may not develop.
A careful examination of nature shows both competitive and cooperative behavior. It is quite common for organisms to compete and cooperate with one another, often times simultaneously. Members of a species may hunt in packs (cooperation) while also fighting for alpha status within the pack (competition). Particular behaviors exist on a continuum of pure competition on one end and pure cooperation on the other.
Ray Noorda, founder of the networking software company Novell, noticed a similar phenomenon in the business world. He coined the term coopetition to represent this concept. Coopetition, a synthesis of the words competition and cooperation, was designed to convey the dynamic relationship between the two. Business often involves cooperation to create the market (the pie) and competition to divide up the market (one’s slice). Ruthless competition is often a lose/lose proposition and has on occasion resulted in destroying the market all together as almost happened with the 1990’s price wars in the airline industry where more money was lost in a few years than profits earned since Orville and Wilbur Wright. On the other hand, no one wants to help create a market if they can’t capture a portion.
A good example of coopetition can be found in just about any section of town that has several restaurants concentrated in a relatively small area. From a traditional business perspective, it looks like a bad idea to open a restaurant in an area already full of restaurants. However, it is the abundance of places to eat that attracts customers who may visit the area without any specific restaurant in mind. The restaurants cooperate to create the concentration of culinary options and compete to snare customers after they arrive.
There are several theories about coopetition and methodologies for implementing it. One of the most popular and one of the simplest was outlined by Adam M. Brandenburger and Barry J. Nalebuff in their very successful book entitled "Co-opetition". A key concept to understand is that of complements.
A complement to one product or service is any other product or service that makes the first one more attractive, such as hot dogs and mustard, cars and auto loans or digital cameras and color printers.
Complements are generally reciprocal. Just as auto loans complement new cars, new cars complement auto loans. Some businesses can actually fail because of lack of complements. Organizations that provide complements are called complementors. Brandenburger and Nalebuff introduced the Value Net as a schematic map that represents all the players in a game along with their interdependencies. The same player can have multiple roles. We’ll employ the business-as-game metaphor throughout this discussion.
On the vertical dimension, customers and suppliers play symmetric roles in creating value. On the horizontal dimension, competitors and complementors play opposing roles in creating value. A player is your competitor if customers value your product less when they have the other player’s product than when they have your product alone. A customer is likely to value a color sublimation printer less if they already have a color laser printer. A player is your complementor if customers value your product more when they have the other player’s product in addition to your product. A customer is likely to value a digital camera more if they also have a color printer than if they had no easy way to print their pictures.
The coopetition theory and methodology of Brandenburger and Nalebuff provides a framework for crafting a strategy that will exploit complementors. We will focus on this model for the remainder of this short post, but the webcast will discuss other even more powerful models.
To gauge the effectiveness of any strategy, it is necessary to have an idea how the various stakeholders, including complementors, will react when the strategy is executed. Imagine playing a game of chess, which is often considered to be a game of strategy. Prior to making any move, a good chess player will try to anticipate their opponent’s possible counter-move and their own counter counter-move in response. How does one anticipate the reaction of your opponent or competitor? There are several tools available – game theory, behavioral psychology and history among others.
So what is game theory? Game theory is the study of rational behavior in contested environments. Game theory offers scientific principles that can be used to predict the actions of others. Real-life situations are extremely complicated and game theory only offers a model of that complexity. We lack the time to discuss game theory further in this short post, but the webcast provides additional information.
Topic will be continued to a future post...
Sunday, August 1, 2010
Webcast Suggestions Requested
Strategy For Coaches provides periodic fee-free webcasts on topics related to strategy and geared towards professional coaches. We are actively planning the webcast schedule for 2011 and would appreciate suggestions for topics and speakers. The topic of the webcast should somehow provide a link between strategy and coaching. Staff can assist with the technical aspects.
Thursday, July 1, 2010
Pricing For Services - I
A coaching firm is basically a professional service firm (PSF), all of which have some unique challenges not faced by other types of businesses. Most professional service firms handle prices based on billable hours, but more creative strategies are emerging that are better for both the client and the professional. We will discuss some of these more creative strategies in a subsequent post and will confine our current discussion to billable hours.
The main question, of course, is how does one arrive at a dollar amount? There are three popular methods. The first is applying a cost model where the coach sets a profit objective, figures in their fixed costs and divides the remaining amount by number of hours to reach a price point.
For example, if a coach wanted to earn $150,000 above expenses per annum, with fixed costs of $25,000 and with 1,000 billable hours per annum, the calculation would be:
$150,000 (net revenue) + $25,000 (expenses) = $175,000 (gross revenue)
$175,000/1000 (hours) = $175 per hour
Another method for arriving at a dollar amount is market value. Market value is the price paid for coaches with similar experience in the same market for comparable services. Most professionals research the current "going rate" and then adjust their fees based on how they believe they fit into the market. A typical situation is the coach who fears losing business by quoting a high rate and consequently assumes they must set a low price for their services to start out. The reasoning is they can raise their prices when they are established. The difficulty is that they have put themselves into a niche and clients immediately start thinking of them as less qualified than their higher priced counterparts. Competing on price is not always a good idea, so one should very carefully evaluate whether setting prices artificially low is a prudent step.
Finally, one can base the fee on what a coach would earn as an employee of a major corporation that has staff coaches. To make a fair comparison, the coach needs to consider salary, benefits, expenses and profit. Unlike staff jobs, coaches are not paid when they are not working. Experienced coaches can rarely expect to sell more than 1200 hours of their time a year and a base of 1000 hours a year is probably more realistic. The rest of the time is spent marketing, improving skills, keeping records and other non-billable tasks required for running a business. If an entry-level staff coach makes $90,000 per year, this would work to an equivalent hourly fee of $90 per hour considering salary alone.
Typical benefits include FICA, health insurance and retirement as a minimum. For most corporations, the value of fringe benefits is estimated at 30% of base salary. When these benefits are added to the coaches’ base of $95,000, the annual earnings become $123,500, which ups the hourly rate to $123.50.
Typical expenses include rent, computer equipment and supplies, utilities, postage and transportation, to name only a few. A conservative estimate for expenses is $25,000 a year. When these expenses are added to the previous figure of $123,500, the annual earnings now become $148,500, which ups the hourly rate to $148.50.
Since coaches are taking risks as any entrepreneur, they have right to a profit, which typically ranges from 5-15%. This arrives at the final hourly rate rounded to $170.00. Recent coaching surveys show that most executive coaches work in the $150 - 300 per hour range. After a careful analysis, our rate calculation appears entirely reasonable and justified. However, the perception of the client matters and many clients will quickly multiply the hourly rate by 40 and again by 50 to get a rough estimate of the annual fee. Under these assumptions the rate may appear high. One solution is to use the hourly rate to arrive at an estimate for the total engagement. Future posts on pricing will focus on just this along with other more creative strategies.
The main question, of course, is how does one arrive at a dollar amount? There are three popular methods. The first is applying a cost model where the coach sets a profit objective, figures in their fixed costs and divides the remaining amount by number of hours to reach a price point.
For example, if a coach wanted to earn $150,000 above expenses per annum, with fixed costs of $25,000 and with 1,000 billable hours per annum, the calculation would be:
$150,000 (net revenue) + $25,000 (expenses) = $175,000 (gross revenue)
$175,000/1000 (hours) = $175 per hour
Another method for arriving at a dollar amount is market value. Market value is the price paid for coaches with similar experience in the same market for comparable services. Most professionals research the current "going rate" and then adjust their fees based on how they believe they fit into the market. A typical situation is the coach who fears losing business by quoting a high rate and consequently assumes they must set a low price for their services to start out. The reasoning is they can raise their prices when they are established. The difficulty is that they have put themselves into a niche and clients immediately start thinking of them as less qualified than their higher priced counterparts. Competing on price is not always a good idea, so one should very carefully evaluate whether setting prices artificially low is a prudent step.
Finally, one can base the fee on what a coach would earn as an employee of a major corporation that has staff coaches. To make a fair comparison, the coach needs to consider salary, benefits, expenses and profit. Unlike staff jobs, coaches are not paid when they are not working. Experienced coaches can rarely expect to sell more than 1200 hours of their time a year and a base of 1000 hours a year is probably more realistic. The rest of the time is spent marketing, improving skills, keeping records and other non-billable tasks required for running a business. If an entry-level staff coach makes $90,000 per year, this would work to an equivalent hourly fee of $90 per hour considering salary alone.
Typical benefits include FICA, health insurance and retirement as a minimum. For most corporations, the value of fringe benefits is estimated at 30% of base salary. When these benefits are added to the coaches’ base of $95,000, the annual earnings become $123,500, which ups the hourly rate to $123.50.
Typical expenses include rent, computer equipment and supplies, utilities, postage and transportation, to name only a few. A conservative estimate for expenses is $25,000 a year. When these expenses are added to the previous figure of $123,500, the annual earnings now become $148,500, which ups the hourly rate to $148.50.
Since coaches are taking risks as any entrepreneur, they have right to a profit, which typically ranges from 5-15%. This arrives at the final hourly rate rounded to $170.00. Recent coaching surveys show that most executive coaches work in the $150 - 300 per hour range. After a careful analysis, our rate calculation appears entirely reasonable and justified. However, the perception of the client matters and many clients will quickly multiply the hourly rate by 40 and again by 50 to get a rough estimate of the annual fee. Under these assumptions the rate may appear high. One solution is to use the hourly rate to arrive at an estimate for the total engagement. Future posts on pricing will focus on just this along with other more creative strategies.
Tuesday, June 1, 2010
Strategy For Coaches Is On A New Server
Special Notice: Our site has now been moved to a new web server. We will be testing all customized modules over the next month and will notify members via email when the site is fully functional. Thanks for your patience.
Saturday, May 1, 2010
May Webcast Rescheduled
Special Notice: Due to our web hosting company going out of business, the Blue Ocean webcast for May will be rescheduled.
Thursday, April 1, 2010
Migrating To New Server
Special Notice: Our web hosting company has just gone out of business. We will be migrating our domain to a temporary host until we have a new web server running. Our site will be online in the interim, but lacking functionality such as the forum, membership center and other customized modules.
Wednesday, March 10, 2010
The Irresistible Offer
The biggest challenge for most coaches is the sales and marketing of their coaching business. It is generally much easier to sell and market products than it is to sell and market services because products are tangible. You can see them and touch them. You can generally watch them operate and get a fairly good idea on how you could put them to use. The same cannot be said for intangibles like services.
When it comes to selling services, most business owners make the mistake of using language that is company focused and not customer focused. Business owners selling repair services might be tempted to use the terms fast, friendly, and reliable to describe what they offer, but a better approach would be to stand in the customer’s shoes and speak towards their perspective. Try and treat your service like a product and understand how it addresses the needs of your customers. The key is communicating the value of what you have to offer and since services often have invisible value, this is easier said than done.
Sales and marketing of coaching services is particularly challenging since the profession is relatively new and there is a good percentage of potential customers that doesn’t even grasp what coaching is all about. Consumers are inundated with marketing messages on a daily basis and their attention span is getting shorter all the time. It is critical to find a winning formula for distilling your marketing message in as succinct a manner possible without any loss of impact or results.
The book "The Irresistible Offer" by Mark Joyner promises to do just that. The subtitle is "How to Sell Your Product or Service In 3 Seconds or Less."
The Irresistible Offer
Mark Joyner
Copyright 2005
John Wiley & Sons, Inc.
Joyner cites many examples of succinct marketing messages that capture attention, have positive impact and consistently produce positive marketing results.
Pizza hot and fresh to your door in 30 minutes or less or it's free.
Domino's pizza.
10 CDs for one cent
Columbia House records
What it absolutely positively has to be there overnight.
Federal Express.
After examining hundreds of these marketing messages, Joyner unearthed the winning formula that most all of them have in common. Joyner calls this the irresistible offer. Joyner’s irresistible offer must answer four basic questions:
1) What you are trying to sell?
2) How much?
3) Why should I believe you?
4) What's in it for me?
Joyner states the Irresistible Offer is an identity building offer central to a product or service where the believable return on investment (ROI) is communicated so clearly and efficiently that it's immediately apparent and that you would have to be a fool to pass it up. Joyner takes the well-known USP (unique selling proposition) concept to an entirely new level. In our inaugural webcast, the concept of competitive advantage is linked with Joyner’s irresistible offer as it applies to coaching.
When it comes to selling services, most business owners make the mistake of using language that is company focused and not customer focused. Business owners selling repair services might be tempted to use the terms fast, friendly, and reliable to describe what they offer, but a better approach would be to stand in the customer’s shoes and speak towards their perspective. Try and treat your service like a product and understand how it addresses the needs of your customers. The key is communicating the value of what you have to offer and since services often have invisible value, this is easier said than done.
Sales and marketing of coaching services is particularly challenging since the profession is relatively new and there is a good percentage of potential customers that doesn’t even grasp what coaching is all about. Consumers are inundated with marketing messages on a daily basis and their attention span is getting shorter all the time. It is critical to find a winning formula for distilling your marketing message in as succinct a manner possible without any loss of impact or results.
The book "The Irresistible Offer" by Mark Joyner promises to do just that. The subtitle is "How to Sell Your Product or Service In 3 Seconds or Less."
The Irresistible Offer
Mark Joyner
Copyright 2005
John Wiley & Sons, Inc.
Joyner cites many examples of succinct marketing messages that capture attention, have positive impact and consistently produce positive marketing results.
Pizza hot and fresh to your door in 30 minutes or less or it's free.
Domino's pizza.
10 CDs for one cent
Columbia House records
What it absolutely positively has to be there overnight.
Federal Express.
After examining hundreds of these marketing messages, Joyner unearthed the winning formula that most all of them have in common. Joyner calls this the irresistible offer. Joyner’s irresistible offer must answer four basic questions:
1) What you are trying to sell?
2) How much?
3) Why should I believe you?
4) What's in it for me?
Joyner states the Irresistible Offer is an identity building offer central to a product or service where the believable return on investment (ROI) is communicated so clearly and efficiently that it's immediately apparent and that you would have to be a fool to pass it up. Joyner takes the well-known USP (unique selling proposition) concept to an entirely new level. In our inaugural webcast, the concept of competitive advantage is linked with Joyner’s irresistible offer as it applies to coaching.
Monday, March 1, 2010
Introduction To Strategy For Coaches Webcast
Our inaugural webcast has been reworked and recorded. All parts will be posted online and available in the membership area which can be accessed by pointing your browser to:
http://members.strategyforcoaches.com/
You will need your username and password provided to you in your introductory email. Simply log into your membership area and watch the webcast as new parts are added. There will be a live discussion on the following dates:
· Thursday, May 20th, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
· Saturday, May 22nd, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
· Tuesday, May 25th, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
(All times are Greenwich Mean Time)
A detailed brochure of the webcast can be found here:
http://www.strategyforcoaches.com/webcastbrochure.pdf
Seminar Outline
Did you ever wonder why some businesses always seem to outmaneuver their competitors? Regardless of downturns in the economy or unexpected setbacks that would cripple most businesses, these companies consistently thrive. Businesses like these can be found in every industry from cottage to high tech and come in all sizes from home based to giant multinationals. They all share one thing in common – a capable strategy. In fact, a capable strategy is one of the best indicators of future success.
On a fundamental level, strategy teaches you how to compete. Since competitive forces shape almost every aspect of our lives and businesses, learning strategy can be one of the best investments you’ll ever make. Unfortunately, very few people understand strategy. The objective of this webcast is to introduce the discipline of strategy and demonstrate how knowledge of just a few aspects can address some of the challenging issues facing many coaches.
An Introduction To Strategy
Strategy is one of the most misused words in the English language. You’ll learn what strategy is and what it is not. You’ll learn a few of the key principles of strategy and the difference between strategy and tactics. The concept of the strategy paradox will be explained.
Competitive Strategy
You’ll be presented with several examples of both good and bad strategies and you’ll learn the typical process that is used to create, plan, manage and execute strategies.
Competitive Advantage
A situational analysis is one of the first steps required to formulate any strategy. You’ll learn the basics of situational analysis and be introduced to the concept of competitive advantage. Jack Welch, former Chairman & CEO of GE, once remarked: “If you don’t have a competitive advantage, don’t compete.” You’ll learn the basics of creating competitive advantage and how to use this to craft an effective business strategy.
Systems Thinking
When confronted by complexity, our natural instinct is to simplify matters by breaking the system of interest into its component parts and studying them as a basis for understanding the system as a whole. There are advantages to this approach, but there are also disadvantages. Another approach involves systems thinking. You’ll be introduced to systems thinking and how it can be used to solve dilemmas that thwart typical problem-solving tactics. You’ll also learn how systems thinking relates to strategy.
Scenario Planning
Many people equate strategy with planning, but typical planning occurs in controlled environments where it is appropriate to create specific goals. Strategy occurs in contested environments that are subject to unexpected and sudden changes. Indeed, world-renowned management theorist Dr. Henry Mintzberg speaks of the death of strategic planning and argues that it must eventually give way to a process of continuous, guided evolution. Scenario planning is a useful tool for dealing with uncertainty.
http://members.strategyforcoaches.com/
You will need your username and password provided to you in your introductory email. Simply log into your membership area and watch the webcast as new parts are added. There will be a live discussion on the following dates:
· Thursday, May 20th, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
· Saturday, May 22nd, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
· Tuesday, May 25th, 2010 at 12:00 AM, 1:00 PM and 6:00 PM
(All times are Greenwich Mean Time)
A detailed brochure of the webcast can be found here:
http://www.strategyforcoaches.com/webcastbrochure.pdf
Seminar Outline
Did you ever wonder why some businesses always seem to outmaneuver their competitors? Regardless of downturns in the economy or unexpected setbacks that would cripple most businesses, these companies consistently thrive. Businesses like these can be found in every industry from cottage to high tech and come in all sizes from home based to giant multinationals. They all share one thing in common – a capable strategy. In fact, a capable strategy is one of the best indicators of future success.
On a fundamental level, strategy teaches you how to compete. Since competitive forces shape almost every aspect of our lives and businesses, learning strategy can be one of the best investments you’ll ever make. Unfortunately, very few people understand strategy. The objective of this webcast is to introduce the discipline of strategy and demonstrate how knowledge of just a few aspects can address some of the challenging issues facing many coaches.
An Introduction To Strategy
Strategy is one of the most misused words in the English language. You’ll learn what strategy is and what it is not. You’ll learn a few of the key principles of strategy and the difference between strategy and tactics. The concept of the strategy paradox will be explained.
Competitive Strategy
You’ll be presented with several examples of both good and bad strategies and you’ll learn the typical process that is used to create, plan, manage and execute strategies.
Competitive Advantage
A situational analysis is one of the first steps required to formulate any strategy. You’ll learn the basics of situational analysis and be introduced to the concept of competitive advantage. Jack Welch, former Chairman & CEO of GE, once remarked: “If you don’t have a competitive advantage, don’t compete.” You’ll learn the basics of creating competitive advantage and how to use this to craft an effective business strategy.
Systems Thinking
When confronted by complexity, our natural instinct is to simplify matters by breaking the system of interest into its component parts and studying them as a basis for understanding the system as a whole. There are advantages to this approach, but there are also disadvantages. Another approach involves systems thinking. You’ll be introduced to systems thinking and how it can be used to solve dilemmas that thwart typical problem-solving tactics. You’ll also learn how systems thinking relates to strategy.
Scenario Planning
Many people equate strategy with planning, but typical planning occurs in controlled environments where it is appropriate to create specific goals. Strategy occurs in contested environments that are subject to unexpected and sudden changes. Indeed, world-renowned management theorist Dr. Henry Mintzberg speaks of the death of strategic planning and argues that it must eventually give way to a process of continuous, guided evolution. Scenario planning is a useful tool for dealing with uncertainty.
Saturday, February 20, 2010
Blue Ocean Strategy And Coaching
Through intuition, trial and error or just plain luck, people stumble on strategies that have a proven track record of success. An amazing strategy for creating new markets through value innovation has been dubbed the blue ocean strategy after a book by that name. Although not likely intentional, this was the strategy that started the coaching profession.
Thomas J. Leonard, a former financial planner, is considered by many to be the father of coaching. Leonard founded Coach U in 1992, the International Coach Federation in 1994 and was the founder and CEO of CoachVille. Leonard can certainly be credited as the person who pioneered packaging and popularizing the coaching profession. He opened the door for thousands of individuals to earn a living as professional coaches.
In a 2003 article in Fortune Small Business, Joshua Hyatt describes his interview with Thomas J. Leonard:
http://money.cnn.com/magazines/fsb/fsb_archive/2003/05/01/343394/index.htm/
Several of Leonard’s colleagues had this to say:
A coach serves a distinctly different role from other professions that offer, what initially appear to be, similar services. Stephen G. Fairley and Chris E. Stout in their book “Getting Started in Personal and Executive Coaching” use the following graph to illustrate what they believe to be the key differences between a coach and roles such as friend, facilitator, mentor, trainer, manager, consultant and therapist.
Fairley and Stout believe there are two key dimensions that distinguish these roles: 1) who is considered the expert, whether that is the client or the professional and 2) what the professional actually does, whether it be predominantly asking questions or providing answers.
Coaching occupies a unique position in this matrix. Both coaches and therapists ask more questions than they provide answers, but they serve different people with different challenges. Therapists typically serve people in need of healing who have psychological or personality issues. Coaches generally deal with healthy people who are interested in performing at a higher level.
Coaches also differ from the numerous roles that offer expert advice in one form or another. A fundamental assumption of coaching is that the client is creative, resourceful and whole and is the expert in their life and consequently, should set the agenda. The coach and client are generally thought of as collaborators creating an alliance between two equals. The role of the coach is to encourage/support people on the path to making important decisions and empower them to find their own answers for achieving their goals. Consultants and the other roles in the lower right quadrant are hired for their expertise and their ability to provide answers to specific problems.
People generally choose coaches if they are stuck in a rut, want to affect change in their business but are experiencing difficulty or have important goals they want to achieve that are currently out of reach. Until the coaching profession was started, this was a market not being adequately serviced by other providers.
In the Fortune Small Business article, Joshua Hyatt states:
From Hyatt’s interview with Leonard, it appears there was no deliberate strategy. Nevertheless, the steps that Leonard took parallel the initial implementation of a blue ocean strategy. That is not surprising since people rediscover tried and true strategies all the time. What is a blue ocean strategy anyway?
Most companies try to outperform their rivals through incremental changes in price or quality - assessing what their competitors do and striving to do the same things better. Cost and value are seen as trade-offs. As the market space becomes more crowded, supply overtakes demand causing products and services to become commoditized, encouraging price wars and rapid feature duplication among rivals. Grabbing a bigger share of the market becomes a zero-sum game and profits gradually diminish across the entire industry. The airline industry was a perfect example of this where price wars resulted in numerous bankruptcies and almost non-existent profit margins.
Markets that are well explored and already crowded with competitors are called "red oceans". They are called red because the only way to increase profits is by taking away market share from the competition. This usually results in bloody battles where few companies emerge unscathed. However, since the dominant focus of strategy research has been on competition-based red ocean strategies, this is not uncommon or unexpected.
"Blue oceans" on the other hand represent uncontested market space - pools of demand and customers that have not been reached by any competitor. Blue oceans have always been around. Just look back a few decades, and you will find that many industries we now take for granted – such as mobile communications or biotechnology – that simply didn't exist. Technological advances represent one reason blue oceans are developed, but another one is creative thinking that discards conventional wisdom and current product/service design.
Blue ocean strategy was made famous with the following book:
Blue Ocean Strategy
W. Chan Kim and Renee Mauborgne
Harvard Business School Press
These two authors studied 150 strategic moves representing over thirty industries and spanning a timeframe of more than 100 years to discern how these companies became successful through value innovation. The authors uncovered common factors leading to the creation of blue oceans and the key differences separating winners from mere survivors.
So why is this important aside from the historical curiosity regarding Thomas J. Leonard stumbling onto a blue ocean strategy for developing the coaching profession? The coaching profession has proved to be a very challenging business with a significant number of coaches earning less than they desire despite considerable effort. While Leonard’s work represents an outstanding beginning to the implementation of a blue ocean strategy, it falls short on several key issues. The Strategy For Coaches webcast in May 2010 will provide a detailed examination of the blue ocean strategy and how a more complete implementation of the strategy could make the coaching profession far more lucrative for the coaches while providing clients with an even better value proposition. This is one webcast you don’t want to miss.
A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=eyNDjPGzFXo
Thomas J. Leonard, a former financial planner, is considered by many to be the father of coaching. Leonard founded Coach U in 1992, the International Coach Federation in 1994 and was the founder and CEO of CoachVille. Leonard can certainly be credited as the person who pioneered packaging and popularizing the coaching profession. He opened the door for thousands of individuals to earn a living as professional coaches.
In a 2003 article in Fortune Small Business, Joshua Hyatt describes his interview with Thomas J. Leonard:
http://money.cnn.com/magazines/fsb/fsb_archive/2003/05/01/343394/index.htm/
By now, because of Leonard's exhaustive efforts, no one needs a definition of what a business coach is. That's mainly because most of us have given up trying to figure it out. Think of it this way: Coaches are like motivational speakers, except that they listen instead of talking. Is it possible to turn to someone else for self-help? If it is, that's another way to define what these sounding boards do. They offer support and guidance, serving as friends for CEOs who deservedly have none.
Several of Leonard’s colleagues had this to say:
"Thomas turned coaching into a viable business," says Jeff Raim, a 48-year-old coach based in Angel Fire, N.M.
Typically, coaches encourage their clients to scour their inner selves and "be the source of their own answers," as Dan Kennedy puts it
...
"Coaching draws from people some clarity about what needs to be done and how best to make that happen," says Kennedy. "There are people who would really rather be told what to do. Coaching is not for them."
A coach serves a distinctly different role from other professions that offer, what initially appear to be, similar services. Stephen G. Fairley and Chris E. Stout in their book “Getting Started in Personal and Executive Coaching” use the following graph to illustrate what they believe to be the key differences between a coach and roles such as friend, facilitator, mentor, trainer, manager, consultant and therapist.
Fairley and Stout believe there are two key dimensions that distinguish these roles: 1) who is considered the expert, whether that is the client or the professional and 2) what the professional actually does, whether it be predominantly asking questions or providing answers.
Coaching occupies a unique position in this matrix. Both coaches and therapists ask more questions than they provide answers, but they serve different people with different challenges. Therapists typically serve people in need of healing who have psychological or personality issues. Coaches generally deal with healthy people who are interested in performing at a higher level.
Coaches also differ from the numerous roles that offer expert advice in one form or another. A fundamental assumption of coaching is that the client is creative, resourceful and whole and is the expert in their life and consequently, should set the agenda. The coach and client are generally thought of as collaborators creating an alliance between two equals. The role of the coach is to encourage/support people on the path to making important decisions and empower them to find their own answers for achieving their goals. Consultants and the other roles in the lower right quadrant are hired for their expertise and their ability to provide answers to specific problems.
People generally choose coaches if they are stuck in a rut, want to affect change in their business but are experiencing difficulty or have important goals they want to achieve that are currently out of reach. Until the coaching profession was started, this was a market not being adequately serviced by other providers.
In the Fortune Small Business article, Joshua Hyatt states:
Unlike most entrepreneurs, he didn't spot a gap in the world around him and then set out to fill it. Instead, he found a business by looking inside himself. Leonard, who seemed to have a heightened awareness of his own demons, created the tool that he needed. "You often learn to teach what you most need to know," observes Raim.
From Hyatt’s interview with Leonard, it appears there was no deliberate strategy. Nevertheless, the steps that Leonard took parallel the initial implementation of a blue ocean strategy. That is not surprising since people rediscover tried and true strategies all the time. What is a blue ocean strategy anyway?
Most companies try to outperform their rivals through incremental changes in price or quality - assessing what their competitors do and striving to do the same things better. Cost and value are seen as trade-offs. As the market space becomes more crowded, supply overtakes demand causing products and services to become commoditized, encouraging price wars and rapid feature duplication among rivals. Grabbing a bigger share of the market becomes a zero-sum game and profits gradually diminish across the entire industry. The airline industry was a perfect example of this where price wars resulted in numerous bankruptcies and almost non-existent profit margins.
Markets that are well explored and already crowded with competitors are called "red oceans". They are called red because the only way to increase profits is by taking away market share from the competition. This usually results in bloody battles where few companies emerge unscathed. However, since the dominant focus of strategy research has been on competition-based red ocean strategies, this is not uncommon or unexpected.
"Blue oceans" on the other hand represent uncontested market space - pools of demand and customers that have not been reached by any competitor. Blue oceans have always been around. Just look back a few decades, and you will find that many industries we now take for granted – such as mobile communications or biotechnology – that simply didn't exist. Technological advances represent one reason blue oceans are developed, but another one is creative thinking that discards conventional wisdom and current product/service design.
Blue ocean strategy was made famous with the following book:
Blue Ocean Strategy
W. Chan Kim and Renee Mauborgne
Harvard Business School Press
These two authors studied 150 strategic moves representing over thirty industries and spanning a timeframe of more than 100 years to discern how these companies became successful through value innovation. The authors uncovered common factors leading to the creation of blue oceans and the key differences separating winners from mere survivors.
So why is this important aside from the historical curiosity regarding Thomas J. Leonard stumbling onto a blue ocean strategy for developing the coaching profession? The coaching profession has proved to be a very challenging business with a significant number of coaches earning less than they desire despite considerable effort. While Leonard’s work represents an outstanding beginning to the implementation of a blue ocean strategy, it falls short on several key issues. The Strategy For Coaches webcast in May 2010 will provide a detailed examination of the blue ocean strategy and how a more complete implementation of the strategy could make the coaching profession far more lucrative for the coaches while providing clients with an even better value proposition. This is one webcast you don’t want to miss.
A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=eyNDjPGzFXo
Wednesday, February 10, 2010
Systems Thinking Applied To The Blame Game
A common situation that occurs in business and personal life is the blame game. Something goes wrong and we naturally start looking for who is at fault. Blame usually leads to punishment of the offender. To the casual observer, it appears that the problem has been identified along with the appropriate solution.
W. Edwards Deming, a pioneer in quality control, management and systems thinking, found that 93% of the time, problems in organizations can be traced to the design of systems, structures and processes. Only 7% of the time did people cause the problems and in about half of those cases, the issue could be rectified with additional training.
Much of what we identify as problems are really indicators or symptoms. They are the resultant effects of underlying causes. H. William Dettmer on root causes remarked: "Treating an undesirable effect alone is like putting a bandage on an infected wound: It does nothing about the underlying infection, so its remedial benefit is only temporary. Eventually the indicator resurfaces, because the underlying problem causing the indicator never really went away. Eliminating undesirable effects gives a false sense of security. Identifying and eliminating a critical root cause not only eliminates all of the undesirable effects that issue from it, but also prevents them from returning."
The blame game is so common, that it is unlikely a coach hasn’t run into it with a client at some point in their practice, regardless of the coaching specialty. So if the blame game is often unproductive, why do so many people engage in it? People engage in this behavior because it offers benefits – it provides a scapegoat, a quick fix and a deflection of responsibility. The blame game fits a common pattern seen over and over again called "Shifting The Burden".
In our inaugural webcast, we introduced systems thinking. A system is just an interdependent group of items forming a unified pattern. Basically, systems thinking involves seeing overall structures, patterns and cycles in systems, rather than only specific events. This broad view can help you to quickly identify the real causes of issues and know just where to work to address them. The internal structure of a system is generally more important than the events that generate the issue. An event orientation rarely gets you to the root cause of a problem. You generally find that one event is caused by another event, which is yet caused by another event and so forth.
A more productive approach is to look for patterns of behavior that characterize a particular situation. Amazingly, similar patterns of behavior show up in a variety of different situations and the underlying structures that cause these patterns are well known. These patterns of behavior are generally referred to as archetypes.
A “Shifting The Burden” archetype usually begins with a problem indicator that prompts someone to apply a "solution". The "solution" appears obvious and tends to relieve the problem indicator quickly, but in reality, just diverts attention away from the root cause of the problem. We can represent a "Shifting The Burden" archetype with the following diagram:
The diagram contains two loops – called balancing loops. In our inaugural webcast, we defined a balancing loop as any attempt to move some current state (the way things are) to some desired state (goal or objective) though some action (whatever is done to reach the goal). In a "Shifting The Burden" situation, the two balancing loops representing a different type of "fix" for the problem indicator. The upper loop represents a symptomatic "quick fix" and the bottom loop represents measures that take longer, may be more difficult, but ultimately address the root cause of the problem. The double line in the arc on the lower left represents a possible delay in seeing the result of the action taken.
The blame game is an example of a "Shifting The Burden" archetype. You experience a problem and search for the person to blame. Blame is the quick fix that diverts your attention away from long-term interpersonal or structural solutions. Blame provides some immediate relief and a sense of doing something; it can make us feel powerful and can keep us from examining our own role in a situation. Unfortunately, blame has undesirable side effects such as eroding communication, generating fear and destroying trust. In the long term, this reduces the flow of information about the current reality and hinders actual problem solving actions, which lead to more errors, which perpetuates the blame game.
What are the recommended responses for dealing with a "Shifting The Burden" archetype? There are three:
• Look for unintended consequences for actions thought to relieve problem symptoms.
• Look for the root causes that are really responsible for the issue.
• Take actions to resolve BOTH immediate pain (if appropriate) AND long-term root causes.
Let’s apply these recommendations to the blame game. The focus of blame is generally on the individual with punishment the usual intent and with the unintended consequence being cover-up, increased fear and reduced trust. A better response is accountability. Blame and accountability are vastly different. Blame means to find fault with whereas accountability means to be counted on. Accountability emphasizes keeping agreements and performing tasks as required. The focus of accountability is generally on the problem and not the person. The intent of accountability is generally performance and not punishment. When done right, accountability helps people become aware of their own mistakes and shortcomings so they can take ownership of them and use them as opportunities for learning and growth.
However, it is difficult to be accountable for something over which you have no control. Accountability is a contract to achieve measurable results, but an individual cannot keep their promise if circumstances beyond their control change. Consequently, holding people accountable must be done in the context of clearly defined outcomes adjusted regularly to reflect changing realities. When desired results are not achieved, one must concentrate on uncovering the root causes that are really responsible for the issue.
Comprehensive systems analysis is what is needed and that is a topic deserving of it’s own presentation. Briefly, systems analysis is an explicit formal inquiry carried out to help a decision-maker identify the appropriate course of action. It comprises both analysis and synthesis – breaking down a system to see its component parts and assembling the system to see how the parts interact and inter-relate. Systems analysis tells us why a process fails to achieve its intended objectives or produces a surprising result. Without addressing root causes, problems always recur. Systems analysis strives to uncover the root causes.
The hallmark of a systems problem is when you encounter a situation where continually replacing a position with different people results in the same behavior and failure to achieve the objectives desired. One should conclude that it is not a matter of finding the "right" person for the job, because the person is likely not the issue. A simpler way to look at this is to try and discern the forces that are acting on a person in a particular situation. How would a typical person respond under these conditions? If the expected response is not the desired response, you are now getting closer to uncovering the information you need to make the necessary adjustments.
This discussion is not meant to imply that all problems are system problems or that blame has no role to play in good management or everyday life. By understanding the difference between blame and accountability and understanding how the structure of a system can encourage undesired behaviors and interfere with achieving the outcomes sought, responses to issues can be much more nuanced and tailored to both the situation at hand and the needs of the individuals involved.
A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=g4ufWZvn64M
W. Edwards Deming, a pioneer in quality control, management and systems thinking, found that 93% of the time, problems in organizations can be traced to the design of systems, structures and processes. Only 7% of the time did people cause the problems and in about half of those cases, the issue could be rectified with additional training.
Much of what we identify as problems are really indicators or symptoms. They are the resultant effects of underlying causes. H. William Dettmer on root causes remarked: "Treating an undesirable effect alone is like putting a bandage on an infected wound: It does nothing about the underlying infection, so its remedial benefit is only temporary. Eventually the indicator resurfaces, because the underlying problem causing the indicator never really went away. Eliminating undesirable effects gives a false sense of security. Identifying and eliminating a critical root cause not only eliminates all of the undesirable effects that issue from it, but also prevents them from returning."
The blame game is so common, that it is unlikely a coach hasn’t run into it with a client at some point in their practice, regardless of the coaching specialty. So if the blame game is often unproductive, why do so many people engage in it? People engage in this behavior because it offers benefits – it provides a scapegoat, a quick fix and a deflection of responsibility. The blame game fits a common pattern seen over and over again called "Shifting The Burden".
In our inaugural webcast, we introduced systems thinking. A system is just an interdependent group of items forming a unified pattern. Basically, systems thinking involves seeing overall structures, patterns and cycles in systems, rather than only specific events. This broad view can help you to quickly identify the real causes of issues and know just where to work to address them. The internal structure of a system is generally more important than the events that generate the issue. An event orientation rarely gets you to the root cause of a problem. You generally find that one event is caused by another event, which is yet caused by another event and so forth.
A more productive approach is to look for patterns of behavior that characterize a particular situation. Amazingly, similar patterns of behavior show up in a variety of different situations and the underlying structures that cause these patterns are well known. These patterns of behavior are generally referred to as archetypes.
A “Shifting The Burden” archetype usually begins with a problem indicator that prompts someone to apply a "solution". The "solution" appears obvious and tends to relieve the problem indicator quickly, but in reality, just diverts attention away from the root cause of the problem. We can represent a "Shifting The Burden" archetype with the following diagram:
The diagram contains two loops – called balancing loops. In our inaugural webcast, we defined a balancing loop as any attempt to move some current state (the way things are) to some desired state (goal or objective) though some action (whatever is done to reach the goal). In a "Shifting The Burden" situation, the two balancing loops representing a different type of "fix" for the problem indicator. The upper loop represents a symptomatic "quick fix" and the bottom loop represents measures that take longer, may be more difficult, but ultimately address the root cause of the problem. The double line in the arc on the lower left represents a possible delay in seeing the result of the action taken.
The blame game is an example of a "Shifting The Burden" archetype. You experience a problem and search for the person to blame. Blame is the quick fix that diverts your attention away from long-term interpersonal or structural solutions. Blame provides some immediate relief and a sense of doing something; it can make us feel powerful and can keep us from examining our own role in a situation. Unfortunately, blame has undesirable side effects such as eroding communication, generating fear and destroying trust. In the long term, this reduces the flow of information about the current reality and hinders actual problem solving actions, which lead to more errors, which perpetuates the blame game.
What are the recommended responses for dealing with a "Shifting The Burden" archetype? There are three:
• Look for unintended consequences for actions thought to relieve problem symptoms.
• Look for the root causes that are really responsible for the issue.
• Take actions to resolve BOTH immediate pain (if appropriate) AND long-term root causes.
Let’s apply these recommendations to the blame game. The focus of blame is generally on the individual with punishment the usual intent and with the unintended consequence being cover-up, increased fear and reduced trust. A better response is accountability. Blame and accountability are vastly different. Blame means to find fault with whereas accountability means to be counted on. Accountability emphasizes keeping agreements and performing tasks as required. The focus of accountability is generally on the problem and not the person. The intent of accountability is generally performance and not punishment. When done right, accountability helps people become aware of their own mistakes and shortcomings so they can take ownership of them and use them as opportunities for learning and growth.
However, it is difficult to be accountable for something over which you have no control. Accountability is a contract to achieve measurable results, but an individual cannot keep their promise if circumstances beyond their control change. Consequently, holding people accountable must be done in the context of clearly defined outcomes adjusted regularly to reflect changing realities. When desired results are not achieved, one must concentrate on uncovering the root causes that are really responsible for the issue.
Comprehensive systems analysis is what is needed and that is a topic deserving of it’s own presentation. Briefly, systems analysis is an explicit formal inquiry carried out to help a decision-maker identify the appropriate course of action. It comprises both analysis and synthesis – breaking down a system to see its component parts and assembling the system to see how the parts interact and inter-relate. Systems analysis tells us why a process fails to achieve its intended objectives or produces a surprising result. Without addressing root causes, problems always recur. Systems analysis strives to uncover the root causes.
The hallmark of a systems problem is when you encounter a situation where continually replacing a position with different people results in the same behavior and failure to achieve the objectives desired. One should conclude that it is not a matter of finding the "right" person for the job, because the person is likely not the issue. A simpler way to look at this is to try and discern the forces that are acting on a person in a particular situation. How would a typical person respond under these conditions? If the expected response is not the desired response, you are now getting closer to uncovering the information you need to make the necessary adjustments.
This discussion is not meant to imply that all problems are system problems or that blame has no role to play in good management or everyday life. By understanding the difference between blame and accountability and understanding how the structure of a system can encourage undesired behaviors and interfere with achieving the outcomes sought, responses to issues can be much more nuanced and tailored to both the situation at hand and the needs of the individuals involved.
A presentation of this post can be found on our YouTube channel:
http://www.youtube.com/watch?v=g4ufWZvn64M
Monday, February 1, 2010
How Will Globalization Affect Coaching?
Wikipedia defines globalization as: "a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations."
The primary objective of CEOs is to maximize profits to their shareholders, and as a consequence, CEOs are always looking to rein in labor costs and the escalating cost of benefits such as healthcare. CEO's are interested in finding productive labor wherever it might be as shown by their significant investments in countries like India, China and the Philippines.
Outsourcing is one facet of globalization. Outsourcing is fueled not only by the drive to increase profits, but it is also fueled by the consumer-driven passion for affordable prices. Destination countries benefit by developing a globalized economy based on highly sought-after skills and delivering services using the internet.
The inaugural webcast has a scenario of coaching being outsourced to India. It does appear that white collar skilled labor is being outsourced right now. A stunning example is the outsourcing of lawyers. Most lawyers thought this would never happen because laws vary considerably by locale so law was thought to be a local profession and immune to globalization. That is not the case:
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002355.html
This example has shown that globalization can affect white-collar professions, previously thought immune to foreign competition, in the same way that the manufacturing jobs have been affected for years.
The inaugural webcast uses a scenario planning exercise to explore how globalization could affect coaching. This is clearly an issue that should be front and center in the minds of most coaches.
The primary objective of CEOs is to maximize profits to their shareholders, and as a consequence, CEOs are always looking to rein in labor costs and the escalating cost of benefits such as healthcare. CEO's are interested in finding productive labor wherever it might be as shown by their significant investments in countries like India, China and the Philippines.
Outsourcing is one facet of globalization. Outsourcing is fueled not only by the drive to increase profits, but it is also fueled by the consumer-driven passion for affordable prices. Destination countries benefit by developing a globalized economy based on highly sought-after skills and delivering services using the internet.
The inaugural webcast has a scenario of coaching being outsourced to India. It does appear that white collar skilled labor is being outsourced right now. A stunning example is the outsourcing of lawyers. Most lawyers thought this would never happen because laws vary considerably by locale so law was thought to be a local profession and immune to globalization. That is not the case:
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002355.html
When Aashish Sharma graduated from law school two years ago, his father had visions of seeing him argue in an Indian court and eventually become an honorable judge.
Instead, Sharma, 25, now sits all day in front of a computer in a plush, air-conditioned suburban office doing litigation research and drafting legal contracts for U.S. companies and law firms. He is part of a booming new outsourcing industry in India that employs thousands of English-speaking lawyers such as him to do legal work at a small fraction of the cost of hiring American lawyers.
...
"Ninety percent of a lawyer's work is legal research and drafting, and all this can now be offshored to India," said Russell Smith, who worked in a Manhattan law firm called SmithDehn before moving to India to set up an outsourcing company in 2006. "A large portion of our fees in the U.S. is because of office rent. It is often a big decision to hire one attorney in the U.S. In India, we can hire 10 at a time and train them all at once."
This example has shown that globalization can affect white-collar professions, previously thought immune to foreign competition, in the same way that the manufacturing jobs have been affected for years.
The inaugural webcast uses a scenario planning exercise to explore how globalization could affect coaching. This is clearly an issue that should be front and center in the minds of most coaches.
Monday, January 25, 2010
Book Review: QBQ! The Question Behind The Question
QBQ! The Question Behind The Question
By John G. Miller
G. P. Putnam’s Sons
New York 2004
http://www.qbq.com
There is scientific evidence to show that strategic leaders are more successful at effecting organizational change. Strategy work involves far more than finding the magic formula that can be blindly followed to create the winning strategy. That formula does not exist. We must abandon the quest so common in today’s culture of searching for the quick fix and direct our attention inward. True positive change begins with individuals changing themselves. I was happy to see the same advise applied to the concept of accountability.
QBQ! The Question Behind The Question is a very small book only 150 pages long with large type but it carries a powerful message that is timeless and valuable. Miller tells us how we can add tremendous worth to our organizations and our lives by "eliminating blame, complaining, and procrastination" and putting personal accountability into action. The book is filled with examples.
Instead of asking, "Why aren’t they motivated?", ask "What can I do to be more inspirational?"
Instead of asking, "Who will care as much as I do?", ask "What can I do to show I care?"
Instead of asking, "Why are they so unfriendly?", ask "How can I be a better friend?"
Miller encourages us to look inward instead of outward since only by being able to ask this "question behind the question" can we take ownership of the problem and start working toward a solution. Make no mistake – the message is not to let others off the hook or take on their responsibilities. The author aptly points out that such behavior is not a service to others, but a disservice to everyone, although I wished he had clarified this concept further. The message is to stop being the victim and start taking responsibility for dealing with the situation. Deciding not to make a choice is making a choice. We are always accountable for our own choices are and free to make better ones.
Psychologists know that if you challenge someone’s worldviews and change the way they think, they will often change the way they act and only action gets results. Psychologists also know that if you can change one’s behavior, you will eventually change how they think. In order to reliably and consistently change one’s behavior, you need a framework that people can follow. Miller provides a simple, but useful framework for encouraging personal accountability. His framework is the Question Behind The Question. When you find yourself in a negative situation and are thinking about blaming others, complaining or procrastinating stop and ask yourself a question:
1) Begin the question with "what" or ""how" and not "why", "when", or "who".
2) Make sure the question contains an "I" and not "you", "they", "them" or "we".
3) Focus on an action you can take when phrasing the question. The results are profound as you see your thinking and actions change over time.
This book is an easy read and reminds me of "Who Moved My Cheese" or the "One Minute Manager" series. Miller provides excellent stories about people who practice personal accountability that are inspirational. The presentation is pedagogically sound so you should easily be able to apply the practical principles contained in the book to every area of your life for maximum impact. I highly recommend this book.
By John G. Miller
G. P. Putnam’s Sons
New York 2004
http://www.qbq.com
There is scientific evidence to show that strategic leaders are more successful at effecting organizational change. Strategy work involves far more than finding the magic formula that can be blindly followed to create the winning strategy. That formula does not exist. We must abandon the quest so common in today’s culture of searching for the quick fix and direct our attention inward. True positive change begins with individuals changing themselves. I was happy to see the same advise applied to the concept of accountability.
QBQ! The Question Behind The Question is a very small book only 150 pages long with large type but it carries a powerful message that is timeless and valuable. Miller tells us how we can add tremendous worth to our organizations and our lives by "eliminating blame, complaining, and procrastination" and putting personal accountability into action. The book is filled with examples.
Instead of asking, "Why aren’t they motivated?", ask "What can I do to be more inspirational?"
Instead of asking, "Who will care as much as I do?", ask "What can I do to show I care?"
Instead of asking, "Why are they so unfriendly?", ask "How can I be a better friend?"
Miller encourages us to look inward instead of outward since only by being able to ask this "question behind the question" can we take ownership of the problem and start working toward a solution. Make no mistake – the message is not to let others off the hook or take on their responsibilities. The author aptly points out that such behavior is not a service to others, but a disservice to everyone, although I wished he had clarified this concept further. The message is to stop being the victim and start taking responsibility for dealing with the situation. Deciding not to make a choice is making a choice. We are always accountable for our own choices are and free to make better ones.
Psychologists know that if you challenge someone’s worldviews and change the way they think, they will often change the way they act and only action gets results. Psychologists also know that if you can change one’s behavior, you will eventually change how they think. In order to reliably and consistently change one’s behavior, you need a framework that people can follow. Miller provides a simple, but useful framework for encouraging personal accountability. His framework is the Question Behind The Question. When you find yourself in a negative situation and are thinking about blaming others, complaining or procrastinating stop and ask yourself a question:
1) Begin the question with "what" or ""how" and not "why", "when", or "who".
2) Make sure the question contains an "I" and not "you", "they", "them" or "we".
3) Focus on an action you can take when phrasing the question. The results are profound as you see your thinking and actions change over time.
This book is an easy read and reminds me of "Who Moved My Cheese" or the "One Minute Manager" series. Miller provides excellent stories about people who practice personal accountability that are inspirational. The presentation is pedagogically sound so you should easily be able to apply the practical principles contained in the book to every area of your life for maximum impact. I highly recommend this book.
Friday, January 15, 2010
Strategy For Coaches Launches YouTube Channel
Strategy For Coaches has launched a new YouTube channel at:
http://www.youtube.com/strategyforcoaches
where informative videos will be posted on practical strategies for building a successful coaching practice. This resource will compliment and not replace our quarterly webcasts. The YouTube videos will be short presentations, while our webcasts will be much more comprehensive.
Coaches face a myriad of issues in building a successful coaching practice. Worthwhile questions that coaches must ask themselves and topics for future videos include:
Do you have a clear vision for your practice?
Do you have a method for generating a steady stream of prospects?
Do prospects easily grasp what you have to offer?
Can you concisely demonstrate the benefits of coaching?
Can you articulate why a client should choose you over other service professionals?
Strategy For Coaches will focus on these and other issues of interest to professional coaches in upcoming videos. The information will be of value regardless of whether a coach concentrates on executive, leadership, business, entrepreneur, life, career, wellness or another coaching specialty.
In addition to the YouTube channel, Strategy For Coaches also provides a community forum. Peer-support relies on the belief that people who are facing similar challenging circumstances can help and learn from one another.
The Strategy For Coaches community forum can be found at:
http://forum.strategyforcoaches.com/
http://www.youtube.com/strategyforcoaches
where informative videos will be posted on practical strategies for building a successful coaching practice. This resource will compliment and not replace our quarterly webcasts. The YouTube videos will be short presentations, while our webcasts will be much more comprehensive.
Coaches face a myriad of issues in building a successful coaching practice. Worthwhile questions that coaches must ask themselves and topics for future videos include:
Do you have a clear vision for your practice?
Do you have a method for generating a steady stream of prospects?
Do prospects easily grasp what you have to offer?
Can you concisely demonstrate the benefits of coaching?
Can you articulate why a client should choose you over other service professionals?
Strategy For Coaches will focus on these and other issues of interest to professional coaches in upcoming videos. The information will be of value regardless of whether a coach concentrates on executive, leadership, business, entrepreneur, life, career, wellness or another coaching specialty.
In addition to the YouTube channel, Strategy For Coaches also provides a community forum. Peer-support relies on the belief that people who are facing similar challenging circumstances can help and learn from one another.
The Strategy For Coaches community forum can be found at:
http://forum.strategyforcoaches.com/
Friday, January 1, 2010
New Strategy Resource Available For Professional Coaches
The coaching profession has proved to be a very challenging business, with many coaches struggling despite considerable effort. Success in the coaching business requires more than just being a skillful coach. Strategy is of vital importance for any business and it is even more critical for a profession as young as coaching.
Strategy For Coaches addresses this need with the launch of a new website, www.strategyforcoaches.com. Statistics show that most coaching firms are solo practitioners where the coach - the provider of services - must also act in the capacity of CEO, CFO, manager and marketer among other roles. This can be a daunting situation resulting in burnout and decreased productivity. Peer-support relies on the belief that people who are facing similar challenging circumstances can help and learn from one another.
Strategyforcoaches.com includes a community forum where coaches can share strategies for building a successful practice. A recent study published in Harvard Business Review showed that businesses with a carefully crafted strategy outperformed those that don’t have one by a factor of 15. Strategy clearly matters but this is not a topic covered in most coach training schools. Coaches would benefit from a pertinent strategy resource.
Strategyforcoaches.com elicits the expertise of professional strategists in creating their quarterly newsletter and webcast on topics related to strategy and of interest to professional coaches. Strategyforcoaches.com is open to professional coaches or coaches in training regardless of coaching specialty. Interested coaches can request access by clicking the Join Us button on the main page of the website.
Strategy For Coaches addresses this need with the launch of a new website, www.strategyforcoaches.com. Statistics show that most coaching firms are solo practitioners where the coach - the provider of services - must also act in the capacity of CEO, CFO, manager and marketer among other roles. This can be a daunting situation resulting in burnout and decreased productivity. Peer-support relies on the belief that people who are facing similar challenging circumstances can help and learn from one another.
Strategyforcoaches.com includes a community forum where coaches can share strategies for building a successful practice. A recent study published in Harvard Business Review showed that businesses with a carefully crafted strategy outperformed those that don’t have one by a factor of 15. Strategy clearly matters but this is not a topic covered in most coach training schools. Coaches would benefit from a pertinent strategy resource.
Strategyforcoaches.com elicits the expertise of professional strategists in creating their quarterly newsletter and webcast on topics related to strategy and of interest to professional coaches. Strategyforcoaches.com is open to professional coaches or coaches in training regardless of coaching specialty. Interested coaches can request access by clicking the Join Us button on the main page of the website.
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