Michael Beck

The Art of Persuasion

Mastering the art of persuading people is essential to achieving great results. As a leader, one of the main responsibilities is to develop sound strategies. But no matter how good a strategy is, the results gained will be proportional to the amount of buy-in people have for that strategy.

Over the years, I’ve seen many leaders resort to one of two approaches in an attempt to “persuade” people to get behind an idea. The first approach is to argue the facts to make their case. (This is especially popular with analytical people.) The thinking behind this is that if you present enough facts and do it with more passion, the other person will eventually come around to your way of thinking. Unfortunately, this approach rarely works. (I’ll explain why in a bit…)

The second approach leaders sometimes resort to is to use “the hammer”. By that, I mean that because the leader is in charge, they can always resort to saying, “We’re going to do it this way because I say so.” And because they’re the boss, everyone agrees to do it that way. The problem is that there is a big difference between compliance and commitment. The results achieved by a committed team are far greater than those gained by a team that is simply compliant.

The key to gaining buy-in for and commitment to an idea or strategy lies with understanding how people make buying decisions. Although many people think that decisions are made based on evaluating the facts and features, that’s not quite true. People buy emotionally.

It’s not that facts and features don’t matter. They do. But the truth is that people buy a thing or an idea because of how they feel about it. Once they make that decision, they’ll use the facts and features to rationalize it.

Therefore, the key to persuading people and gaining buy-in is to shift their perspective so they feel yours is correct. The two most effective approaches for changing someone’s perspective are the use of questions and the use of analogies.

The Use of Questions

Asking the right questions can be extremely effective in persuading people. The key to asking the “right” questions is to be curious rather than to be challenging. Questions need to be worded and delivered in a manner that doesn’t cause the other person to become defensive.

As a simple example, consider two people see things differently. If one of them asks, “How can you say that?”, it would clearly put the other one on the defensive. In contrast, consider taking a curiosity approach by asking, “OK. Help me understand why you see it this way. Why do you think this will work?”

In doing that, they avoid challenging them and instead, asking them to better explain their position. One of two things will come of that. Either you’ll discover their approach has merit, or you’ll see where their thinking or judgment is flawed. Once you have that insight, you can either ask follow-up questions to gain more clarity or ask additional questions to shift how they see things.

The Use of Analogies

When you’re trying to shift someone’s view about a situation or an idea, analogies can be a powerful tool. Arguing your point by discussing the specific situation at hand usually causes people to defend their position. They’re emotionally invested in the outcome.

But when you use an analogy – an example from a different industry or different context – people can stay neutral to the story. Using an analogy that people can relate to evokes an emotional response – one that the two of you can usually agree on. Using the right analogy can make your point very effectively and instantly shift the other person’s perspective. It pays to master the art of storytelling.

The art of persuasion relates to emotions more than facts. By asking good questions and offering effective analogies, a leader can gain more influence within the organization and generate better results.

If you’d like help becoming more influential, please contact me.

Employee Turnover is Not a Problem

Don’t get me wrong, I understand and appreciate that turnover creates challenges. Employee turnover causes a decrease in productivity, lower profits, inconsistent quality, and certainly creates work overload.

But here’s the question: Is employee turnover a problem or a symptom?

Turnover is a symptom.

But what is turnover a symptom of? You might argue that turnover is a symptom of unmotivated people, apathy or a labor shortage. But most often, turnover is a symptom of poor leadership. Turnover occurs because poor leaders lack purpose, lack integrity, lack a plan for developing people, have poor communication skills, and treat people like things instead of like people.

Have you ever worked for someone who lacked integrity? Someone who would say one thing and do another? Someone who promised to do something but never did it? Someone who took the credit and placed the blame? Unfortunately, I’d have to guess that each of us has had that kind of boss at one time or another.

When you were in that situation, did you continue to do your work? Of course you did. Was your work accurate and correct? Of course it was. Did you take the initiative on new projects for the benefit of the company? Maybe not. Go the extra mile to make a difference? Hmmm… Did you leave the company at the first opportunity? Point made. When an individual or a company lacks integrity, turnover occurs.

Have you ever worked at a company where the prospect of advancement was nonexistent? Someplace where you knew that you weren’t going anywhere? Did you stay very long? That’s my point. Without opportunity for growth and expanded responsibility, people leave.

Have you ever worked at a company where major changes were “sprung” on you? Where work was assigned to you and after you completed it, you found out you had done the wrong thing? What happens when people don’t communicate effectively? Poor communication leads to misunderstanding, conflict, de-motivation, and stress. What does misunderstanding, conflict, de-motivation and stress lead to? You got it – turnover.

And then comes the most insidious issue of them all – treating people like things rather than like people.

How does someone treat people like “things”? They do it in several ways. They do it when they’re insensitive to them and interact with people as if they have no feelings. They treat people like things when they ignore the fact that everyone has hopes and dreams and fears and stress. They treat people like things when they relate to people as if their own goals and aspirations are more important than the goals and aspirations of the other person. And they treat people like things when they don’t show respect for people or value their contributions and efforts.

When someone treats a person like a thing, it sends the message that they are unimportant and that they just don’t care about them. And when people sense a leader doesn’t care about them, they start not to care about that leader. When the company tolerates leaders who don’t care about people, people tend not to care about the company. When a leader treats people like things, turnover occurs.

In contrast, an effective leader understands that people’s hopes, dreams, fears, and stresses are real and matter to them. An effective leader inspires people. An effective leader interacts with people as people, helping them to be their best. And an effective leader helps people achieve their goals.

When a leader and an organization have a clearly defined purpose, they attract and retain the talent they need. When a leader and an organization have integrity, it builds trust and loyalty. When a leader and an organization are committed to developing people, people become the best they can be. When a leader and an organization communicate effectively, conflict and tension diminish, and cooperation increases. When a leader and an organization treat people as people, they appreciate it and reciprocate.

Turnover isn’t a problem – it’s a symptom caused by leadership problems. Fortunately, these problems can be resolved, and you have the power to make that difference. Strive to become the best leader you can be.

The 3 Biggest Meeting Mistakes

It never ceases to amaze me. Every executive I know wants to be more productive and to get more productivity from their team. They also feel that they would be far more effective and productive if there weren’t so many meetings. And yet, no one seems to do anything about it!

One of the smartest ways to boost personal and team productivity is to address the issue of meetings and how they’re conducted. Think about it… A one-hour meeting attended by eight people is equivalent to a full day (8 man-hours) of time spent. That means that reducing the total time spent in meetings by just 60 minutes a day would literally save a full-time person! (8 man-hrs. x 5 days = 40 hours/week)

Here are three of the best strategies to make your meetings and your team more productive.

1. Stop scheduling one-hour meetings
A one-hour meeting is convenient to schedule and has become the norm, but in truth, there’s no real reason for them to last that long. (I’ve even seen regular 4-hour meetings scheduled!)

Consider scheduling 15-, 30- or 45-minute meetings instead. (The strategies that follow will help you accomplish this.) Additionally, one of my favorite strategies for reducing meeting time is to conduct “standing” meetings, where everyone literally stands rather than sits. Hallways are usually good venues for these. (I guarantee the meetings won’t drag on!)

2. Stop using meetings for data dumps and briefings
Think about how much of your meeting time is spent disseminating information. Chances are it’s in excess of 50% of the meeting. A much smarter way to deliver information is in written form. If you had everyone brief you (and anyone else who needs the information) in writing in advance, then the actual meeting would be devoted to discussion and/or making decisions. (This approach, of course, requires that people actually read or scan the information prior to the meeting.)

Reserving meetings strictly for discussions and decisions can easily cut most meeting times in half.

3. Stop inviting so many people
Think of how many times you have people in your meetings who don’t really need to be there. They generally don’t contribute nor do they need to contribute. They’re just there to be there. Instead, try these two strategies.

If there are people who may have information that the group may (or may not) need, simply have them be available to answer any questions that may arise. Additionally, if their presence is simply to keep them informed and to help them feel part of the team, consider summarizing the high points and outcomes of the meeting in writing and sending a copy to anyone who needs to know.

And here’s a final thought on meeting productivity… Consider how much of your time is wasted in meetings called by others and suggest they implement some of the strategies you’re starting to use in your own meetings.

Boost your productivity and that of your team by shortening meeting times, using meetings only for discussion and decisions, and limiting the number of people who are required to attend your meetings.

Successions: Is Contingency Planning Enough?

We all know the scenario: An owner wants to retire, has someone in mind to be their successor, and needs a professional to structure the transition.

So, they contact you and you set about putting together a solid plan for their succession. You help them clarify their needs. You help them value their company. You help them structure the buyout with respect to taxes and their estate. And you help them structure the transfer of ownership.

Additionally, because you have much more experience at this than they do, you include strategies to protect them if things don’t go as planned.

Frequently, to protect the owner’s interest and the company’s value, transfer of ownership is phased in over time. This helps the owner retain control of the company as the successor takes on more and more responsibility. It also gives the successor incentive by giving him or her increasing stock ownership. This works well as long as the successor does well.

But what if the successor doesn’t do well? While it’s true that the owner still retains ownership, the reality is that – years after the transition plan was developed – they’re left with no successor and will need to either find a new successor or sell to some outsider.

An effective way to minimize the likelihood of successor failure is to have a professional help groom and guide the successor, thereby increasing the likelihood that he or she will succeed. With so much at stake, it’s a smart investment. It’s why we offer Successor Development.

Alternatively, if the owner wants to completely step away from the company upon signing the transition papers, ownership is transferred to the successor immediately and the owner takes back a promissory note that the successor will make payments on over time. A good contingency plan provides a solution in the event that the successor defaults on his or her loan payments. Typically, the owner gets the stock back and returns to run the company.

But if that happens, there are a number of serious problems that arise. One is that the owner will have to come out of retirement (after several years of being retired) to run the company once again. The second problem is that the company will no longer be as valuable as it once was (as evidenced by the poor cash flow causing the loan default). A third problem is that, just as in the previous scenario, the owner no longer has a successor.

And the last problem is that (years after the original transition) the market will have a sizable surplus of seller over buyers, resulting in a buyer’s market with lower multiples and buyers who are more demanding. (I’ve written about this in a previous article.)

Once again, an effective way to minimize the likelihood of failure is to have a professional help groom and guide the new owner, thereby increasing the likelihood that he or she will succeed. With so much at stake, it’s a smart investment. It’s also why we offer Successor Development.

Finally, even with additional guidance and grooming, the successor sometimes turns out to be a poor choice and doesn’t succeed. In that case, recruiting a new successor may be the best solution for the owner because it will provide the full value of the business and will keep the business locally/privately owned. It’s why we offer Successor Recruiting.

3 Common Mistakes a New Owner Needs to Avoid

Taking over the ownership of a company is an exciting event. It’s a time filled with hope and dreams, opportunity and vision, fear and insecurity, and broad responsibility.

Your family relies on the business doing well. Employees and their families rely on the business doing well. Customers and suppliers rely on the business doing well. Even the previous owner relies on the business doing well (if for no other reason than to ensure that all the buyout payments get made).

Because of all these things, it’s important to avoid the following three common new owner mistakes.

Mistake #1: Making Changes Simply to Prove the New Owner Is in Charge

There are two aspects to this mistake that need to be addressed. First, newly acquired power, responsibility, and authority can be intoxicating. It can be tempting to flex one’s new ownership muscles. This temptation can arise from years of having ideas without the authority to implement them or it can arise if the new owner feels he or she must establish his or her leadership competence in the eyes of employees. The second aspect pertains to the successor’s relationship with the founder. There may be a tendency to arbitrarily make changes simply to establish that he or she is now in charge, not the founder.

In either case, making changes simply for the sake of change is a mistake. A wise owner will reflect on his or her motivations for wanting a change, show restraint, and reflect good judgment before making any changes. Change for the sake of change is destined to cause problems rather than solve them.

Mistake #2: Continuing to Think (and Act) Like an Employee

In many cases, a new owner has spent his or her entire career as an employee. The mistake is to continue to think and act like an employee. There are several differences between the way an employee thinks and the way an owner thinks, and if a new owner doesn’t make this shift, problems will arise.

Employees tend to think narrowly. They usually focus on the task at hand and/or on their specific domain of responsibility (operations, finance, engineering, etc.). In contrast, an owner needs to consider the bigger picture and how his or her decisions impact each aspect of the business.

Employees tend to think short-term. Their focus tends to be on current matters, current revenues, current expenses, and current profits. In contrast, an owner needs to consider both short-term and long-term success, needs to be able to make decisions without having all of the information about the future, and must learn to balance risk and reward. Rarely is a decision about the future risk-free, and an owner needs the ability to assess and minimize that risk.

Additionally, employees tend to focus on doing good work while at work but generally don’t take their work home with them. Owners, on the other hand, learn that the business becomes their life, and they think about it all the time, wherever they are.

And finally, employees know that if they make poor decisions, or they become dissatisfied, or the business just doesn’t do well, they can always find a new job elsewhere. Owners understand that failure is not an option. Generally, there is no “Plan B.” They understand that the business is their only future, and this understanding colors their decisions and actions.

Mistake #3: Not Earning the Trust and Respect of Others

The degree to which an owner earns the trust and respect of others determines the effectiveness of their leadership. There’s a big difference between the results gained from people who simply comply with orders and those gained from people who are committed to the success of the company. Exceptional leadership elicits excellence. In order for an owner to be effective, he or she must earn the trust and respect of those around them. A new title doesn’t automatically earn the trust and respect of others. Industry knowledge can earn professional respect, but a leader earns trust and respect through everyday actions.

Trust is earned by demonstrating integrity. It is critical for an owner to follow through on his or her commitments. Actions truly do speak louder than words, and good intentions won’t cut it. Owners may have the best intentions when they agree to a list of commitments, but if they don’t follow through on those commitments, they’re viewed as lacking integrity. Likewise, if an owner states that certain values are important to him or her but then acts in a manner at odds with those values, they demonstrate a lack of integrity. And when that happens, people learn not to trust them.

Respect must also be earned. The most effective way to earn respect from people is to show them respect. As leaders, we show respect when we listen to what others have to say. People often feel they have good ideas and have something to contribute. Whether we agree with them or not, soliciting input from others demonstrates that we value them and their ideas, and that goes towards earning their respect. The most effective means of showing respect for others is asking good questions of people and then listening to their answers.

How to Avoid These Mistakes

It’s often difficult for new owners to bridge the gap between where they are and where they need to be. And bridging that gap can be the difference between a successful business and one that languishes in mediocrity. However, an owner’s ability to evolve generally relies on two things.

Having a Confidential Sounding Board
Often, the evolution of a company is conceived during open discussion of ideas, but most owners don’t have the right “sounding board”. It requires an environment within which an owner’s inklings, ideas, and concerns are brought to light, challenged, and expanded. The best strategies will leverage strengths, minimize risk, and balance long-term needs and goals with short-term needs and goals.

Gaining Unbiased, Outside Perspective
Outside perspective is essential as a catalyst for creative, game-changing strategic thought. Outside input is necessary to uncover blind spots and move past them. Every owner needs an objective, supportive confidant with whom to complain, vent, confide in, and talk things out. Owners must carefully think through possibilities, assess and manage risk, and then select the strategic plans with the best potential.

If you’d like help as a new owner, please give us a call. Our team of executive coaches works with clients around North America. Executive coaching can help an owner grow revenues, increase profits, and improve cash flow. You are welcome to call me on my direct office line: Michael Beck, 503-928-7645 (Portland, OR).