2

Copyright © 2007 by Richard C. Wilson

All rights reserved. No part of this book may be reproduced or

transmitted in any form or by any means without permission by the
author.
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 Dedication

I dedicate this book to my parents Tom and Sue Wilson.

 Introduction
You might have read the 1st edition of Rainmaker. It was printed in
hardback in included information on Game Theory as well as extra
business examples and a complete dictionary of sales and game
theory terms. I have decided to create this Rainmaker handbook to
concentrate on communicating only the real meat of each issue
discussed.

“ Live as if you were to die tomorrow. Learn as if you were to live

forever.”

– Mahatma Gandhi

Relationships drive business. Everyone sells and negotiates ideas,

products and services on a daily basis. Sales responsibilities are
moving more from one-stop sales calls to consultative or relationship-
based sales processes. This shift and other fads and trends have been
taken into consideration while writing this book, and the lessons
contained within are mostly targeted towards those in investment
marketing and sales positions.

The three largest influences that led to the writing of this book include
my experience running an online textbook business, best practices and
models from Thomas D. Wilson & Associates, and over 200 Harvard
Business Review articles. The three most influential academic influ-
ences on my life and this book have been Dr. Jonathon King from
Oregon State University, and Dr. Bharam Adrangi and Dr. Robert
Peterson from the University of Portland.

The “About the Author” section is at the back of this book. My contact
details are always on www.RichardCWilson.com.
 Table of Contents

Chapter 1: Stimulating Growth 1

Chapter 2: Relationship Cultivation 9

Chapter 3: Investment Sales Toolbox 19

Chapter 4: Sales Team Develop

Chapter 6: Leading Edge Practices 67

Chapter 7: International Sales Expansion 79

Chapter 8: Sales Ethics 101

Chapter 10: Networking 501 106

Chapter 10: Negotiation Tools 111

Chapter 11: International Negotiation 126

Chapter 12: Competitive Intelligence 146

Conclusion 153

About the Author 156

Chapter 1: Stimulating Growth

“…selling is the process of moving goods and services from the hands
of those who produce them into the hands of those who benefit most
from their use”

– Hopkins (Selling for Dummies page 9)

“I'm a believer in momentum.”

- Lance Armstrong

“People love to buy, but they hate to feel like they’ve been sold.

- Jeffrey Gitomer
2

The Investment Sales Cycle

“Selling involves person-person communication with a prospect. It is a

process of developing relationship; discovering needs; matching the
appropriate products with these needs; and communicating benefits
through informing, reminding or persuading.” (1)

th
A 16 century religious group, in instructing its “field men” in the art of
making converts used this pattern:

1. Make contact
2. Gain confidence
3. Establish conviction
4. Gain conversion
5. Work for continuance (2)

After over 500 years, the process of convincing others to buy some-
thing has remained the same. Another version of the sales cycle is
presented within Percy Whiting’s 5 Great Rules of Sales. He describes
the five stages to each sales engagement; attention, interest, convic-
tion, desire, and close. Most sales processes also known as cycles,
go through each of these stages although advertising sometimes
assists a sales person with the first few stages of the process.

1. Attention – You must get your customers attention. If

you do not stand out, you have struck out on your
whole sales process.
2. Interest – You must quickly gain your customers inter-
est. If someone is interested in your product or ser-
vice, they will gladly listen to your sales pitch.
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 3
3. Conviction – The next step is convincing the prospect
that it would be wise for them to purchase your prod-
uct.
4. Desire- After convincing someone that your product is
great, you must make them desire ownership of it.
5. Close – A customer can experience all of the above
and not purchase a product or service. You have to
close the sale to make it happen. (3)

*For another version of the sales cycle used for relationship cultivation
efforts see the 6 “I”s model in Chapter 2.

Buyers typically want to deal with sales people who:

• Are their friends

• Are honest
• Understand business trends and their specific company
• Provide advice during the decision process around the sale
• Present a good professional image and friendly personality
• Help the buyer find solutions to real problems

To begin working on your sales development program, you must know

some basic elements of what you would like to achieve. Work with
your sales team to answer the following questions:

• How are you going to achieve your goals by promoting the

benefits your company provides to customers?
• What are the true identifying characteristics of your business?
What would you like them to be?
• Who is your target market?
• What is your niche within that market?
• What marketing weapons will you use?
• What is your marketing budget? Why?
4

“Unless you love everybody, you can't sell anybody.”

- Dicky Fox (from the movie "Jerry Maguire")

Knowing your customer is as important, if not more important than

knowing your own company’s goals. Your customers are the core
reason for your existence and the more familiar you are with their
needs and pains, the better you can serve them. Out of the world of
consumers, some people are your customers, while others are not.
Within your group of customers, some are highly profitable to serve,
while others might be costly to maintain.

How much are each of your customers worth? Over their lifetime of
commitment, what is their value to your business? How much does it
cost to obtain those customers?

If you do not know these numbers or know which customers are the
most and least valuable or expensive to obtain or maintain, you have
some homework to do. These numbers are vital to making your sales
force more efficient, and your company more profitable. Figure out
how you can focus your resources on the most profitable types of
clients, and discern why they are so profitable. Use this to build a new
sales approach that targets these clients.

“The fruits of life fall into the hands of those who climb the tree and pick
them.”

- Anonymous

Everything comes to those who hustle while they wait. The secret to
patience is always having something to keep you busy. In other words,
you must have enough irons in the fire that you will always have
ongoing projects, while you are simultaneously scouting potential
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 5
clients and managing current clients. Most Senior Vice Presidents
within professional service firms should be spending 70% of their time
on managing clients and 30% on obtaining new ones. If you are the
principal of a firm and you are billing 20 days a month, you are proba-
bly falling behind on sales.

Sometimes your second or third project at a firm will not come immedi-
ately after the first. Stay in touch; invite your contacts to conferences
and client gatherings. If they were satisfied with your work, and are
open to staying in touch, you will realize the rewards for the manage-
ment of the relationship.

When you start a project, actively note what solutions you might be
able to provide the client in the future. Specifically, it is important to:

• Assure the client of their decision to hire you

• Constantly “over deliver” and make them feel like they got
a great return on their money.
• Constantly manage change and project scope.
• Develop relationships using the 6 “I”s model described in
Chapter 2.

Until you have “over delivered” on what a client has already hired you
to do, you have not earned the right to sell them additional work. The
best sales teams sell through execution, and position themselves to be
the next obvious choice when the client is ready to bring somebody on.
Take note of what types of vitamins or painkillers you can provide, but
do not freely offer to perform this work or submit unsolicited proposals
for projects. Instead, focus on building respect, trust, and confidence in
your team’s abilities and the work will flow from there.

“Any selling involved in a professional service has just begun when the
contract is signed. All that has been sold up to that time is a promise.
The major “sale” comes in delivering on that promise.”
6

- Warren J. Wittreich

Part of executing on the quality of the product or service you have

already sold, is making sure the client is happy. Even when you are
wrapping up a project with a client that you will probably never do
business with again it is very important to keep them happy. Why
should you make sure your customer is always happy?

• Ninety-six percent of dissatisfied customers never complain

directly to the salesperson.
• But 91 percent of those unhappy customers will not buy from
that salesperson again.
• The average unhappy customer will talk to at least 9 people
about their negative experience.
• While 13% of those unhappy customers will tell over twenty
other people what happened. (4)

“Your most unhappy customers are your greatest source of learning.”

- Bill Gates

What should you do if you already have a group of unhappy custom-

ers? Use it as a learning opportunity. Understand if the customers that
are unhappy are profitable and worth keeping, and if they prove to be
so use the situation as a chance to show them that you care about their
business. Find out why the customers are unhappy, and experiment
with different methods of both preventing unhappy customers in the
future and winning back old customers. Tinkering with these strategies
can help you create and maintain more long-term relationships.

“If you're not making mistakes, then you're not doing anything.”
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 7
- John Wooden (Hall of Fame basketball coach
for UCLA)

Dr. Robert Peterson, a business professor at the University of Portland,

has developed a list of five distinct ways that you can build credibility
with your customers. Presenting yourself in a way that shows your
strengths in each one of these five pillars of selling will help build
rapport, trust, and long-term relationships.

1. Expertise: Selling skills; knowledge of the customer’s products,

and industry, as well as your own.
2. Contribution: Ability to assist the customer in reaching their
bottom-line goals and objectives.
3. Representation: Commitment to the customer’s interests; abil-
ity to provide objective advice, counsel, and assistance.
4. Trustworthiness: Honesty, reliability, consistency in actions,
and overall ethics
5. Compatibility: Match between representative’s interaction
styles and the personality traits of the customer. (5)

Evaluate every presentation you make to ensure that you are convinc-
ing the client or potential client why you are trustworthy, knowledge-
able, compatible, etc. Covering all of these areas within each
presentation will help you cover the pillars of credibility that are most
important to them.

Summary

◊ Whiting’s five stages of selling are attention, interest, convic-

tion, desire, and close.
◊ Knowing your customer is as important, if not more important
than knowing your own company’s goals. Figure out how you
can focus your resources on the most profitable types of clients
8

you serve and discern what makes them so profitable in the

first place.
◊ Until you have “over-delivered” on what a client has already
hired you to do, you have not earned the right to sell to them
again.
◊ Everything comes to those who hustle while they wait.

References

1. Manning & Reece Selling Today p. 6

2. Kurzrock The Sales Strategist page vii
3. Whiting, Percy, “The 5 Great Rules of Selling” Copyright ©
1957 McGraw-Hill Book Company.
4. White House Office of Consumer Affairs Study 1985.
5. Peterson, Dr. Robert and Lucas “5 pillars of selling credibility”
Copyright © 2001 University of Portland.
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CC
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Hard work made it easy. That is my secret. That is why I win.

- Nadia Comaneci (Olympian – Won 6 gold medals during the

winter Olympics of 76)

“People buy for their own reasons, not for yours.”

- Author Unkown
1
0

The 6 “I”s of Relationship Cultivation

“It takes as much energy to wish as it does to plan.”

- Eleanor Roosevelt (U.S. First Lady)

Relationships are at the core of everything in business. The smarter

you work and more efficiently you use your connections, the more
successful you will be. You may use the model described in this
chapter to cultivate new partners, employees, and clients. It helps
segment the relationship development process into distinct steps that
ensure a thorough understanding of your customer before you ask for
the sale.

There are three ways ramp up your sales development program:

1. Solicit new clients

2. Increase the frequency of client purchases
3. Raise the average purchase of each client (1)

Using the 6 “I”s model you will be able to do all three as it focuses on
the relationship and solving each customer’s real problems. This
model has been used to raise hundreds of millions of dollars in the
fundraising field, and the core ideas behind it have been around for
generations within virtually ever industry.

There are two core sales tasks to manage

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 1
1
• Understanding the customers situation
• Adapting your solution to their needs (2)

Use this model to help improve these two core tasks and as a “relation-
ship cultivation roadmap” to train young sales professionals or remind
senior executives of what steps are necessary to develop strong long-
term sales relationships. The model serves as an hourly or weekly
tool, or something that you use as a theoretically base while creating
your sales strategy.

The 6 “I”s of Relationship Cultivation

(3)
1
2

1) Identify & Qualify

Market Research – Potential Client Identification

Internal Knowledge Assessment

Due Diligence – Qualification

This part of the process does not involve any client contact.
Extensive client identification should be conducted upfront
using past success factors. If this type of knowledge bank
does not exist, create one.

2) Introduce & Interact

Initial email or phone call, create awareness of what

you do

Educate your potential customers.
i. Send the contact articles or a book written by a
third party around an area of service that you
offer.

Invite them to a seminar, free training session, or send
them a value added newsletter to help get your foot in
the door.

Ask questions but more importantly, listen.

Build rapport.

During this stage of the 6 “I”s take your selling hat off and
start getting a feel for who you are working with. Interact
with them and find common ground that you can work use
later, noting their hot buttons and sore points.

3) Interests & Needs (listen)

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 1
3

Listen to client, do further research, identify areas of
service for later.

Qualify (the opportunity for both parties).

Discover the client’s hot buttons (WIIFM – What is In It
For Me).

Listen for both personal and organizational details such
as birthdays, personality differences, past project suc-
cesses or failures, and issues related to corporate poli-
tics.

Schedule a quarterly breakfast or lunch with your pri-
mary contact to discuss the service you are providing
and gain the opportunity to listen to their current needs.

Use the list of 20 Listening Questions from Chapter 9
on Connecting with Clients.

This is the most important step of this relationship cultiva-

tion process. At this point you must listen closely to what is
and IS NOT being said and practice Stephen Covey’s
method of understanding before being understood.

4) Inform & Deepen Understanding

Confirm your understanding and articulate the specific

information relating to the customers business, estab-
lishing trust.

Develop credibility and a valuable long-term relation-
ship.

Present yourself using Peterson’s 5 Pillars of Credibil-
ity discussed in Chapter 1.

Now that you have pre-selected this contact, gained rap-

port, and listened to their needs, inform them of the value
you could deliver. Customize your approach based on
everything you know.

5) Involve & Acknowledge

1
4

Confirm your understanding.

Work together to create a win/win plan for both organi-
zations.

Allow the client to create or “think” of the final solution
first, or gain their approval along the way to build their
level of understanding and final buy-in.

This step represents the point where the client is process-

ing your idea, and you are engaged in selling the details of
it. You confirm your understanding of their problem and try
to create solutions that fulfill all of the interests involved
from both parties.

6) Invest Resources & Execute the sale

Move forward with action items for the partnership.

Send the client important referrals and ask for referrals.

Evaluate responses & results (positive/ negative).

Affirm decisions (minimize buyer’s remorse).

Place an initial phone call to confirm all of the project
objectives and future steps that should be taken into
consideration.

Seek additional opportunities to serve & sell this client.

Following the first five steps of this process makes this last
one much easier. Move forward with the agreement, for-
malize it, and conduct your post-agreement evaluation of
the process and lessons learned. Take monthly or quar-
terly pulse check as to the level of value each of your cli-
ents receives and perceives. Conduct either formal or
informal feedback surveys or meetings to learn how your
firm can serve its clients better and improve the specific re-
lationship at hand.
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 1
5
“Vision without execution is a hallucination.”

– Thomas Edison

Your 6 I’s Pipeline

To improve your sales program you will need to first assess its current
health and identify areas of improvement. Start this process by
reviewing the latest quarterly performance results, and identify what the
inputs were that drove those results. Identify how much revenue was
realized, the number of new customers brought on, the number of units
or projects sold, and the total growth over the same quarter of last year.
Performance should be transparent and owned by the whole team, in
spirit, and compensation.

It is possible to have outstanding sales results while spending too much

to obtain customers or draining the employees working on new clients.
Make sure you are cognizant of the number of inputs being invested
throughout the process. How many sales solicitation, public relations,
presentations and follow up phone calls were made last quarter? How
many calls need to be made tomorrow and every business day to
improve that number for next quarter?

Identify where your sales team has been effective in cultivating rela-
tionships and how it might move forward to ensure the cycling of clients
in a way that will be resource efficient for the firm. The 6 “I”s tool will
help you keep a constant view of your overall sales activities and help
ensure a constant stream of new clients. If you download the 6 “I”s
model, you can use it to watch clients move through the 6 “I”s pipeline
and it will provide you with tips on how to move forward at each stage.
This is useful for cold calling type sales, or relationship-based selling
initiatives.

Sales Knowledge Management

1
6

Most companies do not utilize their employees to their full potential.

One great way to harness their abilities is by mobilizing them through
small sales-focused groups. This can serve as an extra source of
income, inexpensively market your business through the people who
know it best, and ensure you are selling the right products at the right
places to the right types of customers. Every employee should work
within a team where their skills compliment other member’s abilities,
and all personal networks should be sifted for additional partnership
and sales opportunities. There are dozens of specific areas that
individuals or groups of employees can focus on improving sales
including:

• Formal Client Qualifications

• Potential Client Identification and Due Diligence
• First Contact Meetings, Cold Calls, and Networking
• Sales and Contract Material Creation
• Internal Knowledge Assessment and Best Practices Analysis of
competitor sales initiatives

Once this is complete, work on creating an explicit sales tracking

system that rolls up individual efforts into group and department-based
performance tracking. This should tie together your long-term sales
goals with each week’s new potential client contacts, calendar addi-
tions, new customers, current targets, and items to tackle over the
following week. The knowledge management system can executed be
within a sales program or a simple Excel spreadsheet, and should
focus on action items and results. Usually these materials will be most
effective while visible to everyone on the sales team. Team and
individual compensation should be structured to entice employees to
work on the area where their natural strengths will be best utilized.
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 1
7
“Knowing is not enough; we must apply. Willing is not enough; we must
do.”

- Johann Goethe (German poet)

Explicitly developing strategic sales plans, no matter how dynamic the

environment, is invaluable to a company seeking extraordinary growth.
Without a plan, you will drift from client to client, relying on luck to keep
your company moving forward and your resources fully utilized. If you
do not have any competition, you have your head in the sand, and you
need to redefine your market. If you do not have enough customers,
ask yourself, what new niches could we carve out of the market with
our current resources? What are the most profitable competitors in the
market doing?

Now that we have discussed employing the 6 “I”s client cultivation

program it is important to address how it will fit into your overall sales
development plan. Success for many companies comes through trying
dozens of ideas and keeping what works. While fighting off competition
is about market and business intelligence, agility, and dynamic strate-
gic plans. It is not the fastest, biggest, or strongest that excel, but the
most adaptive. The 6”I”s of Relationship Cultivation model can you
help you competitively adapt to market dynamics and change in
customer preferences.

Summary

◊ Three ways to ramp up your sales development program 1)

Solicit new clients 2) Increase the frequency of client pur-
chases 3) Raise the average purchase of each client
◊ Cultivate more major clients using the 6 “I”s model.
◊ The 6 “I”s are 1) Identify & Qualify 2) Introduce and interact 3)
Interests & Needs (Listen) 4) Inform and Deepen Understand-
ing 5) Involve & Acknowledge 6) Invest & Recognize
1
8

◊ Create an explicit sales tracking system that rolls up individual

efforts to group and department level cultivation assessments.

References

1. Fifer, Bob, “Double Your Profits” Copyright © 1995 Collins Pub-

lishing.
2. Peterson, Dr. Robert – PowerPoint – University of Portland
Professor of Sales & Negotiation.
3. Smith, Buck, “Moves Management” This model was adapted
from Thomas D. Wilson’s 6 “I”s of Fundraising.
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Chapter 3: Investment Sales
Toolbox – Models & Strategies

There's a way to do it better -- find it.”

- Thomas Edison
2
0

This chapter will help you use tools around the 6 “I”s of Relationship
Cultivation model described in Chapter 2. There is a saying that goes,
“If the only tool you have is hammer, everything looks like a nail.” Not
every problem is a nail, so this section of the book is a sales toolbox
with several models and practical applications to help you improve your
sales development program. It focuses around improving the effec-
tiveness of your sales force.

Investment Sales Tool #1: Sales Systems

Your sales effectiveness can be thought of as a system affected by

many variables, and made up by of several pieces. These pieces can
all be improved to enhance the performance of the whole. It is easy to
compartmentalize these different areas and try to maximize each
without paying attention to the whole system. This would be a mistake,
as a decision for any one area should compliment the others, and not
get in the way of their implementation. The following four areas of your
business are all interconnected:

• Strategies: Define how you will meet your goals and vision for
the company or sales division. What methods and paths of ac-
tion are you going to employ and follow to complete your mis-
sion?
• Selling Skills: What capabilities do your individual sales em-
ployees or groups have that can be used to find new solutions
or ways to sell more business? “Know yourself.” Leverage
what you have into a winning team and you will attract A play-
ers down the road.
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 2
1
• Resources & Support: What resources do you have in place
that help members of your team communicate and share
knowledge? Ensure that everyone is held accountable, and
that management is truly a supporter and cheerleader rather
then a slave driver or micro-manager. Focus on coaching,
training, principal based leadership, and performance-based
rewards.
• Systems: What systems are you using to combine your skills
and resources into core competencies that your firm will use to
execute its sales strategy?

“Opportunities multiply as they are seized.”

- Sun Tzu

Investment Sales Tool #2: Strategic Tools

There are a number of strategic tools your firm can use to solicit new
sales. These include:

Strategic Philanthropy

Public Speaking

Article and Book Publication

Satisfied Clients

Internet related marketing

Alliances and Partnerships

Advertising

Surveys and Research

Written and broadcasted publicity management

When you are sending out press releases, make sure you have
captured some sort of vital industry shifting news that people need to
read about. Forget about selling and talking about yourself or you
might kill your chances of getting any publicity. Focus on information
that will affect the targeted audience. You want to project an image of
2
2

being well informed and having valuable insights, not as a self-

promoter or a group that is desperate for new clients. Remember the
importance of relationships while seeking to get a story published.
Who knows someone within the organization whom you would like to
connect with? Who should be cultivating these relationships within your
organization?

“Destiny is not a matter of chance, it's a matter of choice; it's not a thing
to be waited for, but a thing to be achieved.”

- William Jennings Bryan (Secretary of State)

Investment Sales Tool #3: Four Strategic Rules to Create Exces-

sive Profits

Rule #1: Do Things Today

Focus on quarterly goals, not yearly. Move fast. Execute. How are you
investing your time, and what is the hurdle rate that you employ when
gauging the return on an activity? Always ask yourself, “what is the
best use of my time right now?” Time is money.

Rule #2: Strategically Use Time and Money

Strategic time and money management involves investing resources in

ways that promote your business’s competitive advantage and helps
develop new or existing core competencies. Cut non-strategic costs to
the bone, and outspend the competition on strategic costs. Do the
same for time spent on strategic vs. non-strategic projects or initiatives.
Constantly re-invest excess profits in areas that produce the largest
strategic returns. Overhead is not an investment! The enjoyment of
the overhead “perks” or norms that employees take for granted should
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be overshadowed by the greater financial rewards for those same
individuals and other shareholders. (1)

Rule #3: Never Compete on Price

Focus on what the customer gets out of what you are selling, not what
you put into it (Benefits vs. Features).

• Competitive, but not lower prices.

• Over-delivery.
• Robust advertising.
• A high level of quality and service.
• Challenge and change your internal metrics or the as-
sumptions that your business runs on. (2)

Rule #4: Carefully Differentiate

Ensure that your company has a unique offering that customers are
willing to pay for. In the March 2005 Harvard Business Review article
“Market Busting,” Rita McGrath and Ian MacMillan discuss how many
companies have successfully changed themselves to take market
share and increase their sales effectiveness.

The areas they suggest considering when deciding how to differentiate

include:

• Transforming your customers experience.

• Transforming your offerings.
• Redefining your business’s profit drivers.
• Anticipating and exploiting industry changes.
• Creating a radically new offering. (3)
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“Nothing splendid has ever been achieved except by those who dared
believe that something inside them was superior to circumstances.”

- John Barton

Investment Sales Tool #4: The 4-Square Planning Model

Every day when you begin working on your sales program, draw four
boxes on a piece of paper. In the top box, write what you want to
accomplish over the next year. In the next box, write what you would
like to accomplish this quarter. In the third box, describe in more
detail would you would like to accomplish over the next week. In the
last box, write down what you will have to accomplish today to meet all
of those objectives. Directly tie this to do list with your long term goals
and then execute it. This exercise takes less then 2 minutes and
allows you to really focus on what is crucial for moving forward towards
your definition of success.

Example:

This Year

Sell $3M in new business.

Grow the sales team by three

people.
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This Month

Close four new accounts worth at

least $50,000 each.

Conduct a needs assessment

meeting to determine what type of
sales person we should hunt
down.
This Week

Sell one account worth at least

$25,000.

Arrange for an inexpensive and

timely Myers-Briggs psychological
test for your sales team.

Today’s To Do List

Call back Clients A,B,C.

Schedule sales interviews with

companies X, Y, Z.

Research Myers-Briggs tests

online.

Investment Sales Tool #5: Top Five Sales Objections

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There are hundreds of excuses as to why someone would be indeci-

sive when making a decision about a purchase. You should be
cognizant of different excuses when trying to overcome them to make a
sale. The following is a list of the five most common reasons for a
customer to be indecisive:

1) They may lack financial or personnel resources to purchase or

make use of the offering.
2) They may believe that it is politically safer to take no action
then risk resources or a reputation on a seemingly risky or un-
conventional purchase or investment in service.
3) There may be political issues between internal business units
or managers.
4) There may be an absence of any sense of urgency in moving
the sale forward.
5) There maybe a lack of clear superior value when your offering
is compared to a competitor’s offer.

Review this list and note which objections come up most often during
your sales pitch. What others variations on these objections do you
often see? Come up with at least two responses to each of these
objections based on the rapport and type of product being sold to the
customer. (4)

Investment Sales Tool #6: Request for Proposals

Request for Proposals (RFPs) are used internationally to solicit bids on

contract, consulting, and government based projects. Most industries
have some version of an RFP for on area of business or another.
Usually you will be up against 4-10 other companies who are all
submitting similar information on the potential project that you are
applying to work on for the company releasing the RFP.
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While responding to an RFP or submitting an informal proposal to a
potential client, it is helpful to have a guide for your response. If you are
not told exactly how to respond to a RFP you can follow this format:

Introduction
o Opening email or cover letter
o Title page
o Table of Contents
o Executive Summary

Confirm your understanding of the RFP.

Review your planned solution.

Match your solution with their needs.

Assure them of your competence and superior
value, ROI (Return on Investment).

Your Prescribed Solution
o Details of the solution

Pricing/ROI.

Differentiation of your solution.
o Work Details

Microsoft Project Schedule.

Implementation team, resumes, references.

Case studies, differentiation.

Subcontractors.
o Objective Compliance

Discuss the value they will realize for their
investment.

Compile a detailed report on how you will fulfill
their needs.

Tool #7: ABC’s of Sales Campaigns

The following model is a tool for efficiently moving your company

through the four stages of a sales campaign. Use this to ensure your
company conducts the proper preparation while still focusing on what is
going to give you the greatest return for your time.
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ABC’s of Sales Campaigns

Initiation:

• Articulate goals, objectives, and the company’s sales mission.

Market testing:

• Test your product or service offering, pricing strategy, and in-

ternal knowledge collection on the execution or possible
improvement of the product or service.

Sales Campaign Preparation:

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• Create all of the potential client identification lists, sales materi-
als, strategic plan, contracts, follow-up notes, and thank-you
emails. The first step within the 6 “I”s would be done during
this stage.
• Sell everyone on the sales campaign before it begins.
• Gather three customer references for each type of service or
product you offer, and place them within your marketing mate-
rials.
• Compose two solid responses to each of your top three sales
objections.
• Define at least three points of valuable differentiation from your
competitors.
• Create in-depth profiles of your top 3 competitors for each
product or service.

Execution Stage:

• Focus on maximizing your effectiveness during the money

hours of the day (9-5pm). Develop relationships and focus on
daily results and actions.
• The planning is over, game on. This is the point at which you
realize the value of all the previous work you have done.
• 6 “I”s steps 2-6 would all occur during this execution stage (5)

Your company might move through this cycle several times for different
divisions or market needs. This model suggests spending more time
upfront then most sales models, which in turn provides a strong
foundation and framework for extraordinary levels of sales.

Set aside time every day for client cultivation and sales planning
objectives, regardless of the number of fires raging at the office. The
plan should simple and flexible; you want to spend a lot of time selling
not managing your efforts to sell. A tenacious, systematic, and cus-
tomer focused approach will lead to a full pipeline of clients. Focus on
results and solving real problems, listen and then provide what was
3
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asked for. While managing your personal selling time, create urgency
each day, setting goals for the total number of outbound sales calls,
sales introductions, and signed contracts per week.

The next short section of this chapter can help you improve the use of
your selling time. It covers the use of decision-making strategies to
enforce a common productive cultural that is open and results-oriented.

Decision Making Systems

In an article entitled “Great Escapes” in Fortune magazine, Michael and

Jerry Useem refer to tools that can help you effectively manage
decision-making processes. These tools are applicable to managing
yourself or your sales team and should assist you in analyzing your
own decision-making systems or processes.

Burn the Boat

"No matter how far you've gone down the wrong road, turn back."

- Turkish proverb

In the 1960’s, Symour Cray ran two unrelated businesses, selling both
sailboats and supercomputers. His supercomputers were unique
having several designed-in extras such as decorative fountains. While
he spent much time customizing his supercomputers, he realized that
they would be obsolescent within a year or two. To help remind himself
of this reality, and drive the point home to his team, he builds a beauti-
ful sailboat every spring and burns it the following fall.

It can be very hard to throw away something one has invested time,
money, or personal image into. In the 1920’s, Henry Ford wrote, “My
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advice to young men is to be ready to revise any system, scrap any
methods, and abandon any theory if the success of the job demands
it.” Ford followed this strategy himself until sticking to his own original
strategy lead to his company’s decline and General Motor’s jump in
market share.

What is your sales team spending time on that is no longer effective?

What are you still doing in the name of tradition or because it was
profitable yesterday? Ensure that you are burning your boat every fall
and not proclaiming innovation while resting on laurels of past success,
as was in the case of Henry Ford.

“I try to learn from the past, but I plan for the future by focusing exclu-
sively on the present.”

- Donald Trump

Voice Questions

Good managers want employees to voice their opinions. Managing

conflicting ideas is how you extract value out of a diverse sales or
management team. “If you walk into a room as a senior person and
innocently say, ‘Here’s what I’m thinking about this,’ you’ve already
skewed people’s thinking,” says Marine Gen. Peter Pace, who was
nominated to become the next chairman of the Joint Chiefs of Staff.
He recommends to “start with a question and don’t voice an opinion.”
This way no one can line up behind you reinforcing your original idea
instead of stating his or her own perspective on the situation. “If you
are looking for answers, ask the question,” advises Pace, and “you
ought to be the first person to self-critique.” Be cognizant of how your
own views are affecting the actions of your teammates. Strive towards
excellence in decision-making and execution, not unanimous agree-
ment on all decisions.

Let the battle rage

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Similar to the lesson suggested above, another tried and true value of
competitive competencies is letting conflicts work themselves out.
Arguments based on principles of the decision, and not political camps
are healthy and push everyone to analyze the true merits of each case.

In the 1980’s, Gillette experienced some beneficial internal conflicts

while debating whether to meet Bic, Inc. in the market with cheap
plastic razors or invest millions in developing a higher quality metal
version. CEO Colman Mockler let the divisions fight it out. For nearly
two years, Mockler played a neutral position until finally declaring the
new metal razor camp the winner.

Educate your instincts

Should you trust your gut? That depends on what you are made of.
What experience and education have you been exposed to that makes
your instincts more robust? The instincts of a veteran police officer
have been shaped by years of experience, so when his gut tells him
that something is wrong it is usually right. Research shows that others
with less experience in similar situations perform poorly because the
unconscious intuitions have not been developed. Your mind calls upon
hundreds of resources every minute that you are not even aware of. In
Malcolm Gladwell’s book “Blink” he refers to “thin slicing.” This is his
terminology for the second analysis of situations or ideas that we
conduct while making a decision. If you or the person making the
decision is cognizant of the important variables at hand and has made
similar decisions their gut reaction should probably be trusted.

Keep this in mind when managing your sales team. What sales and
industry-based newsletters have your employees subscribed too? What
books do you recommend to them and how can you support further
education on their part? The minute you have to manage anyone, you
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have made a poor hiring decision. Identify people with great instincts,
a thirst for knowledge, and a hunger for learning. (6)

Summary

◊ To reach optimal sales effectiveness you should focus on the 4

levers, 1) strategies 2) selling skills 3) resources and support 4)
systems.
◊ Remember the 4 rules of excessive profits 1) Do things now,
today. 2) utilize strategic cost and time consumption 3) Never
compete on price 4) Carefully differentiate.
◊ Start everyday with the 4-Square Planning Model.
◊ Use the ABC”s of Selling, working through all of the stages
including; initiation, market testing, sales campaign
preparation, and execution.
◊ Effectively manage decision making use the “Great Escapes”
prescribed by Michaela and Jerry Useem.
◊ Educate your instincts.

References

1. Fifer, Bob “Double Your Profits” Copyright © 1995 Collins

Publishing.
2. Guerilla Consulting Newsletter Copyright © 2005
http://guerrillaconsulting.com.
3. Mcgrath, Rita and Macmillan, Ian, “Marketbusters – 40 Strate-
gic Moves that Drive Exceptional Business Growth.” Copyright
© 2005 Harvard Business School Press.
4. Fifer, Bob “Double Your Profits” Copyright © 1995 Collins
Publishing.
5. Wilson, Thomas “The ABC’s of Fundraising,” Copyright ©
2005.
th
6. June 27 Fortune Magazine page 97-102 “Great Escapes”
Time, Inc. Copyright © 2005 Volume 151 No. 13.
Chapter 4: Sales Team
Development

“The task of a leader is to get his people from where they are to where
they have not been.”
- Henry Kissinger (Secretary of State)

“For a man to achieve all that is demanded of him he must regard

himself as greater than he is.”
- Johann Goethe (German poet)

“My philosophy of life is that if we make up our minds what we are

going to make of our lives, then work hard toward that goal, we never
lose...”
- Ronald Reagan (40th President of the U.S.)
3
6

If your sales efforts are successful,

it is likely that you will eventually
need to expand the capabilities and
size of your sales team. Managing
a team of sales people, especially
young professionals, involves an
additional set of skills on top of managing the sales process itself.

The first step in creating a stellar sales team is hiring the right people.
Acknowledge and take notes of who possesses the most skills and
experience but hire talented, energetic super-connectors, rather than
the person with the checklist of experience. A well-known hedge fund
manager once told me that he only hires people who are hungry,
humble, and smart. If you are going to employee someone for the
long-haul, hire people based primarily on traits that you cannot teach or
instill within someone through training. Your best employees will have
to be ambitious and hungry enough to overcome obstacles and break
sales quotas.

Conflict is inevitable. When new sales professionals join your team,

bring their past knowledge to the table, and combine their old ways with
your new ones. Do not structure the team or put policies in place that
limit all conflict, as this decreases the value of their experiences. Every
idea should be constantly challenged, and if you have hired someone
who has been successful in your field in the past, their approach to the
sales process will be different in at least one material way. Cultivate
these differences into a more robust team, and create a sales approach
that draws off what has been successful within other organizations. If it
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does not work well today, cut it off. If it is producing high returns, feed
it more energy and resources.

Ensure that your sales team knows what is expected of them. You
should aspire to know what each employee’s passion is. Have them
create a personal career plan that integrates their current responsibili-
ties and goals within your company with their long-term goals. Coach
them to include specific periods, dollar amounts, and targeted self-
development investments. Try to understand why each person comes
to work everyday, what his or her goals are, and what their dream job
description would be. Once their plan is complete, have them create a
SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of
their own professional life, and create a personal mission statement to
work off of. Be creative and draw off each employee’s strengths while
challenging them to use their personal strengths to accomplish more
then they ever have before.

“Differences of trait and talent are like blood types: they cut across the
superficial variations of race, sex, and age and capture each person’s
uniqueness.” To really be a great manager, you need to know each
team member’s strengths, the triggers that activate those strengths,
and how they learn. Great sales managers discover, develop, and
celebrate what is different about each person and develops roles
around the capabilities and competencies of the team and organization.
You must learn as much about each individual team member as
possible. Give them Myers-Briggs (personality) tests, invite them out to
group and one-on-one lunches when possible, and pick their brain for
clues about what makes them tick. Find out what their best and worst
days at work have been and why. (1)

“Congratulate yourself when you reach that degree of wisdom which

prompts you to see less of the weaknesses of others and more of your
own, for you will then be walking in the company of the really great.”

– Author Unknown
3
8

Contact Management

It is a rare situation when you will be working as a sales person by

yourself. Contact Management is crucial to managing your own
meeting records and transmitting knowledge to others such as part-
ners, clients, or members of your sales team. After each sales presen-
tation or phone conversation with a potential client, create a contact
report of the event stating the purpose of your conversation, why you
talked, what you learned, and what the next action items are moving
forward. After it has been created, the report should be stored within a
central depository and the necessary people should be notified that one
has been created for that specific client. A sample contact report is
shown below.

Name: Chris Wells

Name of Contact: Buck Rogers

Date: 9/1/05

Method of Communication: Phone

Purpose: Check on program approval progress

Notes/Results: He was out of the office so I left a message to call one

of us later this week.

Taking your Monthly Sales Pulse

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Even after you have done a great job of constructing your “dream
team” sales force, you will still need to manage their work efforts to
balance their strengths and weaknesses, while aligning their goals with
your overall department and company’s mission and goals. Create
forms to analyze the work behaviors and actions of everyone on your
team. Focus on getting your employees fired up, motivated to learn
from their mistakes, while using their strengths to accomplish more as a
team. Try to mold that approach into positive criticism while giving
them feedback on their sales process results over the past time period.

Every time you meet with a customer, figure out what the best and
worst deal that you could get from them. This will help you determine if
it is still worth the investment of your time. Design the way you ask for
each sale and client selection priorities around both the best and worst
situations.

Managing International Sales People

Groups and teams are used in different ways, with unique characteris-
tics in different regions around the world. Many groups and teams
whether they are organized in the traditional sense or in a virtual way,
will be multicultural and/or multinational. This poses the complicated
task of assessing what cultures are represented on your team and how
these will affect management practices and sales performance. A
more collectivistic culture is more group focused, and the dynamics of
how a group works within the whole of the organization will be different
than you would typically find in the United States.

Similar to our previous discussion on personal and experience diver-

sity, differences within your international team or division can be an
advantage. Intelligently managed conflict can keep ideas fresh and
current with the realities of the market. There is a famous saying in
business, “If everyone agrees to a proposal right off the bat no one has
done their homework.” You want different ideas to be worked out while
keeping the best aspects of all of them. This is how you can turn
diversity into a competitive advantage. Employees from different
4
0

cultures have different perspectives, assumptions and business

experiences. Tapping their knowledge and insights adds value and
should be sought out. (2)

“Let us not be blind to our differences – but let us also direct attention
to our common interest and the means by which those differences can
be resolved.”

– John F. Kennedy (38th President of the United States)

Most experienced sales people are knowledgeable about their prod-

ucts, customers, and market. Within an international sales position, an
employee’s breadth of experience becomes even more critical because
they must be familiar with the cultural nuances of partners and competi-
tors from different countries. This tolerance can make or break a deal.
When hiring for an international sales position, a premium should be
placed on international sales experience and cultural awareness.
Ideally, a sales person should have a solid grasp on the fundamentals
of selling practices, your product, the target customers, and the cultural
differences between their own country and other areas that they will be
selling. Advanced classes on cultural analysis or management or
some international experience should be sought out before bringing
someone on to an international assignment. (3)

Dr. Meckler, a well published cross-cultural management professor at

the University of Portland suggests creating a knowledge bank within
your company by interviewing all expatriates upon their return, and
adapting training policies, personnel selection, and even compensation
packages based on the best practices used in other countries. This
applied knowledge could lead to more successful expatriate assign-
ments, seasoned managers who stay with your company, and a more
robust global presence due to superior management practices. An
example of one area that could be analyzed for your companies benefit
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could be the “shock cycle” experienced by expatriates at your firm.

Culture Shock is the “adverse or confused reaction to what is ‘normal

behavior.’” Recently assigned expatriates often experience similar
adjustment experiences while adapting to new norms. What might be
acceptable in the society a manager grew up in, could be seen as
irrational, exotic, or meaningless within a new culture. The following
graph shows what the cycle looks like and the average timeframe it
takes expatriates to experience the different stages within it. The more
an expatriate can learn about or experience what a culture is like, the
better. Simply being cognizant of some of the differences and expect-
ing more as you progress through an international assignment can
make the adjustment process more manageable. Understanding how
diverse cultures have an impact on organizational impact is a critical
management skill for managers within multinational corporations. (4)

Group incentive plans operate differently in different parts of the world.

The primary means of recognized achievement changes from region to
region. One example is the use of group incentive plans in the United
Sates vs. Hong Kong. Research has shown that Hong Kong employ-
ees “had stronger beliefs that the required performance targets of the
group incentive plan could be achieved and they could receive a
payout from the plan.” (5)

There are many skills that managers need to acquire to take their sales
force international. Interpersonal skills may be the most important
asset while attempting to learn the idiosyncrasies of a new market.
Most studies have shown that performance is based more on who the
person is rather than their analytical abilities. Using effective commu-
nication and solid relationships to expand into new cultures is a
necessity for international expansion. (6)

International Development Executives

4
2

Stephen Green, the CEO at HSBC runs a truly international organiza-

tion employing over 215,000 people across the globe, while operating
in five different languages. HSBC has a reputation for developing
global leaders. The culture of the company strongly supports interna-
tional experience to broaden the minds of their employees. Green
noted in a recent interview that when making hiring decisions, HSBC
does not look so much at what or where people have studied but at
their tolerance for change and difference, their ambition, and their view
of the world. An effective international manager must have the traits
that can not be easily taught to someone. Other leading CEO’s have
noted that many interviewees may be able to speak three or four
languages and have studied cross-cultural management, but have a
very narrow view of the world. Many hiring managers are looking for a
passion and curiosity about the world, and an attitude of exploration.
The company bets on the fact that although their workforce is highly
diverse, their common experiences working abroad will bring them
together and teach them to cooperate within cultures and groups
different from their own.

Jeffrey Immelt, CEO of General Electric believes that a good global

company must be number one with customers all over the world, it
must have products, technologies, and factories for products to be sold
around the world, and it must be a global people company. He focuses
on obtaining brains and markets to get better every year. He notes in
interviews that he spends time tracking his top performing employees,
and that he runs the 300,000-person company so they feel like the
CEO might stop by at any time. He also supports cross-training and
personal network building for everyone in the company, to form
informal support systems across the organization. As Immelt puts it,
“You can’t be a lone ranger and also be a global manager.” (7)

Motivating Your Sales Team

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While establishing objectives for your sales team try to remember the
SMART method.

• Specific
• Measurable
• Action
• Realistic
• Timebound (8)

In addition to motivating your sales team using your compensation

systems and management techniques, I have compiled a list of books
and movies that you might want to use or add to your company’s
employee resource library.

Books

• Think and Grow Rich, Napoleon Hill

• Maximum Achievement, Brian Tracy
• The Purpose-Driven Life: What on Earth Am I Here For?, Rick
Warren
• The Other 99%: How to Unlock Your Vast Untapped Potential
for Leadership & Life, Robert K. Cooper
• Man’s Search for Meaning, Viktor Emil Frankl
• Live Your Dreams, Les Brown
• Failing Forward: How to Make the Most of your Mistakes, John
C. Maxwell
• Don’t Sweat The Small Stuff, Richard Carlson
• Awaken The Giant Within, Anthony Robbins
• Swim With The Sharks, Harvey Mackay
• The One Minute Sales Person, Spencer Johnson
• Over The Top, Zig Zigler
• Leadership, Rudolph W. Giuliani
• How to Win Friends and Influence People, Dale Carnegie
• How I Raised Myself from Failure to Success in Selling, Frank
Bettger
4
4

Movies

• Vision Quest
• Wall Street
• Stand By Me
• Patton
• Remember the Titans
• Varsity Blues
• Rudy
• The Rookie
• Gandhi
• Henry V
• Friday Night Lights
• The Family Man
• Meet Joe Black
• Alive
• Ali
• 8 Mile
• Braveheart
• Defending Your Life
• Forest Gump
• Gladiator
• Jerry Maguire
• Rocky
• On the Waterfront

Sales Job Interview Questions

Why do you like sales?

How are you a good sales person?

Tell me about your most productive sales day.
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Do you ever attend networking events?

Have you ever conducted an informational interview?

What parts of the sales process to you thrive off of?

What parts of the sales process do you dislike?

What sales knowledge, experience, or contacts do you have
that would be valuable to this team?

Why would you like to sell this product?

What have you done outside of formal education in terms of
professional development?

How many field related books have you read in the past three
months?

Do you subscribe to any online newsletters or business maga-
zines?

Do you have any examples of how you creatively achieved
success within a sales position in the past?

Describe a situation where you were almost fired at a past job
and how you reconciled the situation.

What three skills do you think are most important for succeed-
ing in selling this type of product?

Describe your experience in lead generation or prospective
client research.

Describe your experience in the areas of cold calling and initiat-
ing contact through email or fax.

What is the highest number of sales calls that you have made
in one day?

How many people have you presented to at one time?

Give some examples of how you overcome objections while
selling a potential customer.

What has been your biggest mistake within a sales position?
What have you learned from this?

What are your long-term career goals?

What are your short-term career goals?

Sales Aptitude Tests

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6

While sales aptitude tests are a viable option for any organization with
a sales division in-house, they are not often used. The three benefits
of administrating sales aptitude tests include improving your selection
process, aiding supervision and training, and facilitating promotion.
There are dozens of tests that have been used, but the most popular
ones include:

o Meyers-Briggs Personality Test

o Otis Self-Administrating Test of Mental Ability
o “Social Intelligence Test,” by F. A. Moss, T. Hunt and
K. T. Omwake
o “How Perfect is Your ’Sales Sense,’” by Canfield
o “Interest Inventory for Sales People,” from The Per-
sonnel Institute, Inc.

All of these tests tend to agree on traits that described the successful
salesperson. The following list of successful salesperson traits is
derived from Robert Hilgert’s Harvard Business Review article on the
use of sales aptitude tests:

o Emotional stability: This refers to the ability to take

turndowns without losing self-control or getting de-
pressed.
o Self-sufficiency: A salesman possessing this trait is
resourceful in meeting new situations and in attacking
problems; he is a person who can work without direc-
tion “on his own”
o Objective-mindedness: This implies that the salesman
has the ability to read events, unaffected by his own
action or feelings, and the power to express facts with-
out distortion from personal prejudice or self-interest.
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o Dominance: This is the opposite of submissiveness; a
salesman possessing dominance has “fighting quali-
ties” and has the ability to control and direct interviews.
o Self-confidence: This is a self-defining term; specifi-
cally it means that a person with this trait has the con-
fidence in his own ability to achieve what he
undertakes.
o Social-mixing qualities: These qualities simply show
that the person desires and needs human companion-
ship in groups
o Tact and diplomacy: These two very important quali-
ties indicate that the person has the ability to handle
delicate interhuman situations with such smoothness
as to instill a maximum of good feeling in others.
o Sizing up people in situations face to face: This refers
to the ability to recognize during the course of an inter-
view, the mental and emotional state of others from
what they say, their facial expressions, and their ac-
tions.
o Sense of humor: This refers to the person’s ability to
see humor in situations in which he himself is involved.
o Sales aptitude (a specific term, not to be confused with
sales aptitude in general): This means that the person
has an interest in selling and at the same time has a
natural flare for convincing others.
o Mental ability: This is evident in speed of thinking,
quality of thinking, and manner of following instruc-
tions, which are definitely factors significant in selling.
(9)

“For a man to achieve all that is demanded of him he must regard

himself as greater than he is.”

- Johann Goethe (German

dramatist, poet & novelist)
4
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Summary

◊ Establish objectives for your sales team using the SMART sys-
tem.
◊ Hire based primarily on innate traits like ambition.
◊ Value diversity and conflict.

References

1. Buckinham, Marcus, “What Great Managers Do” Copyright ©

2005 Harvard Business Review Publishing, March 2005, Vol-
ume 83 Number 3.
2. Francesco, Anne and Gold, Barry, “International Organizational
Behavior,“Pages 121 and 208 Copyright © 2005 by Pearson
Education, Inc.
3. Mintu-wimsatt, Alma, and Gassenheimer, Jule. “The Problem
Solving Approach of International SalesPeople: The Experi-
ence Effect.” Journal of Personal Selling & Sales Manage-
ment; Winter2004, Vol. 24 Issue 1 P19, 7p, 4 charts.
4. Francesco, Anne and Gold, Barry “International Organizational
Behavior,“ Copyright © 2005 by Pearson Education, Inc.
5. Fong, Sonny and Shaffer, Margaret “The dimensionality and
determinants of pay satisfaction: a cross-cultural investigation
of a group incentive plan” International Journal of Human Re-
source Management 2003.
6. Yamazaki, Yoshitaka and Kayes, Christopher. “An Experiential
Approach to Cross-Cultural Learning: A Review and Integra-
tion of Competencies for Successful Expatriate Adaptation.”
7. “In Search of Global Leaders - A Changed World” Copyright ©
2003 Harvard Business Review August 2003 pages 38-44.
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9
8. Peterson, Dr. Robert – PowerPoint – University of Portland
Professor of Sales & Negotiation.
9. Hilgert, Robert, “Use of Sales Aptitude Tests” Harvard Busi-
ness Review.
Chapter 5: Prospecting

“Shotgun, net the wounded, nurse them, sell them, maintain them”

- Author Unknown

“In any moment of decision the best thing you can do is the right thing,
the next best thing is the wrong thing, and the worst thing you can do is
nothing.”
-Theodore Roosevelt

“The way to get started is to stop talking and start doing.”

-Walt Disney
5
2

Think of your sales efforts as a war, with each day being a separate
battle. Yes, there are many differences between wars and business
competition, but it’s useful to think of business in these terms for time
management and priority setting purposes. You should act as a sales
commando, fulfilling the role you are trained to perform while working
with your team to complete your mission. If you have someone who is
great at identifying and approaching new sales prospects, have them
focus on that effort, and spend less time creating sales presentation
materials, so you can focus on areas where you provide the most
value. In other words, do not put your best sniper on half time as the
cook. This is a simple idea, but one often overlooked while expanding
sales teams.

“Every morning in Africa a gazelle wakes up. It knows it must run faster
than the fastest lion or it will be killed. Every morning a lion wakes up. It
knows it must outrun the slowest gazelle or it will starve to death. It
doesn't matter whether you are a lion or a gazelle -- when the sun
comes up, you had better be running.”

- Author Unknown

Each day’s “battle” is waged from 9AM-5PM, or whenever the typical

hours of client cultivation are within your industry. Organize your day to
take advantage of the hours when the battle is being waged. Either
you are executing on sales opportunities or your competitors are.
Complete all non-revenue generating preparation activities before or
after the “battle” hours. Dedicate segmented times within your week for
cultivating clients who are moving along each of the 6 “I”s steps
towards a completed sale. Try to mix up the scheduling of these
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activities to keep yourself on your toes and improve your ability to
attract clients that are more profitable. An example of doing this would
be switching your call times from 10-11am to 2-3pm so that you will
catch a different set of people who are available at that time. The more
thorough you are in systematically cultivating major clients, the more
successful you will be. Try to schedule “non-battle” hours for improving
industry, product, or sales knowledge. What can you outsource or
minimize to use your time more effectively?

Example: Mary Ellen knows how to fight sales battles and win. She
dedicates seven hours of phone time every business day at her
recruiting desk in North Carolina. She brings in over one million dollars
a year for her firm by completing all research outside of her calling
hours, and then calling all day long, moving business forward. She is a
great example of someone who consistently maximizes her use of time.

Be aware of the number of “battle” days within each month and quarter
and what you expect to get out of him or her. Know where you are and
where you should be within your sales goal timelines to get the most
out of each day. If you do not work full time on sales, try to choose a
reasonable amount of time to dedicate towards it each day. Every half-
hour a day of sales work, adds an extra day’s worth of sales work every
month.

Use all of your down time efficiently, and in a way that promotes the
productiveness of your battle hours. Always have something on hand
to review or read while waiting for a client or waiting in line somewhere.
Have a collection of sales CDs to listen to or lists of people you can call
while driving so that you use your commute time as a competitive
advantage against those who listen to music while on their way to work.
The average U.S. worker spends at least thirty minutes in the car on
the way to and from work. Using this time for phone calls and profes-
sional development can make a significant difference on your level of
sales performance over the course of a quarter. How are you investing
your time? (1)
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“The future depends entirely on what each of us does every day.”

-Gloria Steinem (Founder of Ms. Magazine)

Sales team managers need to come up with creative strategies, and

make confident decisions that are timely, yet not perfect. Results are
what counts, and time is always in low supply. Many sales managers
or team leaders are afraid to make bold decisions. It often seems that
if the wrong decision is made it may ruffle someone’s feathers, or
simply add risk to your otherwise safe position. Many decision makers
do not know how much positive information is enough to take a risk.

The Marine Corps addresses this issue with the “70% Execution
Solution.” Meaning if you have 70% of the total information targeted as
valuable, have done 70% of the analysis, and feel 70% confident of the
answer, then move forward with a decision. Intelligently designed
execution is more valuable then no execution. Endless analysis is a
drain on company resources.

Apply this lesson to your decision-making process and standards.

Agile sales forces can reposition themselves on profitable ground,
while less agile ones will make sure you could have been reaping
above average profits before they join the party. (2)

Task Management

The top 2% of sales people follow-up with 98% of their prospects.

These same top 2% earn 80% of all available bonuses. Phone calls
are the most personal way of following up, while hand-written notes are
the most unique.

The following table can be used by your sales team to identify where
you are and where you should be spending most of your time. Is it
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focused on the right activities? Are all these tasks assigned to people
who really own them and excel and fulfilling them?

Prospecting for new Growing & expanding Non-selling activi-

business the business ties

Telemarketing Follow-up calls Reports

Canvassing (on the phone Proposals
Mailing and in person Administrative
Networking Referrals work
New ideas Follow-up
Maintaining letters
relationships Thank yous
General pa-
perwork

(3)

Cold Calling and Prospecting Guidelines

“Don't judge each day by the harvest you reap, but by the seeds you
plant.”

- Robert Stevenson (Scottish poet)

There are three main phases to a sales call:

• Getting information
• Giving information
• Getting commitment
5
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Whenever possible, have a clear

view of your intentions when
contacting a potential client. More
importantly, know how they will
benefit by talking to you. Google
the company and person you will be
speaking with to identify their
interests and possible areas of
common ground. Having this knowledge will impress the other party
and can give more meaning to a short phone conversation, which may
in turn give you a foot in the door down the road when you call on them
a second time.

How do your clients specifically benefit when they make a purchase

from you? When calling a potential client for the first time communicate
your value to them in a concise way that perks their interest. Make sure
that your whole sales team has an understanding of this and constantly
tries to increase their understanding within this area.

Engaging a New Prospect

While some phrases should be used to increase your effectiveness

others take away from creating an immediate need, and making the
best use of both parties time.
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Words to Use Words Not to Use

• Maximize, increase, grow • How are you today?

[sales, customer retention, pro- • I’d like to learn a little more
ductivity, etc.] about your business to de-
• Minimize, reduce, decrease, termine…
eliminate [expenses, customer • We’re the leading provider
service challenges, diversions, of…
etc.] • We work with several of
• Profit from your competitors…
• Specific, specifically • I’d like to see if there are
• Save, conserve some ways we might work
• Accumulate, acquire together
• Prevent • Is now a good time to talk?
• Fully • Did I catch you at a bad
• Immediate, now time?

(4)

Create “sales prospecting” statements for your team for every situation
imaginable. Include written statements for catching a potential client on
the phone, being screened by a gatekeeper such as a secretary, or
being left with a voicemail message. Ensure that your value is appar-
ent within the first six seconds of your message to the potential client.
Ensure that every pause, word, and question has a specific purpose
and positive effect on engaging this new potential client.

Example Prospecting Statements

The following is a set of example prospecting statements for Jack

Farmer, an investment salesman trying to connect with hedge fund
managers who might want to buy his companies database product.
5
8

Chris Schmit will be the name of the business manager that is trying to
reach in these scenarios.

Decision Maker Script

Hi Chris, my name is Jack Farmer and I work for Investment Databases

Inc. We specialize in providing industry specific capital markets
research to hedge fund managers such as yourself. What does your
company do to conduct or confirm research on your prospective
investments?

Gatekeeper Script

Hi Barbara, my name is Jack Farmer and I’m with Investment Data-

bases, Inc. I would like to connect with Chris to discuss capital market
research and database technologies. Is there a time that I could try
calling back to speak with him?

Decision Maker Voicemail Script

Hi Chris, my name is Jack Farmer, I am with Investment Databases,

Inc. and I would like to set up a time for us to discuss your hedge fund’s
capital markets research. Our firm offers a unique segmented data-
base product that most managers find surprisingly customizable and
affordable. I can be reached on my mobile at (555) 555-5555. (555)
555-5555. Thank you.

“Life begets life. Energy creates energy. It is by spending oneself that

one becomes rich.”

- Sarah Bernhardt (French writer)

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Listening and Asking Questions

It is important to listen, but to do so, you have to ask good questions.

Asking great questions can help you establish rapport, understand your
competition, understand your customer’s specific needs, and help you
construct a solution to their specific problem.

There are five types of questions you can ask customers:

1. Confirmation: Confirm your assumptions or research.

2. New Information: Clarify their needs and real business chal-
lenges.
3. Attitude: Identify the customer’s opinion of your product or
company.
4. Commitment: Gain a feel for how “sold” they are at any one
point in time.
5. Concerns: Identify and address concerns or objections that
could block the sale.

Dr. Robert Peterson from the University of Portland suggests using a

trick he calls “golden silence” during a sales talk. The golden silence is
a pause for three solid seconds after your customer has answered a
question that you have asked. He believes that this is beneficial
because:

• It increases the comfort level of the relationship.

• The length of responses usually increases as the cus-
tomer fills the silence with extra information.
• It tends to enable the customer to ask more questions
that are formulated during these few seconds while
they are analyzing the situation.
• It will encourage speculative open-ended thinking. (5)

16 Listening Questions
6
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The following list of questions should be used in conjunction with the 6

“I”s model discussed within Chapter 2. These questions will help you
generate conversation over the phone with potential clients at every
stage of the relationship. These are open-ended questions that should
prompt the other party to talk while you gather knowledge about their
current needs and resources.

1. Have you used others services/products like this in the past?

2. How was that experience?
3. How did your company first know there was a problem?(if there
was one)
4. Was there anything you wish had happened?
5. What requirements do you have internally for this type of a ser-
vice/product?
6. Is there a timeline your firm had in mind for making a decision?
7. What is the culture of your company like?
8. How is your company different from most in terms of ser-
vice/product needs?
9. Can you elaborate on that last point?
10. What do you think about this?
11. What would you like because of this conversation?
12. Are there other services or products that you would like to talk
about?
13. What stage in the purchasing process is your firm in?
14. What is your firm’s budget for this service/product?
15. What has changed since the last time we spoke?
16. Who else is working on the selection of this service/product?

“The most important thing in communication is to hear what isn't being

said.”

- Peter Drucker (Austrian-American economist)

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Building Rapport

Tom Caddy, a Portland, OR based sales trainer, has trained hundreds

of professionals in improving their ability to gain rapport with custom-
ers. He provides them with the following list of ideas to do so:

• Always stay in the same body position as the customer.

• Watch the customer’s gestures and communicate in a similar
way
• Match the customer’s tone of speaking.
• Use the same choice of words if possible.
• Match their breathing with yours if possible.
• Listen for their values and emulate them in your speech and
actions.

Caddy believes that everyone has a “home-base” of communication, it

is their primary way of communicating their thoughts, feelings and
ideas. There are four different types of people you will have to adjust
your sales approach for:

1. Visual – They talk very fast, require constant eye con-

tact, and respond to pictures and drawings first.
2. Auditory – They usually talk with melody and respond
to sounds and words first.
3. Kinesthetic – They talk slow and soft and respond to
touching and feelings first.
4. Digital – They are very controlled and emotionless, re-
spond to logic and facts. Ask them what they think, not
what they feel.

Everyone uses these bases of analysis while making a decision. Your

job is to figure out which way they run through these bases, and what
their primary base is. Presenting information in the same way they run
6
2

the bases ensures success in decision-making and building rapport

with them. (6)

The top five reasons people are reluctant to move forward on a sale is
their perception that they do not have enough:

1. Money
2. Desire
3. Trust
4. Urgency
5. Need (7)

Throughout your sales process, turn boring descriptions of your product

into excitable demonstrations as to why they should purchase from
you. Instead of rattling off specifications, conduct demonstrations.
Instead of listing capabilities, tell stories about proven results. (8)

Appointment Setting Guidelines

• Define your selling responsibilities.

• Define your customer’s responsibilities.
• Explain the purpose of the meeting from the customer’s
perspective.
• Identify who will or should be present at the meeting.
• List the materials or resources needed to conduct the meeting.
• State your valid business reason for meeting while asking for
the appointment and again at the start of the meeting.
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The following chart should be used for major sales calls to help the
salesperson remain cognizant of the goals, tips, and strategies of the
sale at hand.

Sales Call Guide

Account__________________________________

Prospect/Customer:
__________________________________________

Single Sales Objective:__________________

Customer Concept Action Commitments Getting Informa-

tion

Giving Informa-
tion

Valid Business Reason Credibility Getting Commit-

ment
6
4

Have your sales professionals review this form and be able to talk
about each section of this sales rehearsal plan. The following defini-
tions explain what each section refers to as part of the total sale.

Concept: What is this person trying to find a solution to or avoid? Is

this a vitamin or painkiller for them? What motivation does this person
have to recommend or take action on my solution?

Action Commitments: Establish your best and minimum action com-

mitments as discussed earlier and ensure that they are realistic for this
specific customer.

Valid Business Reason: Does the reason for them to talk or meet with
me really line up with their core problem or pain?

Credibility: Know if and why you have credibility and communicate it to

the client through your expertise, contribution, representation, trustwor-
thiness and compatibility.

Getting Information: Validate what you have learned about this

customer or their business to show that you have been listening.
Identify their attitude, new information about their needs, and their
commitment level and desired results.

Giving Information: Present to them your unique strength regarding

their core problem or pain and give them the reason as to why you are
different from your competitors in a meaningful way to them.

Getting Commitment: Which one of the five objections are they most
likely to use? What creative solutions exist to accommodate that
concern? A no is not a no. It is a yes, cloaked in concern over a
specific issue. (9)
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While developing your sales team, advise them to associate with role
models, invest in education and self-development, and learn from every
failure. Make sure they know what customers really want, and that
they are not required to do things that are not sales related. If some-
one on the team fails at something, teach them that success can be the
greatest form of revenge. Preparation and action are fear’s greatest
enemies. Learn from problems and then move on.

“One who fears limits his activities. Fear is only the opportunity to more
intelligently begin again.”

- Henry Ford

Summary

◊ Be aware of the number of “battle” days within each month and

quarter and what you expect to get out of each of those.
◊ When calling a potential client for the first time communicate
your value to them in a concise way that sparks their interest.
◊ It is important to listen, but to do so you must ask good ques-
tions.
◊ Use Peterson’s “golden silence” tactic during sales talks.
◊ The top 2% of sales people follow-up with 98% of their pros-
pects.

References

1. Guerilla Consulting Newsletter Copyright © 2005

http://guerrillaconsulting.com.
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6

th
2. June 27 Fortune Magazine page 97-102 “Great Escapes”
Time, Inc. Copyright © 2005 Volume 151 No. 13.
3. Peterson, Dr. Robert – PowerPoint – University of Portland
Professor of Sales & Negotiation.
4. Guerilla Consulting Newsletter Copyright © 2005
http://guerrillaconsulting.com.
5. Peterson, Dr. Robert – PowerPoint – University of Portland
Professor of Sales & Negotiation.
6. Tom Caddy – http://www.nmscorp.com.
7. Peterson, Dr. Robert – PowerPoint – University of Portland
Professor of Sales & Negotiation.
8. Heiman, Stephen, Sanchez, Diane, and Tuleja, Tad “The New
Conceptual Selling” Copyright © 1999 by Warner Books.
9. Fitz-Gerald, “Sales: What your professors won’t tell you.”
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Chapter 6: Leading Edge
Practices

“Do not follow where the path may lead. Go instead where there is no
path and leave a trail.”
-George Shaw (Irish playwright and critic)

“Only the limits of our mindset can determine the boundaries of our
future.” – Keith D. Harell

“You cannot fix what you will not face”

– James Baldwin
6
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Many lessons can be learned from taking best practices from one
industry to another. In the academic world, these universal or at least
multi-industry applicable strategies are sought out and analyzed within
large studies. This chapter highlights the key lessons from five leading
books from both the academic and professional domains, and shows
how they relate to improving the sales program in your business.

In Search of Excellence

In Search of Excellence, by Peters and Waterman’s, was written based

on a study of 47 of the greatest companies in America. They found the
following 8 themes common among the group of companies. All of
which revolve around people, customers, and action. The 8 themes or
principles the companies were grounded on include:

1. A bias for action – “getting on with it”

2. Close to the customer – learning from the people served by
the business
3. Autonomy and entrepreneurship – fostering innovation and
nurturing “champions”
4. Productivity through people – treating rank and file em-
ployees as a source of quality
5. Hands-on, value-driven – management philosophy that
guides everyday practice – management showing its com-
mitment
6. Stick to the knitting – stay with the business that you know
7. Simple form, lean staff – some of the best companies have
minimal headquarter staff
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8. Simultaneous loose-tight properties – Autonomy within
shop-floor activities plus centralized values and visions.

Rate your company, sales division, or personal sales efforts against

this list of eight characteristics. Do you sense a “bias for action” or a
strong sense of autonomy while conducting sales? Are all of the
characteristics prevalent in your work? Out of the ones that are clearly
not present, which ones make sense to implement for your line of
business? (1)

Built to Last

Jim Collins is arguably the most well read professor at Stanford

University. His two most well known publications Built to Last and
Good to Great both have valuable lessons that can be applied to fast
growing companies and sales teams alike.

In his first widely read book, Built to Last Jim Collins recommends that
businesses do a number of things to improve the management their
business. Here are some of the main ideas that you should consider
for your business when creating or managing your team or division.

Clock Building

Imagine that someone could look up at the sky and instantly tell the
exact time, night or day. This is a great skill to have, but how much
more useful would it be if you could build clocks that could always tell
everyone the time? The analogy that Collins uses sheds light on how
successful companies develop processes, cultures, and visions that
focused on the long haul. Do you have a visionary leader who tells you
the time? Build a clock based on what he or she does and ensure his
or her best practices live on long after he is gone.

BHAGS
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Big Hairy Audacious Goals are something that your team may use to
help motivate everyone towards a goal that is just barely reachable.
You should challenge everyone with goals that they probably only have
a 60% chance of meeting. Stretch the limits of what has been done
and make your work atmosphere fun and intense. Jim Collins noticed
that large corporations set BHAGS at the corporate and divi-
sional/group levels. This weaves in nicely with modern motivational
theories and models, which consistently focus on creating goals that
are measurable and just barely attainable. What types of short and
long-term objectives have you set for your sales efforts? Are they big
enough? Push the limits.

“I like thinking big... if you're going to be thinking anyway, you might as

well think big.”
- Donald Trump

Preserve the Core/Stimulate Progress

General Electric is one of the companies that Jim Collins has recog-
nized as being extraordinarily successful over a large span of time.
When Jack Welch, the most well-known CEO of General Electric,
handed over his position to his successor he told him the same three
words every CEO has in the history of the company. “Blow it up.” In
essence, to change everything imaginable within GE except for the
core ideology.

What does your company stand for? What ideology does it rest upon?
Define these things and create tactics and strategies that revolve
around the non-negotiable items that characterize your company.
Keep the sacred, but throw out routines or traditions that are not
effective or competitive in the market.
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“It’s not the biggest or strongest competitor that survives but the most
adaptive.”

- Author Unknown

Good Enough, Never Is

One trait that Jim Collins saw among all of the companies he studied
was consistent strives towards excellence. Whether it be strong
cultures, understanding of vision, BHAGS, or compensation structures,
every company showed tendency to never settle for “good enough.”
Not surprisingly, he found that companies that strove to improve what
was currently in the market and being used within their company,
yielded above average returns on their investments. The lesson here
is to always strive towards perfection. If there is a way to make your
sales process better or a way to improve your division’s sales effi-
ciency, then do it. It is never good enough if there is a way to make it
better.

“It’s a funny thing about life: If you refuse to accept anything but the
very best, you will very often get it.”

– W. Somerset Maugham

Try a Lot of Stuff and Keep What Works

This principle is tried and true, even if it is not always apparent. Many
companies seem to have designed great solutions to problems, as if
they were given the perfect product ideas in their sleep. The reality is
that most of these companies market tested ideas and built prototypes
for dozens or possibly hundreds of different products before selling
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their “hit” product. What is your division testing or tinkering with? Your
internal processes? Customer management systems? Lead generation
efficiencies? Sometimes companies simply stumble over new ideas or
products but you can not stumble if you are not moving. (2)

“I'm a great believer in luck, and I find the harder I work, the more I
have of it.”

- Thomas Jefferson

Good to Great

Jim Collins states in his book Good to Great that “almost any organiza-
tion can substantially improve its stature and performance, perhaps
even become great, if it conscientiously applies the framework of ideas
found and used by Good to Great companies.” The book touches on
the following themes, which were found throughout companies that
have gone from good to great:

Good is the Enemy of Great

This idea is similar to the “good is never enough” concept from Built to
Last. In this section of the book, Collins urges companies to focus
equally on what to do, what not to do, and what to stop doing. He
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believes that most companies focus too much on what to do and ignore
what not to do or what they should stop doing. What are you doing
based on tradition or industry standards? What assumptions or
processes have you rested on because they were “good enough?”
Good should be viewed as horrible because neither “great”.

Level 5 Leadership

This term “Level 5 Leadership” is used to describe a certain type of

leader who was seen among many of the companies, which made the
leap from good to great. They were more than just “clock builders”,
they had unique characteristics such as humility and professional will
towards excellence. This type of a leader is known for taking credit for
bad performance while giving credit to others when things go well.

First Who…Then What

Collins says, “People are not your most important asset. The right
people are.” He uses the analogy of a bus driver to while describing
how to create a winning team within your organization. He recom-
mends that you first get the right people on the bus, and then you get
the wrong people off the bus, then the right people in the right seats,
and then figure out where you want to drive that bus. Hire people with
characteristics you cannot easily instill. Focus on who you are paying,
not how. He also recommends analyzing someone’s character, work
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ethic, intelligence, and dedication to their values before deeply analyz-

ing credentials and practical skills.

Confront the Brutal Facts

Collins found that companies that made the leap from good to great,
had a consistent belief in their ability to succeed in the end. He
believes that if companies do their due diligence and gather all of the
facts, the right path will often unfold in front of them. He recommends
the following four ways to build a culture where the truth is always
heard:

• Lead with questions, not answers.

• Engage in dialogue and debate, not coercion.
• Conduct autopsies without blame.
• Build “red flag” mechanisms for turning information into infor-
mation that cannot be ignored.

The Hedgehog Concept

Every morning the fox wakes up and starts crafting elaborate plans on
how it will finally catch it’s nemesis, the hedgehog. It uses creative
strategies, combining old ideas and trying to catch the hedgehog off
guard. Yet every time the fox approaches the hedgehog, the small
animal simply rolls up into a ball and waits until the fox leaves it alone.
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It does this on a daily basis, without fail. If it tried to run or use one of
the fox’s tactics it would die, however it can consistently rely on it’s
hedgehog strategy to save it’s hide and move forward with it’s life.

Your company’s hedgehog concept is the “one big thing” for your
organization to understand and stick to. What does or can your
organization do, understand, or use as your core solution to competi-
tive threats and changes in the industry? The concept itself is similar to
your core ideology (which never changes), differing only in the sense
that it can be slightly less permanent. Your hedgehog concept must be
something you are deeply passionate about, best at in the world, and
are able to make a profit by doing. Figure out what falls into all three of
these categories, and obtain an understanding and strategy based on
it.

“Behold the turtle; he makes progress only when he sticks his neck
out.”

– James Bryant Conant

A Culture of Discipline

Hire people who are disciplined in their own right. The second you
need to manage someone, you have made a hiring mistake. Manage
systems, not people. Collins believes this is superior to managing
people because:
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• When you have disciplined people, you do not need hierarchy.

• When you have disciplined thought, you do not need bureauc-
racy.
• When you have disciplined action, you do not need excessive
controls.

The Flywheel Concept

A flywheel takes relentless

pushing to get it to turn over
even once, but after a while of
pushing in the same direction it
starts to gain momentum until it
is a very powerful force. Collins
contends that “Good to Great”
transformations never happen all at once. They are the result of years
of persistence. It might look dramatic and revolutionary from the
outside, but on the inside it is more of an organic development process.
(3)

Tipping Point

The Tipping Point was written by Malcolm Gladwell and describes how
you can segment the types of people in your organization into buckets.
He argues that there are three types of useful people you should be
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identifying, tracking and developing on your sales team. These people
are connectors, mavens and salesmen. Connectors bring everyone
together. They are the social glue and thrive off spreading messages
and networking. Mavens are human knowledge banks. They know the
facts, gossip, and have the social skills to inform others. Salesmen
persuade others to action. (4)

Whom is your team made up of? Based on your ideology and “Hedge-
hog Concept” for your division or sales team, what types of people are
going to be most useful for you to contact? How is your sales team
reaching connectors, mavens, and salesmen outside of your organiza-
tion to promote your company?

Summary

◊ Score yourself or sales team against Peter and Waterman’s 8

characteristics of excellence.
◊ Use BHAGS, never settle, always innovate, and change every-
thing except your core ideology.
◊ Understand your “Hedgehog Strategy.”
◊ Are you a connector, maven, or salesmen? What type of peo-
ple are you working with or hiring?

References

1. Peters, Tom and Waterman, Robert “In Search Of Excellence,

Lessons from America’s Best Run Companies” Copyright ©
1988 Warner Books, Inc.
7
8

2. Collins, Jim C. and Porras, Jerry I. “Built to Last” Harper Busi-

ness © Copyright 1994.
3. Collins, Jim “Good to Great – Why some companies make the
leap and other do not.” Copyright © 2001 Harper Business, Inc.
4. Gladwell, Malcolm. “The Tipping Point – How Little Things Can
Make a Big Difference” Copyright © 2002 Back Bay Books, inc.
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Chapter 7: International Sales
Expansion

“Make sure your positive seeds are planted in positive ground.”

– Keith D. Harrell

“The best compensation for doing things is the ability to do more.”

– Author Unknown.

“Progress is impossible without change; and those who cannot change

their minds, cannot change anything.”

– George Bernard Shaw

8
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“Conventional wisdom argues that domestic competition is wasteful: It

leads to duplication of effort and prevents companies from achieving
economies of scale…Domestic rivalry, like any rivalry, creates pressure
on companies to innovate and improve. Another benefit…is the
pressure it creates for constant upgrading of the sources of competitive
advantage. Ironically, it is also vigorous domestic competition that
ultimately pressures domestic companies to look at global markets and
toughens them to succeed in them…local competitors force each other
to look outward to foreign markets to capture greater efficiency and
higher profitability. And having been tested by fierce domestic competi-
tion, the stronger companies are well equipped to win abroad.”

-Michael Porter (The Competitive Advantage of Nations) (1)

International trade has gained much press and strategic importance for
growing corporations over the last ten years. It currently represents
30% of America’s Gross Domestic Product compared to less than 10%
in 1970. (2)

st
Near the turn of the 21 Century, several nations were starting to make
ground on the major industrial powers of the world including the United
States, France, Germany, Japan, and the United Kingdom. The rate of
international trade by France only grew at 1% and the United States by
2.1%. Many smaller, less developed countries had international trade
growth rates that were much higher. The healthy growth of companies
in the future will depend upon their ability to capture market share
internationally. When expanding internationally you should analyze
how your sales process will work overseas and confirm that there are
labor, capital, and technological resources available to support opera-
tions. (3)
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“Good ideas can come from anywhere, and good products can be sold
anywhere. The more places you are, the more ideas you will get. And
the more ideas you get, the more places you can sell them and the
more competitive you will be. Managing in many places requires a
willingness to accept good ideas no matter where they come from –
which means having a global attitude.” (4)

Why do companies expand into foreign markets? The reality of today’s

business world lets almost any type of company operate on a global
level. Potential customers and competitors can be found in virtually
every country in the world. Firms generally expand globally for the
following reasons:

• Raw Inputs: Many companies expand internationally so they

may secure cheaper or higher quality inputs to create their
products or run their business.
• Other Resources: Many firms have found that certain types of
labor or other factors of production can be found at lower total
costs in less developed markets.
• Political/Economic Situations: There may be subsidies, legal
structures, or other political or economic situations that provide
a fertile business market for a growing business.
• New Markets: Some companies expand simply by seeking
additional markets that they can market their refined products
or services to.
• Economies of Scale: Many companies are forced to expand
internationally to meet the requirements of production at an ef-
ficient scale, meaning they need to produce their products for a
global customer base to reach the volumes required to turn a
profit on that area of their business.
• Domestic Life Cycle Factors: Sometimes firms are forced to
look outside their domestic borders to survive as local markets
become saturated and intense competition lowers the attrac-
tiveness in their home market.
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2

• Economies of Scope & Learning: Some companies expand,

seeking economies of scope, and learning between different in-
ternational business centers.

While stereotypes can help give you a starting point for what to expect
in other cultures they can undermine management decisions. Conduct
your own primary research and interviews to find out what the norms
and unique attributes of the target countries are that your firm might
expand into. “Managers often pick up the impression that the Chinese
are good at this, the Germans are good at that, and so on. But I have
learned that in every place we operate, in every country, the people
want to do a good job. They simply need training. There is not place
where people can’t do a world-class job.” (5)

While deciding how to manage an international sales organization, a

manager must decide between the centrist vs. non-centrist approach.
The centrist approach is more controlling. It saves some costs, but
obviously lacks some necessary adaptation required for success in
some countries. With this approach, the needs of the home country
are often the primary concern, and foreign subsidiaries are treated like
domestic branches of the parent company. The noncentrist approach
is when foreign sales offices are allowed to do their own thing. As long
as the foreign offices create returns within the expected levels and
meet growth targets, they are left to design their own sales strategies
and programs. The view of the home company is seen as just as
important as the foreign company under this model.

Many companies drift towards one of these policies without ever

consciously choosing to be organized as a centrist or non-centrist
company. Until the company has new management come in, or is
bleeding so badly that the company might face major layoffs or a
change in senior management, most companies practices the centrist
way of international management and never change. The widespread
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nationalism and growing number of management education institutions
around the world means that local subsidiaries will have more power in
deciding how they are ran. Many of these managers have a growing
pride and consciousness of their rights and are starting to refuse to
bow to policies made in some faceless and distant head office. (8)

One of the advantages of running an international corporation is the

insight gained into a diverse range of best practices. Some Asian
cultures including Korea adopt new technologies much faster then as in
America. A cell phone company that is considered innovative in
America might be years behind the competition in Korea. If that same
firm had operations in both locations they might be able to move up the
learning curve to offer the best technology in Korea and then adapting
it with the best practices of the industry to the American market as it is
adopted down the road. You can also learn a lot by analyzing the
marketplaces you operate in. Even if your company is not the leader in
each area of operation, the moves of your competitors can help you
firm dominate globally. (10)

Risk of Entering New Sales Markets

More and more companies are finding that international business

opportunities are becoming just as competitive, and in some situations
saturated, as their home markets. Tight margins and fast-paced
innovation in already popular places of international expansion push
the search on to smaller less developed countries. This brings up
several questions; what are the principal management problems that
exist today? What can international companies do to increase the
effectiveness of their management approach? The following issues are
some of the most important international management problems:

1. Local Profit Distribution: Better tools and processes are

needed to keep affiliate management focused on profit goals.
2. Multiproduct Difficulty: More practical ways to estimate product
and cross-segment profitability.
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4

3. Incremental Investment Flow: Profit planning and capital budg-

eting techniques are needed that point the way towards higher
returns on international company assets.
4. Political, Economic Risk: There needs to be a meaningful
model created to translate broad economic, market, and politi-
cal risks factors into applicable hurdle rates and sound deci-
sions made about opportunities that exist around the globe.
5. Staff Contributions: In large groups of staff members, it is hard
to pinpoint each individuals effect on profitability. A better sys-
tem of rewarding for performance and profitability in large or-
ganizations is needed.

There are not answers for all of the problems of international managers
face, but below is a five-point course of action for those who need a
better way of evaluating different markets and products on a global
level.

1. Once a year, affiliates and divisions should be asked to as-

sign full costs and total capital employed to major product
groups.

2. Once a year, the product costs and product investments

that are related to sales made within the division’s investment
area should be transferred to each division from affiliates and
other divisions.

3. Use this same information to develop realistic product-

stream profit and return on capital employed for major cus-
tomer groups.

4. Individual products should be lifted out for special study

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5. The relative contributions of customer groups by product
should be rated, coupled with revised operating goals that
would lead to improvements in operational efficiency and return
on capital. (6)

Top Ten Barriers to Trade

Many companies experience barriers to providing services in new

countries. A recent Danish study showed that the top ten most com-
mon trader barriers:

1. Technical Barriers within the company.

2. Corruption within the government and business practices
of targeted foreign countries.
3. Difficulty in accessing information on and/or changes in
legislation and rules.
4. Unannounced and frequent changes in rules.
5. Barriers linked to taxing of income in other countries.
6. Hindrances linked to public procurement.
7. State subsidies for local companies.
8. Administration of rules discriminating against companies.
9. Barriers of entry for labor and problems in acquisition of
work permits.
10. Restrictive rules on investment.

Over 70% of the Danish companies surveyed experienced significant

barriers of entry while trying to expand internationally. Although each
home countries expansion experiences may differ, the list above
provides a good example of what types of barriers exist and how often
growing companies run into them. (7)

Managing Global Affiliates

It is important to rate international affiliates whether they be internal or

externally owned divisions on a qualitative and quantitative basis. In
Butler and Deardens Harvard Business Review article entitled “Manag-
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ing a Worldwide Business,” they suggest the following checklist for

managing global affiliates:

• Market penetration or market share trends, by product and

class of trade.
• Affiliate export sales results.
• Number of days credit outstanding compared with average in
industry.
• Spot surveys of services standards.
• Salesman work load appraisals of the time spent with custom-
ers and dealers in promoting merchandising programs.
• Periodic post-completion audits of capital budget projects to
confirm the credibility of the financial and operating forecasts
that are made by local management.
• General attitude of distributors, dealers, and large consumers
toward company.
• Comparison of unit manufacturing yields and production times
in affiliates with corresponding standards in U.S. plants.
• Productivity gains resulting from methods and systems im-
provements
• Training and management development – the availability of
executives in the organization who are ready to assume
greater responsibility.
• Trends in manpower reduction and employee turnover.
• Extent of exchange exposure in countries where inflationary
pressures are great and there is risk of devaluation.
• Quality of affiliate management’s relations with local govern-
ment and community leaders.
• Worthwhile new ideas or new proposals that have been ad-
vanced in the last year by local management.
• Productivity trends that are a reflection of the efficiency with
which capital and labor are employed – the suggested index
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being the ratio of sales volumes are on key products to labor
costs (inside and hired) plus depreciation. (8)

International Distributor Management

Most companies entering new global markets realize that they must
work with local distributors that are used to doing business differently.
A great deal of international expansion failures can be attributed to a
lack of cultural awareness and adjustment of business processes and
standards. David Arnold, a professor at Harvard recommends the
following 7 rules of international distribution:

1. Select distributors, don’t let them select you.

2. Look for distributors capable of developing markets, rather than
those with a few obvious customer contacts.
3. Treat the local distributors as long-term partners, not temporary
market-entry vehicles.
4. Support market entry by committing money, managers, and
proven marketing ideas.
5. From the start, maintain control over marketing strategy.
6. Make sure distributors provide you with detailed market and
financial performance data.
7. Build links among national distributors at the earliest opportu-
nity. (9)

Multinational Financial Sales Management

Studying of the best practices and business models within multinational

finance as a science is a relatively new area of study. Best practices
change every couple of years and there is still much to be learned.
International financing, working capital management, capital budgeting,
and regional risk assessment are all areas that companies should
strive to manage more intelligently. While international expansion
poses obvious growth prospects, there are also inherent complexities
and risks that come along with the territory.
8
8

International business works within financial markets that aide the

transfer of funds and currencies. The most important international
agencies include the International Monetary Fund, World Bank,
International Financial Corporation, International Development Associa-
tion, and the Bank of International Settlements.

International firms must have a system in place to constantly monitor

exchange rates because their cash balances and total returns can by
wiped out by them. The Foreign Exchange Market aides firms in
obtaining and selling foreign currencies. It is important to consider
government policies and how they might affect exchange rate move-
ments within a country. Governments often attempt to affect economic
conditions in their country by adjusting the exchange rate. For exam-
ple, a weak currency can stimulate the home countries economy and
might be sought after in times of recession at the expense of possible
inflation. At the same time, a strong currency can dampen inflation and
sometimes lead to higher rates of domestic unemployment.

Other tools used to manage international currency receivables and

payables include the currency forward futures and options markets,
which let financial managers hedge their receivables and payables
against possible foreign currency fluctuations. Both futures and options
are used by people who have expectations about future currency
movements, but differ in that holders of currency futures contracts are
obligated to buy the currency on a set settlement date, whereas owners
of currency options have the right to buy or sell a currency for a pre-
determined price with no obligation. Both futures and options can
prove to be very useful for multinational corporations, while being either
profitable or expensive for investors and speculators.

Short, medium, and long-term investing or borrowing is facilitated

through the Eurocurrency, Eurocredit, and Eurobond markets. The
recent growth of these markets have made it easier for firms to expand
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internationally. All of these international markets are used by investors,
speculators, and international companies looking to hedge their
positions or transfer funds abroad.

The foreign exchange market is self-correcting. When conditions

change or news is released the market value adjust to include the new
risks or forecasts. This is facilitated through international arbitrage
which can be defined as “the act of capitalizing on a discrepancy in
exchange rates.” International arbitrage comes in three forms, loca-
tional arbitrage, triangular arbitrage, and covered interest arbitrage.
Locational arbitrage opportunities exist when foreign exchange rate
quotations differ among locations or banks. Triangular arbitrage exists
when there are discrepancies among cross exchange rates. Covered
interest arbitrage can be attempted when the forward rate premium is
not reflected accurately in the interest rates between two countries.
Any act of arbitrage is a vote claiming a currency to be over or under-
valued. The attempts at taking a profit based on arbitrage opportunities
are what correct the market when inconsistencies exist. These market
forces assist with maintaining currency forward and option contract
rates at their appropriate level.

Multinational corporations need exchange rate forecasts for the

following reasons:

• Hedging decisions
• Financing and investment decisions
• Capital budgeting decisions
• Earnings assessments

Many foreign exchange based hedge funds, trading companies, and

private investors develop complex models in an attempt to predict
future currency trends. The most common forecasting techniques used
by multinational corporations include technical, fundamental, market-
based, and mixed. There are many companies that will manage your
foreign exchange risks on an outsourced, consulting, or software based
9
0

service model. These same companies might be able to help you with
the management of cash and fund transfers around the globe.

International Risk Management

Multinational corporations face three types of exposure, transaction

exposure, economic exposure, and translation exposure. Once a
company recognizes which types of exposure it is faces, it should make
adjustments to mitigate those risks accordingly. Common ways to
hedge these risks include:

• Futures contract hedging

• Currency option hedging
• Currency swapping
• Parallel loans
• Forward contract hedging
• Money market hedging

Doing business with international businesses poses intelligence and

credit risks that are more complex than a company will find domesti-
cally. Legal system, business norms, and credit processes can greatly
differ between two countries. More complications arise through the
geographical distances, economic situations, cultural differences, and
lack of information. Commercial banks have recognized the opportu-
nity to aide corporations in conducting global business operations and
have an array of services available for firms in need. There are dozens
of options available provided by banks that will intensely compete for
business in this area.

International cash management poses two major challenges: optimiz-

ing cash flow movements, and optimizing the use of available funds.
To optimize cash flow movements firms can use netting schemes,
lockboxes and pre-authorized checks. To better use the funds that are
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available many multinational corporations group excess funds from
different subsidiaries into a main depositary to realize a greater return.

Once a firm is being managed globally, the topic of international capital

budgeting will have to be addressed. There are several factors can
influence this discussion:

• It is normally appropriate for a multinational corporation’s par-

ent to assess the project from its perspective rather than a
subsidiary’s perspective when determining whether the project
should be undertaken.
• A foreign project is normally more beneficial to the parent when
the foreign currency appreciates over the life of the project.
• The impact of exchange rate movements on cash flows to the
parent tends to be greater when the parent provides most or all
of the investment, but less when the foreign project is financed
with debt from the host country.
• Blocked funds have a greater adverse impact on a foreign pro-
ject when the investment opportunities in the foreign country
are limited.
• If foreign projects affect prevailing cash flows, it should be ac-
counted for in deciding whether the project is feasible.
• The process should account for some uncertainty due to coun-
try-specific factors that influence cash flows and return ratios
on foreign projects.

There is a four-step process for analyzing country risks abroad.

1. Identify political and financial variables that contribute

to the country risk rating.
2. Assign a rating to each of these variables.
3. Assess the importance or influence of each variable
and consolidate them to generate an overall rating as-
sign to the country.
4. Decide whether the overall risk rating reflects a toler-
able or intolerable level of risk.
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2

The level of risk should be included in the capital budgeting process for
each country where projects are planned. This can help mitigate some
risks or simply raise awareness of their existence for the allocation of
funds within the corporation.

Different tax rates among separate countries of operation can affect

financing and investing practices of a multinational corporation. This
must be taken into consideration within the capital budgeting and
international expansion planning. Central financial and cash man-
agement policies should be created to control the corporation on a
global and subsidiary levels to address conflicts of interest that might
arise between different divisions or hierarchical levels within a global
company. (11)

International businesses are exposed to different types of risk then

domestic firms. One of these risks involves the navigating and secur-
ing of foreign financing. In this case export credit insurance can be
used to mitigate risk and help a company expand their global presence.

Export credit insurance programs help American exporters expand their

global sales by protecting them against foreign buyer defaults, whether
it is for commercial or political reasons. The vast number of export
credit insurances available paints an intimidating image of using this
tool, dozens of solid financial institutions are more than happy to help
businesses use export trade financing within their global deals, how-
ever according to Gerald Rama, there are four main reasons why
exporters use credit insurance:

1. Mitigating foreign risk – this is particularly important for emerg-

ing markets.
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2. Overcoming competitors’ selling terms – many foreign export
credit agencies offer aggressive financing to buyers to stimu-
late their country’s export sales.
3. Financing – in many instances, medium-term financing is not
available in local markets. A good trade finance bank will help
sellers integrate financing packages with their sales offers.
4. Cash flow – export insurance can help enhance cash flow and
the balance sheet. (12)

There are many types of financial risks that companies become

exposed to as they expand internationally. The most prevalent risk
discussed while expanding internationally is foreign exchange risk.
The first type of foreign exchange risk faced is the warping of global
sales due to shifts in foreign exchange prices. The second type is that
investments in other countries that will lose real value in home country
terms due to currency valuation changes. There are eight strategies
for reducing foreign exchange exposure:

1. Maintaining assets in hard currencies, and liabilities in soft

currencies.
2. Speeding payments of profits from weak currency subsidiaries
to the parent through profit remittance channels.
3. Delaying investments in weak currency subsidiaries.
4. Increasing local liabilities in weak currency subsidiaries.
5. Speeding payments dominated in hard currencies
6. Self-insuring through reserves. Putting earnings into a special
account in order to cover exchange losses.
7. Arranging protection in the forward exchange market (obtaining
guarantees to sell or buy a currency at a predetermined price
and time).
8. Currency swapping (covering a weak currency being obtained
by buying a forward contract to sell it later).

This list contains some valuable operational strategies for avoiding

foreign exchange risk, but it ignores portfolio management techniques
that some companies use to hedge their international operational risk.
9
4

Every multinational corporation is in many different markets and must

hold both fixed and liquid assets within different countries with different
currencies. Some of these may be freely convertible hard currencies or
inconvertible soft currencies. Regardless of what type of asset a
company holds, each one has its own risk/return details and as such,
there should be some theoretical “optimal” portfolio that multinationals
employ. The diversification of a currency portfolio, whether based on a
complex model or gut feeling, is always less risky then holding one
currency. (13)

Unmanaged foreign exchange risk can cause your company millions of

dollars within a single quarter. Even if you are only doing business in
the U.S. and Europe, the swings in currency valuations can be great.
The Euro rose by 8% against the U.S. dollar in December 2000, after
falling a full 26% within the first 23 months of its existence. Doug Reed
from Siebel Systems has dealt with rapid growth and international
expansion for several years and has learned many lessons while doing
so. The specifics of their program are constantly evolving but they rest
upon the laurels of these four principles:

1. The KISS Principle

• Forget trying to beat the market with your timing, placing
limit orders, over-hedging, underhedging or buying com-
plex derivatives. If you can really do this with any level of
skill, your company either has a unique advantage over
others in the industry or you should not be in a treasury
job. “Keep It Simple, Stupid,” is the key to forming hedges
against foreign exchange risks. Try to secure a current
rate as quickly as possible with an offsetting forward con-
tract. Try to keep everything liquid and accounting friendly
and you will be better off in the end.

2. The Accounting Principle

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• If you keep the way you hedge your risk simple, you can
spend most of your time where you should, determining
what to hedge. Many large international companies query
their accounting databases daily to flag new exposures.
Other groups meet to discuss forecasts for sales, expendi-
tures and overarching budgets that could affect their risk
exposures. While it is advantageous to be proactive in
identifying risks, you have to analyze the past months per-
formance to identify what you missed. Lessons that can be
learned from your actions and the resulting affect of your
hedges.

3. The Control Principle

• An incorrect hedge can mean large swings in earnings that

could lead to some resume dusting, if controls are not in
place. Three individuals should be signing off on every
forward trade, including the trader, the trader’s manager
and a third person who can confirm the trade with the
bank’s back office. Many companies, like Siebel Systems
for example, reconcile their contracts with counterparties
monthly. When a mistake is made on a trade, identify what
lessons should be taken away from the situation and insure
that everyone along the control line is aware of the situa-
tion.

4. The Kaizen Principle

• Siebel Systems foreign exchange managers always tell

themselves, “The only perfect hedge is in a Japanese gar-
den.” Kaizen means continuous improvement in Japa-
nese. It is important to remember that your system is
hedging against a dynamic market and nothing that works
well this year will be relevant within the next. Collect best
practices, analyze trends, and always know there is room
for improvement. (14)
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6

International Corporate Risk

Thousands of managers create international expansion plans every

day. How many of those take sales degree and diversification into
account while forming them? The consensus is very few. A recent
study of 138 firms indicated that differences in corporate risks through
international expansion should be considered by firms planning to
expand. Portfolio theory suggests that expanding internationally within
countries whose market performance is not highly correlated, would
reduce overall risk. Naturally, this also exposes the original companies
to the additional risks of these foreign countries, which there is often
less knowledge of. There are two strategies companies can overtake
while expanding internationally; increasing either their sales degree or
their sales diversity. Sales degree is increased by further penetration
of their current markets being served, and sales diversity is achieved
by penetrating new markets in order to achieve more variation between
markets of operation. (15)

“Financial asset diversification was historically impeded by lack of

foreign securities information, inadequate and inefficient communica-
tions systems, and complicated laws concerning international-capital-
flows. These barriers have subsided to a degree causing a substantial
increase in foreign financial asset holdings. While the international
diversification of real assets has also generally increased over time, it
is more difficult to successfully operationalize. Complicating factors,
exist that cannot be eliminated by improved information or simplified
tax laws. For example, foreign labor laws, foreign government subsi-
dies to domestic firms, and cultural differences may prevent a firm from
capitalizing on real asset diversification. Because the barriers to
financial asset diversification differ from real asset diversification,
effects on the two types of diversification may differ.”
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- Jeff Madura

Summary

◊ Good ideas come from anywhere, and good products can be

sold anywhere.
◊ While sometimes useful tools, stereotypes can often undermine
management decisions.
◊ Over 70% of Danish companies surveyed experienced signifi-
cant barriers to entry while trying to expand internationally.
◊ A great deal of international expansion failures can be attrib-
uted to a lack of cultural awareness and adjustment of busi-
ness processes and standards.
◊ International businesses are exposed to different types of risk
than domestic firms.
◊ Unmanaged foreign exchange risk can cost some companies
millions of dollars in a single quarter.

References

1. Porter, Michael, “The Competitive Advantage of Nations” Copy-

right © 1990 New York: Free Press.

2. Rama, Gerald, “Leveraging Export Credit Insurance to Mitigate

Foreign Risk and Expand International Sales” Copyright © No-
vember/December 2001 .
3. Strategic Issues And Applications. McGraw-Hill Primis. Man-
agement Strategy: Achieving Sustained Competitive Advan-
tage by Macus & Crafting and Executing Strategy, by
Thompson et all.
4. “In search of gobal leaders” – A changed world Harvard Busi-
ness Review August 2003 pages 38-44.
9
8

5. “In search of gobal leaders” – A changed world Harvard Busi-

ness Review August 2003 pages 38-44.
6. Butler, Jack and Dearden, John, “Managing a worldwide Busi-
ness” Copyright © 2000 Harvard Business Review May-June
1965.
7. “The Internationalization of Services: Trends and Barriers”
Copyright © 2003 Economic Bulletin; Oct2003, Vol. 40 Issue
10, p347, 4p.
8. Butler, Jack and Dearden, John, “managing a Worldwide Busi-
ness” Copyright © 1965 Harvard Business Review May-June
1965.
9. Arnold, David, “Seven Rules of International Distribution”
Copyright © 2000 Harvard Business Review November-
December 2000.
10. Pacyniak, Bernard, “Global Risk Takers” Copyright © 2002
Candy Industry; Nov2002, Vol. 167 Issue 11, p16, 4p.
11. Madura, Jeff “International Financial Management” Copyright
© 1986 West Publishing Company.
12. Rama, Gerald, “Leveraging Export Credit Insurance to Mitigate
Foreign Risk and Expand International Sales” Copyright ©
2001 November/December 2001 Business Credit 43-46.
13. Dince, Robert R., Umoh, Peter N. “Foreign Exchange Risk and
the Portfolio Approach: An Example From West Africa” Copy-
right ©1981 Columbia Journal of World Business; Spring 81,
Vol. 16 Issue 1, p24, 6p, 5.
14. Reed, Doug, “KISS and Control: Lessons for Hedging.” Treas-
ury & Risk Management; April 2001, Vol. 11 Issue 4, p6, 1p,
1c.
15. Madura, Jeff and Rose, Lawrence C., “Impact of International
Sales Degree and Diversity on Corporate Risk” Copyright ©
1989 International Trade Journal; Spring 89, Vol. 3 Issue 3,
p261, 16p.
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Chapter 8: Sales Ethics

“Always do right--this will gratify some and astonish the rest.”

- Mark Twain

“Nothing is as frustrating as arguing with someone who knows what he

is talking about”

– Sam Ewing

“When I do good, I feel good; when I do bad, I feel bad. That's my

religion.”

- Abraham Lincoln
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2

Ethical decision-making trends and standards of operation is an

important topic within every business and personal career planning
agendas. If for no other reason, the simple ignorance of what is ethical
can undermine all of your other efforts. If you truly have a great sales
organization, then you should excel based on the execution of your
sales strategy, not through the navigation of grey ethical lines and the
use of overly controversial tactics. The tricky part is defining what
areas are grey or “too controversial.”

There are three different levels of ethical business managers:

1. Moral – The moral manager is dedicated to high ethical stan-

dards in how they manage and act on their own. They are
ethical leaders, and believe it is important to practice business
within both the letter and spirit of the law. They often operate
well above what the law requires of them.
2. Immoral – The immoral manager is against ethical behavior in
business and consciously ignores ethical principles when mak-
ing decisions. Legal standards are barriers to get around, car-
ing only about their own well-being. All that matters to them is
the bottom line and they believe “nice guys will always finish
last.
3. Amoral – Amoral managers can be intentionally or unintention-
ally amoral. If they are intentionally amoral, then they believe
that business and normal ethics should not be mixed because
different rules apply to business. They believe it is normal not
to factor in ethical issues to their decision-making processes.
They often try to get by at the minimum legal standards of
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compliance and no more. The unintentionally amoral manager
is simply ignorant or careless about what the ethical standards
are. They are blind to many of the ethical dimensions of their
decisions, even if they seem themselves as well intentioned
and even personally ethical.

These three types of ethical management behaviors can be seen in all

areas of business. There are three main drivers of unethical behaviors:

1. The obsessive pursuit of personal gain.

2. Short term corporate pressures to meet target sales or earn-
ings.
3. Corporate cultures that promote profit over ethical behavior.

Ethical decisions are present internationally and some concepts of

what is right and wrong are universal and transcend most all cultures.
One example of this is being honest and truthful. Showing integrity of
character and treating people with respect are concepts that are held
up within most cultures. There are many situations where what is
considered right or wrong varies greatly between different cultures.
One example of this is bribes. In China, they are largely seen as tips,
similar to the tradition of tipping food servers in the United States. As
your sales team expands internationally, are you following the ethical
universalism school of thought that the same ethical rules should apply
everywhere or is each culture and situation treated as unique? There
should be a clear picture of how your team is going to navigate the gray
zone that arises while operating a global business. The best method
that I have come across for managing this grey area is the use of the
highest level of ethical standards that exist. This means that whether
you are making t-shirts in China or New York, you operate based on
the same ethical assumptions and treatment of works. You take the
higher level of ethical standards, which in this case would be in New
York, and employee them across the organization for those activities.
(1)
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While 50% of all business schools require technology-based courses,

only 40% require any type of course on ethics or social responsibility.
At the same time, less then a third of the programs require soft-skill
courses like human resource management, negotiations, leadership, or
entrepreneurship. (2)

Raymond Baker has seen every aspect of international business

through his 35 years of experience spanning across 50 countries in
Africa, Latin America, Asia, and Europe. He now works for a think tank
in Washington D.C. on global economics and politics. Baker claims
that most companies from the United States and the West in general
work with their legal advisors to do the bare minimum to comply with
laws regarding international fund transfers and competing on foreign
sales. Baker contends that a good portion of international money flows
consist of transfers specifically intended to escape taxes in their
country origin. These tactics undermine fair competition and keep
open avenues for criminals and terrorists to launder their money and
finance their operations. (3)

The clarity of different ethical policies will vary according to the nation-
ality of the organization. Many less regulated areas such as the United
States or Britain will have more explicit company policies compared to
countries such as France and Germany who are more regulated. The
nationality and company size also has some influence on specific
corporate ethical policies. The United States and British companies
traditionally have clear policies for accepting gifts compared to France
and Germany. Another notable difference is that larger companies
have clearer ethical policies than medium sized companies do. Most
companies within a region have similar ethical policies regardless of
industry. Other studies have shown that older managers tend to have
fewer “ethical lapses,” and peers are the largest influence on the ethical
decision making of most employees.
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What type of ethical manager does your company tend to develop or
attract? What type of behavior should you be screening for during the
hiring process, and what are the implications of this?

Summary

◊ There are three types of managers, the moral, immoral, and

amoral.
◊ There are three main drivers of unethical behavior 1) the ob-
sessive pursuit of gain 2) short term corporate pressures to
meet target sales or earnings 3) corporate cultures that pro-
mote profit over ethical behavior
◊ The clarity of ethical policies often varies according to the
nationality of the organization.

References

1. Strategic Issues And Applications. McGraw-Hill Primis. Man-

agement Strategy: Achieving Sustained Competitive Advan-
tage by Macus & Crafting and Executing Strategy, by
Thompson et all.
2. Navarro, Peter “Why Johnny Can’t Lead” Harvard Business
Review; Dec2004, Vol. 82 Issue 12, p17, 1/2p.
3. Collingwood, Harris “Business’s Dirty Little Secret” Harvard
Business Review October 2002 pages 24-25.
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Chapter 10: Networking 501

“Never let anyone tell you no, who doesn't have the power to say yes.”
- Eleanor Roosevelt, U.S. First Lady

“We work to become, not to acquire.”

- Elbert Hubbard, American businessman

“The one unchangeable certainty is that nothing is certain or un-

changeable.”
- John F. Kennedy, 35th U.S. president
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This chapter on networking is based on tactics I have created and used
to network during my career. If you are as Malcolm Gladwell would say
a “connector” you will eat this stuff up (See the Tipping Point section
within Chapter 6 for more information on connectors). If you are not
use it as a guide to at least meeting the people that you need to know
to utilize your strengths.

The Eight Networking Tricks of Rainmakers

1. Linkedin.com Inroads: Linkedin.com is a great resource for

networking with other professionals within your industry. You
can make connections with thousands of individuals that you
can ask for advice from and network with. Most people who
join the website want to move forward with their careers or they
would not take the time to try networking online. Use this web-
site to find professionals within a company you want to work at,
identify potential new employees, and propose new partner-
ships. Linkedin.com is free and backed by a leading technol-
ogy venture capitalist firm, Sequoia Capital. To join my
network, send me an email at Richard@RichardCWilson.com.

2. Easy Email Access Many people are hard to reach. This is not
an accident. They are often busy or would simply receive too
many sales pitches or spam emails if they are contact informa-
tion was open to the whole world. 95% of all email addresses
within established corporations use standard email formatting.
For example if you worked at Widgets, Inc., your email address
might be Richard.Wilson@Widgets.com and your co-workers
1
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8

email addresses might read Mark.Helmick@Widgets.com and

Chris.Hege@Widgets.com. Every personal email address
within the company is probably formatted so they read
FirstName.LastName@Widgets.com. Remember, email ad-
dresses are not the same across companies, just usually within
a single company. This turns your quest of contacting your
targeted professional into a much easier game. Visit their
“About Us” “Contact Us” or “Customer Service” web pages
online. One of these areas usually includes somebody’s per-
sonal email address, which will reveal the formatting across the
entire company. If you do not have any luck finding an email
address try sending a short note to their customer service de-
partment and wait for a response that will usually come directly
from an individual with a standard email address.

Although most people wont mind you doing this, or even ask
how you got their email address, you should be cognizant that
some people might react negatively to being “bothered” by
someone they do not know. Many people have told me that
they admire that kind of intelligence and tenacity in trying to get
things done. Keep your message very brief and to the point,
and keep it as professional as possible. This tactic will help
you gain access to people that others would give up on after
checking a website or trying to call a few times. The point of
emailing someone that has not provided you with their contact
information is not to pester or sell the contact on something
they have not shown interest in. This tool should be used to
network and suggest a meeting for coffee or discussion of an
idea over the phone that might benefit both parties.

3. Informational interviews: Informational interviews are meetings

usually initiated by a professional looking to learn more about
an industry, company, or potential set of positions. It is a meet-
ing where the goal is to educate someone and establish a rela-
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tionship. Informational interviews can be a great way to get
your foot in the door at a new organization or learn about po-
tential positions that are not open to the public. Many informa-
tional interviews lead to company tours, resume forwarding,
and employment offerings. While being careful not to mistake
this informational interview for a formal interview, creating a
strong rapport with your contact and really selling yourself can
create an inside “champion” of your skills and abilities. I have
conducted over 30 informational interviews and I have only
been turned down about 5 times out of about 35 requests that I
made over the phone or in person. I was paid more when I
graduated from high school then my teachers and the same as
my college professors when I graduated from college and both
of these jobs came from conducting informational interviews.
They work.

4. Resume buffing: Your resume is an extension of yourself. Un-

til a company has gotten to know you well, it is you on paper.
While most reports and documents should not be passed on to
others without going through five drafts, resumes should be re-
viewed 20 times before, being forwarded to a potential em-
ployer. It should not exceed one page in length, so the time to
review it each time should not be too bad. If you have never
done this before pass your resume around to a few close pro-
fessionals that you trust and have them help you. Make sure
that your resume is unique, action word packed, and profes-
sional, stating real accomplishments and testimonials from past
supervisors, peers, or professors. What could you do to im-
prove your real skill sets while improving your resume?
Toastmasters? Publications? Networking? Association Mem-
berships? Ask what hiring managers care about and work on
acquiring those experiences.

5. Persistence: The importance of persistence in networking

cannot be overstated. Start making it your goal to have lunch,
coffee, or an informational interview over the phone at least
once a week within a professional in your industry. Some peo-
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ple will answer on your first phone call and give you any infor-
mation you need, while others will take months to track down.
Never take any of their responses personally. My father al-
ways said “no response means nothing.” Try to understand
their point of view and learn from the situation for your next
networking initiative. While networking, you will run into all
types of people and learn how to read each unique individual
and adjust your approach accordingly. If you leave a voicemail
on Monday, follow up with an email, and wait 4-6 business
days before leaving a second one. If you network enough, you
will gain a very sensitive feel for how much persistence is help-
ful without being so pushy that others do not want to take the
time to help you.

6. Website: Create a website that describes your experience,

education, and any relevant professional publications. I have
found it very useful to have my resume downloadable directly
from the website in Microsoft Word format. This enables you to
be “Googled” and lets you give people your web address over
the phone or on a business card. For an example of this type
of a website visit www.RichardCWilson.com.

7. Presentations: Your ability to effectively communicate ideas,

create PowerPoint presentations, and give speeches will
greatly help build your personal image and career. No matter
how early or far you are in your career, it can be built stronger
by improving your speaking skills. Join a local toastmasters
club, or start speaking at local schools and associations. The
best part about presenting information is that it turns you into a
source of value and brings people to you.

8. Publish: Publishing articles, books, newsletters, columns, and

websites are other ways you can become a valuable resource
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to others. If you don’t think you can write well enough to pub-
lish anything professionally, start writing your first piece today
and have a friend or peer at work help you edit the work.

9. ZoomInfo.com: This website is an aggregator of web pres-

ences for both corporations and individuals. Go to
Zoominfo.com to complete a profile on yourself and your com-
pany today and use this website while conducting due diligence
on potential new contacts.

If you would like to conduct an informational interview with me or see

who I could introduce you to please contact me at
Richard@RichardCWilson.com.

Chapter 10: Negotiation Tools

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“He who has learned to disagree without being disagreeable has

discovered the most valuable secret of a diplomat.”

- Robert Estabrook
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Dozens of books have been published that focus on negotiation tips,
tricks, and best practices. Some celebrate win-win collaborative
agreements, while others prescribe ethically gray competitive bargain-
ing tactics. This book’s aim is to give you a basis of negotiation theory
as a science to assist your professional and corporate-wide effective-
ness at the “bargaining table.”

Negotiation is the process of reaching agreement between two parties

that is mutually acceptable. It is a communication process. In and
through communication, negotiated agreements are formed. Every-
body negotiates on a daily basis whether it be with friends, vendors, or
co-workers. Negotiations can take place over the internet, phone, fax,
telephone, or face-to-face meeting.

The three possible results to every negotiation include:

1. Win / Win
2. Win / Lose
3. Zero Sum

Although negotiations maybe include parties with different information

and objectives, most experts agree that the negotiating process
consists of five basic steps.

1. Preparation
a. This is the stage where you will learn everything about
the negotiator you will be working with to understand
your position, each party’s BATNA (Best Alternative to
a Negotiated Agreement), and conduct any competitive
intelligence or run through any game theory scenarios
that are necessary.
2. Relationship building
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a. The relationship building stage is where both parties

begin discussions and get to know each other face-to-
face. This stage can include days of meals, tours, and
introductions or be as brief as a handshake associated
with a few lines of small talk.
3. Information exchange
a. This stage begins when one side starts to communi-
cate their position in the negotiation. This often in-
cludes a formal presentation followed by explanations
and questions and answers.
4. Persuasion
a. This stage, obvious by its title includes trying to con-
vince the other party to accept their proposal. This
could include both parties working toward a win-win
situation or involve one party trying to influence the
other.
5. Agreement
a. This is the point at which both parties agree on an
acceptable solution to the issue at hand.

Why do we care about segmenting the negotiation process into its

separate stages? As with any system, delineating the process into
distinct types of intentions and actions can help identify and focus
energy on specific potential process improvements. For example,
focusing on your relationship building process to build a uniform
approach across your company can help build a solid reputation as a
company that works towards open collaboration and partnerships
across an industry.

There are several different situational factors that can change the
process and results of a negotiation. These include:

o Geographical location
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o Is the negotiation location on-site for one company?
Expensive to travel to for one firm? The daily costs of
negotiation can place unbalanced pressure on one firm
to reach a solution.
o Room arrangements
o Is the room set up with a round table, or two tables on
opposite sides of the room? Some rooms are built to
feel more collaborative than others and should be kept
in mind while preparing for a negotiation.
o Selection of negotiators
o Different areas of the world or even within a country
select negotiators based on different criteria. In Mex-
ico, managers might be selected for their social influ-
ence where in the U.S. it might be based on their
competence and position within their firm.
o Time limits
o Are there limits set by one or both firms that will put
pressure on the negotiation at some point? This can
make a big impact on what concessions are given by
each side, and are often overlooked.
o Verbal tactics
o These include promises, threats, warnings, self-
disclosures, questions, or commands.
o Nonverbal tactics
o Silence, tone of voice, facial expressions, body position
and gestures. These can be used to send signals to
the other team and should be managed among your
own team to not send the wrong signals.
o Facial Glazing
o Facial Glazing is looking at a counterpart’s face, spe-
cifically making eye contact and communicating some
level of intimacy.
o Initial Offer
o Making your first beginning positioning statement sets
the tone and mood for the negotiation. Was it ex-
treme? Explained using third party statistics and facts?
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Did the party seem hard-nosed about sticking to it’s

guns or willing to work on creative solutions?
o Touching
o While many cultures including the United States and
Japan often only touch while shaking hands in a nego-
tiation, touching is often used in countries like Mexico
or Brazil to signify confidence or the building of a rela-
tionship. This can change the direction of a negotiation
and should be paid attention to while doing business
abroad. (1)

How you address the other party in a negotiation will be reciprocated in

their response and approach to the negotiation as a whole. This
reciprocity is referred to as Interpellation and means that if one treats
another party with great respect, they are likely to act in the same
manner. How you address other interpellates or “calls forth” details of
what the other group will really act like, for better or for worse. From
the science of the communication world, there are five disciplines of
strategic intelligence and tactical ingenuity that you can use to manage
yourself or your team within a negotiation.

1. Self Mastery: This involves the willingness to move beyond

self-consciousness and employ the ability to break out of nega-
tive spirals and reactive behaviors. You must remain true to
your long-term interests at every turn.

2. Mental Models: Analyze your own mental models that limit

what you believe is possible or instill assumptions upon areas
left un-discussed.

3. Vision: You must know what you want and have a vision of
what success will be. Do not confuse your fear-based posi-
tions with your courage-based interests. Most people do not
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know what they want and create short-term reactive solutions
based on current resources or positioning.

4. Workability: You must be able to call others to your vision and

build your solution in a logical fashion that makes sense from
their perspective.

5. Integration: You must integrate these four disciplines into one

whole system of connected processes to create a superior sys-
tem of negotiation. (2)

3D Negotiation

There are three ways to improve the effectiveness of your personal or

corporate wide negotiations. They could employ tactics, deal design,
or game setup efforts.

Great negotiators practice 3D negotiation. They are experts at not only

playing the game well but also creating the right type of game in the
first place. Like a commander who positions his troops before battle on
high ground before combat, a master negotiator is able to define a
problem so that the solution will favor him. The point is that like wars
and real estate, the value or profits are created within negotiations
largely before the talks have begun. The structuring of the process, the
game both will play, will greatly influence in the outcome.

One way to change the game is by “claiming value.” This can be done
by adding issues, parties, or information to the discussion. Issues
which can be sacrificed later or parties that show the other party that
you are not bluffing, but really committed to moving forward one way
another, can all aide the progress of your negotiations. Getting third
party assessments, opinions or judgments can help you explore the
real value of your Best Alternative To an Negotiated Agreement
(BATNA), and allow you to present it in a robust way to the opposing
party.
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Microsoft used 3-D negotiation tactics while negotiating against

Netscape for AOL’s browser usage. While the negotiations were over
Netscape and Microsoft’s browser software, Microsoft changed the
game by giving AOL real estate space on the Windows Desktop. This
closed the deal as it allowed AOL to reach an additional 50 million
people per year at effectively no extra cost. Bill Gates sacrificed the
short-term success of MSN, but played that card to gain the long-term
viability of Internet Explorer and his Windows operating system as a
whole. He changed the game; they were technically inferior in terms of
browser performance but chose to change the focus to what would
really make the business decision makers at AOL sign the agreement.

Three specific tools you can use to aide you or your group in 3-D
negotiations includes:

1. Scan Widely: To create the right game, you will usually have to
scan your environment. What makes your company unique?
What resources or relationships do you have that you could
employee within this negotiation to change the game? Do not
come to the table with an idea, come with a commitment from
the other needed parties so all that is needed is their signature.

2. Map backward and sequence: Identify the end best case sce-
nario goal and then work backwards to ensure your firm has an
iron grip on achieving it. Think backwards to possible objec-
tions and thinking/negotiating processes that will occur along
the path to the decision. What extra issues can you add or
what can you take away from their BATNA that will make clos-
ing the deal more attractive?

3. Manage the information flow: Timing is as important in nego-

tiation as it is in humor. Mismanaged exposure to plans or too
much information can spoil a deal or create mistrust or confu-
sion.
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It is important when implementing these negotiating tools and all others
to err on the side of ethical negotiation practices. If you are intelligent
enough to run a honest profitable business there should be no reason
to cut corners. Try employing creativity every time there is an opportu-
nity to use trickery. (3)

Six Negotiation Pitfalls

Sometimes it is just as important to remember what not to do as it is to

remember what to do. Focus on avoiding these six mistakes and you
will be better off in your negotiations:

1. Neglecting the other side’s problem

a. You need to understand the other side’s problem at
least as well as your own. Repeat back to them in dif-
ferent words what you understand it to be and explain
to them your solution in their terms. What is in it for
this specific company and specific employee to agree
with our proposed solution?
2. Paying attention exclusively to price
a. Money is left on the table at negotiations everyday be-
cause one or both parties are focusing only on price.
This hampers creativity and joint gains based on part-
nerships, joint-use, or knowledge transfer pay-offs.
Thinking outside the box and within the bounds of both
parties’ interests can go a long ways.
3. Letting positions drive out interests
a. In every negotiation, there are issues, positions, and
interests. Issues are the items being decided on dur-
ing the negotiation. Positions are each party’s stand
on the issues. Interests are the concerns each party
has that will be affected by the negotiation. Negotia-
tion is half economics and half emotional, and people
are often judged or become personally emotionally in-
volved with their specific positions rather then the
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overarching interests that both groups might have in

common.
4. Searching too hard for common ground
a. Sometimes current negotiating themes emphasize
looking for win-win situations to such a high degree
that parties forget that differences are sometimes
needed to create solutions where there is no common
ground. Some situations require compromise and cre-
ate a solution that is the best possible for two groups
without really finding any common ground.
5. Neglecting the BATNA
a. Roger Fisher, Bill Ury, and Bruce Patton coined the
term BATNA in their book Getting to Yes to represent
the action a group would take if the negotiation fell
through. Examples of BATNA’s include negotiating
with another group, simply ending the possible deal,
sourcing the deal internally, or forming an alliance. A
BATNA can be treated as a sort of hurdle rate for ne-
gotiations. Both groups must like the negotiated deal
better then their BATNA to be able to accept it, other-
wise by definition they would simply go with their
BATNA
6. Failing to correct a skewed vision
a. Whether the negotiations are being conducted
internationally or intra-culturally, a vision as to where
they are headed can drift far from reality. Self-serving
biases, misinterpretations, and unforeseen
consequences of details can all send the negotiation
off-track from the path towards success, or far from the
route you thought it was following. (4)

Aristotle identified three means of influencing others:

o Logos (logical appeal)

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o Pathos (emotional appeal)
o Ethos (appeal derived from respect for the speaker)

The form of appeal that your negotiating team chooses has a great
effect on the strategies you should follow and preparation that will be
conducted.

One study has shown that the following three verbal tactics can
increase the positive outcome of most negotiations for the employing
party:

1. Asking more questions.

2. Making fewer commitments before the final agreement.
3. Increasing the amount of the initial request.

What is more important than memorizing the list above is taking into
consideration how these tactics change the negotiation. What type of
relationship are you building with this future partner or client? What
types of behavior are best for the long term health of your employees
and organization as a whole?

In preparation to negotiate, you will need to asses your own needs and
those of your counterparty. If your group’s needs are not readily
apparent, they might be derived from your strategic plan, personal
goals, mission statement, or official goals and objectives. While
assessing your counterparty’s needs you should look at their annual
reports, website, and ask others who are familiar with the company. (5)

Pre-Negotiation Checklist

 Ensure that you are about to negotiate with someone of author-

ity who can get things done.
 Understand the existing or foreseen objections within the up-
coming negotiation.
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 Review your top 7 positioning levers that you can use that will
be seen as valuable negotiating points by the other side.
 Fully present your value proposition before negotiating begins.
 Have a strong understanding of your BATNA and try to define
theirs to know whether the discussion of either one would add
to your leverage.
 Work in a coopitive fashion, competitively but looking for win-
win solutions.
 Be confident, patient, and listen before stating your view.

Negotiating Checklist

 Take notes to remember key points and if nothing else show

continued interest and intent listening
 Listen as carefully as possible to what is and is not being said.
 Use silence as a tool.
 Explain how the other side would benefit from the agreement
and confirm that you have understood this correctly.
 Try to employ open-ended questions to confirm your ability to
understand their position.
 Review small agreements periodically to reinforce them.

Post-Negotiation Checklist

Agreement Made

 Review and summarize verbally and/or in writing the agreed

upon terms for everyone involved in the negotiation.
 Reinforce the value you will be delivering and thank the other
party for their time.
 Debrief with your team or self on what worked well and what
you learned about this specific customer and type of negotia-
tion.
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No Agreement Made

 Thank the other side for their time and efforts.

 Do not burn the bridge; keep the door open for further discus-
sions.
 Debrief your team on why the deal did not go through noting
what did work well, and what was learned about the customer
and the type of negotiation used.

Sample closing statements

The following list of closing statements comes from JustSell.com, an

online resource for sales professionals.

• Would you like to move forward?

• Are you ready to get started?
• Can we go ahead?
• We can start the process today with a credit card if you
would like.
• We can deliver it to you by the close of business tomorrow
if you would like.
• We can have it delivered by the end of the month if we can
get a signed contract into the implementation department
by Thursday.
• Should I forward a contract so you can get started?
• Would you like to try it for a quarter?

(note: any closing statement should be delivered or asked with confi-

dence and an expectant attitude)

(6)

Keeping Negotiations Out of Court

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Even relatively small court cases can damage relationships, tarnish

reputations, absorb talent, and create a financial black hole. Although
lawsuits seem to be on the constant rise, so is the amount of available
solutions to avoiding having to go into court in the first place. These
options are forms of Alternative Dispute Resolution (ADR). They
include arbitration, mediation, rent-a-judge, summary jury trial, and
mini-trial.

Arbitration: This form of ADR is generally adversarial in nature, and the

outcome includes a binding decision made by a third party. It is the
closest thing to litigation out of all the ADR choices available.

Mediation: In mediation, the third party does not impose a solution but
simply helps the two parties resolve their differences, and come up with
their own solution.

Rent-A-Judge: This is a unique variant to arbitration where a retired

judge is hired to hear the case of the two parties and make a decision
on the issue. All of the procedures during the course remain the same,
but it is not a formal court case so it does not have to be open to the
public. The decision is often binding, but the process of this and legal
standing of the decision can vary based on location.

Summary Jury Trial: This tool is used to help two parties who have
totally different views as to how a jury would react to a certain case.
Both sides get to present their ideas to a jury made up of potential real
jury members and then the jury’s decision is made, providing input to
both sides. This can help bring a settlement out of a stalemate during
negotiations.

Mini-Trial: This option is a mix of traditional settlement negotiation,

mediation, and adjudication. It is a voluntary procedure and requires
the acceptance by both sides on the outcome. It is often used to
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calculate the odds of wining a real trial and settling based on that
possibility. (7)

Summary

o The negotiating process moves through the following phases:

preparation, relationship building, information exchange,
persuasion, and agreement.
o There are three possible outcomes to every negotiation, they
include: Win/Win, Win/Lose, and Zero Sum.
o The five disciplines of strategic intelligence include self-
mastery, mental models, vision, workability, and integration.
o The three ways to improve the effectiveness of your negotia-
tions: 1) tactics 2) deal design 3) game setup
o Three specific tools to use in 3-D Negotiations 1) scan widely
2) Map backward and sequence 3) manage the information
flow
o Aristotle identified three means of influencing others; logos,
pathos, and ethos.

References

1. Francesco, Anne and Gold, Barry “International Organizational

Behavior,“Pages 121 and 208 Copyright © 2005 by Pearson
Education, Inc.
2. Leonard C. Hawes, Communications Sylabus 6000-002 fall
2002 Negotiation Theory & Method.
3. Lax, David A. Sebenius, James K. “3-D Negotiation” Harvard
Business Review; Nov2003, Vol. 81 Issue 11, p64, 9p, 1 chart,
1 diagram, 1c.
4. Sebenius, James K. Harvard Business Review; April2001, Vol.
79 Issue 4, p87, 9p.
5. Fransesco, Anne, and Gold, Barry. “International Organiza-
tional Behavior” Copyright © 2005 Pearson Education, Inc.
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6. JustSell.com Sales Reference Materials. (See

www.JustSell.com).
7. Allison, John R. “Five Ways to Keep Disputes out of Court”
Harvard Business Review; Jan/Feb90, Vol. 68 Issue 1, p166,
8p.

Chapter 11: International

Negotiation
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“My father said: “You must never try to make all the money that’s in a
deal. Let the other fellow make some money too, because if you have a
reputation for always making all the money, you won’t have many
deals.”

- J. Paul Getty

Negotiation, like all other types of business management processes, is

affected in international business by the diverse cultures and ways of
doing business in different regions of the world. Many of these busi-
ness norms are rooted deep within the cultural fabrics of society and
the reasons why some countries differ in their business norms, such as
typically make decisions as a group rather then individually, are not
readily apparent. This part of the book tries to give some guidance to
negotiating abroad by presenting highly developed stereotypes about
different countries and regions of the world. Even more importantly it
presents frameworks to analyze cultures and make sense of the
different business norms you can encounter globally. These stereo-
types are meant to be used as a high level starting point for those
societies in general, and additional regional and industry specific
research should be conducted before going into any international
negotiation.
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Learning more about your counterparty in a negotiation is a great way

to increase the effectiveness of your negotiating. Your company
should learn and maintain as much knowledge about the region,
culture, and specific company as possible to interpret or emulate their
communication efforts and business practices. Other culture’s negoti-
ating styles will always differ, even within your own team; it is important
is to know how they can differ, and what the best approach for each
situation might be.

Today’s business world commonly involves establishing partnerships,

supply chains, and operations in several parts of the world. It is
important to at least be cognizant of the important differences across
cultures so you may deal with real issues, and move past the distrac-
tions caused by the different cultural norms in place. These distrac-
tions are commonly referred to as “noise,” and they may greatly
increase the cost and even threaten a successful outcome of a negotia-
tion. Some types of companies that often engage in international or
cross-cultural negotiations include joint ventures, multinational corpora-
tions, venture capital firms, and software companies. According to
Professor Perlmutter of the Wharton School of Business, international
managers spend more than 50 percent of their time negotiating.

Effective negotiators form a strategy based on the characteristics of the

situation and people involved. The most common characteristics of
successful international negotiators are high self-esteem, breadth of
knowledge, flexibility, stable and optimistic personality, high aspira-
tions, a likeable personality, credibility, and great people skills. There
are four areas where differences in culture can make a meaningful
difference in the process and outcomes of the negotiation. These
include language, nonverbal behaviors, values and analysis or deci-
sion-making processes. (1)
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It is important to know the common business practices and norms
within the country you are hoping to sell your products within. You
must pay attention to changes in gatekeeper and key master roles and
take the cultural dimensions of different areas into account within your
sales process.

Culture influences negotiators and every aspect and stage of the

negotiation process. Various cultures are used to working towards
different goals in the field of negotiation. While some regions value
win-win situations, others would rather compromise or try to create a
win-lose situation. (2)

Sales Negotiation Differences

There are three things that can really affect sales negotiations in
different cultures

1. Individual Differences (affective disposition and experience

in cross-cultural negotiations)
2. Cross-Cultural Differences (internalized cultural values,
emotional expression, linguistic style)
3. Context (relationship between negotiating partners, levels
of trust, and conditions surrounding a negotiation)

During a sales or negotiating process conversations proceed in positive

upward spiral or negative spiral downward towards poor results for both
parties. There are things you can do to break out of negative spirals
and increase the velocity of any positive
spiral that you are experiencing. The
authors of “The Role of Affect in Cross-
Cultural Negotiations” suggest that you
focus on your personal attitude, focus on
the outcome, or use one of their prescribed
tools. The tools they suggest include
cracking a joke, talking about casual
personal matters to build rapport, or taking
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a short break to the let the air clear. The main point of these tools is to
ease tension, and show you are motivated to come to an integrated
agreement. (3)

An effective metaphor for doing business within an entirely new culture

is an iceberg. Above the surface, you can witness the visible traits of
the people within the culture. You can learn a lot about the culture, but
at most you usually come up with a list of “do’s and don’t’s” for busi-
ness practice there. The next layer of the iceberg that is underwater –
not readily visible are the shared values. These require inferences
from behavior that you might have observed in the new culture. These
are more powerful because values partially drive behavior. Shared
assumptions make up the most submerged part of the iceberg repre-
senting the very abstract core beliefs of a society. These are the
hardest to uncover but can help you truly understand a culture. (4)

What we teach the next generation of managers and lawyers in our

schools strongly influences the negotiating style and practices of
tomorrow’s businesses. Throughout the U.S. educational system, we
are brought up to compete, for grades, in sports, and jobs. Adversarial
relationships and winning are essential themes of the American male’s
socialization process. Business and law schools give the grades and
awards to those with the best arguments, research, and presentations.
What they do not teach is how to ask questions, get information, listen,
or use questions as a powerful persuasive technique. Few people
know that in most places the one who asks the questions controls the
process of negotiation and accomplishes more in bargaining situations.

It is important to forget your assumptions and face the reality of

business in each culture that your business operates or you negotiate
in. It can help to break down the process into separate parts to
investigate, such as; who are the players? Who decides what? What
are the informal influences that can make or break a deal?
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Who are the players?

To be an effective negotiator you have to consider what other govern-

mental, regulatory, and corporate players can affect the deal. For
example in the United States the SEC, Justice Department, or Federal
Trade Commission might all play a role in the negotiation. What similar
organizations, if any are you forgetting about?

Who decides what?

Just as important if not more so then knowing who is playing, knows

each group’s role in the process. You will not know which issues are
the most important or which groups you should really be selling your
solution towards if you do not know who has power over what parts of
the business.

What are the informal influences that can make or break a deal?

The hardest question you must ask your own group is what informal
influences are at play within this negotiation. What traditions, social
networks, or industry ties and expectations exist that could alter the
direction or interests of the parties within the negotiation? This could
include powerful families, industry groups, the mafia, or other labor
groups. Not paying attention to these factors can lead to a negotiation
going up in flames for no apparent reason at all.

The following box is taken directly from James Sebeniius’s article

entitled “The Hidden Challenge of Cross-Border Negotiations”

Cross-Cultural Etiquette and Behavior: Dos and Don’ts

Greetings How do other people greet and address one

another? What role do business cards play?
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Degree of Formality Will my counterparts expect me to dress and

interact formally or informally
Gift Giving Do businesspeople exchange gifts? What
gifts are appropriate? Are there taboos
associated with gift giving?
Touching What are the attitudes toward body contact?
Eye Contact Is direct eye contact polite? Is it expected?
Deportment How should I carry myself? Formally?
Casually?
Emotions Is it rude, embarrassing, or usual to display
emotions?
Silence Is silence awkward? Expected? Insulting?
Respectful?
Eating What are the proper manners for dining?
Body Language Are certain gestures or forms of body
language rude?
Punctuality Should I be punctual and expect my coun-
terparts to be as well? Or are schedules and
agendas fluid?

Here are a couple of more regional specific rules Dean Allen Foster’s
Bargaining Across Borders:

o Never show the sole of your shoe to an Arab, for it is dirty and
represents the bottom of the body.
o Look directly and intently into a French associate’s eye when
making an important point, but avoid direct eye contact in
Southeast Asia until the relationship is firmly established.
o In Italy, do not touch the side of your nose; it is a sign of dis-
trust.

The list goes on and on and can certainly help you avoid mistakes.
The rules are so complex and detailed that it is difficult to keep them
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straight, and the likelihood of regional variation further complicates
matters. (3)

You must analyze many different areas to avoid irritating the other
party, and starting or ending a negotiation with a bad note. These
areas include:

o Welcoming
o Transportation
o Dress codes
o Gift giving
o Entertainment
o Privileges
o Courtesies
o Ceremonies
o Official forms of address
o Presentation of credentials
o Business and visiting cards
o Receptions
o Language
o Documentation
o Departure
o Precedence
o Use of interpreters
o Compositions of the negotiating teams
o Seating arrangements
o Timing

The important thing to take away from the lists above is that there are
several areas where cultural norms differ. It might be wise to create a
similar short analysis of a country you are planning to do business in.

International Negotiation Attributes

The following are different areas of distinction that are usually found
between major countries and regions of the world.
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Role of Individual Individualist vs. Collectivist

Trust Based on a Relationship or
Intuition
Risk Attitude Risk Accepting or Risk Adverse

Basic Concept Competitive vs. Cooperative

Selecting Negotiators Skill/Experience vs. Status
Issues Stressed Substance Issue or Relationship

View of Time Time is Limited vs. Longer Time

Horizon
Form of Agreement Written vs. Verbal; Legally
Binding or Not

Protocol Degree of formality

Communications Verbal, Non-Verbal, Use of
Silence
Persuasive Arguments Facts & Logic, Intuition &
Emotion or Tradition

Geert Hofstede is one of the most well known experts on cultural

negotiations. He conducted research by analyzing IBM’s international
subsidiaries around the globe for cultural trends and distinctions. His
study spanned over fifty countries and included professionals of about
the same educational level. Hofstede’s efforts resulted in his conclu-
sion that cultural differences revolved around four dimensions.
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Power Distance
Individualism vs. Collectivism
Masculinity vs. Femininity
Uncertainty Avoidance
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Power Distance is the degree to
which the less powerful members
of society accept an unequal
distribution of power as normal.
Individualism and Collectivism
looks at the value cultures place
on individual accomplishment and
actions vs. the value of being a
member of a group.
Masculinity within a culture
represents the amount of value
placed on assertiveness, perform-
ance, money, and competition.
Femininity represents a prefer-
ence for values around quality of
life, service, and caring for a less
fortunate people are most valued.
This is the level of comfort cultures
have in structured vs. unstructured
situations. A high uncertainty
avoidance norm within a business
or culture might lead you to expect
a need for a more granular
discussion of negotiated details
and contract terms.

Results of the Study:

Hofstede found that when a region showed larger Power Distance

acceptance levels it lead to a more centralized control and decision-
making structure. He also found that collectivism will lead to a more
stable relationship over time and that masculinity leads to ego-boosting
behaviors and a liking of the strong by opposing teams and those
working together.
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Understanding the other party’s culture in a negotiation allows you to

understand, communicate, and plan more effectively. You should read
about the countries traditions, customs, and history while questioning
others that have visited or lived in the area. Most of the research
efforts should be spent on culture, not language, while still avoiding
blind reliance on cultural stereotypes. Avoiding irritants while commu-
nicating ideas can help from knocking an otherwise successfully
progressing negotiation off-track.

International Country Profiles

Many countries and regions have unique patterns of personalities and

negotiating norms. Some of these norms are taught explicitly while
others are subconsciously absorbed. Negotiations often include
distinct sets of cultures, religions, morals, style of communication, belief
structures and ethics. All of these preferences and styles need to be
understood to effectively understand and Although some stereotypes
over generalize characteristics of what cultural negotiation approaches,
most of them are somewhat true.

It can be dangerous to stereotype the groups you are negotiating with

based one the “culture” that they operate within. It can be an advan-
tage to be cognizant of some things generally true in the culture as a
whole, but at the same time focus on the individual. Personalities,
backgrounds, and interests should play a lead role in assessing the
individual or team.

American Cross-Cultural Norms

Graham and Herberger have identified 10 characteristics as typical

American strategies towards negotiation. The following section lists
these characteristics and explains how the authors suggest negotiation
should be approached differently given their presence.
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1. I can go it alone: Most U.S. executives believe they can handle
negotiations themselves. Might as well save those resources
for other uses, or so the logic goes. Negotiation is a very com-
plex process and social event where an equal number of smil-
ing faces and brains analyzing possible creative solutions are
priceless.

Recommended change: Use team assistance intelligently and

think about adding technical or technological experts to your
team. Involve younger managers who could learn from observ-
ing and think of the cost of involvement for anyone as in in-
vestment in the outcome.

2. Pardon my French: Most other developed countries are used

to speaking in two or three languages when necessary. While
English is the most popular business language to date it is im-
portant to understand that we are less accommodating than
others.

Recommended change: Ideally the negotiators should speak

the local language, an attempt at learning key words or ac-
knowledging the tradeoffs of using an interpreter can go a long
way.

3. Check with the home office: Americans pride themselves on

being able to approve the full deal and having a foreign coun-
terparty have to “check with the home office” can be truly insult-
ing to an American negotiator. What a waste of time the
American might think, why aren’t I dealing with the man who is
really in charge? Limited authority is quite common overseas
and is a useful bargaining tactic in many situations.

Recommended change: While preparing negotiations you

should determine the authoritative limits of both parties and
gauge the advantages and disadvantages of having different
levels of authoritative power for your negotiators.
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4. Get to the point: Americans like to get to the heart of the mater
and get down to business. This is starkly different than other
customs of focusing on the problem or relationships first which
can sometimes be seen as a waste of time by Americans.

Recommended change: Many parts of the world rely more on

strong relationships then legal systems. This is an important
part to remember while trying to make sense of broken com-
mitments or gauging the value of new ones. Spending more
time on relationships might be necessary for your executives to
operate in a foreign nation.

5. Lay your cards on the table: Americans expect honest and

open information flow and commitments. While most cultures
value honesty many see conflicts that occur down the road as
more important than the agreement which could be easily
wiped away. Other cultures see certain tactics at the negotiat-
ing table as perfectly acceptable that would be found rude or
un-ethical in other parts of the world. A good example of this
can be found in Brazil where negotiators often use trickery on a
much more common basis then you find here in the United
States.

Recommended change: Foreign executives seldom-lay all of

their cards on the table and you might have to ask the same
questions several times to get a “straight answer.” Some for-
eign countries are known for producing negotiators who expect
to negotiate a lot and make several concessions. You may
need to adjust your approach to this type of behavior.

6. Don’t just sit there, speak up: Americans are not generally
comfortable with silence. This might seem like a small detail
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but those most uncomfortable with it often fill the space with ex-
tra information that can get you in trouble during negotiations.

Recommended change: Recognize the power of silence and

train yourself to doodle or write notes so you are not the first to
break silence. Learn to use this tool and more importantly be
aware of its use against you.

7. Don’t take no for an answer: Persistence is highly valued in

the educational and work lives of most Americans. Hero’s
never give up in American folk lore. A negotiating session
should be something that you win at, like a sports game.

Recommended change: Some negotiations are formal activi-

ties where the real action happens within and through relation-
ships. If someone says no in a culture such as Japan, take a
break and come back to the issue at a later point from a new
angle.

8. One thing at a time: Americans like to tackle things sequen-

tially, while many far eastern negotiators might prefer to wait
until the very end of the talks to come up with a solution.

Recommended change: Avoid making concessions on any

one issue until all of the issues have been discussed. Many
other countries gauge the progress of negotiation differently
than Americans.

9. A deal is a deal: Americans expect others to honor agree-

ments and fulfill their commitments regardless of circum-
stances. What some Americans might take as a commitment
others might take as simply friendly business talk.
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Recommended change: A deal means something different in

every region of the world. Recognize this and learn from past
actions of opposing parties and local advisors.

10. I am what I am: Few Americans take pride in changing their

strategy for each situation. Most have their preferred or proven
way and stick to it through the thick and the thin.

Recommended change: You must be flexible to build rapport

with international groups and reach solutions that meet both of
your needs. International power shifts are happening, we as
Americans might have different types of levels of power in the
future, and we must adjust our negotiating style to these. (5)

Cultural Analysis

Four ways to analyze a culture that you will be doing business with
include:

1.Relationships: Is the culture deal-focused or relationship-

focused? In deal-focused cultures, relationships grow out of deals;
in relationship-focused cultures, deals arise from already devel-
oped relationships.

2.Communication: Are communications indirect and “high context”

or direct and “low context” Do contextual, nonverbal cues play a
significant role in negotiations, or is there little reliance on contex-
tual cues? Do communications require detailed or concise informa-
tion? Many North Americans prize concise, to-the-point
communications. Many Chinese, by contrast, seem to have an
insatiable appetite for detailed data.
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3.Time: Is the culture generally considered to be “monochromic” or
“polychromic”? In Anglo-Saxon cultures, punctuality and schedules
are often strictly considered. This monochromic orientation con-
trasts with a polychromic attitude, in which time is more fluid, dead-
lines are more flexible, interruptions are common, and
interpersonal relationships take precedence over schedules. For
example, in contrast to the Western preference for efficient deal
making, Chinese managers are usually less concerned with time.

4. Space: Do people prefer a lot of personal space or not much?

In many formal cultures, moving too close to a person can produce
extreme discomfort. By contrast, a Swiss negotiator who instinc-
tively backs away from his up-close Brazilian counterpart may in-
advertently convey disdain. (6)

Dozens of studies have been conducted and articles published on the

stereotypical negotiator from the United States. Through all of these,
the common themes often include:

Strengths
Willingness to make concessions
Cooperative and fair
Pragmatism
Preparedness
Win-win orientation
Candor, honesty, friendliness
Weakness
Cultural insensitivity
Too quick to concede
Don’t understand relationship
building
Poor listening skills
Lack of unified constituencies
Impatience

Cross Cultural negotiation researcher Stephen Weiss suggests eight

strategies for cross-cultural negotiations:
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1. Employ agent or advisor. When neither party is familiar with

other, a negotiator can hire an agent to represent him at the
negotiation or an advisor to assist.
2. Involve a mediator. This requires the two parties to agree on
a third person to facilitate the negotiation and is also useful
when neither party is familiar with the other’s culture.
3. Induce a counterpart to follow one’s own script. This is suit-
able if only the counterpart is familiar with the negotiator’s cul-
ture and manner of negotiating. Then, the negotiator can try
to induce the counterpart to follow the negotiator’s approach.
4. Adapt to the counterpart’s script. When each negotiator is
moderately familiar with the other’s culture, the negotiator can
change some aspects of the usual negotiating approach to be
more like the counterparts.
5. Coordinate adjustment of both parties. Another strategy,
appropriate when the two parties have moderate familiarity
with each other’s culture, is for the two to mutually coordinate
how they will adjust to each other; in other words, they
negotiate how they will negotiate.
6. Embrace the counterpart’s script. One party can offer to com-
pletely follow the style of the other when only that party is very
familiar with the other’s culture.
7. Improvise an approach. When both parties are highly familiar
with the counter-part’s culture, they can improvise an ap-
proach, personalizing it and developing the approach as the
negotiation unfolds.
8. “Effect Symphony.” This strategy, suitable when both negotia-
tors have high familiarity with the other party’s culture, in-
volves developing a synergistic approach in which the two
parties cooperate to draw on the special capabilities of each
negotiator.
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Regardless of how much each party knows about each other there
is a suggested strategy to help improve the negotiation. (7)

The following are characteristics of negotiations often found within the

following regions:

Western Europe

o Typically reserved showing very little emotion.

o Slow concessions with moderate initial demands and issues
being sequentially processes similar to American negotiators.
o Stronger hierarchy then what is found in the United States.
o Business people are very fast-paced and punctual .
o There is an emphasis on initiative & achievement.
o Individualistic society that is status-conscious.
o Relationships are slow to develop.

Latin America

o The concept of “Face” is very important.

o Very personal and animated, close personal space, and soft
handshakes.
o Must establish relationships through favors and friends are the
way to get things done.
o Big picture spontaneous decision making styles is common.
o Time is abstract and organized around events, not time frames.
o Negotiations can move very slow.
o Individualistic culture based on personal qualities instead of
achievement.
o Strong sense of dignity.

Middle East/North Africa

o Strong eye contact, close personal space, touchy.

o Group oriented, and very deferential to those of status.
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o Relationships are a very important part of the negotiation proc-

ess.
o Yes could still mean no in a polite way if it comes off hesitantly.
o High initial demands, slow concessions, extreme “face” con-
cern.
o Group oriented.
o Bargaining is a way of life.
o Not punctual or planning-oriented.

Pacific Rim

o Moderate-high initial offers, multiple issues presented and

solved at once.
o “Face” is important.
o Relationships and group approvals are important.
o Reserved body language.
o Words mean very little, lots of silence.

“He who speaks doesn’t know, he who knows doesn’t speak”

- Author Unknown

Summary

• Learning more about your counterparty in a negotiation is a

great way to increase the effectiveness of your negotiating.
• Effective negotiators form a strategy based on the characteris-
tics of the situation and people involved.
• Culture influences negotiators and every aspect of the negotia-
tion process.
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• There are three things that really affect sales negotiations in
different cultures 1) individual differences 2) cross-cultural dif-
ferences 3) context
• To break out of a “negative spiral” try cracking a joke, talking
about casual matters to build rapport, or taking a short break to
let the air clear.
• Understanding the other parties culture in a negotiation allows
you to understand, communicate, and plan more effectively.
• Remember how the iceberg model represents the little parts of
a culture that are visible above the surface.
• Regardless of how much each party knows about each other
there is a strategy to help improve the negotiation.

References

1. International Negotiations by David Mitrovica GSEG Recorder

March, 2001 p48.
2. Fransesco, Anne, and Gold, Barry. “International Organiza-
tional Behavior” Copyright © 2005 Pearson Education, Inc.
3. George, Jenifer, Jones, Gareth, and Gonzalez, Jorge, “The
Role of Affect in Cross-Cultural Negotiations” Journal of Inter-
th
national Business Studies, Vol. 29, No. 4 (4 Qtr., 1998) pages
749-772.
4. George, Jenifer, Jones, Gareth, and Gonzalez, Jorge, “The
Role of Affect in Cross-Cultural Negotiations” Journal of Inter-
th
national Business Studies, Vol. 29, No. 4 (4 Qtr., 1998) pages
749-772.
5. Graham, John and Herberger, Roy, “Negotiators abroad – don’t
shoot from the hip.” Copyright 2001 Harvard Business Review;
Jul/Aug83, Vol. 61 Issue 4, p160, 9p.
6. Graham, John L, Herberger Jr. Roy A., “Negotiators Abroad –
Don’t Shoot From The Hip” Harvard Business Review;
Jul/Aug83, Vol. 61 Issue 4, p160, 9p
7. Weiss, S.E. (1994a). “Negotiating with Romans – Part 1, “
Sloan Management Review, Winter, 51-61
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Competitive Intelligence is the gathering of information about real or
potential competitors to assist in strategic planning. It is not espionage,
as the process uses the access to public records to conduct research.
The knowledge you gain during the intelligence gathering process can
change how the company operates, invests, and plans to position itself
in the future. Due to the reliance on primary research, you must
confirm everything you discover to ensure that it is accurate and
reliable. This requires human judgment and often involves throwing
away assumptions and political groups that want to see certain out-
comes to the process.
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There are many reasons why companies conduct competitive intelli-

gence. As mentioned above it useful for both game theory and
strategic planning, but it also adds value in the areas of pricing,
distribution adjustments, investments, and the potential creation of a
competitive advantage by turning your company into an agile “startup-
like” guerrilla.

Conducting competitive intelligence work can include analyzing

industries, environmental trends, economic trends, political develop-
ments, global trends, technology developments, regulatory and
compliance trends, and the evolution of parallel or historic industries or
markets. Most Competitive Intelligence initiatives start with an internal
knowledge assessment. This “CI Audit” as it is sometimes called helps
provide the company with a starting point, and can lead the team
towards the areas with the most promise. Although internal knowledge
is useful, it is important to remember that every assumption should be
challenged, and confirmed facts of the market takes precedence over
any assumption or personal belief. Other sources of competitive
intelligence research include:

• Online databases
• Investment community sources
• Government sources
• Interviews, surveys, drive-bys, or on-site observations
• Consumer groups, competitors, newspapers, suppliers, dis-
tributors, customers, journals, financial reports, wire services,
trade associations, academic researchers, sales force employ-
ees, customers, industry periodicals, promotional materials,
competitor products, tradeshows, annual reports, reverse engi-
neering, service reengineering, and competitive benchmarking

Early Warning Systems

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A recent poll of over 140 corporate strategists showed that most
companies have been totally caught off-guard by as many as three
high-impact events in the past five years. Moreover, the vast majority
(97%) said that there was no "early warning system" in place at their
company. At the same time, these strategists admit that foreseeing
these events is a crucial part of their job. There are hundreds of
informational resources available, such as the ones mentioned above.
These sources allow businesses to conduct competitive intelligence
projects, and create a warning system of some type. The hard part is
not getting information; it's making sense of what's actually valuable or
useless. Building an early warning system of your division or company
involves three steps.

1. Anticipate Specific Futures: Scenario analysis or game theory

tools are useful ways to create long-term investment, develop-
ment, and strategic plans. In this stage of the process, you
identify all of the possible situations, the estimated probability
of each happening. Each of these scenarios should list the ac-
tions of different competitors or outside groups and what the
result would be. This should help you develop a better under-
standing of what might happen, and where resources should
be invested to mitigate the risks, and take advantages of what
has been identified as the most probable unfolding of events.

2. Appoint Sentries to Watch the Signals: Once the initial scenar-

ios are mapped, the business must keep an eye out for indica-
tions that one of the scenarios is unfolding. Lookouts must be
made out of ordinary employees. This is done by assigning re-
sponsibilities to individuals who are exposed to certain types of
information, and by creating a company-wide knowledge man-
agement system. One way companies are now doing this in-
volves the use of swarm intelligence technology. This
technology collects information from all employees within a
company and allows them to vote on the threat level of poten-
tial news.

3. Expedite Decision Making: Information and intelligence are

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only assets when put to use. When agility and the pursuit of
new high growth markets are widely seen as "smart" business
moves it is surprising to see that only 13% of the companies
surveyed had a way of "forcing quick action," and even less re-
act even "fairly soon" after an important event. War games can
serve as a good tool to push decisions into actionable items
that have been critically evaluated and acknowledged regard-
less of the current bureaucratic hurdles.

Companies will always face new threats, and profit from new opportuni-
ties. Executives who are successful in the end will employ intelligent
tools and processes so they will not be left without a chair when the
music stops. (2)

Clone Your Opponent

The best way to read a competitor and guess their next moves is
getting inside of their shoes. Look at your competitors, and your own
company and team from their perspective and emulate their decision-
making process and priorities.

The New England Patriots have used this very tactic while facing the
Indianapolis Colts and their star quarterback Peyton Manning. The
Patriots did not believe they would be able to stop him with their
conventional defensive tactics so they invented a new one. They
selected their backup quarterback, Damon Huard, and made him live
and breathe the life of Peyton Manning. The backup studied every
aspect of Peyton’s game, from how he walked, called plays, and
adjusted to different game situations. The Patriots scrimmaged against
this mock Peyton Manning and got used to his style of play and pattern
of offensive decisions. Game time came and the Patriots intercepted
four of Peyton’s passes and crushed the Colts. (3)
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This type of cloning tactic should be integrated into your sales team’s
efforts to guess where the market is going, or what your competitors
might do in the near future. Analyzing problems and plans from the
perspective of your competitors can help simple ideas evolve into
viable solutions. Assign a group or individual team member to become
an expert on a competitor that really matters. Tie their ability to
emulate this competitor’s decision-making process and movements to
their salary or bonus.

Summary

• Competitive Intelligence is used throughout a business, espe-

cially in strategic planning.
• Although internal knowledge is valuable, it is important to forget
assumptions and make decisions based on confirmed facts
when possible.
• A recent poll of over 140 corporate strategists showed that
most companies are caught off guard by as many as three
high-impact events in the past five years.
• Building an early warning system involves anticipating specific
futures, appointing sentries to watch for signals, and expediting
decision-making.
• The best way to read a competitor and guess their next moves
is to get inside of their shoes.

References

1. Malhorta, Yogesh, “Competitive Intelligence Programs – An

Overview.” Copyright © 1996 BRINT Institute
2. Fuld, Leonard "Be Prepared" Harvard Business Review;
Nov2003, Vol. 81 Issue 11, p20, 2p, 1c
th
3. June 27 Fortune Magazine page 97-102 “Great Escapes”
Time, Inc. Copyright © 2005 Volume 151 No. 13
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Conclusion

“Yesterday is gone. Tomorrow has not yet come. We have only today.
Let us begin.”
- Mother Teresa
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The sales and negotiation material in this book can be used as a

training manual, educational piece, or an investment in your personal
development. Through the past 14 chapters, I have included some
best practices, working models, actionable checklists, and well-
researched theories. These can serve as great tools, similar to a
painter’s brush and edger, but without the right approach, they are
useless.

In the movie, “City Slickers” Curly tells his crew that the secret to life is
one thing. When they ask what that one thing is, he laughs and says,
“That’s what you have to find out.” While it is true that everyone might
have a different trigger or goal that internally motivates or inspires
them, I was “woke up” while listening to the story retold below. For me
it is that one thing and understanding whatever drives you will enable
you to use the tools previously discussed in this book to the best of
your abilities.

Kaizen means continual improvement. It sounds great. Why not

always move forward and improve? If we improved our relationships
and ourselves every day, we would be happier then we are now. The
secret to actual being successful at this is turning the means into ends
in themselves or that the ends are simply a bonus. Dr. Jonathon King
was my professor for a couple systems thinking classes at Oregon
State University. He started the first class by telling a story about
painting a fence around his yard. There was over 50 feet of fence-
board for him to cover and the whole weekend ahead of him to labor in
the sun until he returned to his teaching job on Monday morning. He
complained about it to anyone who would listen and continued to think
negatively about the project all the way through painting about 5 feet
worth of the fence. After realizing he had only gotten about 10% of the
work done in the first half of the day he put down his brush and took a
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break to grab a drink. Upon returning to the fence he looked at the tiny
amount of work done and realized that even an energetic child could
have been more productive. Although the drudgery of having to paint
in the sun during his valuable free time was what made the painting so
egregious, it was obvious that his negative attitude was actually making
the project last longer and take up more of his time. He sat and
thought about this while drinking his lemonade and decided to create a
new plan for tackling this project.

He decided that he would get excited about the project, turn it into a
game, and challenge himself to paint the fence better and with better
quality then he had before. He set a time goal to finish the project in
half the time that he had originally planned, tried to do an excellent job
instead of just getting it done, and became excited about the means of
painting instead of simply completing it so he could spend the rest of
his free time as he pleased. It worked.

At one point, growing up Dr. King found that this way of approaching
any project, whether it be painting a fence to writing a book can be
done better if you see it as a game. Doing so creates a fulfilling
experience that usually ends in exceptional results. He successfully
used this strategy to become elected as head of his 500-person squad
on a navy vessel, and later, a well published professor at Oregon State
University. The lesson to be learned is that continual improvement,
striving for excellence, searching for meaning, and pushing ourselves is
only possible with the right mindset and approach.

Top Ten Lessons from Rainmaker

There are hundreds of tools and lessons you could take out of this
book. I find the following ten to be of the most significance.

1. Manage sales form a systems-based perspective.

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2. Use an advanced relationship cultivation model to increase

your sales.
3. Change the game you are playing.
4. Manage your “battle days” and “battle hours” to maximize the
use of them and increase your sales efficiency.
5. Remember the three types of employees you can hire, sales-
men, mavens, and connectors.
6. Stick to your core ideology and develop a hedgehog strategy.
7. Get the right people on the bus, then figure out where to drive
the bus, and then get everyone in the right seat.
8. Use game theory and competitive intelligence in your strategic
planning and sales research initiatives.
9. Train your instincts and tune your listening abilities with golden
silence and listening questions.
10. Kaizen – continual improvement and focusing on what you are
passionate about and making a competitive game out of it.

About the Author

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Richard C. Wilson, MBA (RichardCWilson.com)

Richard Wilson is an investment research and

marketing professional. He runs five websites
including InvestmentRegulation.com and works for
the Capital Allocation Partners, an investment
marketing and consulting firm which partners with
investment managers as their outsourced market-
ing and PR department. Previous to joining the
Capital Allocation Partners Richard’s experience included running and
selling an online textbook retail business and 4 years of investment
sales, commodity/currency research and corporate finance consulting.
At age 21 Richard became the youngest person ever nominated for the
Top Forty Executives Under Forty Award given out by the Portland
Business Journal.

Richard Wilson has his MBA in Finance from the University of Portland
and is close to completing his Masters in the Psychology of Persuasion
from Harvard University.

You may purchase additional copies of the Rainmaker Handbook

online at http://www.Lulu.com/RichardCWilson.

Richard maintains or is associated with the following websites:

• http://www.Linkedin/in/RichardCWilson
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• http://www.RaiseAUM.com
• http://www.HedgeFundMarketing.Org
• http://www.InvestmentRegulation.com
• http://www.HedgeFundRegulation.com
• http://www.3PMRegulation.com
• http://www.Anti-Bribery.com

Richard C. Wilson
Mobile: (503) 789-7901

Richard@RichardCWilson.com

Richard can be found on Linkedin.com at

http://www.Linkedin.com/in/RichardCWilson and his bio, resume,
publications, and contact details are constantly updated on
http://www.RichardCWilson.com.
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