the square root of ZERO

Watching the tennis from Roland Garros, intently listening to Patrick John McEnroe's insightful comments, 10 days go by and there are only 2 contestants left standing from the 100 tennis players who pitched. Some of them never looked like they should be on the same court as Rafael Nadal! How come some are stand-out competitors and others also-ran?

The DRIVER

The thought struck me ~ this is what I’m seeing in ALL of my clients that come to us for Business Development services. Their Business Processes, especially the revenue generation process, displays the “anecdotal truth” that less than 20% of the team are producing greater than 80% of the outcomes. Why is this characteristic so ubiquitous? Do you see your sales-team in this picture? Did you know, that if you plotted the size of every leaf in this picture you’d come out with a natural distribution? Even the distance between your ear and your mouth over all the population ~ has is "own" natural distribution which optimises the size of a telephone headset. Trying to distort that distribution ~ where the mean ~ the central average person in your team ~ occupies the top quartile, is difficult if not impossible.

The good old 80:20 rule is alive and well, we think, but, how come does this not work all the time ~ for example, "the rich get richer and the poor get poorer"?  How does it seem impossible to even get 20% of my salesforce to make quota?

The rich get richer and the poor get poorer!

This “old wives’ tale”, an aphorism, very often using different, more politically correct wording, when trying to describe an economic reality. Commonly, it's more of a socialist criticism of the free market system (capitalism), arguing for the inevitability of what Karl Marx called the Law of Increasing Poverty. It seems, there is no natural distribution in economics, or for that matter in Business Processes delivery ~ especially the sales process.

the LAW of diminishing returns

Darius Foroux author of Master Your Productivity Master Your Life, writes about the observation that 50% of the (planned for -&- expected of) outcomes, are predicted by the square root of the total number of people who participate in the work. Something called Price’s Law, originally published and referred to as the "discrete Lotka power function". So, suppose 100 authors write at least one article each over a specific period. Then the number of of articles that are read (consumed) for any particular author in that time period could be depicted in this table.  Therefore, a conclusion could be drawn, that this “LAW” may be applied to the following observations;  (THIS is terrible news for those pouring their souls into writing BLOG's!)

  • of all the books published, the majority of all books read come from a few authors,
  • of all the work done, the majority of the profit produced, is generated by a small minority,
  • of all the client interactions from your sales team, the vast majority of revenue will come from only a few salespeople,
  • lightbulb-o
    in any business process, in all outcomes there are a few critical people in the process that produce these outcomes!

This is why, only a few fortunate people get richer, a few prolific authors are read and the LAW of diminishing returns operates. That adding salespeople to your team will not produce the revenue you expect. But counter intuitively, reducing the “business eco system impact” on your top salespeople ~ allowing them to sell ~ increasing productivity and effectiveness, will produce greater ROI than adding more feet on the street.

This is also why, as businesses grow the proportion of people that contribute effectively ~ as a percentage of the whole population in the enterprise ~ gets smaller. Productivity is not more people but innovation in their process of delivery as well as looking at peripheral "eco-system" enablers.

The MOVEMENT

These are the five traditionally recognised human senses. Use these coat hangers to frame your communication to your team. Firstly, inspire them to deliver by identifying what is in "it" for them, then, Expose them to a more productive way to do these assigned tasks by Educating (spend a lot of time here and be sure to certify understanding), then, using group awareness on how "our" process delivers in todays' context, define how we will Apply this new way of doing things to the business. Lastly, using the 5/7 delivery mechanism the ProvenPath(™), which guarantees Implementation, make sure that the project delivers. 

  • Sight (vision), create a process and document this so that those that enact the process, can be reminded of what they need to do, measuring themselves against the process. This brings personal satisfaction in a job well done, but most of all it matches the entrepreneurs expectations to the outcome of the tasks delivered by engaged employees.
  • Hearing (audition), motivation in this new millennium, is not command and control which used to fit our fathers generation and to some extent even worked for our generation. Hearing immediate positive feedback is the stuff of now-days champions.
  • Taste (gustation), there is nothing like the taste of success by building an outcome that satisfies your entrepreneurial vision, while generating personal satisfaction within the participating process members. This is the stuff of low attrition in the team, retained enterprise knowledge and customer satisfaction.
  • Smell (olfaction), there is nothing as rancid as the fumes from a rotting fish, dying from the head ~ the leader ~ and polluting everything in the team. This is the characteristics of “a top company to work for”, involved in a cause where all my energy goes into production rather than the in-fighting of misalignment of expectations.
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    Touch (somatosensation), when we touch a customer and they have a great transaction experience (do you have a continual test for this?) they speak to others. They refer to the experience ~ a referral! Customer satisfaction is primarily about their experience of being touched and in a very secondary space, their experience with the product and the outcome of using that product

The MEASUREMENT

Once upon a time, we had to “let go” the top performer in our sales team. We were experiencing Price’s Law firsthand, and the problem was, that we were being held to ransom by the individual. The tail was wagging the dog. Our decision was questioned in Labour Court as the act was seen as a “constructive dismissal”! Fortunately, this type of individual is also very disruptive to their peers and highly dismissive of the business process ~ they revel in “doing it their way!” So, when the distraction was finally removed we achieved the following increases in our productivity;

  • we freed up management time,
  • got conformity and joy in delivering our common process,
  • delivered brand protection and
  • conformity to brand promise which resulted in 
  • a huge increase in customer satisfaction
  • unsolicited leads increased and 
  • repeat purchasing from established clients 
  • drove up profits ~ the lifeblood of a performing enterprise ~ not revenue!

What is the answer?

The FRANCHISE model

This introduction video (2:46minutes), shows the system of Delivery (SoD) perspective of what are desirable business disciplines found in a thriving business. In our view, what the outcome may look like, is called the franchise model

Franchises have two basic models; one is a logo or branding model and the other is a business process model. McDonald’s is a process model linked to a very strong branding model. So, their brand attracts, and because their business processes are extremely fully defined their product has enviable qualities*! ALL, the franchisee has to do, is implement these processes in a disciplined way to deliver on the brand promise of a defined, managed, measured, repeatable outcome*.

Using this System of Delivery framework, helps enterprises to achieve the franchise model through the allegory of three role hats worn by the characters in our story. (get the FREE eBook ~ "herding cats" here) These three hats are, the entrepreneurs, the managers, & the technicians hat. Each character has an important part in the story ~ although, not one of them is more important than the other. Each of them relies on the other to produce their professional outcomes. Should they get their individual jobs right, and work as a team, they will produce this principle of excellence!

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Peter French

Business Coaching is not consulting, it's also not therapy. It's a unique profession that lives somewhere in between these two poles - structured to leave lasting life and business value!

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