How often has this happened to you? A manager in your group walks in to your office and tells you that a critical resource in her organization has given notice. He is joining this other company because of a substantial jump in compensation. If only you can match that comp, your manager feels confident of arguing him out of his decision. She needs your support to approve this.

I am sure not infrequently. What do you do?

Almost without exception, I have learnt to say No. Fifteen years back I would have thrown more money, fought hard and done whatever to change that person’s mind. I do not advise to do that any more. Hit rate was very low for me. Here is what I have learnt:

Changing a job is a big decision for most human beings. Most people don’t want to look for a job for sheer reasons of inertia, zone of comfort etc. Almost surely nobody starts looking for a job because one is seeking more money. One goes thru a lot of introspection, frustration or whatever reason to convince oneself that one is going to change jobs. Somewhere along the way, he confides and explains his plans to his wife and family too. That is a very big mental jump.

Once the search process and selection process begins, the person is pretty much over the cliff in terms of deciding not to stay back. Most surely, wherever he goes there is a better compensation package – even if slightly. Not because he was getting paid less fairly but most hiring companies know they have to give a sweeter deal to move the person.

When he confronts his manager – better comp is cited as a prime reason – incorrectly – why he she wants to move. It is an easier reason – it is a hard number plus one gets an elated sense of pride by flaunting higher market valuation. It is a more difficult argument to prove which workplace is better, has better opportunities etc for the sheer subjectivity of it.

At this point, throwing more comp has a very little ability to work. Even if one did match and made a compelling point why the current job is better the probability of winning is very low. Because – and here is where the second reality comes in – usually one has already committed to the other job before notifying the manager. Most definitely, one has mentally moved to the excitement of the new place.

Trying to get the person to mentally back off from that is very difficult. It is almost insurmountable to have the person fall on the sword in front of the prospective company as well as the family and explain why it was a bad decision to begin with to leave. There are too many bridges to be burned. And now his current company knows he was on the look out. It is far – and I mean very far – easier to just go with the original decision.

My advise to my managers is usually to not commit to any comp side at all. Work with the employee to convince himself that he actually wants to stay for all the right reasons. Signal that you can work out the comp side as long as all the other things are worked out. But make sure that the employee can undo the decision mentally and in front of others at home and new company first. The comp part is the easiest part. If you increase the comp first, you almost invariably are going to get the same decision – after a couple of days of “careful thinking”.

Comments?

I had originally seen this in a presentation made by a gentleman from CNN.

You can see this and many variations of this on youtube.

While this presentation was about ramifications on our education system, I think it is great also for us in the technology sector in terms of understanding how fast this whole space is moving.

If any one of you have run software companies, you probably have faced this problem at least once in your life. You have a software product that is very successful with the large customers (higher end of the market). But taking it down market – while sounding reasonably simple (after all, it solved more complex problems – right?), was never successful.

And you probably have heard the same “reasons/excuses” – mid-market customers have the same problems as the large customers… the software is too complex / costly for smaller customers, implementation takes too much time etc etc.

And you have wondered why can we not “package” the software up and sell it at a reasonable price point for the lower end market with very quick implementations. Well, you have company, at least – in me. Not once, not twice – but quite a few times, we failed in taking a software product down market. The definition of “failure” is not being able to sell quite a few copies of the “tightly packaged” products – obviously with far shorter sales cycle and implementation cycles than the larger customers. With one exception – only once in my experience, it actually worked. And it is important to understand why.

Here are my learnings:

First, technology is the easiest part. Shrink-wrapping a software – using templates, smaller set of APIs, limit setting – whichever path you take is usually simple and given a little time and money, can be easily accomplished. I need to add here that sometimes if the total cost of ownership dictates that the software be ported to a different platform (third party components, database, OS, J2EE vs .Net), that might take quite some time and money. Still not a difficult task.

Of course, naming your new product “Your Original Product LITE” or “Your Original Product EXPRESS” is the next logical step 🙂

The real challenge comes during the sales process. Your sales organization is acutely aware of the strength of the product (having sold it before to large customers or the internal reputation of the product). And that is where the difficulty starts. Invariably, the sales process goes to a point of feature-functionality war (feedback from the sales person’s contacts that the competitor’s product demo-ed very well or the prospect asked questions about certain features). It is infinitely difficult to stay within the “boundaries” if you know the product can do more and you feel pressure (real or imaginary) that the product needs to come off as the better one. Ask any sales person if you do not believe this. The sales person’s single focus at this point of time is to close the deal.

Even if the sales happened “within the boundaries”, the next challenge comes at the implementation level – maybe not that acute though. When a customer asks for another report or implement a unique business situation/case for them, the service consultant’s first, second and third instinct is to go ahead and implement it. First he/she knows it can be done. Second he/she, as a consultant, wants to come across as “knowledgeable” and “helpful” to somebody who helps pay his paycheck. At that point of time time, most are thinking of the “boundaries”. And thus the project is no more a “quick and simple” one.

So, is this winnable at all?

The only time it worked for me was in a small country in Central Europe where we we able to sell a high-end product that we had packaged down in really short sales cycles and definitely short implementation cycles. It was not about the country or the market – their problems were exactly the problems we had seen in the smaller prospects in US. The big difference was – this was done thru a different channel. We had trained this company on the product (the dumbed down version, of course) for two weeks. After that, they were free to sell and implement the product in the market. We got a cut of the license and maintenance. And it worked great!! Till this day, I am convinced, that the only reason it worked is because the sales persons and the implementors did not know any better. They had very little idea about the true power of the product or what it had done for large customers.

So, faced with requests for more features, they figured out how to work harder to downplay the importance of those features, find alternate ways to getting the value to the customer or possibly sometimes lose deals. (I never got visibility to the deals they lost).

So, my clear learning is, taking a high end software down market is a very difficult proposition (unless you use different channels altogether). On the contrary taking a software up market is far easier (it takes time and money though). If you need to play both the markets, it is my suggestion (somewhat unintuitive to many people) that you might want to think hard about having two different products if you insist on using the same channel to sell and serve.

Comments?
Rajib

What does it take to be a courageous leader? Courageous leaders differentiate themselves by how they take on new challenges. It does not take a lot of courage to run day to day operations. No doubt, running day to day operations is pretty challenging too. But leaders exhibit their true courage on how they deal with adverse and contentious situations. Here are the top 10 traits that I have observed in the leaders that I have considered to be truly courageous:
 
1. Exhibit Optimism: Courageous leaders are calm and have a “can do and will do” attitude that permeates a steely resolve in the teams.
2. Inspire and Influence: Courageous leaders focus on inspiring and influencing people by showing them the higher goals and giving them the resources to reach them instead of falling back on the command and control model. Command and control often gives quick results but the results have a short life.
3. Avoid Saying “Both”: Courageous leaders are not afraid of prioritizing. Faced with a myriad of choices, they adroitly focus the organization on a few goals.
4. Seek to Understand: Courageous leaders cut across teams and tie them together to a greater goal. The most valuable trait in building cross-organization teams is the ability to seek to understand before seeking to be understood. They understand that opposing views are necessary to make any forward progress.
5. Guts to get into the details: Courageous leaders do not consider themselves “above” certain operational details. While they do not unempower their teams, they have no difficulty into diving in whenever they need to. This rule is possibly the one that I have seen most managers fail on as they climb up the corporate ladder.
6. Willing to admit there might be a better way: Courageous leaders are willing to take risks, fail early (and cheap) and learn from them quickly. It is this openness to the idea that they might be wrong that makes them far more capable of adopting change. This trait also tends to make better listeners out of them.
7. Avoid going for the “perfect decision”: Courageous leaders understand that the trick to making the “right” decision is to make a decision quickly and then executing on it like crazy to make that the “right” decision. Nobody runs a control experiment side by side with the alternates. Get enough data and use gut rather than wait for all the data – is their usual motto.
8. Being “Right” versus being “Successful”: Faced with contentious situations, courageous leaders focus individuals and teams on what will make all of them “successful” rather than how they can be “right”. In today’s intelligence-based industries, where individuals are valued for their personal intelligence, it is often difficult for one to give up on what one believes is “right” for the greater good of being successful as a company.
9. Personal Ego: Courageous leaders focus on not aligning personal ego with a particular viewpoint. At the end of the debate, the leader thus, does not believe that he or she fell in grace by “losing” a point. This prevents him or her from arguing beyond a logical point (where making forward progress becomes more important than going more threadbare on the arguments). Conversely, they are careful to criticize viewpoints and not people.
10. Org charts: Finally, courageous leaders have scant respect for positions, roles, business cards and org charts. They realize that the right people – regardless of their position – need to be brought in to craft solutions. They understand that most problems cannot be solved by “re-drawing” boxes. So, they focus on getting teams across organizations to come together, get aligned on a common goal and give them the support and air cover to make mistakes to achieve those goals.

What have you learnt in your career as true courage in leadership?

Rajib

I had some interesting inputs from one of the earlier blogs about reference calls. Most of them – including people from HR department – seem to think that the standard process of checking references (asking the candidate for referees) is probably not very effective. Emboldened by that, I thought I would like to put forward one more question I had. This time it is around when an employee leaves. There is this thing called exit interview that happens. I myself had to give a couple in my life.

This has made even less sense to me than reference calls. For one thing, I doubt that an employee is very unbiased in giving opinions before leaving. Either he/she left under duress – in which case, all inputs are going to be overly negative. Or he/she found a great opportunity in which case, most likely, responses are going to be – by and large positive so as not to burn any bridges.

In any case, even if the opinions are on the mark, I would rather get inputs from people who have decided to duke it out in the company than somebody who has decided to part ways. There is nothing wrong in parting ways (you have to look after quite a few things in your life including your career, family etc) but seeking organizational inputs from such a person is less interesting to me.

There was an article I read about a month back in the Wall Street journal. I forgot the name of the company – or what they even called the process they had adopted. But the essence of the process was instead of interviewing candidates “why are you leaving?”, they regularly interview existing employees “why are you staying”. Jarring at first as a concept – it gets to the heart of what we as organizational leaders need to understand. What are the careabouts of an employee and where do stand on them?

I say jarring because I think it is easy for us to say why we are leaving (we have gone thru a thorough process in our minds and with our families before we made the decision – and also chose what will be the public explanation of the decision 🙂 ) but if somebody walked up and asked “why do you stay” – answering it would be interesting, to say the least. I am sure the usual ones “great work” “great team” will roll out of our tongues almost immediately. In reality, we do not regularly sit back and debate with ourselves “why do we stay”. Most of the days in my career, I stayed because I was too busy to even think about not staying. And it was comfortable not to keep questioning why am I doing what I am doing 🙂

But I think regular introspection lets us understand who we are and what really gets us going. Then we can really help ourselves and our managers and our organization to see how to create opportunities where we will be self-actualized. It forces us to realize that keeping ourselves motivated and challenged is more of our individual responsibility than the manager’s or the company’s.

In any case, anybody care to throw some light on what could be some upside of doing exit interview? As always, looking to learn from your experiences.

Rajib