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Letter from the Editor
My daughter, Katie, bought a new car last week – a 2004 Honda Accord. And now, officially, she has ceased to be a member of the Traut Household with the last official string – car insurance – now severed. That’s a subject for another letter…
Let me see a show of hands. How many of you love shopping for cars? Okay, hands down. No, how many of you love shopping for cars? There are a few crazies wildly waving your arms, please stop.
I happen to be one of the crazies; I love the hunt, the psychology, the gamesmanship, and the ultimate dealmaking. Katie, on the other hand, hated the whole process.
Like my wife and millions of other people, buying a car (or negotiating a raise or selling a house) is something akin to public speaking – given a choice between death or negotiating, some people would pause to weigh the options!
Of course, maybe the reason I love negotiating is because I’ve been negotiating for so many years. Or because I’ve negotiated so many deals – some with success and some less successful – and have learned a little from each negotiation. Or maybe it’s because Entelechy teaches this stuff and the techniques we teach actually work.
The point of this editorial is that there are some things – like buying a car
or house – that you can negotiate. And there are other things – like the march of time slowly changing who you are – that you can’t negotiate; you can only accept. Or perhaps the point of this editorial is that there are things that the old man can still teach his daughter.
Enjoy this issue. We feature a cool training technique, an interview with Keith Ferrazzi, author of the best seller, Never Eat Alone, and many other fun and useful things.
Terry
Keith Ferrazzi on Relationships
“Success in any field, but especially in business, is about working with people, not against them. No tabulation of dollars and cents can account for one immutable fact: Business is a human enterprise, driven and determined by people.”
- Keith Ferrazzi
I recently had the pleasure of communicating with Keith Ferrazzi, author of the best selling book,
Never Eat Alone and Other Secrets to Success One Relationship at a
Time. I was introduced to Keith through Entelechy’s relationship with Linkage, Inc. in creating training materials to support their highly acclaimed Management and Leadership series of broadcasts.
How do you regard people? Are they a primary joy in your life, fun to be with? Are they a necessary evil through which you must “manage” to get work done? Are they toll collectors on your way to success: I’ll do a favor for you if you do a favor for me?
Keith Ferrazzi suggests that people ARE your success – whether looking for another job or doing well in your current one. Building relationships isn’t simply about being nice or extroverted. Being friendly is important, but effectively building relationships requires much more than a warm smile or a firm handshake.
Keith’s humble background certainly didn’t seem like the place that would incubate a perspective that would rocket him from Yale to Harvard Business School to his stellar successes at Deloitte & Touche and Starwood Hotels. However, it was precisely this environment that revealed two truths: 1) most people tended to congregate with their own – rich with rich and middle-class with middle-class, and 2) while people tended to help when asked, rarely were they asked; or at least asked in the right way.
Think of your own company. If yours is like most, sales folks tend to interact with sales, marketing with marketing, R&D with R&D, and so on. Now think of those who have achieved success in your company. Chances are they are also the most connected, the ones adept at building relationships outside of their functional group. Chances are that they’re no smarter or experienced than others, but are very likely – consciously or unconsciously – practicing many of the behaviors Ferrazzi believes are key to building relationships.
Ferrazzi describes why building relationships is essential to success in business today:
Connecting is one of the most important business – and life – skill sets you’ll ever learn. Why? Because, flat out, people do business with people they know and like. Careers – in every imaginable field – work the same way. Even our overall well-being and sense of happiness … is dictated in large part by the support and guidance and love we get from the community we build for ourselves.
Connecting is a philosophy of life. Its guiding principle is that all people, every person you meet, is an opportunity to help and be helped . . . no one gets ahead in this world without a lot of help.
- Keith Ferrazzi, Never Eat Alone
 Studies have shown that developing deep, genuine relationships – both internally among our co-workers and externally with partners and customers – is one of the most important skills we can have.
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Building customer loyalty is ultimately less about a product or service than it is about the quality of the relationship.
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Relationship development is the most critical success factor for any leader.
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Those who develop positive relationships with their employees and coworkers are more likely to inspire greater productivity, career growth, innovation, and overall employee performance.
Organizations who are genuinely committed to developing the next generation of leaders, build a culture that encourages relationship building as a means of driving organizational success.
To achieve the results we desire, we need the help of many people. And that’s why we must create high-trust relationships with our clients, business partners, and the people in our organizations and communities.
Mindsets for Relationships
Meaningful relationships aren’t created through quick, casual encounters. You must invest time and energy to grow a meaningful relationship with someone.
Relationships Equal Success
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You can’t get there alone.
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Others have provided help, encouragement, and connections that have played a part in our success.
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Success is more likely when you have meaningful relationships.
Business Relationships are Personal Relationships
Be Intimate
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Humanity, vulnerability, and honesty open the door to intimacy.
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The end result of being human – sharing your passions, dreams, experiences, and vulnerabilities – is mutual trust and loyalty.
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When you are human with your contacts, you build loyal and trusting relationships that will last a lifetime.
Be Generous – And Don’t Keep Score
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 Generosity is as simple as offering sincere compliments and praise, and progresses through more complex forms. Intimacy and success come from giving without expecting anything in return.
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Willingly offer to help others and ask for help yourself.
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Generosity, freely offered and exchanged, is a valuable and unique asset.
In general, most people understand that being nice to the people you work with is just common courtesy – but we now know that it goes deeper than that. Fostering deep relationships in your professional life (and all areas of life) is the key to reaching your goals and helping others reach their goals.
Building relationships is like building muscles. You need to work your relationship muscles and constantly do things that might seem like work, but will ultimately drive success for yourself, your group, your organization, and your clients. As you develop strong, mutually beneficial relationships you will not only infuse joy into your career, but also increase your potential for success.
Keith Ferrazzi is one of the rare individuals to discover the essential formula for making his way to the top through a powerful, balanced combination of marketing acumen and networking savvy. Both Forbes and Inc. magazines have designated him one of the world’s most “connected” individuals. Ferrazzi’s extraordinary rise to prominence, which includes a stint as the youngest C-Level Executive for a Fortune 500 company while at Starwood Hotels and Resorts Worldwide, has even inspired a Stanford Business School case study. Now, as Founder and CEO of Ferrazzi Greenlight, he provides market leaders with advanced strategic consulting and training services to increase company sales, and enhance personal careers.
Entelechy’s Collaborative Negotiations
In the letter to the editor, I talked about my daughter Katie’s distaste for the car-buying experience and a lot of her distaste had to do with negotiations. I’d like to offer you the same advice I offered her to help you negotiate your next car deal, or raise, or ….
Before I share negotiation techniques, I need to explain that these techniques come from the
middle of Entelechy’s Collaborative Negotiations course. In Collaborative Negotiations, we emphasize the importance of using your negotiations capabilities to get the best deal for both parties, assuming that both parties are going to continue working together for many more years:
In negotiations, there are typically two forces at play: concession because each side truly does want to reach an agreement or they wouldn’t be negotiating; and competition because each side wants to ensure the best results for themselves. When too much emphasis is placed on either concession or competition, negotiations can end up in a situation where someone feels that they lost.
Collaborative Negotiations, therefore, is about balancing the power enabling you to work jointly with the customer to reach a settlement that is a win for both of you AND that allows you to continue building the business relationship.
While this admonishment is critical to building relationships for the long haul, when you’re making a single purchase and you’re less worried about the relationship, then you can take the gloves off and negotiate for the best deal for yourself. Here’s how.
Four Rules of Power
Power is distributed. Power only exists when you have more than one person; you cannot exert power if there is no one to exert power over. Therefore power is always distributed, even when you may feel completely powerless.
Power exists only if it is accepted. There are many instances where a powerful person has tried to exert power over someone who just didn’t accept the person’s power. Look at the Wizard of Oz: four individuals and a dog risked life, limb, and stuffing to reach the great wizard (he had power); they fell on their knees when they first met him. After they saw him exposed behind the curtain, however, the foursome barely acknowledged him.
Power may be real or implied. Your boss may or may not be able to fire you at will. Your customer contact may or may not be the one making the final decision and be able to award the contract to you. Many times people imply that they have more power than they really do. If you accept what they say at face value, their power becomes real. With power – a creation of our own making – perception IS reality.
The distribution of power changes. In any relationship, power changes frequently. Power is not static. You can build or diffuse the power of either party. This is important to know because you always have the capability of increasing your power.
Three Sources of Power
There are three primary sources of power: information, relationship, and options. Let’s look at each.
 Information is power. The more you know about a situation, the better able you are to negotiate from strength. If you know that the car seller’s quota closes at the end of the month, you have gained power (and know when to return)!
The same is true about you. The more the other person knows about you – whether you’re desperate for a car or in love with THIS car, for example – the more power HE has!
You can acquire power by doing your research. Knowing the going rates for the car you’re interested in buying, knowing what other dealers may be offering, the effect of mileage on the car’s value, etc. are all informational sources that could give you power in purchasing a car. Putting this in business terms, the more you know about the customer’s business goals, current market share, current challenges, buying options, etc. the more power you may have.
Relationships are also a source of power. People buy from people. The stronger relationship you have with the other person, the more collaborative the negotiations can be. While you rarely have – and even more rarely form – a relationship with a car dealer, they may try to form a temporary personal relationship with you.
In non-transactional sales (buying a car one time from a dealer is a transaction) where repeat business is important, good relationships can truly be a powerful thing. Many sales are thwarted because the incumbent vendor has a strong personal relationship with the buyer. How can you, the new vendor, hope to unseat the current vendor? Here are four areas in which you can build the relationship:
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Demonstrate value: The customer’s perception of your worth, excellence, usefulness, or importance (with respect to them or their business). Value addresses the customer’s question, “What can this person or company do for me?”
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Demonstrate competence: The customer’s perception of your skill, knowledge, and experience (with respect to them or their business). Competence addresses the customer’s question, “Can this person or company do what they say they can do?”
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Build trust: The customer’s confidence in your integrity, ability, and intent (with respect to them or their business). Trust addresses the customer’s question, “Do I trust this person?”
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Demonstrate propriety: The customer’s perception of the appropriateness or properness of your actions (with respect to them or their business). Propriety addresses the customer’s question, “Is this person behaving properly or appropriately?"
Options/time is the final source of power in
negotiations. The more options you have, the better able you are to negotiate from strength; the more time you have to negotiate, the better off you are. In car buying terms, the Internet has significantly increased our options and power. Where in MY day of car buying, one had to drive around until you found the one car that was within your price range and wasn’t too ugly! In our car-buying scenario, the more options you have (and keep open) the more likely you are to negotiate a great deal.
Similarly, we lose power when we feel we have no options or no more
time. When we’ve been searching for weeks, we may have a tendency to think that we need to buy – we’ve invested enough time. When we fall in love with one single car, we unconsciously eliminate other cars as options – and lose some of our negotiating power in the process.
In non-transactional sales, we want the customer to eliminate options so that we become the only choice they have. We do this by identifying and building up (or, ideally, quantifying in $$ terms) the customer’s challenges and then positioning our capabilities as the best solution to his or her problems. Through the use of strategic questioning (at Entelechy, we call it FIRST questioning) and appropriate positioning of features against high value needs, you can virtually eliminate – in the customer’s mind – any options the customer may have thought they had initially. Likewise, artful questioning and positioning can increase the need – in the customer’s mind – to act quickly. You effectively eliminate their options and time and increase your negotiating power.
Of course, there are many negotiation tactics that sellers and buyers use to try to get the other side to react – from “defer to a higher authority” (i.e., “My Dad’s got to approve.”) to “nibbling” (i.e., “…and this scratch here, and the color of the seats, and…”). Most car dealers are trained to recognize and deflect these tactics. Unfortunately, most car buyers – YOU – are not trained to recognize seller tactics such as “walk-away” (i.e., “That’s the best we can do; take it or leave it.”) or “defer to a higher authority” (i.e., “Let me see if I can convince my manager.”) Recognizing these as negotiation tactics automatically reduces their effectiveness.
Epilogue: My daughter, Katie, shopped around and negotiated. She used Kelly Blue Book to recognize the effect of mileage on a car and used it to counter the dealer’s comment: “At 64,000 miles, it’s barely broke in.” (She found out that a 2003 model with 43,000 miles was worth more than a 2004 model with 64,000 miles, a valuable piece of information that knocked a couple hundred dollars off the price.) She secured financing BEFORE she went shopping and used her pre-approval on a car loan to negotiate a better financing rate through the dealer.
And, at the end, she found – and bought – a car that she fell in love with. And got it at a price that was more than fair.
Entelechy Customizes High Performance Management
Editor’s Note: We are often asked to differentiate Entelechy from other training companies such as AchieveGlobal, DDI, Center for Creative Leadership, Huthwaithe, Franklin-Covey and others. While Entelechy is similar to the above companies in that we end up with a training program and performance consulting services, there are two primary – and we believe critical – differences. Entelechy believes that most sales, management, or customer service models that other companies tout as “advanced” and “unique” are, in fact surprisingly similar. (In our former roles as training directors, we saw more than our fair share of slick sales pitches selling virtually the same concept.) Second, Entelechy believes that effective training is built around YOUR needs (not OUR flashy sales, management, or customer service model) and YOUR goals. In fact, at the end of our customization, we authorize you to use the training – even modify the training – to meet your changing needs. (Oh, and we don’t charge you for the privilege to use or modify the training!)
Over the next several issues of The Key, we’ll feature examples of the work we’ve done to create training that is more than a gimmick; training that creates lasting change for companies and individuals.
Two weeks ago I found myself in Maryville, Missouri at the Kawasaki Motors Manufacturing (KMM) plant, one of the largest employers in northern Missouri. I was in the middle of delivering a two-day High Performance Coaching class that we had customized for the company.
One of the features of the program is our online 360-degree inventory that provides a keen insight into the strengths and areas for development for each manager. In addition to soliciting input from employees about their perception of their managers’ skills, we also ask employees to identify what motivates them. And we ask managers to guess what motivates their people.
Without fail, the two perceptions – what employees say motivates them and what managers THINK motivates their employees – is ALWAYS off, and usually significantly off. For example, managers think compensation is the top motivator and their employees say it’s involvement in decisions that impact them. For the 12 years I’ve been delivering our customized coaching class, it’s been a safe bet that managers don’t know what motivates their employees. Except at
KMM! There was almost perfect alignment between the manager and the employees!
Getting to know what motivates employees is key to successful performance management.
 If job security is a top motivator, then new skills acquired through coaching helps ensure greater job security. If compensation is the top motivator, then new skills acquired through coaching may make you eligible for a new, higher paying position.
Of course, the High Performance Coaching included lots of experiential activities to help KMM managers apply their new skills. But knowing what motivates employees – THEIR employees – is the key first step to developing and engaging talent.
For more information on how Entelechy can customize a management training program for YOUR company, contact Terry at
ttraut@unlockit.com.
And Now for Something Completely Different
Entelechy’s new mini-module on managing the generation mix uncovered some nostalgic sites. If you’re a baby boomer or an older Gen-Xer, you’ll find yourself transported by the following link:
http://moreoldfortyfives.com/TakeMeBackToTheSixties.htm
Ready for an old-fashioned vocabulary quiz? Test your word knowledge at:
http://www.freerice.com/
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Terence Traut, President of Entelechy "unlocking potential"
ttraut@unlockit.com
phone: 603-424-1237
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