It’s a Trap! Stop Throwing Money on the Flames!

It’s a Trap! Stop Throwing Money on the Flames!

I was speaking to a prospect the other day who told me once a month he liked to take large piles of money and set fire to it in the company parking lot–for the amusement of all.

Well, those might not have been his exact words, but the message was the same.

He told me that they were investing a lot of money in improving their sales and customer relations. They were investing in training, they were investing in new tools, and they were investing in new technology. They had bought into a pricey CRM system and loads of other exciting innovations.

The problem was that he felt like they were spending endless amounts of money on everything, but nothing was helping. Results weren’t improving, and all the training and shiny new tools only seemed to be keeping their heads above water.

This is a something I come across fairly regularly, so I was prepared with a few simple, sales-related questions to help diagnose the situation.

For example, I asked him about the average number of outbound calls his sales people were making. I asked him about the average lifetime value of a customer that came from a particular referral source. I asked him to tell me why they’ve lost some customers. I asked him how he knew his people were using the new tools he’d shelled out on. I asked about quote follow-up. I asked him if I could pick individual existing customers, at random, and if he was confident his sales staff could tell me the last time they talked to, and what the conversation was about.

Simple stuff, right? I was asking him to tell me about all of these simple little key performance indicators that should have been easy for him to answer, but he wasn’t sure. He was drawing a blank. He couldn’t answer any of my questions. In fact, he was a little bit embarrassed about it.

What he could tell me was that lots of his management team were excited about Big Data, and thought that if they’d just invest in that area, they’d be able to make better decisions. In effect, they were saying “After years of get-rich-quick schemes, this scheme is sure to get us rich… And quick!”

Here’s an unpopular opinion for 2017:

For 99 out of 100 companies, Big Data is a trap, and it will be nothing but a money pit for your company.

The reasoning is simple–Big Data is the Boston Marathon, and most businesses haven’t learned to crawl yet. Unless you’ve mastered decision making with Small Data, then Big Data is going to suck all the money and time out of your company and leave you with no ROI.

Look, don’t get me wrong, I’m huge believer in tools and technology. You’ve heard me talk about the importance of the right tools & processes a million times. I talk about it in this 60-second video. But it’s important to know why you’re making the investments and what you’re looking to improve before you do that. Shameless plug: A good consultant can help you sort out the why!

Everybody wants to be Jim Collin’s GREAT and you should strive for greatness– but I’m on a mission to suggest good is often good enough. If you’re not even good, then it’s impossible to make the leap to great. Too many are trying to make a giant leap without learning to walk, first. And paradoxically, being consistently good is often much better than moments of greatness.

So, back to my prospect–what should he do? Where should he invest? Since this is a common problem, I was able to give him advice that I knew worked regardless of what his next investment or project was. Namely, he had to be able to identify what “success” looked like before the start of any initiative, define the criteria he’d use to know the initiative was being implemented, and take responsibility for seeing it succeed.

You see, no investment in tools, technology or training will help if leadership isn’t willing to walk the walk and talk the talk. Everything often becomes another flavor of the month. I’ve had salespeople tell me that if they can just endure this training initiative, things will be back to normal in no time.

As a leader, if you’re not willing to check up on how the tools are being used, or to have a better understanding of what tools are needed, or where the improvements are needed then no amount of data is going to help. You’re better off basing your strategy on finding a needle in a haystack.

Most companies have a lot of areas in their business where the simple (but incredibly important) questions aren’t being asked or answered on a regular basis. Focus your attention there first, and you’ll not only find much higher ROI – you’ll also save yourself and your people a lot of wasted time and effort.

Your Challenge for This Week: Pick a single area of your business where you’re about to make an investment (tools, training, technology) and ask yourself, do you know the outcome you’re trying to achieve?

Always start with the desired results and remember my Big Data Golden Rule: If you can’t explain to a 12-year-old what you’re looking for and why then you likely don’t need it.