TSP076 | Dan Weinfurter – Transcription
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John Livesay:
Hi and welcome to The Successful Pitch. Today’s guest is Dan Weinfurter, the author of Second Stage Entrepreneurship. The other title was going to be How Hard Could It Be?, but then decided not to have that title. He said, “It’s so important to hire smart people. The cost of hiring the wrong person is higher than leaving the position unfilled.” He said, “If you really want to be successful in sales, you must have people happy working for you, by having a culture that resonates for them, and they must like the person they worked for,” and he goes on to say that, “If you want to make a pitch, make sure that it’s targeted and consistent with your branding.” Who are you? What makes you different and better, and how can you prove it? And the best way to prove it is through storytelling. You must build credibility and trust to the stories you tell.
The interview begins in 45 seconds right after this information on how you can get funded fast.
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Hi and welcome to The Successful Pitch Podcast. Today’s guest is Dan Weinfurter, the author of Second Stage Entrepreneurship. He’s also the founder and CEO of GrowthPlay, which is a sales effectiveness business consulting firm, and Dan consults with many organizations developing and implementing sales and leadership effectiveness, strategies that drive profitable growth. In his 25 years of being a serial entrepreneur, he’s built three, not just one, but three successful companies including Parson Group, his first start-up that landed number one on the coveted Inc. 500. In addition to consulting, speaking, and interim management, he guest lectures at leading business schools, and was a mentor for the Clinton Foundation’s Institute for Entrepreneurial Excellence. Dan, welcome to the show.
Dan:
John, pleasure to be here.
John:
What a great background that you have, and what great experience you have, especially for a podcast like this one called The Successful Pitch. You obviously know how to sell and pitch. Can you take us back to your early career of selling and your first start-up, and how did you know that that’s what you wanted to do?
Dan:
Well, it is probably a two-part question, so I’ll try to answer both singly and then we can go from there. So right out of college I was hired by General Electric, and I went through their sales training program. So that was back in the day where a company would hire a 22 year old and put him through a year of training, with the hope that the 23 year old would be able to sell sophisticated services to executives in big companies. Those days are somewhat gone where companies spend that amount of time and effort bringing young people up to speed. But for me it was really fortunate and has got me started in a career early, even the businesses I’ve started, the common denominator has been the buildup and deployment of an effective sales organization. So, my GE career lasted eight years, and then subsequently GE have now done — this is my fourth, actually, that I’m working are now all in business services, trying to help companies do one thing or another.
John:
Let’s talk about the Parson Group. Did you have to raise outside funding for that, and how did you come up with the idea?
Dan:
So the idea for Parson Group actually came from a business that I was involved with, previous to starting Parson Group that was an information technology staffing business. We watched ourselves grow and we completely, and continuously outran our operational capability which included finance in accounting, and so, we turned to the outside staffing, temporary service providers for help. As we watch what these firms did, we saw that they frankly were terrible and violated all of the things that we thought were responsible for our group at the firm that I was at. And so, the notion was hatched, “Well, what if you took our business model and applied it to the finance and accounting vertical, and you had capital and you built it correctly, what could you do?” And so, after ARC, which was the firm I was at went public, I resigned, wrote a business plan, and raised essentially $4 million on a PowerPoint. We used that to sort of hire five people in Chicago in July 1995, and six years later we had a $90 million business, all organic growth.
John:
Amazing. I bet those investors were happy.
Dan:
Well, we needed to go back to them a couple other times.
John:
Which is fine. That’s expected.
Dan:
Which is fine.
John:
You hit the milestones. You need more money to grow, yeah.
Dan:
We did, and so yeah, they were very happy. It worked well where all parties involved.
John:
Great. Well, let’s talk about this great book of yours. I’ve had the pleasure of reading it cover to cover. It’s just fantastic. How did you come up with the title Second Stage Entrepreneurship?
Dan:
Well, the original title was How Hard Could It Be?, which was not meant to be serious, but that was part of the problem. So, the editor that I was working with didn’t think that that title was right and thought it might offend people, and so as we were working with the publisher which is Palgrave Macmillan, we kicked around a bunch of different ideas, and frankly, the editor at Macmillan gets credit for this, and that she thought that there was this void between how do you start a business and then how do you get it to the next level. Plenty of books on startups, plenty of books on sales, but this whole — what we call “second stage growth”, she thought that there was a void in the market. So we reshaped it a bit through the editorial process, and made it far more broad-based, and then instead of just talking about sales, we talked about all of the things that tend to be important in growing a business from an early stage to what we call the second stage, which is a much bigger business obviously.
John:
One of the key things that’s over and over important is hiring smart people which you talked about in this great book. I know that investors look to that when you’re pitching for money, who’s on your team, and even as you continue to be successful you need higher and higher rounds, one investor told me that the quality of your team has to equally go up. The CEO can’t be the CFO anymore. Can you speak to some of the things you talked about, like how to hire smart people and in specific, I love what you wrote when you said, “intellectual curiosity.” Tell me what that means.
Dan:
So two parts. So, ironically, I think that the hiring process, while it is the most important part of the growth journey for any company. Ironically, my view is that it’s the least disciplined. So you think about what’s involved in hiring a person. So in most cases, it’s a million dollar and up decision that somebody is making, and seldom is that rigor applied for that level of decision-making. So salesperson for example seems fairly routine, it’s at least a million dollar decision, and then I tell people I’ve made it wrong enough times to know that my numbers are right.
John:
That’s great.
Dan:
And in a manager, so if you’re starting a new geography, that’s at least to $15 million decision and I could say the same thing there. I’ve made a mistake enough to know that that number is correct. So, first I try ground people in the fact that these numbers are real, and if you get the right person great things happen, and if you get the wrong person bad things happen. So, what the trick is is that, every role for every company at every stage of growth is different, and so you can’t just take what you’ve done in the past and apply it to the business that you’re a part of today. It might or might not work. It’s a flip of the coin. So I teach a class at Kellogg and I was guest lecturing into this class called Digital Innovation, and one of the things that the professor teach us in that class pointed out which is true is that, in the technology space, and it’s probably no different than anywhere else, the founder hires his or her number two 70% of the time without defining the role and without talking to more than one person.
John:
Really? Not even a — yeah, I can understand that to finding the role because it’s you’re going to do everything, but not talking to more than one person fascinates me.
Dan:
That would be a lack of intellectual curiosity, would it not?
John:
It would. There we go. We’ve got it defined, and you’ve brought it in full circle. I love it.
Dan:
But it’s funny, you talk to people, and this is one of my favorite tricks, is after an interview is almost done, you ask a person, “So, what are you reading today?” And it’s amazing to me how often you get an answer, “Well, I don’t have time to read. Too busy. I don’t really read,” or “I’d look at some magazines and there’s papers but I don’t read any books.” It’s hard for me to imagine how anybody can get the information that they need to do their job correctly without reading, and furthermore, just if you’re curious about life, you ought to be picking up things even if they’re not business related in reading or pick up a novel, pick up a political and non-fiction book. Read something.
John:
Right. I couldn’t agree with you more. Really is, it’s like what you’re putting into your body for fuel, what are you putting into your brain through reading to keep yourself growing. One of the things you say in Second Stage Entrepreneurship is “The cost of hiring the wrong person is higher than leaving the position unfilled.” We’re going to tweet that line out. Can you give us a story around that?
Dan:
Yeah, one of the things that I learned the hard way again is it’s better to have no one in the role than the wrong person, and the theory is there is if you have no one, you do something about it. If you just hope that it’s going to get better, guess what? It doesn’t. So I encourage all people, if you have somebody who’s not correct in the role, move that person along and then go about finding the new person. You’re going to be far better served in the — even in the short run.
John:
And Dan, how long do you give somebody in a new position to prove themselves? Three months? Six months? A year?
Dan:
Well, I’d give you the classic consulting answer, it depends.
John:
Okay. Let’s say if it’s a new salesperson. Let’s say I’m a founder of a startup, I’ve got somebody who obviously needs some training, and come up to speed, how much time do I give them to prove themselves, before I know it’s a wrong choice?
Dan:
If you’re paying attention, it shouldn’t take very long, and again, you have to pay attention. So it’s not so much that you manage it by numbers per se, because the specific numbers can be wildly good or wildly bad based on just luck and timing. But if you’re paying attention and you’re working with that person, you can see the quality of interaction they’re having with others, you can see if they’re doing the right things that are likely to make it work over time. So, be a little bit lax in terms of the specific empirical outputs, but be really rigorous about the quality of the interactions and the qualitative aspects that you know will dictate success for that role over time. That’s the critical thing.
John:
That’s incredibly valuable.
Dan:
That might be — it could be a week, it could be a month, it could be six months, but you just have to be paying attention.
John:
I love that, because so many people just look at the numbers, right? If you don’t meet your quota by this time, “Boom! You’re out.” Like you said, there’s a lot of other circumstances. If the person’s kind of a good work ethic, and is a good culture fit, and like you said, doing what it takes. The number of sales calls, phone calls, emails, whatever it is, to be successful then focus on that. Now, let’s dive into this whole section you have in Second Stage Entrepreneurship about the power pitch. I love your whole philosophy that if you ask five sales people to describe what the company does, five other people who are in sales, and then five trusted customers to describe what the company does, sadly, you would probably get a lot of different answers.
Dan:
You will, and it’s so fundamental and so basic.
John:
That you said, you keep talking about the need to be targeted and consistent with your branding, right?
Dan:
So think about it. Everybody should be able to answer these questions with complete clarity. What do you do for your customers? What do you do that’s different? What do you do that’s better? And be able to demonstrate or prove it. You should be able to do that in very short periods of time. You might only have, literally, 20 seconds to answer the question what do you do, you might have 15, and so people actually — they think it’s easy and so they just wing it. But to get that nailed down with the level of clarity and rigor that’s necessary, actually, involves a lot of practice, and a fair amount of, what I call, “preparation” so that you have different versions of that for different audiences.
If you’re talking to somebody at a cocktail party, it’s probably different than if you’re talking to a CEO or you have a prearranged meeting, and you have that actually, ready to go.
John:
Yes, and most people think they can just wing it, and they are so afraid of sounding robotic or they don’t want to memorize anything. I constantly teach people, “You know what? Tiger Woods doesn’t wing it. Meryl Streep doesn’t wing it. Everybody who is a professional prepares, right?”
Dan:
They prepare, and the only way that I’ve ever gotten people to take it serious is to film them and then actually show them how bad they are at it.
John:
Yes, you really hear the stumbling and how hard it is to follow what they’re trying to say and how few people really understood what they said and all that stuff, right?
Dan:
Well, I go back to my GE days, and we did this every day for my entire first year of training. We need to do these role plays and if you did it badly they play it back three or four times until everybody in the room was laughing. I mean, it was all in good fun with all these people here, but you actually get it nailed down, okay, this stuff all is hard and needs to take practice. That’s where all these started from and it’s how I become part of what I use to be, a critical path for business success, and get nailed it.
John:
Since you’re an expert in sales, and managing sales teams and hiring the right team, one of the things I’d love to have you share with us is how do you get sales people who are so competitive, not only outside of the company but within the company, to start sharing best practices with each other, so that the whole company can benefit?
Dan:
Well, it’s a simple question, but probably a complicated answer. So sales people, they’re competitive with each other, but they also like to be part of the gang. There’s a fair amount of camaraderie, if everybody hates you and you’re a salesperson, that doesn’t work very well because no one will hang out with you. So, effective sales teams that I’ve been part of, while they are competitive, they’re certainly more than willing to talk to their peers about what they do. Many times they will have the point of view of, you probably can’t do it as well as I do, so I have no risk in telling you what I’m to, but I think the sales manager who’s doing his or her job correctly is drawing from the entire group all of the things that can be done that tend to move the meter in work in that particular business. Then bringing the team together so that those best practices are shared amongst the group in a way that they’re digestible or consumable, and most people that I’ve worked with are more than willing to be part of that process.
John:
That’s great. Whether you’re pitching or an investor for money, or pitching for a new client, it’s all the same where you have to be able to describe what you said, “What do you do that’s different and better to be able to prove it?” And the best way I know is through stories, and you write about this is Second Stage Entrepreneurship a lot. Where you have a whole process of, tell a story about a problem another client had and be sure to name that client, and how they tried it without success, without your help, and then how you came up with the solution and then most importantly, which I think most people forget in these kinds of stories, is what kind of ongoing success does the client have from working with you? Can you tell us how you developed such a smart strategic way to tell a story that helps drive sales?
Dan:
Actually, I read a book and this is called What’s Your Story? It’s written by University of Chicago Business School Booth professor by the name of Craig Wortmann, called What’s Your Story? But it actually — some of that goes back before that is was at my GE days, one of the things that we would do is we would build stories about where we had done this work for others in the startup world, and it became a far bigger necessity for success. So if you have a company that doesn’t have a name brand and you’re trying to sell to a Fortune 500 client, you have to build credibility and trust. You can do a little bit of that by how you behave what they’d — in their heart to hearts, they want to also know who else do you this for, and how do I know that I’m not making a career limiting decision by bringing you into my firm. The stories are a great way to build that credibility and trust, especially if you can make them personal, and you name the person that you were working with, and you talk about the impact that it had, not just on their business, but on them personally. Because in the end, almost everybody makes a business decision based on the impact to them personally, and then they back into the business rationale for that decision. It’s not always that way, but it’s almost always that way. Great predictable human nature.
John:
I love that. Everyone thinks if we just do the job you’re asking us to do and there’s RFP, we’ll get the business. It’s like if you tell a story of somebody else hiring you over a competitor, and that person looking so good to their boss that they got promoted, that’s an example of a personal impact, right?
Dan:
Yeah, in fact, it’s rarely RFP away, you’re not going to win it. Unless you have to write it, it’s a waste of time and effort. Spinning your wheels.
John:
We’re going to tweet that out. “Build credibility and trust through stories.” That’s a great line. It really really is. In reading your book, I came across, that we have a mutual friend Paul Rand, who runs his wonderful social media agency in the Midwest in Chicago, my hometown, and he said, “Your brand is not what you say about yourself, it’s what your customers say about you.” Right?
Dan:
Exactly.
John:
I’d love to have you speak to, of that about, not just your brand that you’re working for — you know, how important it is to sell the brand of whatever company you’re working for, but this whole concept of having a personal brand, I think is really essential as a salesperson. Don’t you?
Dan:
It’s not only essential as a salesperson but for any role in life. Think of the politicians that are on the news right now. They all have their personal brands, which in some cases is helping them and then some cases it’s not. But, the other part of this is it takes a lifetime to build a reputation and not very much time in order to wreck it. So, what Paul talks about — and I’ll actually see him on Fridays, is you should live your life as though every day is part of the building of your own personal brand. Again, it’s not so much what you say, it’s people watch what you do, and just living a life where you’re truly your word, and if you say you’re going to do something, you do it. If you’re building a business or you’re part of a business, make sure the business behaves in a very similar way. If you say you’re going to get back to somebody on Tuesday morning, get back to them on Tuesday morning, not Tuesday afternoon.
John:
Dan, you’re singing my song. I mean, that lack of integrity drives me crazy, and sometimes you can set the bar just by doing what you say you’re going to do. If you say you’re going to follow up, follow up, that’s automatically sets you on the top, I don’t know, 10%, sadly, of salespeople who don’t follow up, that 90% that don’t.
Dan:
It’s probably higher than that.
John:
One of the things you talked about is this written monthly review, and a lot of people hate reviews, a lot of people love them, if they get good ones. But I like this whole concept of doing it monthly instead of quarterly or twice a year, and some of the questions that you think people should be is asking is how do you feel about last month? I think what’s really fascinating is to tap into people’s — do you feel proud? Do you feel embarrassed? Do you feel frustrated? And then what didn’t happen that you want? And this for me is the number one thing that made me successful is, what are your top ten accounts and your top ten opportunities? If you just focus on that, I think you will — the 80-20 rule kicks in, don’t you agree?
Dan:
I would agree, because the ones that are on that top list are probably not going to get done. You think about any executive is similar that they can only really act on the top five things on their list of objectives under a given point and time. So if you’re trying to get to them with something that’s not on the list, good luck getting — they might listen but they’re not actually going to take action on it, same as true with driving sales activity.
When I was first told I had to this, this is one of the stories I tell on the book, so I said, “You got to be kidding me. Monthly? Seriously?” I pushed back on it and I thought it was just going to be a time consuming sort of pure credit process but it’s just the opposite, the people have to come in with the knowledge of what they did in the prior months, what they’re going to do in the current months, and then, probably the important part is that the people who are doing really well, get really good reinforcement, and get the help that they need to do even better. Sometimes those conversations just don’t happen with the people that are doing well, and the people that aren’t doing well is sort of a paper trail or on a trail that’s built up over time. We talked about last month, you know, we’re having this same conversation again, it’s just doesn’t feel really good to me.
John:
It’s groundhog’s day, right?
Dan:
Deja Vu all over again as the saying goes.
John:
Right.
Dan:
It doesn’t take very long before you realize that this is not going to work in that point and you don’t have to go through the charade of a performance plan, you can just move on the person because the trail is already built. But the most important thing is it helps the good people do better, because it reinforces the behaviors that they have put in place, that are responsible for their success, and the review forces a conversation that you already need help. One of the big jobs of a sales manager is to really help the team, help the individuals that are part of that team be successful. It’s not to manage and control, that’s what people think, that’s not it. It’s been helpful.
John:
Right. One of the things you have on your GrowthPlay website is how to, not only find great talent but keep them. Can you speak to what your secret sauce is there?
Dan:
It’s probably not change in 30 years, and really, there’s two things that I think are critically important. So one’s the culture of the business, it is the culture and the mission resonate with the people that are part of the team. So if they’re engaged in a business that they don’t really like, I mean, good luck keeping that person over the long haul. So that’s one, and then related to that is who they work for, and part of the most important person is their direct supervisor, but if it’s corrupt or bad at the top, that will engender cynicism and it will end up rotting from the top eventually. There’s people who won’t put up with that over the long haul. So, I mean, the truth is when people quit, they quit their boss or their bosses first and foremost, and everything else follows.
John:
Yes, it’s not for the extra X percent of money, is it? It’s about not feeling appreciated a lot.
Dan:
Well, you just work for a jerk. There was a study in HBR, I just read a few weeks ago, was done by some Gallup researchers and this is almost hard to believe, I think it ran last year, and they pointed out that American businesses hire the wrong person in the first line managerial role, 82% of the time.
John:
Wow. Well, do you think, part of that is, if you’re a great sales person, then you get promoted, and suddenly you’re sales manager and it’s a completely different skill set?
Dan:
Absolutely. They’re in fact, the better the salesperson you are, the more likely it is that you’re not going to be a good sales manager. In fact, we have the science behind this, only 10% of successful sales people have the innate behavioral DNA to be successful sales leaders.
John:
So what’s the solution? Should they go through some training if they want to do that? Or is it just not in their DNA? Doesn’t a sales manager need to have been a sales person to understand what’s required?
Dan:
That is true. In fact, you have to have been a somewhat successful salesperson to be a successful sales leader, but you have to go find the people in your sales organization or who exist elsewhere, who both could sell and can lead people. And it’s a narrow pool of people you’re looking at, but you got to find them or it’s not going to work. Think about it, as a salesperson, it’s all about yourself. So as a sales leader, it’s all about the team. As a sales leader the job is to facilitate an outcome through collaboration. As a salesperson you just take charge and get it done. Much like, if you think about an athlete versus a coach, and it’s the same analogy.
John:
Yes. Got it. Terrific.
Dan:
If you’re really good, you don’t even realize what you’re doing, you just do it naturally. Can you train other people to do that? Maybe, some can.
John:
Yes. Or do you have the patience to train them, right? That’s the other thing you have to realize that — just because you’re on a certain level of expertise, the junior salespeople probably aren’t. They’re going to need some hand-holding and some patience.
Dan:
Very true.
John:
Well Dan, how can people follow you on social media, as well as, obviously, GrowthPlay.com. Tell us the best way to keep track of what you’re doing and how to engage with you.
Dan:
So I’m on Twitter at @danweinfurter D-A-N-W-E-I-N-F-U-R-T-E-R. I’m on LinkedIn, I think it’s danielweinfurter. I have a personal website danweinfurter.com and then we obviously have a company website growthplay.com. So all of those tend to work and work pretty well.
John:
Fantastic. Well, obviously besides the Second Stage Entrepreneurship, which we’re going to put the link in the show notes for people to buy, you also mentioned that great book What Is Your Story?, so we’ll put both of those in there. Dan, any last words or thoughts to leave with the listeners about how to pitch or how to sell?
Dan:
Probably the last thing, sales in my view is one of the last great frontiers that’s still not viewed as a discipline like finance or marketing or engineering, yet, half the people that come out of college end up in a sales role, and any white collared professionals spends a significant portion of his or her time in their occupation of selling, and so I think it pays everybody dividends to actually do what you would do with any discipline which is to study and get good at it, and not just think that you can wing it. There are definite activities and processes that are proven to work in sales, just as they work in other disciplines, and give sales it’s due and to stay in court, because it’s deserving of it.
John:
Fantastic. Dan, thanks again for being on the show. You’ve been a great guest, and everybody, go get this great book, Second Stage Entrepreneurship.
Dan:
John, thanks for having me on the show. I appreciate it.
Thanks for listening to The Successful Pitch Podcast. If you liked the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out.
You know, people say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest but when it comes time to write the check, they don’t do it. So, how do you get people to say yes and then follow through? Visualize yourself on the left side of a riverbank and you have to cross the river and on the other side of the river is where the funding happens.
So, first, you make up your idea and then you make it real and then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own with a lot less frustration than you will get when you hear a bunch of no’s and you don’t know why. So, if you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar and sign up and get in depth information on how you can get funded fast. Thanks.