Situation: A company is planning to pitch a Blue Ocean service to a major prospect. The service has a proven track record with industry leaders and is not being offered by other vendors. How do you pitch a Blue Ocean service?
Advice from the CEOs:
Start by listening to the client’s current situation. Here are some opening questions:
How did you get here? Just the 2-3 minute version. As a follow-up question, ask what their past performance has been.
What is your most important competitive strategic advantage? Follow-up: what is your future competitive advantage – the same or different?
If everything goes right, where do you see things in 2-3 years?
What obstacles, roadblocks and constraints will keep you from getting there?
Include graphics in your presentation on both the prospect’s current situation and how your proposal differentially impacts their ability to reach their future objectives.
In your presentation, highlight your ability to offer a very competitive overall cost proposal based on your ability to outsource work to lower cost subsidiaries or partners.
Emphasize your track record providing the proposed service to industry leaders.
Be sure that your overall proposal looks sound and responsive to the prospect’s need as you understand it. It will be important to understand whether the individual with whom you are meeting next has the same perspective. Try to determine this before your next meeting.
Adding an additional vendor within your proposed framework doesn’t upset the apple cart. It probably benefits everyone as long as it benefits the prospect.
Note: The term Blue Ocean Strategy comes from a book published in 2005 and written by W. Chan Kim and Renée Mauborgne, professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. The authors argue that companies can succeed not by battling competitors, but rather by creating ″blue oceans″ of uncontested market space through the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.
Situation: A company has relationship with a consultant. The consultant has approached the company for additional work with a higher dollar value. How do you assess the value of the services that are being offered? How do you assess the value of a consultant?
Advice from the CEOs:
Consulting is a competitive market. Look at the work being offered and tell the consultant that while you appreciate the value of her services and the relationship that she has with the company, you want to talk to others to understand the market rate for the additional services being offered.
Are consultants or contractors really much different from employees? How do you determine value when you are hiring? You determine this based on skills and market pay rate for skills. You’ll need to some homework to determine appropriate rates, but otherwise do the same here.
Look at your budget and upcoming expenses. If the proposed work is more important than other planned expenses, decide on a dollar figure and tell the consultant that this is what you’re willing to spend. If the consultant can convincingly pitch a higher value, you’ll listen.
Is the relationship with the consultant important to you? Is the proposed work important? If both are the case, sit down with the consultant and help them to craft a better offer.
Situation: A company’s employees are increasingly getting offers from other companies. They believe that they have a good team, a good work environment and offer a competitive pay and benefit package. However, they are concerned that the job market in Silicon Valley is heating up. How do you keep your employees on-board when they start receiving offers from others?
Advice from the CEOs:
Make sure that your wage and benefit scale continues to be competitive. The Silicon Valley Index, published by Assets Unlimited in Campbell, is the best local survey covering Silicon Valley and the San Francisco technology market.
Survey after survey finds that compensation is basically a hygiene factor – it has to be good enough so that needs are satisfied, but it isn’t one of the more important factors in retention. The Gallup Organization has determined that respect, challenging responsibilities, and personal recognition are much more important factors in employee retention. Be sure that you are actively involving your key personnel as leaders in formulating and updating your processes, and that there are plenty of opportunities for recognition and celebration for your staff.
If you are generating a profit, share this with the employees as an incentive. This may well be better spent in fun and team-building activities like a weekend in Tahoe for a team, or supporting their creative needs by sponsoring their efforts in engineering design competitions. Whatever is appropriate for your company, involve your employees in setting company performance goals and give them a voice in determining how achievement should be rewarded. Making them part of the process builds better long-term loyalty.
On the sales side, establish a reward incentive structure for bringing in new business for the company to prompt field personnel to develop and exercise their business development skills.
Whatever you and your team decide, be sure that your choices support your overall strategic plan.