Mark Jewell's Blog: Selling Energy, page 216

The Innovator’s Dilemma

Why do successful companies fail and shut down?  Over the past fifteen years the lifespans of companies are shrinking, regardless of whether they’re household names and seemingly unstoppable.  The failures and shuttering of companies like Sears and Polaroid are examples of a shift in the marketplace, and at times these changes seem unforeseeable.

But are they?  There is a lot of food for thought in Charles O’Reilly and Michael Tushman’s Lead and Disrupt, which examines this phenomenon from the inside out.  The tendency for larger companies to rest on their laurels and stick to what works ultimately gets them into trouble.  In some cases, “if it isn’t broke, don’t fix it” might be good advice, but in others it may be refusing the life preserver that keeps you afloat.

O’Reilly and Tushman argue that the most successful companies survive because of their adaptability to changing technology and customer demand.  A stellar example is GKN, which started as a coal mine before moving on to produce iron, then metal fasteners (bolts, screws & nuts) and eventually aircraft and auto parts.  What would have happened if the company had insisted on sticking with coal mining?   In all likelihood, it would have been another casualty among thousands.

Alvin Toffler once remarked, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”  Lead and Disrupt contains a number of case studies exploring “ambidexterity,” the authors’ term for a company keeping one foot in the past (what works) and one in the future (exploring innovation).  The subtitle of the book is “the innovator’s dilemma,” which describes this balancing act.  Whether you’re in a leadership position or in the trenches, understanding this kind of adaptability is a must.

Here is the summary from Amazon:

“In the past few years, a number of well-known firms have failed; think of Blockbuster, Kodak or RadioShack.  When we read about their demise, it often seems inevitable—a natural part of ‘creative destruction.’  But closer examination reveals a disturbing truth: Companies large and small are shuttering more quickly than ever.  What does it take to buck this trend?

“The simple answer is: ambidexterity.  Firms must remain competitive in their core markets, while also winning in new domains.  Innovation guru Clayton M. Christensen has been pessimistic about whether established companies can prevail in the face of disruption, but Charles A. O’Reilly III and Michael L. Tushman know they can!  The authors explain how shrewd organizations have used an ambidextrous approach to solve their own innovator’s dilemma.  They contrast these luminaries with companies which—often trapped by their own successes—have been unable to adapt and grow.

“Drawing on a vast research program and over a decade of helping companies to innovate, the authors present a set of practices to guide firms as they adopt ambidexterity.  Top-down and bottom-up leaders are key to this process—a fact too often overlooked in the heated debate about innovation.  But not in this case.  Readers will come away with a new understanding of how to improve their existing businesses through efficiency, control, and incremental change, while also seizing new markets where flexibility, autonomy, and experimentation rule the day.”

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Weekly Recap, March 4, 2018

Monday: Check out Clay Water Brick, by Jessica Jackley, which explores entrepreneurship from a philanthropic point of view.


Tuesday: Explore the “Basics of the Trojan Horse.”


Wednesday: Explore how to overcome the “My Building Is Too Old” objection.


Thursday: Read up on how to sell energy efficiency to homeowners.


Friday: Learn how to effectively frame savings-to-investment (SIR) for homeowners.


Saturday: Read this article for 18 Habits of Successful Sales Pros.

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18 Habits of Successful Sales Professionals

It doesn’t matter how many great ideas you have – unless you are able to communicate your ideas effectively, you might as well not have them. People who communicate well, do well. You have to be an effective and persuasive communicator in order to make something happen.

In the efficiency sales setting, you have to sell your ideas.

The purpose is to persuade a person or a group of people to approve a recommendation or proposal and agree to put it into action.
Bad communication slows things down or stops the process dead in its tracks; good communication speeds things up.
Your prospect will judge the accuracy of your engineering by the quality of your communication. Poor communication can ruin a sale that would have otherwise been in your pocket.

Hubspot published an article that examines eighteen skills the best salespeople share. If you find yourself having trouble demonstrating the value to your prospect, I highly recommend reading this article and working on these habits of effective reps.

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Framing SIR for Homeowners

If you’ve attended my sales training or are a frequent reader of this blog, you know I’m a big fan of using savings-to-investment ratio (SIR) to showcase the benefits of expense-reducing capital investments (see last month’s “The Power of SIR”).  It’s a simple way to showcase how many dollars of present value you would receive for each dollar invested today.

Comparing the contemplated investment to a mythical ATM machine is a  particularly effective way to convey the concept of SIR whether your listener is financially sophisticated or not. Imagine that your magical ATM machine would return $2.50 for every dollar you inserted.  How many dollars would you put into that machine?  Probably every dollar you had, and perhaps every dollar you could borrow!  Well, that machine mimics an SIR of 2.5.  Simply put, every dollar invested today generates $2.50 in present value returns over the course of the investment.

In fact, the most compelling and concise financial analysis is one that shows a distinct SIR figure for each year of a multi-year horizon.  Showing your prospect how many times their original investment they are likely to receive given a variety of potential holding periods gives them the confidence to say “yes” today.

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Selling Energy Efficiency to Homeowners

Your own home can be one of your best investments.  It can provide a better financial return than the stock market, the money market, a certificate of deposit or a bond.  So what about investments that improve that already attractive investment’s energy efficiency?

If your home becomes more comfortable after energy efficiency improvements, chances are you won’t be as quick to move, which would help you avoid an expensive transition expense.

And even if you do wind up moving, there are more and more data in the marketplace to support the contention that efficient homes not only command a price premium over their less-efficient counterparts; they also spend fewer days on the market once they are listed for sale.

Another interesting dimension to consider is what you could do with the utility savings.  Would you repurpose those dollars to pay down your mortgage more quickly?  Would you reinvest them in home improvements that would further increase the comfort (and perhaps value) of the house?

Those savings could also help fund a child’s education, a new car or other discretionary expense.

Bottom line, there are plenty of advantages to making one’s home more efficient, and the best approach to writing a one-page proposal to convince a homeowner to invest in EE improvements is to first calibrate your recommendations according to the homeowner’s stage of life and financial situation.  You might start by asking the homeowner:

Are you still paying off your student loans?
Are you currently paying kindergarten tuition or saving for college?
Are you feathering your nest for retirement?
Are you planning on making this a rental property eventually?

With this kind of brainstorming you’ll uncover compelling reasons that a homeowner should be embracing energy efficiency.  On any given street, you’ll likely find newlyweds and senior citizens and empty nesters and everything in between.  Take the time to evaluate each of your prospects’ values carefully and you’ll be better positioned to uncover the emotional drivers for each person.

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My Building Is Too Old!

Every now and then you’ll hear the objection that it’s too hard to make older buildings energy efficient.  I think that’s one of the silliest objections I’ve heard for a couple of reasons, and after thirty years in the business and hearing just about everything, here are some ways to handle it.

One of the more comedic ways you could counter this objection is to say something like “Well, it’s funny you should mention that. The oldest building in the United States to receive an ENERGY STAR was a bank branch in Cambridge, MA built in the 1800s.  How old is your building?”  Of course, most of the people raising this objection are talking about buildings built in the ‘80s or ‘90s.  Sometimes even the ‘00s.
You’ve got to remember how buildings were constructed back in the day. Most of them are made out brick with really thick walls, great thermal mass and smaller windows.  They might not have the curtain wall technology of newer buildings; however, they have excellent insulation potential.
Because a building is older there’s a greater chance that the mechanical systems are completely retrofit from the time they were built until the present. As a result, you’ve got the best of both worlds – an incredible thermal envelope and mechanical systems that are more likely as new or even newer than a building constructed more recently.
The EPA has done a study of buildings and found that the age of a building is not significantly correlated with energy performance. I’d also encourage your prospects to visit the ENERGY STAR registry of labeled buildings and take a look at the years many of them were built.  There are now over 20,000 of them and age isn’t a discriminating factor.

So as much as you’d think the older building excuse might be a problem, it’s just that – an excuse.  If someone frets about it during your pitch or brings it up in later discussions, don’t hesitate to put it to bed.

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The Basics of the Trojan Horse

When it comes to proposing energy efficiency changes, it may seem overwhelming to your prospects.  They may perceive it as a hassle-filled process with paperwork and government interference, or something that has little value to them.  As with any ninja strategy, you’ll have to ask yourself how to overcome their objections.

Here’s are the basics.  A Trojan horse is only useful if the people inside the castle think that the horse is worth bringing in.  If you say, “I’m going to do __________ and install _________ and it will cost _______,” it’s unlikely they’ll bring it through the gates.  It might seem unnecessary, frivolous or inconvenient.  It’s also possible that they don’t understand what you’re offering or how it might benefit them.

This is when it’s essential to frame what you’re offering in a way they can understand.  Do your research and offer your findings in a digestible way.

For example, if you’re pitching to a multi-tenant building you may say, “If you make some changes you may be able to attain an ENERGY STAR® rating.  Your neighbors have already done this and they have had an easier time attracting and retaining tenants as well as charging higher rents.  If you have a lower score than you thought, you might be interested in working with us to improve the energy efficiency of the building.”

This is just one example of many; however, this kind of communication works nine times out of ten.  I’d come right out and say it.  “That’s why we do this.”  In the end that is what rings true: being honest with your client about your “why” and how your offerings bring value to the table.  These are the most important parts of the Trojan horse you’re building and the most likely way you’ll be invited in.

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Making Something from Nothing (For the Better)

I’ve often repeated some great advice my father shared with me, “The best way to prosper yourself is to prosper others.”  This advice goes hand in hand with a quote from Jessica Jackley’s Clay Water Brick: Finding Inspiration from Entrepreneurs Who Do the Most with the Least: “The greatest entrepreneurs succeed not because of what they possess but because of what they are determined to do.”

This is the basis of Jackley’s book, which explores entrepreneurship from a philanthropic point of view.  When it comes to prospering others, Jackley had a vision for her business and had to fight hard, often against the odds and with ceaseless patience.  But she succeeded.  Her brainchild is Kiva, a nonprofit that offers micro loans through online donations.

Making a successful business out of nothing was difficult, but Jackley didn’t give up.  The principles of her book are inventive and in line with what we teach at Selling Energy, which is to use everything at your disposal and make a strong case for what you’re selling.  Sometimes you have nothing at all, and Jackley’s story is proof that you can still succeed.  When it comes to trying to make the world a better place – particularly through helping others – this is a required read.

Here is the summary from Amazon:

“In the tradition of Kabul Beauty School and Start Something That Matters comes an inspiring story of social entrepreneurship from the co-founder of Kiva, the first online micro lending platform for the working poor. Featuring lessons learned from successful businesses in the world’s poorest countries, Jessica Jackley’s Clay Water Brick will motivate readers to more deeply appreciate the incredible entrepreneurial potential that exists in every human being on this planet – especially themselves.

“The heart of entrepreneurship is never about what we have. It’s about what we do.”

 

“Meet Patrick, who had next to nothing and started a thriving business using just the ground beneath his feet . . .

“Blessing, who built her shop right in the middle of the road, refusing to take the chance that her customers might pass her by . . .

“Constance, who cornered the banana market in her African village with her big personality and sense of mission.

“Patrick, Blessing, Constance, and many others are among the poorest of the world’s poor. And yet they each had crucial lessons to teach Jessica Jackley –lessons about resilience, creativity, perseverance, and, above all, entrepreneurship.

“For as long as she could remember, Jackley, the co-founder of the revolutionary micro lending site Kiva, had a singular and urgent ambition: to help alleviate global poverty. While in her twenties, she set off for Africa to finally meet the people she had long dreamed of helping. The insights of those she met changed her understanding. Today she believes that many of the most inspiring entrepreneurs in the world are not focused on high-tech ventures or making a lot of money; instead, they wake up every day and build better lives for themselves, their families, and their communities, regardless of the things they lack or the obstacles they encounter. As Jackley puts it, “The greatest entrepreneurs succeed not because of what they possess but because of what they are determined to do.

“In Clay Water Brick, Jackley challenges readers to embrace entrepreneurship as a powerful force for change in the world. She shares her own story of founding Kiva with little more than a laptop and a dream, and the stories and the lessons she has learned from those across the globe who are doing the most with the least.”

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Weekly Recap, February 25, 2018

Monday: Check out The Hard Thing About Hard Things, by Ben Horowitz, for a survival guide to building and running a business.


Tuesday: Learn some online research techniques to help you hit the ball out of the part during your first meeting.


Wednesday: Explore more research techniques in order to give you insight into how you might approach a prospect during your first meeting.


Thursday: Read up on how to get your prospect to agree to let you sit in on a meeting with the rest of their committee.


Friday: Try out Gigwalk if you need boots on the ground to help take stock of efficiency issues, faulty equipment or doing a lighting count.


Saturday: Read this article for “19 Tiny Habits That Lead to Huge Results.”

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Small Changes Making Big Changes

January is gone and February is on its way out; however, the beginning of the year isn’t the only time you can step back and re-evaluate how you’re going about your day to day activities.  That can happen anytime.  Anytime is the right time to push yourself to be better.

I recently came across this simple but stunning article “19 Tiny Habits That Lead To Huge Results.”  Most of these suggestions are the things that we forget are important to do in order to balance ourselves and take stock of our progress.  These tips might represent a gentle reminder for some and a major undertaking for others.  However, this piece certainly lives up to its title.  Contained within are simple actions that collectively can make a huge difference.

Looking for small commitments that can change your life in a variety of ways?  You can review Inc.’s article here.

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