You Have 10 Minutes: Maybe
Over the past couple of weeks this writer has been part of several conversations regarding the value proposition of technology for established as well as startup companies and how to articulate it.
This remains a tough subject and we have been addressing it over the years. However, there is an approach that is successful when properly executed.
As part of master’s level course, one graded test for my students goes along these lines. You have been given the opportunity to ‘pitch’ your CAPEX/Technology Sale to the Chief Financial Officer. In the current market environment, she is skeptical about new capital investments. She is the economic buyer, very busy and has allocated no more than ten minutes for this meeting? How will you close the deal?
Students are offered the opportunity to select their own project or sales initiative, so they are very familiar with the background. This also allows them the opportunity to ‘rehearse’ with the instructor before the actual meeting with the CFO.
First, What Not to Do
Sadly, many sales representatives/internal project advocates view the selling process through the following lens:
The merits of this project or technology solution are obvious. After all, everyone agrees we must move forward.
The Return on Capital Employed (ROCE) or Net Present Value (NPV) is clear on the chart presented. The justifications (spreadsheets) support our plan.
Moreover, senior executives only want the single PowerPoint slide and high-level risk overview. After all, she doesn’t want the details and has been briefed by her staff. How much can be discussed in ten minutes anyway?
Hit–Lost Deal Button!!
If this scenario sounds far fetched, it is based on reality. At an Internet of Things conference, one panel moderator from a major professional services firm advocated that IoT investments must be made to remain competitive because everyone else is doing it. When this attendee asked about project governance and risk mitigation planning, was told it was outside the scope of the discussion.
What Drives Decisions?
One of the first things this sales guy does when preparing for a meeting with senior executives is to read the Letter to Shareholders in the customer’s Annual Report. Typically, the strategy, challenges and priorities of the firm are easily discerned.
If the project/solution is not aligned with business, success is much less likely. Also, how does it fit in the firm’s portfolio of projects/technologies?
Often risks are not as well understood as they could be with simple models suggesting exposures are low and unlikely. Many sale representatives do not even think about the governance issues associated with the ‘spend.’
Expect a senior executive to be engaged and ask insightful even tough questions. They have to be answered—with authority! Can’t wing this, only homework will prepare for this meeting!
Finally, what drives her? Not the company; the individual.
Hit–Won the Deal Button!!
Is this in the ‘too hard to do’ category? Not at all, and processes and means are available to guide this course. Several tools are available such as our Economic Value Proposition Matrix® and the white paper Asset/Equipment Integrity Governance: Operations—Enterprise Alignment. These can help guide your closing efforts.
Not a typical sales model but it works—several billion dollars later!
Lessons from the Classroom
As might be expected in an academic environment, many students struggled to reduce the data into a ten-minute compelling pitch. Mark Twain is credited with saying “I didn’t have time to write a short letter, so I wrote a long one instead.”
It takes significant effort to succinctly address complex multi-faceted problems. A classic; when tasked to write a one-page executive summary one student submitted a multi-page report with appendices. His retort was that the subject was too important to only write one page on it. This response defeated the learning objective of the exercise.
CFO’s do not make trivial decisions. If you would have her take time to listen to you. Be prepared!
Is the Deal Worth Winning?
For more information check out our Value Proposition Matrix® and the Digital Oilfield Case Study.
Millennials Take On Our Increasingly Complex World
Critical Mass: Value from the RBC Framework
Nuclear physicists define the term, “critical mass” as the amount of fissile material whereby a nuclear reaction is self-sustaining. From that original definition, the construct is further developed along societal and political terms as a function of the environment and number of adopters and their interdependencies that create enough of a consensus for individual actions that sustains an undertaking.
In 1996, the author published the first of several case studies on a societal interaction model based on the Relationships, Behavior and Conditions (RBC) construct among economic actors. Previously the model was only in the domain of academia.
This blog addresses contemporary issues from the RBC perspective and whether in the present state they are sustainable or not. Many readers may be familiar with the “Innovation Adoption Curve.” RBC seeks to enlighten the causality of behaviors that cause movement towards the critical mass that generates movement along this diffusion curve.
- Lessons from the Seventies November 12, 2019
- Want – Like – Need October 24, 2019
- It’s the Economics Stupid! October 18, 2019
- In Defense of Humans—Machines Are Not Ready Yet October 1, 2019
- Culture Matters A Lot! Cultural Interactions Matter MORE!! September 22, 2019
Other Blogs Dr. Shemwell Authors
Dr. Shemwell is an author for the following 3rd party blogs.
Governing Energy Blog
BTOES Insights is the content portal for Business Transformation & Operational Excellence opinions, reports & news. Dr. Shemwell is a contributor.
Consult 2050 connects organizations with a wide range of consultants all around the world. The firm operates an online marketplace for consultancy services.
About the Author
Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector. He is the author of six books and has written extensively about the field of operations. Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling Operational Excellence and regulatory compliance management. He has studied cultural interactions for more than 30 years—his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of societal relationships.