The Magic of Business Charisma eBook Edition

8/18/2019 The Magic of Business Charisma eBook Edition

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Ralph Laurieand

Jason Laurie

T HE M AGIC OF

BUSINESS CHARISMA™

The Magnetic Allure Which Attracts New Clients And Makes

Existing Ones Loyal Fans


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Copyright© 2005- The Laurie GroupAll rights reserved. No part of this book may be reproduced or

transmitted in any form or by any means, electronic ormechanical, including photocopying, recording, or by any

information storage and retrieval system, without permissionin writing from the Publisher.

This book is dedicated to PatriciaHyland, who taught us that thegreatest business lesson of all is apassion for life. We miss and loveyou.

Patricia Hyland

June 6th, 1950 - May 20th, 2001


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PREFACE

In May 2001, my sister-in-law, Pat Hyland passed away at agefifty. She was stricken with a rare form of cancer from which

she was unable to recover. At her memorial service, many ofher friends spoke about what a wonderful person she was. Butwhen her oncologist, a doctor who sees death on a regularbasis, walked to the podium, I was more than surprised. Whywould he choose to take time away from his business to saysomething about Pat? After all, this wasn’t the first time he’dlost a patient. He began talking about how Pat touched his life,how she had made a difference and left him a little betterperson. It was very heart felt and extremely emotional.

I took something away from that service. Regardless of yourpurpose in life, you need to nail it. You should make adifference whether it’s for your children, spouse, friend orbusiness enterprise. Being the best makes your time on thisearth worthwhile. Our lives are but a speck of time. Men livearound seventy-two years and women get to be around a bitlonger at seventy-eight years. I’ve discovered that having funeach and everyday makes life more fulfilling. If you’re nothaving fun, you’re wasting the precious time you’ve beengiven. Having fun doesn’t mean you don’t contribute, it just

means that you enjoy what you do so much that it’s not work.If you’re not happy in your work, change it. Don’t waste yourlife doing something that you don’t enjoy.

Pat inspired me. The purpose of this book is to pass on to youwhat I’ve discovered over the past fifty-seven years. It’sdesigned to help you make a difference in your life. It wouldbe a great honor for me to know that you will pass on whatyou’ve discovered from these pages to your staff, your fellowworkers, business owners, friends, and family. If we all work

hard together, we will make a significant impact.

Good luck and good reading.

Ralph Laurie


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INTRODUCTION

Writing this book is something that I’ve wanted to do for quite

some time but for one reason or another I never took the timeto do it. Like all things, I guess I could have blamed it on mytravel schedule, long working hours or just being too busy.Well, the excuses are gone, I’ve found my pen and here I amwriting this book.

This book talks about The Magic of Business Charisma™ thenext step beyond customer service. It’s the special magneticallure, which attracts new clients and makes existing onesloyal fans. In order to develop this special attraction, it’s vital

to incorporate a series of principles into your business life.This book is a compilation of these principles and stories frommy past experiences, which I’ve developed over the past 39years. The more principles you incorporate, the greaterattraction your business will have to your clients. This will notbe easy, but, if you want to be the best, it’s what you have todo.

In a way, writing this let’s me vent my feelings about howAmerican business operates or I should say how it bungles

away opportunities for greatness. It provides me a chance topoint out my past observations and share them with you. I’vespent the lion’s share of my adult life witnessing, experiencing,and interacting with businesses whose customer service, forthe most part, is atrocious. It doesn’t seem to make a bit ofdifference as to the size of the business either. Ma and Pastores and multi-billion dollar corporations have forgotten theirpurpose. By and large the customers are treated like second-class citizens. No one gets pleasure from waiting in long lines,enjoys being ignored, nor do we delight in playing the mindless

game of pressing buttons on a touch-tone phone, moving fromone set of menu options to another just to find that none areappropriate to handle our inquiry. And, when we are finallyconnected to a live body, they’re unable to help us solve ourproblem. Then we’re placed on hold only to be inadvertentlydisconnected.

I’m sick and tired of the phrase , “Thank you for your patience,” which is the most overused sentence of the Airlineindustry. I’m not the least bit patient and they’re thanking thewrong guy! I’m drained by having to play by rules that benefitcompanies at the expense of the consumer. I’m annoyed abouthaving to check in at the hotel after three p.m., but have tocheck out by eleven a.m. I find myself wasting time driving 10


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miles to a store to purchase an on sale item only to be told bythe clerk, “We’re out of stock, but, we’ll call you when it comesin.” Yeah, right! I can’t figure out how we’ve been duped tobuy-in on trumped up fees, such as shipping and handling,especially when the goods aren’t worth the extraneous

charges. I have a hard time figuring out why the HamptonInn, a low priced hotel, doesn’t charge for high-speed Internet,when the high-class Hilton does. I’m not sure how we gotsnookered into having to tip a minimum of fifteen percent to awaiter or waitress even though the service was lousy. And, ifit’s gratuity, why is it automatically added to my check, as acharge, when I have more than six people at the table? Whatever happen to “Welcome to Avis, my name is Bill, how may Ihelp you?” Why are we greeted instead with “Drivers License!Credit Card! Do you want the gas option? Do you needinsurance?” Where did the hamburger disappear to that isfeatured in the T.V. advertisement, with fresh lettuce, a crisppickle, real red tomato, and a ½ pound hamburger patty?What happened to truth in advertising?

I wonder who took away our common sense. I’m so tired ofhearing, “I’m sorry but that’s the policy.” Whatever happenedto guidelines? How about all the new stores, gorgeouslydesigned and equipped with 30 checkout stands but only have

4 employees to operate them. I’m tired of going to the movietheater paying a premium price for a ticket, a bag of popcorn,and a soft-drink then being forced to watch twenty minutes ofcommercials and previews before the actual show begins. Itirks me when I arrive at a restaurant for my specifiedreservation time and find that there is no table available. It’sangering to be relegated to the bar to wait an additional thirtyminutes.

What’s happening out there? Have we forgotten who we are

and whom we serve? Have we lost our collective purpose andpassion to serve our customers? Have we sold out toshareholders? If you pick up the telephone, is it possible toreach Mr. Sears or Mr. Wal-mart? How about Mrs. Safeway orMrs. Bank One, or Mr. Bank of America? What about GeorgeBest Buy, or Frank Home Depot? What about your localdentist, physician, attorney or accountant? One thing’s forsure, most phones will be answered by some automatedattendant who’s there to help put you in contact with the rightperson. Just try calling the phone company. They’ll put you in

contact with Mr. Phone Hell!

So who are the representatives of these companies? Who’scalling all the shots? Why does it seem like employees arepuppets being dangled from the stings of management? You’re


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probably not going to like the answer because it’s US! That’sright. The very people who are being treated like second-classcitizens are the very people treating others like second-classconsumers. Ironically, we’re also the shareholders, businessowners, employees, lower, middle, and upper managers.

We’re the board members, the dentists, the physicians, theattorneys, and the CPA’s. Collectively we’ve created thisproblem. Collectively we will have to be the ones that mustundo it.

This problem has taken over 100 years to develop and it’sbecome the very fiber by which our society has evolved.However, this is a new time and we are new consumers, andwe’re able to change it. It is the purpose of this book to helpyou see for yourself how this can be done. It’s not an easytask, but it’s a necessary task. As business owners,employees, managers, shareholders, board members, andcustomers we should begin to open our collective eyes andfinally see and take responsibility for what’s happening.

Recently, I retired after thirty-nine years of work. I was veryfortunate to have an outstanding career most of which wasspent in upper management. As I looked back on these pastyears, I felt compelled to write about the many business

failures and successes that I experienced as a means to helpyou develop an enterprise that could avoid the pitfalls ofcollapse and gravitate toward the rewards associated withachievement. Why listen to what I have to say? After all, I’mnot a PHD or an MBA. I graduated from college with a BS inPolitical Science, not a degree in business or in marketing. I’vebeen bankrupt and have experienced tax liens on my property.To most business gurus, I have a dark past, which would bebetter buried than shared. So, then why listen? You shouldlisten because of what I’ve experienced, what I’ve seen, what

I’ve accomplished, and because of where I’ve been. That’swhy! I discovered that working hard, working long, and evenworking smart does not guarantee success. Failure becamemy PHD and MBA combined. I found that with failure comesknowledge, with knowledge comes experience, and withexperience and a whole heck of a lot of luck comes success. Iwas fortunate to have joined CAESY Education Systems andwork for 9 years with Bob and Liz Rondeau, two of the mostbrilliant people I’ve ever known. Our partnership was a uniqueblend of personalities that were all different. We didn’t agree

on everything, in fact, it was our diversity that made thispartnership so strong. Together, and with the help ofabsolutely the most dedicated employees, we built one of themost successful businesses in dentistry. Bob and Liz allowedme to take what I’d learned over the years and gave me the


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reigns to incorporate that into a successful enterprise. Withoutfailing a few times, success would have been very difficult.When CAESY was purchased, it gave me the opportunity tomove on to the next step of my career, which involved sharingwhat I have discovered with you.

This book is not about taking a magic potion that will makeyou successful. This is about what you need to do to have achance at being your absolute best. It’s the hardest thing you’llever do and it is not for the fainthearted. If you have what ittakes and you are positioned properly, you will be rewarded inways that cannot be described. It goes beyond the success ofmoney. It gets to the heart of the human condition. It’s allabout stepping back from whatever you do and saying withpride, “I helped build that!” It’s further discovering that justbecause you built something successfully doesn’t mean it willstay that way without continued hard work. What you willdiscover is that your job is never done. All good must bemonitored, protected, and at times torn down andreconstructed. It means that you must experiment and changeconstantly to maintain greatness. Unfortunately, most aren’twilling to do what it takes and that’s okay. Being good isn’t abad thing, it’s just that you’re relegated to share that positionwith all of the other “me too’s” out there.

What this book is not is a new fad on how to treat employeesor get them to do something different. While the book builds afoundation for marketing and selling your products andservices, it does not teach you how to sell or to market yourproducts. However, if your business follows the principlesoutlined herein, both selling and marketing your products andservices will be far easier. Once you’ve read and incorporatedthese principles, then you should read our books on “MarketingCharisma” and “Sales Charisma” .

I make some basic assumptions in this book as well. First, Iassume that you have a product. Second, I assume that youhave sufficient capital and the monthly cash flow to at leastbreak even. Without a product or the cash to carry you, nomatter what is written on these pages, you will not move awayfrom scarcity long enough to make well thought-out decisions.This book, on the other hand, is a hardcore look at what youdo and how your customers perceive what you do either in apositive or a negative light. While the concepts discussed in

this book do not change with time, the way you deal with themis always in a state of change.


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CHAPTER ONE

THE BIG PICTURE - THE NEW CONSUMER

You can’t build Business Charisma without first understandingthe new consumer and where you fit within the economic bigpicture. Discovering these vital pieces will prepare you to buildyour business foundation, culture, and Business Charisma. Once you begin to understand the information in this section,you will be better informed than 90 percent of the Americanpeople. As the saying goes knowledge is power and once youobtain this knowledge it will make a powerful difference in howyou position your day-to-day business operation.

The New Consumer

With the turn of the Twentieth Century, there was a new typeof business enterprise being created. Mass production, whichthrived on a need to efficiently and quickly manufactureproducts, began to take hold. The birth of the assembly linemade it possible. For the first time, manufacturers were ableto produce thousands of units for a much lower cost per unit,which meant that items reserved for the rich, were finally

made affordable to the common person. The concept of supplyand demand was in full swing. Because mass productionrequired a lot of capitalization to set up, there was a need forpublic money to fund many of these enterprises. At the turnof the century, public corporations, which were originallyestablished in the mid eighteen hundreds to fund the railroads,were becoming the new business model. The goal of thesepublic companies were to have a management staff set upprocesses and procedures to efficiently manufacture productsand make them available to the general public. For the first

time, management was not the primary owner of the companyand was running the business using a top down managementstyle called command and control . As businesses became moreand more efficient, profits were greater and greater. This wasterrific for the shareholders but not necessarily forconsumers. Choices were limited to what was produced andthe consumer had to take what was available: “You can havewhatever color you’d like as long as it’s black!”

Many positive things came as a result of this type of businessenterprise. Because more products could be created, moreprofit could be produced. As we look at the Twentieth Century,there were many new inventions introduced for the demandingconsumer. In fact, more products were invented in the


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Twentieth Century than in the history of humankind. See foryourself.

THE ESCALATOR LIE DETECTOR TEABAGS

TECHNICOLOR™ QUARTZ CRYSTAL WATCH RADIO RECEIVER CRAYONS™ THE TRACTOR THE IRON LUNG

AEROSOL CAN LIQUID FUELED ROCKETS THE AIRPLANE

VACUUM TUBE VACUUM CLEANER AIR CONDITIONERS

PENICILLIN BOTTLE-MAKING MACHINE ELECTRIC SHAVERS

CORNFLAKES THE SAFETY RAZOR BUBBLE GUM

SONAR WINDSHIELD WIPERS THE CAR RADIO

THE YOYO THE NEON LIGHT COLOR PHOTOGRAPHY

CELLOPHANE THE HELICOPTER SCOTCH TAPE™

NEOPRENE THE MODEL T THE COMPUTER

JET PLANES GEIGER COUNTER FOOD PROCESSOR

THE BRA THE MOVIE CAMERA THE MILITARY TANK

THE ZIPPER THE GAS MASK GARAGE OPENER

PYREX™ POLAROID PHOTOGRAPHY PARKING METER

THE RADIO STAINLESS STEEL FM RADIO

TOMMY GUN DRIVE IN MOVIES THE TOASTER

CLOTHES DRYER WASHING MACHINE SHORT WAVE RADIO

MAGNETIC TAPE BAND-AIDS™ CANNED BEER

NYLON THE TRAFFIC SIGNAL ROBOTS

3-D MOVIES VOICE RECOGNITION THE COLT REVOLVER

THE CRT THE WINDING WATCH PHOTOCOPIERS

FROZEN FOOD SPIRAL BINDING BALL POINT PEN

TEFLON™ THE LOUDSPEAKER STROBE LIGHTING

THE AQUALUNG FREEZE-DRIED COFFEE NUCLEAR REACTORS

THE JEEP TURBOPROP ENGINE COLOR TV

ATOMIC BOMB SYNTHETIC RUBBER KIDNEY DIALYSIS

TRANSISTORS SYNTHETIC CORTISONE MOBILE PHONES

TUPPERWARE™ THE CREDIT CARD SUPER GLUE

THE FRISBEE POWER STEERING DIET SOFT DRINK

CAKE MIX THE HYDROGEN BOMB RADIAL TIRES

THE VCR MUSICAL SYNTHESIZER THE BLACK BOX

BAR CODING TRANSISTOR RADIOS ORALCONTRACEPTIVES

SOLAR CELLS COMPUTER HARD DISCS FIBER OPTICS TETRACYCLINE FORTRAN PROGRAMMING THE MODEM

THE LASER THE HULA HOOP INTEGRATED CIRCUIT

BARBIE DOLLS THE HOVER CRAFT THE PACE MAKER


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MICROCHIPS HALOGEN LAMS VALIUM

VIDEODISC NON-DAIRY CREAMER PERMANENT PRESS

NUTRASWEET™ BASIC PROGRAMMING CONTACT LENSES

ASTROTURF THE COMPACT DISC THE CALCULATOR

THE MOUSE FUEL INJECTION THE INTERNET

RAM THE ATM THE TV REMOTE

SCANNER THE FLOPPY DISC DVD’ S

GENE SPLICING DOT MATRIX PRINTERS SATELLITES

ETHERNET ELECTRIC GARAGE DOOR MICROWAVE OVENS

LIPOSUCTION POST-IT-NOTES™ LASER PRINTER

CELLAR PHONES STAY ON TAB ENDS INK PRINTERS

MRI MACHINES ARTIFICIAL HEART SUPERCOMPUTERS

THE WALKMAN HEPATITIS VACCINE ROLLER BLADES IBM PC CD ROM WINDOW™

MS DOS SYNTHETIC SKIN DISPOSABLE CAMERA

VIDEO GAMES CONTACT LENSES DOPPLER RADAR

PROZAC HD TV DIGITAL PHONES

JAVA SCRIPT ANSWERING MACHINES PENTIUM PROCESSOR

WEB TV ANSWERING MACHINES FUEL CELL

SMART BOMBS SPACE TRAVEL SPACE SHUTTLE

VIAGRA™ GPS MPEG3 PLAYER

This is just a highlight of what was created throughout the lastcentury. As a result more and more people were employed,new wealth was created, and there was an emergence of astrong middle class.

With wealth brings education. More and more people obtainedcollege degrees than in any other time in history. Mastersdegrees went up 1000 fold since 1940. With newly discovered

drugs, technological devices, and medical breakthroughs, theaverage lifespan increased. More and more people weretraveling greater distances due to the invention of the jetairplane, which in turn, broadened their experiences andeducation.

Starting around 1960, people began to want more from theirbuying experience and workers were growing tired of giving upcontrol of their daily lives in exchange for jobs over which theyhad little control. Political and economic circumstances,however, inhibited workers from making immediate changes.In September of 1968, 60 Minutes, the news program, beganto assault many of the economic, political, social, religious,and business institutions that previously were held in the


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highest esteem. Systematically, we were shown, in manycases, how these institutions lied, cheated and stole from us toobtain their objectives. We began losing trust in theseinstitutions. As time went on, we were shown that we couldn’teven trust our auto mechanics, TV repairmen, plumbers or

baby sitters. Television was becoming the source for truth. InOctober 1973, adding to the erosion of our institutions, wefound that our economy was very fragile and controlled bypeople outside of our country. October 20, 1973, OPECembargoed our supply of oil causing our economy to tailspin.We started suffering from high unemployment coupled withhigh inflation. The new term was Stagflation.

Many older citizens still trusted our government and refused tofall victim to what was being said on the TV. However, this allchanged in August 1974, after a year of misguided truths,President Nixon resigned in disgrace. Even the most self-assured Americans began to lose confidence in the Americanideal.

By 1978, inflation was so high that for the first time inAmerican History, it took two wage earners to purchase ahome. This began to rock the very fabric around which ourAmerican society was built, the ownership of property. While

women have been a part of the American workforce for over100 years, they were by and large working for a supplementincome to the male head of household. More and more womenwere working during the week and found that the only timethat they had to shop was on the weekend. During the late70’s, businesses were forced to stay open late on Saturdaysand many began to open on Sundays as well.

Shopping on the weekend was different from shopping duringthe week. It was ironic because the most experienced workers

worked during the week when there wasn’t a huge demand fortheir expertise. However, on the weekends, when the demandfor experience was needed most, businesses were forced tohire part-time people who were inexperienced and lacked thenecessary training to handle the needs of the consumer.Stores that traditionally were revered by the consumer beganto lose their loyal customers. Sears went from being thenumber one retailer in the world to number two behind K-mart. Even though customers didn’t get any more assistancefrom K-mart employees, their prices were lower and

consumer’s expectations were less. More big box retail outletstores began to come on the scene and move the departmentstores further out of the picture. By 1990, stores like Wal-mart, Price Club (the predecessor to COSTCO), Sam’s Club,and Home Depot started a new retail revolution. These


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businesses were different from high touch companies as theyoffered a huge selection of merchandise at a reduced cost tothe consumer. They bought what was offered and expectationswere less. The stores mirrored the command and control corporations that ran them. And, in order to be profitable, they

needed to become more and more efficient.

Management, in an effort to continue to squeeze profitabilityout of the manufacturing environment, began to usetechnology to cut back on hiring personnel. Such efficiencybuilders as the PHONE ANSWERING TREE , Phone Hell , as I callit, wasn’t invented for the customer to have a betterexperience with the business. It was employed to eliminatethe need for more people. The ATM machine was inventednot to help people, but to cut back on the need to be openduring hours the banks didn’t want to be open. The newscanning machines at grocery stores and Home Depot aren’tfor the customer, but for the business to save on hiringpersonnel. Airlines have employed new high tech machines toexpedite the check in process. This isn’t for the flyer, it’s sothe airlines can cut back on employees and maintainprofitability. Along with using high technology, businessesbegan to cut back on service by eliminating the retail clerksfrom the sales floor and placing them behind cash counters.

They have been relegated to taking money without serving thecustomer. There is nothing more frustrating to the customerthan looking at 25 cash registers and only 2 clerks. Lost timefor the consumer does not concern these companies; for thelonger we wait to be served, the greater the profit opportunitythere is for the company.

Along with cutting back on personal service, businesses havebeen inventing new ways to hide the charges customers arebilled for. What is handling? Shouldn’t handling be part of

the cost of selling the product? We don’t see other costs suchas materials, management, medical insurance, and employeebenefits as charges, at least not yet. They are part of the feethat is paid by the consumer. Hotels charge for local callseven though there is no additional expense incurred by thehotel. Hotels advertise having free high-speed Internetaccess, but charge five dollars for the cat 5 cable in order tohook up. Rental car companies charge a premium for gasolineshould you not fill up the tank. Airlines charge outrageousrates for flyers, ostensibly business travelers, who do not stay

over Saturday night. Cell phone companies charge extra whenwe go above our contracted minutes, but don’t give us arebate when we use less.


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Businesses, like the airlines, get people involved with specialprograms such as frequent flyer clubs only to change the rulesin mid-stream because they can’t squeeze enough profitabilityout of the program to make it worthwhile.

What’s worse is that the employees at the lowest levels of theorganization are forced to uphold policy on consumercomplaints, when the rules change or when there’s insufficienthelp. When employees aren’t allowed to use common sense toaccommodate the consumer, they become frustrated andcynical. They have a tendency to give up and just plod alongdoing a thankless job. They work longer hours and get lesssatisfaction from their work. Many would love to just walkaway but can’t because one week of unemployment couldmean that they might default on their car payment, mortgage,and credit card debts.

When they’re through at the end of the day, on average, theywill spend fifty-one minutes commuting home. That amountsto 9.2 days a year which is .8 days short of a two-weekvacation! Each day they fight traffic, anxious to find sanctuaryin their own home. They work hard to get things in order andcare for their children while preparing their evening meal. Theytry desperately to find something positive to share with their

spouse, and, just before finally settling in for the evening, theyare invited to take part in a short survey initiated by a phonesolicitor. It’s a RAT RACE for both consumers and employeesand they’re tired of it.

So while there have been many benefits of the supply anddemand economy where all value is created by developingproducts and services quickly, efficiently and cheaply, today’sconsumer is sick and tired of being the least important part ofthe buying equation. Today’s consumer wants more than a

transaction from business. They want to be able to play amore important role in their buying decisions. They want tohave the ability to compare products and services from theprivacy of their own home, their sanctuary. They want to beconnected through trusting bonds to the companies from whichthey purchase. And, they have an expectation that they willbe supported well beyond what has been the traditionalscenario in the Twentieth Century. It took from the early1960’s, but the new consumer has finally emerged.

As business owners, employees, shareholders, and managers,we need to be mindful of the mentality of this new consumer.Rather than focusing on value and wealth coming from ourproducts and services, we need to focus our attention onproviding value and wealth directly through the consumer. We


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need to generate relationship value. We need to provide themthe ability to build a strong bond with the company through aprocess of deep support. It is the business ambiance or culturethat respects the customer’s time, enhances their experience,recognizes, responds to, and promotes individuality, provides

choices, enhances flexibility, and is founded on trust,reciprocity, authenticity, intimacy, and advocacy. It is thescience of creating positive interactions to formulate long-termrelationships. And, above all else it allows the new consumerto have Sanctuary , Voice, and Connection throughout theirbuying experience.


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CHAPTER TWO

THE BIG PICTURE - THE UNITED STATES ECONOMY

It’s one thing to understand the new consumer, but without

seeing where you fit into the big picture, it’s impossible tostructure your business to meet their need for Sanctuary ,Voice and Connection. Specifically, because product issecondary to the consumer, you must understand the newconsumer’s mind-set. It is dictated by everything that ishappening all around them on a day-to-day basis. The moreyou understand the pressures, the more empathetic yourbusiness face will be and the more responsive you will be totheir needs.

Most of us go through our daily life without knowledge of howwe’re affected by our macro-economy. It’s my intention to fillyou in on some of these details.

Gross National Product (GNP) and the Gross DomesticProduct (GDP)

The GNP is defined as “The total market value of all the goodsand services produced throughout world by the United Stateswithin a specified period of time.”

The GDP is defined as “The total market value of all the goodsand services produced within the borders of the United Stateswith a specified period of time”.

We measure the GNP and the GDP on an annual basis. It is thereference point for all goods and services that travel throughour economy. Let’s look at some of the larger componentpieces of our economy.

First, the total GNP in the United States for the 2006 calendaryear is expected to be $12.227 trillion. The total GDP isexpected to be $10.6 trillion. On a monthly basis, you willhear reporters talk about how our economy grew by a certainpercentage. It is against those numbers that the percentage iscalculated. If you hear that the GNP is growing at threepercent per year, we’re looking at growing our national outputby over $366 billion dollars a year.

Federal Spending

The Federal Government is going to spend over $2.479 trillionin the 2006 fiscal year, but is only intending on collecting$2.053 trillion from us. This leaves a deficit in 2006 of $427


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billion, which will add to our national debt of $7.8 trilliondollars. What this means to us as consumers is that the moremoney the government takes in taxes, the less money wehave to physically spend or save. As of this writing ourprojected United States population stands at 296,230,224.

Each American, man, woman, and child owes $26,292 as theirshare of this massive debt. Since September 30, 2004 thenational debt has grown at $1.67 billion per day.

It’s not just the Federal Government coffers. We’re spendingmore on local property taxes to primarily fund schools. OurState sales taxes are growing far faster than our income andhidden taxes on goods and services are growing faster than wecan keep up with. Check out the hidden taxes on tobacco,alcohol, land phones, cell phones, hotels, rent-a-cars, fastfood, gasoline and cosmetics. Taxation is fast approachingover fifty-one percent of our gross wages.

Healthcare

The healthcare bill has also grown out of control. We’respending $1.8 trillion in 2006 on healthcare, which is growingfour times faster than the growth of our GDP. Our healthcarebill is 4.3 times the amount spent on national defense and

accounts for 15.3 cents of every dollar spent on goods andservices. Another way to look at the impact of our healthcarebill is that for every automobile that costs $20,000, over$3,000 is spent on healthcare. Most Americans don’t equatethe costs of goods and services as being contributory towardour healthcare bill, which is a big mistake. Instead, the cost ofhealthcare is masked by a relatively small payroll deductionmade by employees. However, this is going to change in thenear future with the employer-based health insurance costsrising by over eleven percent per year, which is the fourth

consecutive year of double-digit increases. Employers are nowpaying on average $9,950 for a family of four. The cost forsingle worker ranges around $3,695. The class of 2005 collegegraduates found that there are plenty of jobs, many withstarting wages higher than anytime in the past decade.However, more and more employers are not offering medicalbenefits and retirement plans as part of their compensationpackage.

The forty-five million Americans who are uninsured, face

massive medical bills that in many cases lead to bankruptcy.In fact, 50 percent of all bankruptcy filings were in part theresult of medical debts. Every 30 seconds, someone files forbankruptcy in the aftermath of a serious health problem. Plus,


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more and more Americans are reporting problems payingmedical bills and accrued debt.

Prescription drug expenses are now over $180 billion a yearand growing faster than healthcare. Americans consume

about three billion prescriptions on average and people oversixty-five spend about $2,300 a year on their medications.

The Housing Industry

The Housing Industry accounts for fourteen percent of theGNP, or 1.7 trillion dollars in 2004. In the past decade, over16 million new homes and condominiums have been built. Lastyear alone, there were over two million constructed.

The housing industry has a huge impact on the Americaneconomy and there are problems looming within it. I’mreferring to the quality of the construction materials and thealarming amount of under-trained workers. Lawsuits haveescalated in the past decade due to materials andworkmanship. The Oregonian Newspaper on June 19, 2005,wrote that just twenty insurance companies have paid out over$10 billion in claims due to poor quality construction. Theyindicated that this figure barely touches the actual total. It’s

important to note that it takes several years for many of thedefects to show themselves. This means with the ever-growingamount of construction, more and more law suits will be takingplace over the next decade.

Gambling

It’s very interesting that in light of all the pressures to meetmonthly bills, last year Americans wagered nearly ½ trilliondollars on gambling ($482 billion). While casinos take the

lion’s share of the gambling dollar, today, twenty-seven statesallow wagering. States love the tax revenue, and claim thatthe economy grows due to the amount of the jobs created.Unfortunately, studies have shown that economies do not growas a result of gambling establishments. This is mainly becauseof the number of other businesses that are displaced and thetypically low wages paid to casino employees.

State lotteries are now taking their share of the gamblingdollars, which helps offset statewide deficits. According to

many statewide TV commercials “Playing the lotto is forentertainment purposes.” Yeah right!

What gambling proves is that Americans can afford what theywant despite everything else. Many folks look to strike it rich


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only to find that their fun has cost them more than theybargained for.

Wal-mart

Wal-mart is the largest retailer in the world with yearlyrevenues of $285.2 billion dollars. Their revenue grew bynearly $60 billion between December 2003 and May 2005.According to Wal-mart they still need 2,500 stores to be builtto adequately serve the United States population. Wal-martaccounts for ten percent of all imports from China and has atotal economy larger than most countries.


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CHAPTER THREE

THE BIG PICTURE – INDIVIDUAL ECONOMIES

According to Forbes Magazine, out of the United Statespopulation, there are 222 billionaires controlling over $700billion. Bill Gates is on the top of the pile with a net worth of$40.7 billion. Imagine that Bill Gates, Mrs. Gates, and the twolittle Gates have a net worth which is as large as 2/3 of theentire economy of Chile.

According to the Wall Street Journal, May 25, 2005, thenumber of millionaires in the United States increased to a

record last year. The number of US households with a networth of one million dollars or more rose twenty-one percent,to a total of 7.5 million households. This number is somewhatdeceiving though, because with escalated home values in theUnited States, the number of millionaires has increasedaccordingly. It is estimated that the number of millionairehouseholds drop to around 5.6 million when the primaryresidence is taken out of the equation.

The Typical American Family

I like to think that the majority of the customers that we serveare not billionaires or millionaires but consist of the typicalAmerican family. The difficulty is in the definition of the typicalfamily.

Households

According to the 2000 census, there are 105,539,122 totalhouseholds in the United States. Of this number there are over

seventy-two million families, with just over thirty-three millionnon-family residences. There are 55.4 million families withchildren and two parents and 12.5 million families with onlyone parent as the head of household.

The average household wages in the United States is $41,994.However, in families with two parents supporting thehousehold, the average is $57,345. Single mothers earn anaverage of $25,458.The number of single mothers increased between 1970 and2000, from three million to 10.5 million. Over the same timeperiod, the number of single fathers increased from 393,000 totwo million.


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Payday Loan Companies

Payday Loan companies have been popping up all over thecountry. While they help solve cash flow problems for manypeople, the interest charged can be outrageous. The rate on a

payday loan can be as much as 500 percent per year or more.Borrowing $200 for two weeks at 500 percent will cost $38.36.This may not seem too high if you are in a bind. But, if youstretch a short-term loan for ten weeks, the interest charged isnearly 100 percent of the total loan amount or $191.78.

The Indebtedness of the Typical American Family

In order to understand why payday loan companies havebecome so prevalent, let’s look at some circumstances withwhich the typical American family must deal.

1. The typical American family cannot write a check for morethan $500 out of their monthly cash flow.

2. Twenty percent of all credit cards are at their maximumlimits. Those that are not maxed out only have an averageof $400 remaining open.

3. $84,454 is the average household's personal debt,including mortgages, cars loans, credit cards, and other

personal debt. (Source USA Today Oct. 4, 2004)4. The average undergraduate finishes school with $18,900 indebt. This includes student loans and credit card debt.(Source Nellie Mae 2-6-2003)

5. Total credit balance from 1996 to 2000 increased anaverage of nearly nine percent per year to a total of $633billion.

6. Americans today have over one billion credit cards.7. A survey by the Consumer Bankers Association found that,

within a year, seventy percent of the people who had

shifted credit card balances to home equity loans wereagain running up credit card debt.8. Researchers at Sanford C. Bernstein, a securities firm,

points out that household debt in the 1990's grew at a ratetwo percent a year faster than their income.

9. Making the minimum payment on a $4,800 balance at theaverage interest rate of seventeen percent, it would takeyou thirty-nine years and seven months to pay off. Youwould pay $10,818.63 in interest alone, and a total of$15,619 for the privilege of charging the $4,800.

10. Over forty percent of U.S. families spend more than theyearn.

11. The average household has seven credit cards.


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12. Over sixty-five percent of all credit card accounts haveonly the minimum payments amounts being made byconsumers monthly.

The Baby Boomer Generation

Baby Boomers are generally defined as persons born between1946 and 1964. They number roughly around seventy-eightmillion or approximately twenty-seven percent of the currentUnited States population.

Listed below are some generalized characteristics of BabyBoomers.

1. They are more likely than either younger or older adults tohave dependent children at home.

2. Despite delayed marriage and high divorce rates, nearlytwo-thirds are currently married.

3. Baby Boomers are already in their peak labor forceparticipation years, and in some cases, in their top earningyears (which are from ages 45 to 54).

4. They are born after World War II and tend to be muchmore individualistic.

5. They are less happy than other adults with the status quo

and are marked by their skepticism and rejection ofauthority.6. They are notorious for their willingness to buy on credit

and forego saving money.7. Boomers have less leisure time than other adults and claim

to feel stressed more often.8. When listing their priorities, they are more likely than

others to focus on education.

How many of the seventy-eight million Baby Boomers will be

able to retire at age sixty-five? This is a key question to theeconomic well-being of the country. There are currently 148million workers in the United States workforce supporting a$10.6 trillion GDP. Statistically, more than half of the Boomersare currently employed bringing the total to just over 39million. According to ING, Inc., the Baby Boomers haveignored their retirement plans and have opted to ignore payingtheir retirement accounts while indulging on other things.Because time is rapidly running out for the Boomers to sockaway enough money to retire comfortably, more will stay in

the workforce. However, it is expected that approximatelyforty-four percent of the existing Boomers will retire betweenage sixty-two and seventy. If we assume that this number iscorrect, that means that of the 39 million existing Boomers inthe workforce, 17 million will be leaving by 2011.


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This equates to 17 million fewer workers to maintain a GDP,which is currently growing at three percent per year.Furthermore, the strain on the remaining workers to maintainthe Federal, State, local taxes, and social security contribution

will be extreme. This will extend the existing burden to theremaining workforce which will be only eight-nine percent oftoday’s current force.

What did we take from the Big Picture?

As we can see, there are a number of challenges facing ustoday and we need to understand that these challengesdirectly affect the amount of cash that is available forconsumers to purchase our products and services. Withmillions of products, and thousands of marketing messageshitting consumers daily, it is imperative for you to bepositioned to offer a product or service, which gets into themind of the consumer more than others with whom youcompete daily. Because there are so many products fromwhich to choose, and because so many products appearidentical, it’s vital that you distinguish your business by beingdifferent from all the other offerings in the marketplace. If theproducts all look the same, the only way to be different is by

going beyond your product and service. It means that youneed to capture the mind of the consumer by creating anenvironment that allows them to feel comfortable with you.You need to build Business Charisma with them. You need tolook at each interaction point in which your business touchesthe customer. You must analyze each interaction point andmeasure whether it’s making a positive impact, a neutralimpact or a negative impact. Positive impact means that youare going beyond the customer’s expectation and that you areproviding a delightful experience. If you’re just satisfying the

customer’s expectations, you are vulnerable to competitorswho go beyond satisfaction. If you are a business that fallsbelow the customer’s expectations, you will fail. It’s just amatter of time.

As a business owner, manager, or employee, you have toovercome many obstacles that your clients have in order to begreat. You must never fall below expectations, you mustnever just satisfy, you must always delight in order to havethe opportunity to establish a long-term trusting relationship.

Without trust, you will not have loyalty, quality referrals orreturn customers.


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CHAPTER FOUR

BUILDING THE FOUNDATION - REFOCUSING YOUR

ATTENTION

The basic premise of this book is formulated around how tobuild Business Charisma, which is the science of convertingpositive interactions into long-term relationships. Therefore,your primary job is to refocus your attention away from theday to day functions and refocus on generating positiveinteractions with your clients each time they come in contactwith your business. It is a necessity to have a great productor service. However, having great products or services onlyputs you on the playing field. It doesn’t mean anything aboutwinning the game. Many companies that had great products

have fallen into bankruptcy. While you must continue to buildgreat products and provide top-notched services, withoutcreating an environment of trust first, your clients simply won’tallow you to perform your miracles. Interestingly, when youcreate positive interactions as your primary focus, you actuallybuild a far stronger business than operating the old way.Delighting your clients, moving beyond the traditionalcustomer service isn’t some esoteric concept. Instead, it is adeep-rooted emotional need of new consumers.

Dr. Richard Cialdini, the author of, “The Psychology ofPersuasion”, states:

“It’s not the request for action or compliancethat make the difference between a yes or ano, it’s what you do immediately before therequest that makes the difference between ayes or a no.”

He then meticulously outlines human behavior as it relates tosix principles of influence and persuasion. His book iscompelling. However, he isolates each of the principles toindividual encounters. Business Charisma takes his conceptand moves it across the entire environment. He says that ifyou say the right thing immediately before the request, youwill get compliance. While this is true, it’s manipulative andshort lived. On the other hand, if you create an environment oftrust using his principles throughout all the encounters, notonly will you have a yes to your request, you will have

commitment rather than compliance, which will move theclient toward loyalty and a long-term relationship.


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Let’s examine the importance of delighting your clients abovetheir expectations. In his book. “50 Powerful Ideas You CanUse to Keep Your Customers”, Paul R. Timm, Ph.D., writes,

“Exceeding expectations has become almost a

cliché in customer service. While the phrase isoverused, the principle is sound. We can earncustomers’ loyalty by exceeding theirexpectations.”

He gets it. When you move your clients beyond satisfaction todelight, it can pay you back in ways you can’t even imagine.

Each time clients come in contact with your business they willencounter one of three outcomes. They either gain from, feel asense of loss from or are indifferent to their experience. Whenit comes to building long-term relationships with your clients,there can be only one outcome, gain. They must feel thatthey’ve gained control and connection from their encounter.This is accomplished by exceeding their expectations.However, if you simply satisfy their expectations, the clientisn’t unhappy or unmotivated, but complacent or indifferenttoward your business. And when customers are merelysatisfied, you risk losing them. When you fall below the

expectation, you’re completely out of the contest. You loseand so does the client.

Why losing a customer is so bad

It’s often been said that when you turn off a customer, they’regoing to tell at least 7 people about how terribly they weretreated. And, if they’re delighted with how they’ve beentreated they will tell at least 2 people. Let’s look at a realexample of two businesses that provide eye glasses. They both

offer an eye examination, lens grinding, and frames. Alongwith the lenses, they make available such options astransitional lenses, glasses exclusively for outdoor or indooruse, and blended lenses. My wife and I had two choices, LensCrafters or Binyon’s. Lens Crafters is the number one brand, sowe opted to go to them first. When we walked into the storewe found it nice enough and things appeared to be laid out just great. However, that’s where it ended. We had to searchfor an employee to help us. It wasn’t even very busy. Whenwe were finally approached, the employee was short and curt

with us. It was though he was doing us a favor by being therefor us. He merely pointed us the direction of the frames andthen turned and walked away. We didn’t even get a chance toask about an eye examination. Lucky for us, Binyon’s the


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number two competitor was located in the same mall so wewalked out of Lens Crafters and decided to give them a try.

When we went into Binyon’s, we were quickly welcomed by asales person who was helping another client. He said that he

would be right with us. There was a sign above the receptiondesk that read “Schedule Examinations Here.” Mary and Iwalked over to the counter and were quickly welcomed. Imade my exam appointment and was seen within fifteenminutes of coming in. After the exam, I was given myprescription and was turned over to the very professionallooking gentleman who had spoken to us when we firstarrived. He shook our hands as he introduced himself. He hada smile on his face and began to ask me what types of framesin which I had an interest. I told him I wasn’t too sure, so hewalked me through all of the different frame types telling methe pros and cons of each. He let me take control of thebuying process by providing me options. Mary found a pair offrames that she thought would look good on me, so I triedthem on. I liked them, she liked them and the sales pro likedthem as well.

He then marked the frames to ensure that the transitionswould be right for my prescription and provided me with

information about the different options. I decided on thegraduated and transition lenses and opted for the insurance incase of loss or damage. I gave him my credit card and hesaid, “Your glasses will be ready at 1:45 p.m.”

The total bill was over $400 for glasses, which was a bit higherthan I wanted to pay, but I never felt like I was over charged.We came back at around two p.m. and they were ready. Hespent another fifteen minutes fitting me and then cleanedthem up nice. I shook his hand again and Mary and I were on

our way. The next week we came back and Mary purchased anew set of glasses that were around $350. I noticed thatMary’s glasses were so much less expensive than mine and Iquestioned the manager. She quickly looked up my accountand saw that I had just missed the current sale. She quicklyapologized and gave me a $129 credit. She didn’t have to, butshe did it because it was the right thing to do. I wonder howLens Crafter’s would have handled it. Of course, I’ll neverknow.

Why is it so bad to lose a customer? If this scenario is playedout everyday between Lens Crafter’s and Binyon’s, eventually,the Lens Crafter store in Vancouver will go out of business.Let’s look at the impact.


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First, Lens Crafters lost over $700 in sales with two clients andthey had the first chance because of a strong brand presence.Second, if I was a typical disgruntled customer I would tell atleast seven other people. As it turns out I’m telling a lot morethan seven. However, let’s assume that only three out of the

seven of those who I tell will opt to go to Binyon’s instead ofLens Crafters when they need glasses. Binyon’s would havetaken an additional $1,050 away from Lens Crafters. When youadd that the average purchaser gets new glasses every two tothree years, this has a significant impact on the Lens Crafterbusiness. As a delighted customer of Binyon’s I’m going tonow tell a minimum of two more people about my positiveexperience. I will rave about their service. Binyon’s gainedfive new direct customers and countless others from those I’dreferred, while Lens Crafters will continue to plod along sellingglasses in an hour, but steadily loses their clientele.

BINYON’S CUSTOMERS SALES

OUR PURCHASES $700

PEOPLE WE TOLD ABOUT OURBAD SERVICE

7

PEOPLE PURCHASING 3 $1,050

PEOPLE WE TOLD BECAUSE

WE WERE DELIGHTED

2 $700

CHARISMA GAIN 5 $2,450

Binyon’s is building their potential revenue base by $2,450 forevery customer that is dissatisfied with Lens Crafters. If theyget one a day from Lens Crafters, they will receive anadditional $994,250 a year in potential business. So I’ll letyou be the judge of the impact of losing just one customer.

Refocusing on the Interaction Point

Refocusing your attention on each interaction point helps youdiscover exactly how the client sees you. Anytime he sees youindifferently or from a loss perspective, you’ve got to changethe way you are handling the encounter. In many cases, thedifference between a great encounter and a lost encounter canbe very slight. The difference between okay and great can beanswering the phone on the third ring instead of the fourthring or it could be the difference between a smile at a newcustomer letting them know that you’ll be right with them

versus looking away and getting to them when you can. Thefact is, you can’t allow the client to lose connection with yourbusiness at any interaction point no matter how slight.Granted it might not be perceived as negative, but if the


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customer is left with a complacent feeling about your business,you’ll not get a referral and you may not get another chance toserve them.

Summary

1. Having a great product and service is expected by yourcustomer

2. Refocus your attention on each interaction point that thecustomer has with your business.

3. Focus on creating positive encounters with your clients,not negative or indifferent. Customer delight will buildstronger relationships, and create a customer base thatwill be willing to refer their friends and neighbors to you.


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CHAPTER FIVE

BUILDING THE FOUNDATION - THE CHANGE EQUATION

Every answer to every problem can be found in a book, a tape,a CD, a DVD, a lecture, a video, a magazine or on theInternet. Why isn’t everyone healthy, wealthy, and wise? Inthis chapter we will discuss the reasons why change isimperative to building a successful business. We will help youunderstand that change should be embraced and lookedforward to. But, why do people fear change so much?

The first reason people don’t embrace change is becausechanging from one way of doing things to another isn’t only

hard, it’s brutal and grueling. Most of us have had to try tomake changes in our lives for one reason or another and mostof us fail, at least fifty to sixty percent of the time.

Search for that Magic Pill

The key to making a change comes from the word WANT .Many people want to be wealthy, but their definition of want isto win the lottery. Many people want to lose weight, but theirdefinition of losing weight is to take that new diet supplement

that was advertised, “All you need to do is take this once a dayand the fat literally melts off.” Many people want to get intosuperior condition. What they really mean is that they want touse the new all purpose Ab-Cruncher for ten minutes a day forthirty days and end up looking like Arnold Schwarzenegger.

Do you want to change your business so that your clients willdevelop trust and a long-term relationship with you? If so,there is good news! On June 2, 2005, researchers found achemical ingredient for human trust. According to the LA

Times reporter, Robert Lee Hotz, “The discovery is the firstdirect evidence that a hormone called Oxytocin, which evolveda hundred million years ago to aid mating among fish andbreast feeding among mammals, also promotes trust betweenhuman beings.” It’s the magic pill for which we’ve all beenwaiting. I can see it now. A new client calls the business andyou schedule a new client appointment. You FEDX an overnightpackage to him containing a small pill for him to take just priorto coming in for his appointment. When he arrives at theoffice, there’s an immediate trusting bond and you didn’t evenhave to welcome him. Your sales soar to 99.5 percent andyour customer referrals skyrocket- you all live happily everafter.


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It seems that we humans are always searching for a magic pillthat will solve our problems and allow us to continue to liveexactly like we are now. However, successful people, 99.999percent of the time, don’t get rich by hitting the lottery. Theydon’t take a diet pills nor do they work out thirty minutes a

day to build a perfect body. However, that doesn’t stop us.We continue to spend billions of dollars every year fallingvictim to diet books, weight loss potions, and get rich quickschemes.

You Won’t Change without a Discrepancy

Pure and simply, the success or failure to institute changedepends on your change state. There are four states ofchange, Even Keel , Growth, Trouble, or Over Confidence. Onceyou understand the states of change and where you fit withinthem, you will better understand why you and those aroundyou find it so difficult- if not impossible.

Even Keel

When you’re in the Even Keel state, you’re in your comfortzone. When you feel secure or cozy with where you are, it isnext to impossible to change. There is simply no justification to

change to something new. Even under the worst conditions,you would rather keep what you have than to deal with theunknown. Women, choosing to stay in abusive relationships,would rather face their abusers than venture into unchartedterritory. They fear change might be worse than being abused.This perverse thinking can be very dangerous and destructive.Therefore, if you are in your comfort zone and there is nodiscrepancy, changing will be perceived as unnecessary.

Growth

When you are in the Growth state, you have a desire to moveaway from your comfort zone state, to a new place or position.In essence, the existing state is no longer comfortable for youand you want to grow to a new status quo. The distance fromwhere you are now to where you want to move, is the degreeof discrepancy. The greater the distance you want to move,the greater the discrepancy, and the more motivated you areto change. Discrepancy drives you to break through your fearsand move forward to a new level.

Trouble

The Trouble and Growth state are very similar. However, thedesire to move comes from a totally different direction. In the


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Trouble state, you are motivated by the desire to return to theold status quo. You have fallen below your comfort zone andwant to get back to where you feel good. As with the Growth state, the greater the distance between where you are andwhere you want to go is your change discrepancy. As the

leader it’s imperative that you recognize the difference in themotivation between Growth and Trouble. Each state wantschange, but the motive for change is diametrically different.

Over Confidence

Think back to the movie Jaws. The young lady strolls into thecalm ocean on a moon lit night to relax and enjoy the moment.She’s smiling without a care in the world. Gradually, you hearthe music begin, “Dunt, dunt, dunt, dunt…” starting low andthen building to a feverish crescendo. Suddenly, the sharkbites her. Her eyes show total fear and surprise just beforethe shark takes her under the water never to be seen again.She knew there were sharks in the water, but chose to ignorewhat she knew because it was such a peaceful night. She wasoverly confident. Just when she let her guard down, she waseaten and it cost her life.

Entrepreneurs make this mistake every day. Things are going

great in their business and they don’t have a worry in theworld. The reality is that if you’re overly confident, you can’tchange because you’ve already arrived. You know it all andthere’s nothing else to learn. You’re a bit arrogant. You drive anice car, and have a beautiful home. You might think that yourlife is great, but beware. If you are in the Over Confident state, you are inches away from trouble. This happens whenyou take your eye off the ball and let your guard down. Thensuddenly the competitor creates a wonderful new product thatputs you out of business. Unfortunately, you never took the

time to notice it.

If you are either in Even Keel or Over Confident states forgetwasting your time, you’ll not change. The fact is that ninety-five percent of us are in one of these two states. It usuallytakes a traumatic trigger to move us away from beingcomfortable and over confident. To add to the complexity ofthese states, most businesses are made up of manyemployees. Each employee is in one of these states. Imaginethe challenges you have as the leader of the business. When

you want to change from one state to another, you have toascertain in which state each employee is, relative to whereyou are. If you want to grow but most of the employees are inTrouble or Even Keel modes, you’ve got your work cut out foryou.


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Change States

Over Confident (I’ve arrived)

Growth

Growth

Discrepancy

Even Keel (Status Quo)

TroubleDiscrepancy

Trouble

The Change Pyramid

In order for us to understand further why we have troubleincorporating change into our lives, we must look at the fivestages of change. Many times we think that change meansdoing what we’re doing now but a little better. If you need tochange, what you’re doing now is usually not adequate toproperly reach the new objective.

Stage One – Environment

The stages of change explain why we have a tendency to stickwhere we are. The first stage of change involves changing yourexisting environment from what you’re doing now to thatwhich will help facilitate your outcome. For example, if aperson wants to lose twenty pounds, it’s necessary to changetheir existing environment by taking all the sweets out of thepantry and then replacing them with fruit in the refrigerator.

When the dieter needs a snack, they eat a piece of fruitinstead of a candy bar. This environmental change wasnecessary to keep the dieter from repeating a bad habit.


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Stage Two – Behavior

Our behavior changes as our environment is modified. In ourexample, the dieter can no longer eat sweets because they’vebeen removed. Therefore, the dieter’s behavior is altered by

eating fruit.

Changing the environment and altering behavior are the mostdifficult stages through which to go. Changing one’senvironment and behavior is chaotic because even under thebest conditions, you are forced to change the current statusquo. It involves throwing away what you’re doing now anddragging you out of your comfort zone to replace it withsomething entirely new. In most cases, when you step out ofyour comfort zone, it’s difficult to envision what the newenvironmental change will bring. Because the fear of loss isfar more traumatic than gain, we have a natural tendency toresist and go back to the old way. If you think you’re changingsomething in your business and you’re not in chaos, you areprobably not changing anything. If you are in chaos, youshould be celebrating, giving each other high-fives, and feelgood about knowing you’re actually on the right track. It’simperative for the leader to continually remind the peoplegoing through change that a bit of chaos means we’re on a

successful track.

Stage Three - Capabilities

During stage three, we begin to increase our capabilities.Once the dieter throws away the chocolate and puts fruit in therefrigerator, then substitutes the old behavior by eating thefruit instead of the sweets, he begins to lose weight. It’s at thispoint where the dieter begins to see progress. Now thatthey’ve lost a bit of weight, they can wear a smaller size, feel

more energetic, and want to begin to exercise. Once thepeople begin experiencing the benefits of change, increasetheir capabilities and see progress, they move directly to stagefour, beliefs.

Stage Four – Beliefs

Despite how you felt before, once you’ve seen the progressassociated with the change, your belief system changes.

Once you believe you can do it, your sub-conscious helps youget there. Once you begin to believe in the change, I stronglysuggest that you put your mind in its proper perspective. Thinkof the outcome you are trying to achieve, not the processthrough which you must travel. Visualize how you will feel


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after you’ve achieved your objective. Then write out theoutcome as if it’s already completed. If you want to run theBoston Marathon, write something like, “It was a long run, but,I made it and I feel great” or “26 miles, was not as difficult asI thought it would be.” What you gain by putting the outcome

in writing is commitment from your inner self. Even thoughyou may not realize it, the subconscious mind will work on aproblem until it achieves the desired result. Have you evertried to remember someone’s name and it just slips yourmind? You said, “I know it, I just can’t think of it. I know it’llcome to me.” Your sub-conscious mind picks up the problemand while you may have consciously moved on, your innermind has not. Then two days later, the name pops into yourhead and no matter what you’re doing or to whom you aretalking, you yell it out. Your subconscious did the work in thebackground and when it resolved the issue, it turned it back toyour conscious mind. You may have heard the expression,“what you think, you become.” When you consistentlyvisualize the outcome, you change your sub-conscious mind.It will move you toward the outcome, if you consciously wantit.

Stage Five – New Identity

The last stage of change is your new identity. You’ve have nowproduced the desired result and you have a successfuloutcome.

In the first years of business at CAESY (Clinically AdvancedEducation Systems), we only had inside sales reps whoseprimary function was to sell to doctors over the phone and attradeshows. They would receive phone calls from all over thecountry and didn’t really have any defined area of the countryfor which they were directly responsible. This business model

worked well for us until we introduced the new CAESYEnterprise product. Because this product had more capabilitiesfrom our original DVD version is was necessary to start anoutside sales force to perform in-office demonstrations. When Iannounced that we would be putting on an outside force tohelp sell the Enterprise product, the inside reps immediatelybecame threatened. They felt that it would be just a matter oftime before they were going to be replaced by the outsidesales reps. I understood their concerns so I structured thesales process in a team configuration. This meant several

things to the inside reps. First it would be necessary for eachrep to have a defined territory and each would work with aminimum of two outside sales reps. They’d have to changetheir environment from answering any of the incoming calls toanswering calls only in their assigned territory. I had several


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collective and one-on-one sessions with the inside repsexplaining how important they were to the success of this newplan. I spent days explaining where we wanted to go with thisnew way of selling. I needed their buy-in to ensure that theywould work hard to make this happen. I never got their total

commitment. But they agreed to try. To help alleviate theircollective fears, I structured the sales function in such a waythat no matter who made the sale, both the inside and outsidereps would be compensated. This was very positive becausethe inside and outside rep actually had a better opportunity tomake more money.

Despite the positive aspects of this change, the inside repswere very recalcitrant to the situation. They had to changetheir environment and their behavior to accommodate theoutside sales reps and they didn’t want to move away fromtheir comfort zone. Nevertheless, I forced them to realign andfocus in their dedicated territories. Everyday, I met with themto encourage their efforts. Each day they were pushing backsaying it wasn’t working. At the end of month one, they wereso discouraged because they’d lost money due to lesscommissions as a result of lower overall sales. We decided tomake them whole by compensating them with their normalpay to help them through this chaotic time.

During the second month, they were slowly making progress.They started scheduling more demonstrations and sales beganto spike upward. Suddenly, the inside reps were calling theoutside reps asking them how they were doing and if theyneeded any help. The staff was beginning to work together andtheir capabilities began to change. At the end of month two,we’d made our goal. The inside reps began to envision theirfuture and their belief systems changed. By the end of monththree, we were on a collective roll. One by one the reps came

into my office and said that this was the best thing that wecould have done. It took three months and all five levels ofchange to incorporate, but it was successful.

There is another side to reaching your outcome successfully.It’s temporary, because in order to continue to be the best foryou and your clients, you will have to continue to change. Thecycle starts over. It’s called the Reassessment/Change Cycle.However, if you all work together and you communicate withthe staff regularly, they begin to understand that in order to

win requires a little chaos before a lot of success.


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Change Pyramid

Outcomes

ReassessmentProgress

Beliefs Change

Capabilities

Chaos

Behavior

Environment

Summary

1. Change must be embraced not feared.2. There is no magic pill. Change involves being in the proper

state. You must have a need to grow or get out of troublein order to want to make a change.

3. If you are in Even Keel or Over Confident states, you willnot change but it’s just a matter of time before you’re introuble.

4. As the leader, you must uncover each employee’s changestate in order to successfully incorporate the change.

5. Change is also difficult because it involves moving peoplethrough 5 stages in order to be successful.

In stage one, you must be willing to change theexisting environment to the new environment.In stage two, changing your environment meanschanging your behavior.Stage one and two, are chaotic, which is the biggestreason most change does not take place.During stage three, your capabilities begin to change

which drives you toward stage four.In stage four, you begin to modify your belief systeminto thinking that you can be successful.


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During stages three and four, you begin to seeprogress, which causes you to press forward until youencounter stage five.At stage five you’ve hit your goal, and you’ve madethe change.

6. Because change is a continuous cycle, once you meet yourdesired result, you must reassess your current positionand possibly change again to meet the new needs of yourcustomers and it all starts over.


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CHAPTER SIX

BUILDING THE FOUNDATION - OPERATING AS A TEAM

Let’s face it; one of the most over used words in business is

TEAM . If you listen to the gurus out there, ya gada have acoherent working group in the business or you’re destined formediocrity. It’s a lot harder to build a successful team than itis to say the word. It implies several things such as workingtogether as a unit, having a positive attitude about winning,and practicing to be the best at your position.

Great teams have great coaches. The coach is the sidelineleader. He’s responsible for guiding the unit, implementing thewinning strategy, disciplining its members who drop the

proverbial ball, and preparing the roster as to whom will playand who will not. Teams are usually formed around a seasonor a finite period of time. Potential players come together fortryouts to see whether they’ve got what it takes to play fortheir selected organization. Players who get cut from the teamneed to tryout for another team or they must select a lesscompetitive environment to spend their career.

During the season, the coach continues to drill the squadensuring they maintain peak mental and physical conditioning.

At season’s end, the organization is rated by the number ofwins and losses it’s produced. The unit with the most winsbecomes the champion. The season ends and the players gofishing for a couple of weeks. Then they begin their off-seasonconditioning program to maintain their shape to avoid beingcut at next season’s tryouts. If the coach produced a winningseason, he might keep his job for the next season. He willcontinue to study the game plan for next year and always beon the lookout for new and better players whom he will tryrecruiting. Then the cycle starts all over again.

Businesses that don’t work as teams have many things incommon. First, the coach doesn’t understand the players’wants, needs, and proficiencies. Second, because they noseason, players that make the team, have a tendency to settleinto their position because they won’t have to tryout again.Third, their players don’t practice to maintain their skill level.Fourth, because it is vital for the squad to work as a unit, itonly takes one player to severely damage the teamatmosphere. Fifth, the coach has not given the team a clear-cut objective as to how to win. Last, sixth, the coach is notsure how to implement a winning strategy, doesn’t disciplineplayers for not doing their job, and is afraid to cut the weakerplayers from the team.


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In order to get on the right track and build a winning team,you need to assess how you’re playing the game today. Asthe coach, you need to evaluate all your players. You probablyknow of one or two players, for one reason or another who

aren’t playing the game properly. Perhaps their attitude isnegative or they don’t want to improve their skills. If that’sthe case, you need to muster up courage and let them go sothat they can tryout for another team. The teammates thatare left will be sent the message that you want this business tobe a winner.

As a coach, you will need to give your team a reason forwinning. A business purpose or mission is a must. It needs tobe written out and discussed thoroughly with the team. Oncethe team understands the purpose, they can begin to play thegame to win. A compelling reason for your players to followyou is not so easily found. This will be discussed in furtherdetail in chapter six.

As the coach you need to recruit new players. You’ve got tofind players with positive attitudes, who are highly motivated,have a strong work ethic, and show signs of innovation. Thesequalities are not easily assessed, but there are tools in the

marketplace that can help you in this area. Personality profilesgive you a complete written evaluation on your existing teamand prospective members. These profiles will help youdetermine the qualities of each player. Personality profiles canbe obtained over the Internet.

Once you cut the weak players, recruit new players, andprovide them with a reason to win. It’s time to start to work onbuilding the team! The team needs to be practicing regularlyby reading books, magazines, listening to tapes, watching

videos, and attending seminars on improving theirmanagement, and leadership skills. The more the teampractices the better the entire organization will perform.

Finally, as a great coach, you need to implement a process formeasuring each team member’s progress. Weaker players willneed to practice more. Those who can’t keep up will need tobe cut. This may sounds harsh, but it’s good for both theteam and the weaker players. A teammate doesn’t get cutbecause he or she is a bad person; it’s just that they don’t fit

with the current game plan.

Not all teams have good coaches. Team members need tohave a great coach or they will be relegated to be in abusiness without a sense of direction. They will be reduced to a


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group of individuals trying to make sense of their day-to-dayroutine. Teammates, if you’re on a team where the coachdoesn’t get it, do yourself a favor and cut yourself off the teamand go tryout for a coach who does.

To be a great team requires self-discipline, hard work, apositive winning attitude, and a great coach. Anything else just isn’t good enough.

Get Your Team Committed

Get your team committed to helping establish their uniquequalities. So many entrepreneurs think they have to doeverything pertaining to directing the business. Being a leader

is recognizing just the opposite. You can’t do everythingyourself if you expect to have a great business. You have togive power away. When you give power to your other leaders,you will find that your business will grow geometrically. Mostemployees don’t think that they are leaders. Most are contentto do their day-to-day tasks and enforce the rules set down byyou. Don’t let this happen. You have an entire business full ofleaders, while they may not know it, you can prove it to them.I have compiled a list of the top qualities of great leaders andput them together into a leadership survey. Make copies of the

list and distribute it to each employee and ask them to ratethemselves from zero to ten. Scoring a zero on any qualitymeans that you posses no leadership potential on thatcategory. Scoring a ten indicates that you possess greatleadership qualities in that category. I’ve never seen anyoneyet who has rated themselves with zeroes in every category,quite to the contrary. Most people found they possessed, tosome degree, most of the qualities listed on the form. Whenyour team realizes that they all possess leadership qualities, itwill be much easier to accept being a responsible party. Plus, it

will be the first time for many of them to realize how manyleadership qualities they actually have.

Discovering your leaders is a giant step for you as well. You donot want to be a lead buffalo because it makes your teamimpotent to handle the day-to-day decisions that are critical toyour business. What’s a lead buffalo? The way the NativeAmericans used to get their buffalo meat was simple. Theyknew that the rest of the heard blindly followed the leadbuffalo. All they needed to do was start a stampede and the

lead buffalo would make a break for it with the rest of theheard following close behind. They would steer the lead buffalooff a steep cliff to his death followed by the rest of the heard.Don’t let this happen to you and your business. I was a leadbuffalo in my first business. No decisions could be made


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without my ultimate approval. My office was like a revolvingdoor. The employees would come into my office asking forsome sage advice from yours truly. In my benevolent way, Iwould TELL them what to do and how to handle theirproblems. I was constantly putting out fires and my focus was

on making simple decisions for my employees rather thanworking on building market share for my product. I finallyrealized that I was a player/coach and the rest of the teamwas content to sit on the sideline where it was safe.

I vowed to change my behavior and make the employeesresponsive to the decisions that they needed to make. As theemployees came into my office and asked what they should doand how they should do it, I merely replied, “I’m not sure.How do you think we should do it?” At first, they werereluctant to answer, but I wouldn’t let them out of my officewithout them coming up with a potential solution to theirproblem. It took a few months before I hardly had anyonecoming into my office. In fact, if I wanted to know how thingswere going with them, I’d have to go to the front lines and seefor myself. Eventually, the team was so strong that I begangoing to them for all the answers. It was like a breath of freshair.

Team Killers

This probably won’t come as a shock to you, but gossip candestroy a team in no time at all. If you have a member of theteam who just can’t say anything nice about his or herteammates, it’s just a matter of time until the team breaksdown.

Just as bad as gossip is a team member that spends the lion’sshare of his or her time talking about personal problems. Stay

away from discussing personal problems. Eighty percent of thepeople don’t want to hear about them.

Complaints about your boss, co-workers, or company shouldbe immediately quelled. Many times when an employee iswhining about such things, clients are not too far away. Yourcustomers shouldn’t be exposed to this type of droning and itcan be a deal breaker for you and the business.

Triangulation is another team killer. Triangulation involves one

teammate going to another teammate to discuss a problemthat he or she has with yet another teammate. Team membersshould be encouraged to deal with problems face-to-face.When triangulation is allowed to continue, it gets out of control


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because sides are drawn, and the coherency of the team islost.

There are plenty of topics about which to talk with your co-workers without being destructive. Talk about the positive

aspects of the job and find something good in everybody andlet them know about it. If you are one of the gossips, chroniccomplainers, or triangulators and you can’t find anythingpositive to say, it’s just a matter of time until you are foundout. When that occurs, there’s a very good chance that youwill be kicked off the team.

Summary

1. Business teams fail for several reasonsa. The coach/leader doesn’t understand the individual

player’s proficiencies and weaknesses. b. There is a tendency for employees to settle into

their respective positions and become comfortable.c. Employees don’t practice to maintain their skill

level.d. One weak player severely damages the team

atmosphere.e. The coach has not given the team a clear-cut

objective as to how to win.f. The coach is not sure how to implement a winningstrategy, doesn’t discipline players for not doingtheir job, and will not or is afraid to cut the weakerplayers.

2. You must continually assess the players, the process andguidelines to ensure the team is on the right track.

3. You must have a compelling reason to win.a. Must have an established business reason.

4. You must continue to recruit great players.

5. You need to take action once you’ve established the rightteam.6. Don’t be a Lead Buffalo.7. Always avoid the Team Killers.

a. Gossipb. Chronic Complainersc. Triangulation


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LEADERSHIP SURVEY

DESCRIPTION WHERE YOU RATE

(0-10)

GOOD LISTENER

GOOD COMMUNICATOR, PERSUASIVE

KNOWLEDGEABLE

DECISIVE

OPEN MINDED

TEAM PLAYER, TREATS PEOPLE AS EQUALS

SUPPORTIVE

TRUSTWORTHY

HAS CORE VALUES THAT DO NOT CHANGEEVENTS OCCUR

POSITIVE ATTITUDE

LEADS BY EXAMPLE

CHARISMATIC

VISIONARY, LOOKS TO THE FUTURE

GOOD AT FOLLOW THROUGH

SENSE OF HUMOR

SHARES KNOWLEDGE

HONESTY

INTEGRITY

GIVES DIRECTION

INVOLVES THE STAFF IN DECISIONS

ENCOURAGES KNOWLEDGE

HIGHLY INTELLIGENT, ABLE TO ANALYZESITUATIONS

GOOD ROLE MODEL

TRACK RECORD OF SUCCESS

EMPATHETIC


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DELEGATES APPROPRIATELY

DEPENDABLE, DEDICATED

FLEXIBLE

TRUSTS EMPLOYEES

RESPECTS THE WORK OF OTHERS

TACTFUL

CONTINUALLY EDUCATES HIM /HERSELF

PATIENCE

FAIR

ADMITS MISTAKES

KNOWS WHEN TO BACK DOWN

BACKS UP EMPLOYEES

IS HEALTHY AND FIT

GOOD, CLEAN APPEARANCE


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Documents

The Magic of Business Charisma eBook Edition