Know When to Hold ‘Em, Know When to Run
Kenny Rogers Had It Right….
“You got to know when to hold ‘em, know when to fold ‘em,
Kenny Rogers, The Gambler
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done.”
This was a very popular song back in the 1980’s when Kenny Rogers was at the pinnacle of his career. I always liked it because the refrain (quoted above) resonated with me as being a perfect truth. And not just a truth that was applicable to playing poker (which I enjoy, but for which you will never see me seated at the “final table”), but to many situations and challenges that I had faced up to that point and, no doubt, I would face during the entire course of my life.
Now please keep in mind that I am not a real big fan of Kenny Rogers, or even Country and Western music for that matter. So, is it ironic that I am delivering a paper at the Institute of Industrial Engineers (IIE) this May and that it is to be in Nashville Tennessee? Well, at least you can understand the words they are singing…most of the time.
“You got to know when to hold ‘em, know when to fold ‘em”
Take a sales situation, for instance. How many times have you been in a “bad deal,” but let your ego lead you to believe that you could prevail? I recall a recent opportunity at XONITEK where we were pitching an Enterprise Requirements Planning (ERP) project to a very large company whose revenue was in the billions. The only ERP solution that XONITEK represents is Exact/Macola-ES and the competition was SAP, Oracle and Lawson.
Now, given the parameters of the project, I knew that Exact/Macola-ES would accomplish all of the goals that the prospect wished to achieve and more. I also knew that we would be able to achieve a successful implementation with “one less zero” than expected in the project cost. However, when the XONITEK sales team briefed me on the opportunity, I let them know that I believed we were being used as a bargaining chip… as an alternate solution to be eventually used to beat down the proposal from SAP (yes, I even knew at this stage that they wanted SAP).
I was challenged by the sales team on this position and opinion, and my response was simple. With the exception of the modesty associated with Warren Buffet and in the portfolio companies of Kohlberg Kravis Roberts & Co (KKR), people have an instinct to buy the biggest “name” that they can afford, and compete with their peer group for status. This is not about being utilitarian, or even being utilitarian in style. This is about satisfying the ego by bettering their peers and maintaining their status in “the club.” It’s the same reason people will buy a new boutique luxury car over a stock GM model that is a year old.
Please don’t misinterpret. I don’t begrudge people who want to (or need to) show the fruits of their toils in the form of their possessions. This is not the point at all. They earned it, they have it, and they are entitled to do whatever they want with it. Heck, I would do the same and have. In fact, my sole such indulgence is a yacht. Its name is “For Sale.”
No, this is about ME!
Because, it is going to cost ME to stay in a game that I am destined to lose. It is going to cost ME money in the sales cycle. And it is going to cost ME again by devoting a lot of energy and resources to a lost cause when I could be directing these resources towards opportunities that I can win.
In the end our offering was in fact a “zero less” in cost, and was determined to be the best solution by the steering committee, which subsequently recommended our solution to the Board. However, the Board (none of whom sat in on any of the meetings or presentations) decided to engage SAP.
I realize that many of you reading this will tell me stories of how this is not always the case and will regale in their tales of tremendous victories in the face of incredible odds.
And I absolutely believe that such is occasionally true. However, one cannot always pray for the one “river card” to make the inside straight to come through, as it usually does not.
We should have folded ‘em.
“Know when to walk away and know when to run.”
In any situation that you are engaged in an opportunity where there is considerable risk and you have responsibility and accountability, but not authority, you should walk (or run) away. This is a recipe for disaster. In fact, this is not a recipe for disaster, it’s a guarantee.
Such was the case with a client we had. Though we had been rendering spot services for the better part of a year with considerable success, they were about to embark on a significant project. For XONITEK to win this project, the customer wanted; a 25% discount on the services, they wanted a 10% hold-back (retainer) until the project was successfully completed in their eyes, they wanted 30 day terms on progress billings, and they wanted to have authority over the members of the XONITEK implementation team.
As the risk to XONITEK of this being a “no-win” situation was great, we walked away from the deal.
Did you ever get solicited for a Time Share? A very well done piece of marketing material arrives which promises a free vacation to an exotic destination and all you have to do is attend a one-hour long presentation on the virtues of owning a time-share.
Well, for those of you who have accepted such an offer and actually attended the presentation, I am sorry for the pain you endured.
For all of you who have not taken up the offer, but have been sorely tempted… I am going to become… at this very instant… your best friend in the world… Don’t walk from this “once in a lifetime opportunity,” RUN!
“You never count your money when you’re sittin’ at the table.”
Too many times I see a sales team carving up the commissions before the deal is won. This is especially true when the sales team is spread among a few companies which have partnered to win the deal.
A few years ago, XONITEK was partnered with a technology provider whose initials I am sure really stood for “Constant Aggravation.” In every opportunity that XONITEK was involved in where this company was our “partner,” we spent more time negotiating “margin splits” and the terms of engaging than we did on focusing on the actual win.
In one significant opportunity in particular, the only thing between XONITEK and the win was a reference from the technology provider. Despite our best efforts, we could not get a single reference from the technology provider for over a week. All during this time, the prospect’s confidence is eroding and the competition is regaining the momentum.
Rather than waiting around to lose the deal, we took the initiative to go on the technology provider’s customer portal and make a blanket request for a reference. Within hours, one of their customers responded that they would be happy to be a reference. What’s more… they were less than THIRTY MILES from our prospect.
Within days, the deal was won. Oddly enough – and DESPITE our persistence and ultimate win, it turned out that the technology provider was rather displeased at our initiative, and we were chastised for “going outside proper channels.”
There are countless other opportunities with “partners” which we have endured, and in most opportunities where the partnering firm was somewhat smaller, I have found that the honor and integrity of all involved have been exceptional and the focus has been on the win. Conversely, when the partnering firm has been large or even publicly traded – the politics, fiefdoms and blatant greed are the order of the day. This is not to say that one should avoid partnering with larger firms, but that one should proceed with caution.
“There’ll be time enough for countin’ when the dealin’s done.”
Never split the spoils until they are won. If you have a good team, solid business practices (at least when it comes to developing work specifications and proposals), and a tight method for controlling the delivery, then there will be enough reward to go around.
What you must do, is concentrate on your strategy and your game. Never fight someone else’s battle-plan, but guide them into following yours. You have to maintain a level of flexibility and willingness to deviate from your plan, but this must be because of some fundamental change in the environment. Be aware of your surroundings for changes which result in a shift in the natural dynamic of the engagement.
Above all, keep your eyes focused on the mission and eliminate the distractions.
Oh… One other bit of advice… “If you don’t know who the sucker at the card table is… it’s YOU!”
Paris is the Founder and Chairman of the XONITEK Group of Companies; an international management consultancy firm specializing in all disciplines related to Operational Excellence, the continuous and deliberate improvement of company performance AND the circumstances of those who work there – to pursue “Operational Excellence by Design” and not by coincidence.
He is also the Founder of the Operational Excellence Society, with hundreds of members and several Chapters located around the world, as well as the Owner of the Operational Excellence Group on Linked-In, with over 25,000 members.
For more information on Paris, please check his Linked-In Profile at: http://de.linkedin.com/in/josephparis
