The following transcript is provided by YouTube. Mistakes are present. To hear the podcast episode, click HERE.
[Music]
welcome to scaling up the podcast for water treatise by water treaters where we’re scaling up on knowledge so we
don’t scale up our systems hi folks tres Blackmore here the host of scaling up and today we are going to talk about
sales and I know all of us out there are salespeople and our job is to go and
Sales
sell what it is that we do but if you
really look at what it is and how it is that we do it and how we are managed and
the systems in which we do those things it has not changed
since the dawn of time but everything else has if you look at if we had a
manufacturing facility we are always looking for better machines and better
policies and procedures and how do we shorten the distance from point A to
point B to make that more efficient to make it easier on people and manufacture
and they have Six Sigma and all those other items where they make sure that if somebody’s using say a hammer they don’t
have to go and walk away and come back and get a hammer that they have all the tools they need right there in their
location so they can concentrate on what their job is you can pretty much apply
that line of thinking to everywhere in business except for sales sales we have
done the exact same way for forever that’s what got my attention when
Templeton my business coach who’s been on the show came and we do what we call
one two ones and Tim looks at my business and and he sees things that I
can’t see because I’m inside the fishbowl swimming around so he’s got the
perspective that he can look from the outside and have a completely different perspective and we were talking about
how we do sales and he said that he not only read this book he’s actually worked
with Justin Roth Marsh who’s the author of the book I’m getting ready to tell you about
and he has redesigned the sales process it so it’s a really neat concept and
I’ve talked to several people that have worked with Justin and it works so the
book is called the machine a radical approach to the design of the sales
function and really think about it when was the last time you thought about how
you did sales and I’m not talking about techniques and things like that I’m talking about how it’s managed and who
does what job and are those really the right ways of doing that well his book
is really in two parts and you all know that I really enjoy books that give me
something to do and give me something to work on after I read them and that’s what his book does so part one kind of
proves this case you know this is what’s going on with sales and this is what has
to happen because it’s always happened and then part two tells you how to break it apart and rebuild it so I have had of
the opportunity to reach out to Justin and he came on the show to interview
about the book and specifically talk about some of the things that we just take for granted in sales and what we
can do a little bit better so I hope that you enjoy my interview with Justin
Roth Marsh my lab partner today is Justin Roth Marsh and Justin I gotta
Meet Justin
tell you I just finished reading your book the machine and I am just amazed at
how you took a totally different approach to how companies sell I’m
really excited about talking about that but first off how are you doing today hey trace I’m doing good how are you I’m
doing very well you have just a whole list of credentials and I’m gonna mess them up if I talk about them so would
you mind telling the scaling up nation a little bit about yourself well I guess I’m the author of the machine that’s probably how most people come across me
in the first instance so the machine is a book about the design of the cells function how to build sales functions
I’m the founder of a company called ballistics I started ballistics 22 years ago in Australia and moved to the US
about ten years ago when u.s. business sort of eclipsed the Australian businesses in size I have
been involved with a couple of with one or two startups prior to ballistics but I I struggled to remember them because
that was more than 22 years ago I have a I don’t have many more credentials than that maybe a driver’s license
and a diving permit but that’s about it you’re a scuba diver you know what I I
was for a couple of weeks long enough to get what do they call it the deep aren’t the the underwater there’s a name for it
there’s an open water certification or deep or what a certification alright it’s not my favorite sport I think the
the hassle to enjoyment ratio is out of whack I’m you know my primary sports a
tennis and gymnastics currently well fair enough well I got a say and I
Traditional Sales Model
mentioned this earlier when I was reading the book I I never thought about sales in the in the way that you taught
me to think about sales but I think about everything else I do in business with how can I do it better and more
efficient and get some better machine in there improve the process and that’s the
mindset that you took so I was hoping that we could spend a little time talking about the traditional sales
model why you think that’s not the way to do things now and then what is a more
effective way to do sales okay so traditionally sells as viewed as an activity so if an organization wants
sales it goes looking for a person to perform that activity and those people are called sales people and that’s
probably as sophisticated as most organizations get if they need more sales they get more sales people and sales people operate autonomously and in
fact sales people operate like manufacturing folk probably operated about a hundred years ago they work
autonomously they get paid on a piece rate in other words they get paid Commission and I think in some contexts
that model can work but with most organizations we encounter it simply doesn’t work anymore sells as is too
complex for that to be practical you know many of our clients if for many of our clients the product that they’re
going to sell doesn’t exist at the point at which the salesperson start selling it and I think the other the other big
thing too understand is that what we bring to the discussion is is really division of labor our whole approach is a is based
around applying division of labor to the sales function which means splitting it into a group of activities and
allocating activities to folks who are best qualified to perform them and the end result of that is that if we build a
sales environment sales people do nothing but sells so to be more concrete if we’re talking about an inside sales
person they would have 20-plus meaningful conversations a day and do nothing else no prospecting and no
customer service tasks no proposals no order entry nothing just selling well in
Why Should You Change
the water treatment industry it’s the norm that there’s one sales person that handles an account and they’re they’re
responsible for making the phone calls for going out there and finding this prospects writing the proposal doing
every single aspect so with for a industry that’s so deeply entrenched
with that’s the way we do things why should we change how should we change well you only need to change if you want
to make more sales well fair enough all right so why should you change the
reason you should change is because it’s an incredibly inefficient way of operating you know sales people and not
and not only that is it’s not just that it’s extremely inefficient you need to recognize that the more efficient the
more inefficient your sales process is the less you can afford to pay for sales people which means the average caliber
of your sales people is going to be lower than it otherwise could be so its efficiency is a good reason but
efficiency is isn’t the only reason I mean if if I was to go and walk work in
the in that industry I’m not sure it would be my first choice but if I did go and work in that industry I would want
to be sure that I was doing nothing other than hot than high-value activities so I’d want to make sure that
I spent my time selling you know and that would mean standing in boardrooms pitching some sort of proposition best
case you know worst case would be you know standing on the shop floor in a plant somewhere pitching a proposition I
would absolutely not be attracted to the industry if I had to do my own prospecting and generate my own
proposals and I’m sure that would be the case for a lot of professional salespeople and and of
course irrespective of my personal proclivities I would be significantly
more anyone would be significantly more productive if they spent a hundred percent of their time having you know
either face-to-face or telephone based selling conversations rather than ah selecting and doing customer service and
you you talked about salespeople earning their own accounts that’s just ludicrous it makes no sense whatsoever because if
a salesperson owns their accounts over time the size of their list of accounts grows to the point where that end of any
selling at all I will be the first to tell you that when I’ve had salespeople that work for me and it did not work out
How To Change
it was because they weren’t able to do the things that they weren’t really hired to do which was sales they they
weren’t writing proposals right or they weren’t able to prospect to get enough in there so again this is how we’re
taught to build sales department so what’s the departure from that how do we even start to do that well I think some
thinking isn’t reading the books are good goods to hutch but some basic thinking – and I mean sit and watch she
is due a time and motion study on your salespeople and and note down and 10-minute increments what they do for an
entire day and then ask yourself does it make sense to have one person performing that range of activities or would you
increase activity would you increase performance if you split the activities up so I mean the first thing that we
would take away from salespeople is customer service so they have no involvement whatsoever in transactions so they don’t generate quotes they don’t
resolve customer issues and they don’t have anything to do with the processing of orders and then the second thing that
we would remove from salespeople is prospecting so that they can focus exclusively on selling in this to
benefits you get from that obviously salespeople get to be more productive but also salespeople can become much
easier to manage if you’re a supervisor and you have a room with ten inside salespeople in it it’s very easy to tell
whether they’re working or not if the only type of work they can possibly perform is talking to prospective customers on the telephone if you allow
them to you know perform the diversity of tasks that a typical salesperson does
then they essentially become unmanageable and of course if you pay them Commission then that’s unmanageable with a cherry
on top and you’ve only got yourself to blame for that that’s a that’s a good point so what is the ideal sales
The Ideal Sales Department
department look like well in a department that we would build you would have a promotions what the first thing
you would do is have a robust customer service team to ensure that sales people had no reason whatsoever to have any
involvement with processing transactions generating quotes and resolving issues the second thing that we would do is
build a promotions team the job of the promotions team is to top up sales people’s opportunity queues every day
meaning that each morning when a salesperson arrives at work they have exactly the same number of opportunities
in queue that they had the day before and then once you have those two preconditions the sales department
should consist of a bunch of people who spend all day talking to prospective customers on the phone and a supervisor
who makes sure that that’s the case you make it sound so simple it is so we’re
entrenched in such a the same way of doing things but with that comes the same results that we’re always getting
so again easy for you to say well this is a transition that manufacturing underwent 50 to 100 years ago and the
consequence of that transition of highly visible for all of us to see so I think
that the road ahead has already been paved for us all we have to do is follow it we you know it doesn’t make sense to
protest too much people against the people in the rest of the organization are gonna think we’re a bit daft fair
enough so one of the issues that I found as trying to restructure our sales
Finding the Right People
department is finding somebody that is able to do the inside sales part of the
job and how how do you go about advising your clients to find the right person
what are what are some of the things that we can do to make sure that we are getting the right people well first you
need to recognize it’s difficult because this is probably not a plum job it’s probably not the most in demand of jobs
so recognize it’s difficult figure out how to make it more appealing and of course our methods what we’re talking
about here does make it more appealing because you know the idea that the idea that you could work in the industry and
sit on a basket of accounts and and be basically a customer service rep with the added
responsibility of somehow pulling cells out of a hat it doesn’t make it sound
like a very appealing proposition but if you say to somebody look all your sales opportunities are generated for you all
you have to do is the one thing that presumably you’re really good at it makes the job sound more appealing and then if you say well we pay twice what
our competitors pay then it becomes even more appealing now if you do the if you
do some investigation I don’t know what the numbers are in your industry but I wouldn’t mind betting that after they’re done with a camp management a typical
salesperson in your industry only has a couple of true selling conversations a
day off if that even I wouldn’t argue with that so in the model we’re
suggesting we’re going from two a day to twenty a day so that’s a 10 times increase in the rate of work now you
can’t expect a 10 times increase in sales because you would expect that the
salespeople in the current model are certainly stomache stumbling across as witness and windfalls and the volume of
windfalls will be the same in the old model but it will be an increase I mean if you increase the volume of work by 10
times it’s reasonable to expect that you could double the rate at which a single salesperson closes deals so if you have
to pay them 50% more that’s probably a reasonable deal now if you’re paying 50 percent above the market in the form of
salary rather than base Plus per Commission I suspect you’re going to have plenty of people who want to work
for you well you said the prerequisite to even get started with this new endeavor is to make sure that we had
Customer Service
customer service shored up how do we ensure that that’s done well start with
a list of activities so I’ve given you those so that would be processing orders resolving issues and generating quotes
so first make sure that you have folks on your customer service team who are capable of performing those three things
and then second make sure that your customer service team is resolved so that even when you get slammed by the
marketplace and maybe have one person off sick you can still turn around all three of those activity types within
reasonable lead times within the reasonable expectations of your customers in in more technical
environments you probably want to have a two-tiered customer service department so you know frontline CSRs who are
generalists and then specialists upstream from them and that could include you know maybe an estimator an
engineer applications engineer depending on how technical your work is so the
idea is all of the inbound track all of the organization’s inbound traffic goes to the customer service team the customer service team triage is it does
all the simple stuff themselves creates tickets for everything and pushes any complex tasks to a tier two specialist
so all of that stuff is removed from salespeople and hence they’re more productive because they’re only doing
Multiple Roles
their productive activities yeah so with a small company like like mine we may
not be able to fill all of the different seats is it possible for one person to
do multiple seats I don’t think that would be the case I think you probably would be able to fill the seats and
Lissa’s only three people in the company how many in the company well so so mine we have six yeah so I’m not sure how
many people you would need in customer service Atmos if with six people you’re obviously not manufacturing you’re simply it’s a buy-sell business correct
water treatment industry is normally is is more more sales sometimes there’s some production of some water treatment
chemicals programs uh-huh uh-huh so I I would expect maybe you’ve got one person
in logistics distribution and maybe one person in the can sanic and a couple of
customer service reps and a few salespeople it would be a stretch you could probably outsource some roles but
you need to be very careful about getting people to share roles I mean the our rule of thumb is only allow people
to share roles if one of them is critical one of them is optional and if the person you’re giving the roles to
dislikes the one that’s optional and a perfect example of this idea at work is is a bar if you go into a bar and watch
for a period of time you know the bar attendants what you’ll discover is that when they’re busy they’re serving
customers and when they’re not busy they’re polishing glasses now the great thing about Paul in glasses is that it gives passed off
something to do it adds some value because when the classes the glasses are cleaner the bar looks better but the
other great thing about it is that bartenders hate doing it which means that whenever a customer walks up to the
bar they will drop their glasses and attend to the customer if you gave them something they liked doing then it would
start to compete with their primary objective so yes you can double up on roles but only if it meets those
criteria which means your ability to do so is fairly limited so what are some of the biggest mistakes that you see some
Biggest Mistakes
of your clients make after they’ve met with you and they try to put your program into play a big one I think
would be would be trying without trial trying there’s an expression that you
guys use in the States I wish I could remember what it is it’s where you kind of half do something it’s not nickel and
diming but it’s an expression kind of like that it means to to half have a go at doing something and we do see that’s
a problem you know people read the book and they find it intellectually stimulating and they think well by gosh
we should do this to our organization but then when it comes down to it it’s just too hard so what they end up doing is retaining the terminology is is is
using the terminology but maintaining the status quo that that’s a that’s a big problem because obviously you’re not
achieving anything except a little bit of disruption I think it’s important to recognize that the approach that we are
advocating for sales is absolutely chalk and cheese compared to standard practice
so if you go down this path you want to be absolutely sure that this is what you
want to do and you want to be pretty confident that you know what you’re doing because you you want to fall on
one path or the other you don’t want to fall in the undergrowth in the middle between the two so what metric should be
Metrics
attached to the sales department so we can know whether things are working properly especially with trying this new
philosophy or if we’re heading towards a problem okay so let we talked about through it if we take a typical sales
department we’re essentially splitting it into three parts we’re splitting it into promotions so a customer service
promotions and sales so customer service our standard metric is what we call on-time case completion
that’s the percentage of cases or tickets that are completed on time and
on time means relative to customers reasonable expectations so if we have a
policy to turn around quotes in simple quotes in an hour complex quotes in three hours to process orders in an hour
and to resolve simple issues in two hours complex issues in four hours let’s say what we would do is time stamp every
ticket on the way in time stamp it on the way out and calculate the percentage of cases are completed on or before time
and that’s what we call on-time case completion so that’s the only thing that we measure customer service on and we
look to get every customer service team that we’re working with to 90 plus percent on time case case completion as
fast as possible and for those of you who have a manufacturing background you’ll recognize immediately that’s very
similar to dye fought delivery in time on full which is the primary measurement in production environments for
promotions the job of promotions is to keep sales peoples queues full so we
measure queue size as a percentage of optimal so it you know an inside salesperson and we’re talking primarily
about inside here rather than outside you can ask me about outside if you like but in a typical inside salesperson will
in order to stay busy need to sit on a queue of about 80 sales opportunities at all times and if they if they close
about 10 a day meaning you know maybe win one and lose nine or win to lose
eight if they close ten a day that means that those 10 need to be replenished every day to maintain that the queue
size of of 80 so we’re we’re promotions is concerned we just measure the average
queue size to make sure those queues are full and to make sure promotions is subordinating effectively to sales and
they’re where sales is concerns its its revenue per call slot so if if your
salespeople have the capacity to have about 20 meaningful selling conversations a day what we want to know
is how much revenue or how much contribution margin is probably slightly
more meaningful is being generated per call slot and we want to do whatever we can do in
order to increase that number you know squeeze more call slots into the day add more sales people I guess increase their
efficacy so that win more or maybe Inc improve the quality of sales opportunities so they become more
effective but they’re the they’re the three things that we would measure and pretty much the only three things we
measure unless something starts to go wrong in which case we may take some start to take some temporary
measurements for simply diagnostic purposes well you mentioned outside sales what would that look like so the
Outside Sales
the question with all of our with all the organization’s we talk to we have a sort of a come-to-jesus moment where we
ask them to what extent is outside sales really critical and everyone thinks it’s really critical but then when we ask our
clients you know whether they whether they value meeting face to face with
sales people when they’re purchasing stuff in most cases you know in almost every case the answer’s no so we have in
business this weird double standard where we we don’t want to meet with anyone elses sales folks face to face
but we assume that everybody else wants to meet with us I think if you’re if you’re in an engineer to order
environments in selling something complex or expensive you know management accounting services legal services
custom software development things like that where the decision making where the decision is a complex one then it’s
probably critical to be face-to-face at least for you know one or two
conversations in the overall sales engagement if you’re selling something that in if you’re selling some product
or service we’re cut where it’s easier for customers to make objective purchasing decisions it’s probably not
necessary to be face-to-face and if you do insist on being face-to-face you may end up discovering that you have fewer
selling conversations than you could have otherwise had and also that yourselves people are significantly less
efficient than they could be if they were inside because of course the person in the field can have about for selling
conversations a day whereas a person inside can easily have twenty so there’s when you feel there’s a huge tax on
their productivity you know they can they can operate at only one-fifth the rate that they could operate at inside
you go into great detail about this in your book an hour listeners might not have read your book
yet I’m going to make sure I put that information on my show notes page what’s the number one thing you want somebody
to do after they finish reading your book well the easy answer is on the book
also includes access to a video short course so go and subscribe to that short course is the glib answer I think that
the book actually in part 2 of the book so I split the book into two parts part one is the theory which is really what
we’re discussing here and then part two consists of kind of an implement implementation plan it walks you through
the process of planning and and I think what’s likely to happen as most people are gonna you know read both parts and
then make a decision I would I would say that what I would like people to do is
to actually go back and follow the steps in part two because if we get called in
to work with an organization that’s exactly what we do you know the steps that are described in part two it’s it’s
not just an author trying to fill out pages that’s exactly what our game plan is is if we go go in and work with an
organization so the first you know the first couple of steps would be do the time and motion study on your existing
sales team that I referenced before so you know exactly the nature of and the volume of the activities that are being
performed currently and then the second step is to is to you know maybe put all
those activities on post-it notes you know draw some boxes on a whiteboard that contain the titles of the roles
that you’re toying with and then move those post-it notes around between roles so they’re playing with with what you
believe is the optimal division of responsibilities if you’re a small organization like yours and you have to
make trade-offs then what you want to think is well which role you know if we can only have one or two specialists
which roles if we choose to you know which folks if we choose to make them specialists we’ll have the biggest
impact on our rate of growth or our profitability and in a business like yours that’s almost certainly going to
be salespeople so if you do have to have some folks multitasking as you suggested may be the case earlier you want to make
sure the further you want to start by just determining who are the folks who absolutely will not be multitasking and
that’s generally the folks who are going to be having selling conversations with Justin earlier you
Compensation
mentioned that the way the sales department was compensated wasn’t the best way either so what should that look
like okay so this will this will generate some hate mail but well I’ll
make sure to put your email on there so it goes directly to you and not me how about that yeah I think that the way
that salespeople are traditionally compensated probably make sense in the context of the traditional approach to
the design of the sales function so traditionally particularly in the US salespeople were essentially retained as
what watch what we would tend to call manufacturers reps today they were they weren’t employees in the true sense of
the word they were kind of like semi independent agents and they got compensated as such and to the extent
that your salespeople are independent agencies absolutely makes sense to compensate them like independent agents
but the problem that we find with most organizations is it no longer makes sense for salespeople to be independent
agents so we’ve we’ve tried to turn them into employees but they’re still only kind of half employees they still think
they’re independent and management’s not sure whether they are or not and as a consequence we pay them a bit of salary
and then we pay them a bit of peace rate pay as well and it’s a mess I think that
ultimately folks need to either be independent or they need to be part of
the team and there’s no middle ground you either march to the beat of your own drum or you march to the beat of a team
drum there is no third drummer or they’re the individuals do not have the
ability to meet to march to two drumbeats simultaneously it’s impractical in practice and
mathematically indefensible you can really only optimize for one parameter
so our advice is make a choice if you want your sales people to be independent
agents make them independent agents pay them Commission in other words make the manufacturers reps if you if you don’t
if that doesn’t make sense then turn them into proper employees insist that they march to the beat of the company
drum and pay them salaries I just hear people listening to that and thinking that the incentive is now taken
Incentives in Sales
away in sales what do you say to that well the the that you could you could make the same case for every other
person in your organization if you employ a payroll clerk what’s the incentive for them to process payroll
every week that makes sense again it’s a different way of thinking because we’ve always done it a certain
way so so if if I am here’s a way I think about if I employed a salesperson
it would be it would be my expectation that they would sell and there would be kind of a range that I would expect them
to perform within and and I would expect them to have a ramp up period but after the ramp up period I would expect them
to be performing within an allowable range and that would not be optional and by not optional what I mean is if they
were below that range they would not have a job after the you know ramp up
period so then either there might be some sort of um additional training provided and
some counseling but ultimately if they didn’t perform to whatever the required
level is they wouldn’t have a job so the big problem I have one of the big problems I have with with Commission pay
is that you give salespeople freedom that I don’t want to give salespeople I mean if you work for me
I expect I don’t want to selling to be optional it’s mandatory so if if if I’m
going to employ a salesperson I’m prepared to put my money where my mouth is and gamble on a person and if that
person fails then they leave I have no interest in having people living in kind of purgatory where they’re
underperforming but they’re allowed to get away with it because they’re living on less than the poverty line it makes
no sense whatsoever and if and we wouldn’t try and run any other part of our organization like that because we’re
smart enough to know we’d screw it up we wouldn’t do it in production we wouldn’t do it in marketing we wouldn’t do it in
finance we wouldn’t do it in any other part of the organization we only have folks earning this weird mix of salary
and peace rate pay in sales because of inertia because in the past sales people
were in were essentially manufacturers reps and we’ve kind of half moved them
inside and we haven’t stopped to think you know ridiculous it is to have cells
pick folks who are conflicted between being independent and being part of the team Justin I think you’re going to
How did you come up with this idea
change the way a lot of people think about their sales departments for the better I have to ask how did you come up
with this idea in increments not all at once just a little at a time yeah I’d
love to say I was like what was his name the the Fisk the head of the Finn
Greenspan I’d love to say I was in the bath and I just thought it up no in increments I mean I came from a sales
environment at one point I ran a team of a hundred salespeople on basically a hundred percent commission we paid we
paid a salary but really it was an advance against Commission our folks were on a hundred percent commission and
to maintain a team of a hundred we had to recruit about 450 new salespeople each year to cope you know to replace
the ones who left and now some of the folks on the team earn big money you know some of there were we had a couple
of people who weren’t quarter of a million dollars a year and that was sort of 2530 years ago back when quarter of a
million dollars was actually a lot of money so that was my background I let that was in the insurance industry I
left the insurance industry and became the CEO of a startup and we didn’t have the kind of margins that were necessary
to maintain that kind of sales outfit and also after doing it for a number of years I had personally lost the appetite
for trying to manage in that kind of environment so in this startup myself
and the the other partner out you know my other partner started to run experiments neither of us were really
interested in continuing you know that approach to sales we started off by
looking for ways to make sales more productive and by figuring out a way to generate large volumes of sales opportunities at scale and then we
discovered that when we generated opportunities of scale and we did this back then by running public events and
in one particular year I remember we had 45,000 people attend public events so we generated a ton of sales opportunities
and what we discovered when we generated opportunities at scale sales people’s performance only increased incrementally
so somebody who was previous previously earning 60 K would go
from 60 K to 75 K in spite of the fact that we’d increased the flow of sales
opportunities by 40 or 50 times so we discovered that we discovered that sales
people’s you know personalities or whatever was imposing this kind of ceiling on their earnings which made no
sense to us because we thought that salespeople were predictably selfish creatures who would automatically pursue
the the dollar wherever it led them so you know we were frustrated to discover
that salespeople didn’t like money as much as we thought they did but we were convinced that we still liked money so
what we said is look we’ll pay you a really good salary and we’ll queue up will queue up activities in your
calendar for you and sales people thought that was a pretty good deal because they were happy to get rid of the variability associate and the risk
associated with variable pay we paid them really good salaries and we we
packed their calendars with activities I remember in this business at one point
we had a number of offices in each capital city and we had queues of people sitting in reception if you imagine a
doctor’s office that’s what it looked like and you know we were deliberately queuing people up we double booked
salespeople to compensate for no-shows and folks would file in and out of the
sales persons office and the sales person would do a presentation asked them at the end of it if they want to buy and if not the negative if they did
they’d you know settle up at reception and the next person would be wheeled in what we discovered there was that to
operate in an environment like that salespeople only wanted incrementally more they were happy earning
incrementally more but but the design of that environment enabled us to earn almost an act an order of magnitude more
than we were in the old environment so you know the economics I guess led us to that model well let me ask what is the
What is the average of the people that youve worked with
average of the people that you’ve worked with the companies that you’ve worked with the before-and-after the percentage
of revenue that they’ve been able to realize by changing their way of thinking about the sales process so I’m
a leery of averages if I guess you’ve all heard that one about the chap with one hand in ice water and one hand in
boiling water and on average he’s warm the the range is fairly significant
so we’ll have some organizations who do nothing which achieve basically nothing and I talked about Y before and we have
other organizations that achieved transformations that are so profound it’s almost unbelievable I’m thinking of
one organization that in a three-year period 10 times their revenues but both
of those are outliers if I had to if I had to pick like a median I would say that a typical client of ours that or
not even a client a follower of us somebody who reads the book and does a good job of implementing can consistently generate about a 20 percent
year-on-year growth now that doesn’t sound exciting but it’s important to remember that most of the organization’s
we work with their larger so if you’re talking about a 20 million dollar business generating 20 percent
year-on-year growth that’s significant to the business but also that there are
operational reasons why it’s impractical to grow faster than that so you know
small business folks want to hear stories where someone’s grown by 300 percent a month or something but outside
a small business practically that doesn’t happen because the constraint shifts someplace else it shifts to
engineering or operations or capital sometimes you know growing consumes cash
at a scary rate so I think before I mean if it’s a micro business you know with
10 employees or something then sure you can grow very very fast and there’s plenty of plenty of cases of that I
think there’s some video case studies on my blog I interviewed an organization
just recently that’s on the small size like less than 20 people and I think that they have grown for at 30% a year
for three consecutive years which has resulted in them doubling the size of the business I think maybe more than
that but I would say a realistic expectation considering that you’re
going to have to scale the rest of the organization at the same time you know manufacturing production engineering whatever the cases is a 20 percent
year-on-year growth well I will say that when I was reading the book a lot of the questions that I had about why things
Justins last 3 books
weren’t working you did a great job of explaining why and then also in part two how to fix that I want
to recommend to everybody the scaling up nation that you do pick up a copy of Justin’s book I’ll make sure to have that on my notes page Justin do you mind
answering a couple of lightning round questions for us happy – alright so what are the last three books that you’ve
read so I looked them up on Amazon the most recent book is rational optimist by
Matt Ridley so he is kind of a he’s a historian who has an interesting take on
history and and it’s it’s pertinent to this discussion because he focuses on
the profound impact that division of labor has had through history and he
reaches some controversial conclusions so for those people who are optimists and rational it’s it’s I would
definitely recommend that that book in any of Matt Ridley’s books prior to that
I read the buy-side which is a wolf of Wall Street style romp through stock
broking I guess written by a chap called tony duff who was a by side trader who
lived a wild lifestyle I thought I probably wouldn’t like to read this book normally but it is just incredibly
well-written that the Tony Duff is just an amazing writer I I think the story
was the story was interesting and fun and a little bit salacious but it’s
worth reading just because the guise of crazy good writer and prior to that I read American kingpin which is Nick
Bolton’s account of the Russell White story the founder of Silk Road and they’re the last three excellent so last
Who would Justin talk to
question if you could talk to anybody throughout history who would it be and why this once dumped me I’m not sure I
would I would love to talk to the what’s his name the chap who worked on the the
project to decipher the the German code machines the Enigma Alan Turing but I
but I don’t think I have I would have the intellect to have a meaningful conversation with Alan Turing so I’d
probably settle for Winston Churchill Winston Churchill certainly isn’t settling that would be an incredible
conversation so that’s a pretty answer it didn’t have the same intellect as
Alan chewing I mean Alan Turing was just a freak of Einsteinian proportions but but
nobody would say that Winston Churchill wasn’t smart he certainly was an incredible leader so if I was to have
dinner with someone dead you know that would be a that would be a fascinating dinner conversation
excellent well this has been a great treat for me to have you on the show I
Conclusion
can’t tell you how much you sparked in ideas and things that I need to correct
in my company and it was because you took the time to write the book I want to thank you for that and I want to
encourage everybody in the scaling-up nation to read the book because I think you’re going to find some things that
you can do a lot better too any last words you want to give to the scaling-up nation no it’s been a pleasure to be a pleasure to be
interviewed I love getting the word out and I hope folks will go out and go out and read the book I mean it may not it
may not be the right thing at the right time for your organization but it’s going to make you think about sales and
it may even add some insights to the to the design of the organization as a whole it’s something I like to think
about a lot and I think there’s value there for folks well thanks again for coming on the show you’re welcome trace how interesting is
that I mean I never thought that there was any other way to set up a sales
department than how we traditionally do it and if you want more sales you just
simply hire more sales people but he says no there’s a there’s a better way
to do that there’s a better mousetrap out there so folks the book is called the machine and I really enjoyed reading
it we’re actually trying to do some of those things in our company right now so
if you want the book go to scaling-up h2o dot-com forward slash sales book and
that will take you to an affiliate link of mine so you can get Justin’s book and
I’ll tell you what this is such a this was such a radical concept to me I’m
curious to hear what you have to say about it so if you have an opinion go
ahead and send me an email go on my show notes page and send back a question to me and and just let me know what you
thought of it because I I was just blown away with that concept I I had never thought from that
perspective before well let’s get into a couple of questions so the first one is
Trace thanks for sharing all the items that were in your test kit besides what
you mentioned what is your favorite tool the one that you can’t service without
and I actually don’t think I mentioned that if I remember I was doing that show at my home office so I wasn’t at the
actual office so I wasn’t able to look in my test kit and actually this wouldn’t have been in my test kit so
maybe that’s why I didn’t think of it but the tool that I cannot live without
when I service is my Leatherman it’s a multi-tool had one for years all
the ones I’ve had have been guaranteed for life I’ve had some that have rusted a little bit or some were the
screwdrivers have broken off or a knife has broken off and I’ve sent that sucker back in and they’ve sent me a brand new
one now a lot of times they were so old they didn’t have that model so they sent me the most comparative model so I’ve
actually got mine upgraded a couple times because they stand behind their products so much now this in a
commercial for Leatherman but I tell you if you ever had to run back and forth to your truck to get a screwdriver or a
knife or a set of pliers or cutters or whatever you don’t have to do that if
you’re wearing that on your belt and I have to say that it’s a very close
second my flashlight I don’t know what it is but when I put my flashlight on
things I start thinking differently so I don’t know if that’s from watching
detective shows when I was growing up but whenever a tech t’v a detective walked in the room he would get his
flashlight out and he would start looking at things and that’s when he would start finding Clues well folks that’s exactly what I do whenever I go
to a system I get my flashlight out and I start tracking down things to make sure that I see everything in that
system and I make sure I know everything that’s attached to it so and of course
the flashlights good because a lot of times we have very stinky light in the mechanical
room so that allows us to see things oh and by the way oh when I had that test kit episode I mentioned a light that one
of the guys here at Blackmore Enterprises found that we’ve been using for a while
it’s just a sort of a very inexpensive light and what we’ve done we’ve put it
inside our test kit it has a USB charger on it and it the reason we like it is
it’s not the the best quality in the world but the reason that it’s so nice is it folds up really small so it
doesn’t take up a lot of real estate in the test kit and then you can actually prop that open and it’s got like four
levels that you can extend it out on and then you’ve got good quality light to
run your tests now as far as the the light its this is why I think it’s
really cool it’s a 6500 Kelvin bulb now for those of you they have no idea what
I’m talking about well that’s that’s the spectrum that it puts out so that mirrors sunlight and that’s good for
running tests because it’s going to give you the best light to take the
perspective of those tests so if you’re interested in that scaling up h2o /a
light and again it’s an inexpensive light so that might help but the question was what can I live without and
it’s a toss-up it’s the it’s probably the Leatherman but then again it might be the flashlight too so I’ll answer those with
that next question is on several corrosion coupons that I take out of the
system the steel has copper on it where is this coming from
well this is actually a lead-in that I’m going to do for my question and answers
show that’s coming up next and we’re going to talk about the galvanic series because that’s what’s going on here
metals are either anon ik or cathodic and what’s happening is the copper ions
are going on to the steel and when you put the coupons
you’ve got one copper in one steel when you take them out you’ve got what looks like two copper coupons so I’m gonna do
a whole segment on the question on this question because I’ve gotten several about the galvanic series so I’m not
gonna go into why so much on this question I’m simply gonna answer it
you’re putting the coupons in the wrong order so put your steel coupon in first
followed by your copper coupon and you shouldn’t have that problem and
hopefully that will solve it for you and then tune in to a later show and I’ll tell you exactly why that happens and
I’m gonna talk about how to read the galvanic series because a lot of us know that there’s a galvanic series out there
but we don’t know how to use it in our regular water treatment practice I want
to make sure with this show you know how to do that so I hope that gets you started with a solution and then you’ll
know why later folks this show has been a lot of fun for me to put on I hope you’ve enjoyed it I hope you take some
of the things you learn to make yourself a little bit better tomorrow than you are today and I look forward to joining
you again on scaling up
you [Music]