Think about the companies you’ve dealt with in your career, specifically the individuals in those companies and what drives their behavior. Chances are you’ve worked with individuals at various positions and levels, and people at different levels are driven by different motivations.
Part of what makes any professional who deals with business successful is being able to relate to each stakeholder’s personal motivations. I’ve always believed whether you are consulting, selling, advising, or whatever to business, your success is highly dependent on your ability to understand and influence the motivations of individual stakeholders.
My managing partner at my first consulting firm was a master at this. Whether you were the mail room guy, or a board room guy, he could dissect your hot buttons and use this to his advantage. It made him very successful.
To make it big in your profession, eventually you’re going to have to deal with executives. In many ways, they are like any other stakeholder in the company. They have their motivations, incentives, pain points, which drive their behavior and decision making. But generally speaking, executives care about things at a higher level, tend to think ‘big picture’, and are responsible for bigger (and more difficult) decisions.
Even at small companies, the owner doesn’t think about the business the same way as the general manager. The GM thinks operations, tactics, and day-to-day. The Owner is thinking strategic, long-term, and financial.
This financial angle to executive thinking is often missed with professionals as they move up in their career. At even a medium size company, the average CEO and CFO is inundated with investment proposals. Every department head has a list of projects they think is critical or at least worth while.
Now your average CEO / CFO is very smart. But they aren’t experts in every field. How do they distinguish which projects are important and which ones can wait? In my experience, a project or investment must be one of two things (or both).
Strategical Alignment. It is rare today to find top executives that don’t have a formal goal or priority definition process. Maybe its a common practice taught at MBA schools, but business today all seem to be run by CEOs defining their top priorities, then delegating these down as sub-priorities throughout the organization. I’m also always amazed that CEO, CFOs, and heads of large departments usually only have a small number of key goals for a year.
To make what you are pitching considered, relevant, or have any chance of being approved, you need to be tightly aligned with one of these goals. Regardless of how much value it might add to an organization, I would never pitch anything to an executive without first knowing exactly how it specifically aligns and supports one or more of their goals or priorities.
Financial Performance. Executives also think in terms of black and white (or more specifically – black and red). They don’t deal with day to day tactics and operations, that’s for their managers to deal with. They deal with finances.
When they look at a project or proposal, they first look at it strategically, but secondly from a financial standpoint. How will this improve cash flow, cut costs, improve top line, or ultimately drive shareholder value? Especially in tough economic times, its no wonder projects don’t happen without some sort of Return On Investment Analysis tied to it.
In fact, many CFOs want your proposal converted to their custom business case format (including all the required ROI metrics) so it can be directly sized up apples for apples with the rest of the proposals stacked on their desk.
When dealing with small companies and owners, these principles can also hold true. I’ve found owners are constantly under the pressure of the bottom line. All decisions come down to this, and your ability to influence them depends on your understand of the company’s finances and how your proposal directly impacts it.
What about you? What are you doing to connect with executives and how they make decisions?
Michael Ashford is a 20-year veteran in B2B Sales and Consulting, and specializes in helping organizations use Return On Investment Tools as part of their customer efforts..