Posts filed under 'Career'
When was the last time you really took inventory of what you’re best at, what you’re good at, and what you weak at? If you’re like me, it’s probably been a long time.
You might be surprised that the saying, “if you don’t use it, you lose it” is actually true. I had an eye-opening experience this past weekend that has really caused me to pause and reevaluate myself - and you should too!
The short version
I have a good friend and colleague who runs a small web design and hosting company. He asked me to help him upgrade the software on his primary router (if all of this is Greek, just ignore the jargon, I’ll try to keep it light so you can follow along!).
We setup a time to do the upgrade, and he informed me that he had all of the software necessary to complete the project. I put the appointment on my calendar and turned my attention back to my day-to-day activities, safe in the knowledge that my calendar would alert me at the proper time.
Friday night around 11:30pm, I met him at him at his network center and we proceeded to begin the upgrade. This should have been a five or ten minute process.
For us it took almost two hours - and during that time a large chunk of his network was offline! After much digging and poking and prodding (and, I admit, some swearing) we were able to bring things back up and get everything working.
I was shocked at myself and how badly I had performed!
My backstory
I’ve always thought of myself as a “networking guy”. That had always been my strength, and among my peer group and clients I was the go-to guy for fixing their networking hardware and software problems…six years ago!
In the late 90s and into 2000 I spent almost all of my time working in or on network equipment. I was comfortable setting up the hardware and software that drove the Internet. It was what I did, and I took pride in the fact that everyone asked me to handle their routers, networks, and connectivity issues.
However in the intervening years I’ve moved steadily away from a day-to-day relationship with network hardware and software. As I assumed more and more management tasks and moved into application support and ERP systems I found myself touching the network less and less.
And I never realized how badly my skills had atrophied.
So when I was asked to upgrade the software I knew it would be a quick project - and it would have been had I been “in shape” so to speak. And my failure to realize I didn’t have that sharp edge caused my friend’s business to experience an unacceptable level of downtime.
Lessons learned
Going from hero to goat is an eye opening experience. And it really got me to thinking about what other skills I used to take for granted that I may have let languish. I kept thinking to myself, “What else haven’t you done, that you would be bad at now?”
As I came up with a list of things that I would probably screw up these days, I found my brain kept adding in comments like, “Yes, but you’ve learned how to…” and “Four years ago you didn’t know anything about…”
I started compiling my list of skills - whether I perceived myself at being good at them or not - and reviewing it.
As I wrote about in Is your “success resume” up to date? it’s important to keep your list of accomplishments updated while they’re fresh in you mind, I now know it’s also important to keep a tally of your skills, and your familiarity with them, too.
Taking inventory
There are two phases to completing a skills assessment: 1) Building a list of your core skills 2) Evaluating yourself on those skills.
It’s important to not mix up these steps because you’ll get bogged down in the minutia if you try. Get your skill list out of your head and on paper and then process it (you GTDers out there will click with this methodology!).
How do you know what skills you should list? That’s a bit up to your own personal preference, but I listed skills that I would expect to get paid for, or that someday I would like to get paid for. The reason I limited it is because if I sell myself as having XYZ skill and take money for that, but fail to perform, I’m hurting my client and myself.
For example; I’m terrible at painting, but it seems like it should be easy and over and over I get myself into situations where I’m painting a room and saying to myself, “I forgot how bad I am at this, and how much I dislike doing it.” But I didn’t add it to my list because I will never solicit money for painting!
Anyway, get your list down and don’t try to categorize it yet. Put current skills with past skills, mix in skills you’re just starting to pick up, but get them all out of your head and onto a piece of paper.
Once you’ve built your list it’s time to review it. Ask yourself questions like, “Am I good enough at this to get paid for doing it?” and “Would I talk about my abilities with that in a job interview?”
It’s time to be brutally honest with yourself - you’re the only person who will see this list. Some of the skills on your list you may have not used in years, maybe decades, but they will be so deeply ingrained that you would feel comfortable marking yourself as highly proficient with them.
Other skills may be just a few years old, but you have to mark down that you’re probably out of practice, rusty, or not up to speed anymore.
What now?
If you’ve been honest with yourself, once you’re finished you’ll have a concrete list of your core skills and your level of proficiency at each of them. If you’re anything like me you’ll find that about 1/3 of your list will be things that in your mind you were very proficient at, but are not as much anymore, about 1/3 will be new skills that you’ve developed and are very proficient with, and about 1/3 will be skills that your developing and which your proficiency will range from “not very” to “pretty good”.
You may find that your internal perception of yourself changes. Like I mentioned, I used to think of myself as “the network guy”. My perception of myself didn’t match my reality; I was reckless and it bit me.
Now my self image is more in line with reality. I still know a lot about network hardware and software, but I’m rusty and out of practice. Going forward I will need to invest some time refreshing my skills and even brushing up on new technologies and tools that have become standard since the late 90s.
Once you have a real assessment of your skills, you can make sure your self image and reality are in sync. You may even find that there are skills you don’t consider being great at in your self perception, but you are in reality!
July 2nd, 2007
How do you know when you really understand a subject? I always find that when I can explain a subject to a relative newcomer, and make them understand the material, I have a mastery of the subject.
Train to learn is a motto of mine, because if you have holes in your knowledge it will come to light when you have to stand in front of a group and train them. The “why’s” and “how’s” and “what-for’s” will come flying at you fast and furiously from the people you’re training.
We’ve grown the IT department at the company I work for and with a new addition to the team I thought it would be a good idea to do some system training on the ERP software package our company runs.
Normally it takes about a week to go through the “official” training on how to install the system from the software vendor, so there is a lot of material to cover. Sitting in front of the department, notes in hand, was a major test of what I understood and more importantly how well I could communicate it back.
The first day I spend training made me realize where my weaknesses in understanding the system were and where I needed to brush up myself. It also meant a week of going home and doing my own homework to get ready for each new training session.
Train to learn - in this case where you’re weaknesses are.
I’ve found that throughout my life this works. If I really need to understand some new material, when I sit down and explain it to someone else it really helps cement it in my own head.
Have you ever been working through a problem - maybe you couldn’t get something to work the way you expected - you called someone over to ask for their help and as soon as you started explaining what you were hung up on you had an “Oh Duh!” moment where you instantly realized what the problem was?
When these “Oh Duh!” moments happen many people feel silly for not catching on sooner, but you really shouldn’t feel this way. In the process of organizing your thoughts to explain the issue to someone else your brain managed to drop everything into place. That one funky variable that was eluding you became instantly obvious.
There is a technique that programmers use - and I’ve heard a ton of different names for it - where they describe a complex and confusing programming problem - in excruciating detail - to an inanimate object. It helps them achieve these “Oh Duh!” moments and solve their problems.
Why an inanimate object? Would you really want to have a programmer explain - in exacting detail - the problems they’re having connecting a database to a piece of middleware to talk to the shipping software via TCP/IP? If they talk to a stuffed animal, at least they’ll have a captive audience!
But it really does work - when you’re stuck try explaining your problem. Train to learn, and experience an “Oh Duh!” moment. It works even better if you can train a person, because then you’ll get immediate feedback on whether or not they understand what you’re training them.
Give it a try the next time you’re stuck, or the next time you want to see if you really understand some new material. When you train someone else you’ll immediately find your weak areas and you may even have a breakthrough and solve a problem that’s been bothering you!
March 8th, 2006
What do you do that earns you money? If you’re a salesperson, the answer is probably pretty easy to come up with. But what if you’re not part of the revenue-chain in your position; how do you earn your keep?
Top performing salespeople are mindful of their pay-time and their no-pay-time and they work to keep the balance heavily in favor of pay-time. At my company, our top performing sales people don’t enter their own orders into our ordering system, they don’t send faxes with quotes for prospects, they don’t sit and polish their staplers…they get appointments and they get in front of prospects and customers.
That’s their pay-time. If they’re not booking an appointment or spending time in front of a prospect, they’re not actually providing value to the company.
But what if the value you provide isn’t so clearly defined? How do you know if you’re working in pay-time-mode or no-pay-time-mode, and how can you switch gears and spend more time in pay-time?
When I get to work, the first thing I do is check my email messages. I usually justify this to myself by noting that it’s possible someone will have contacted me with a major problem that needs resolving. In reality if any problem that major came up while I was out of the office my cell phone would be lit up like a Christmas tree.
For me, 90% of the time I spend dealing with my email is no-pay-time. Any sufficiently critical problem that arises that would put me into pay-time (i.e. earning my keep through crisis mitigation) will result in my phone ringing or someone appearing at my office door.
So I try to be mindful of this and limit the time I really spend in email. Sure, I still check it first thing in the morning, right after lunch and then in mid-afternoon (and there are some days with a few more checks thrown in) but I’m aware that the time I spend with my nose in Outlook is most definitely no-pay-time for me!
That’s the first trick; Be mindful of the tasks you’re working on.
When you’re mindful of what you’re working on, you can ask questions like, “Is this the best use of my time right now?” If the answer is “no” then it’s time to work on something else.
In my position - technology director - I don’t contribute directly to the bottom line. Usually information technology budgets are seen only as cost centers in companies; a necessary evil to business in the 21st century. Where my key contributions fall is keeping critical systems on-line and functioning smoothly and actively researching new ways to use technology to improve processes.
When our systems are running smoothly, our sales assistants can more easily enter the orders our sales people are generating, our receivables people can get customer statements easily printed, our accounts payable people can get our vendors and suppliers paid. In general, smooth running technology systems enable everyone else to do their job which does contribute to the bottom line.
Likewise, when I am working on improving business processes (with or without technology) those improvements are to enhance the business and save it money or allow people to get more done in less time. Business process enhancement does - for me - directly contribute to the bottom line.
This is the second trick; Know how you contribute to the bottom line.
When you know how you directly contribute to the bottom line, you’ll know what it is that you do that keeps you employed and brings the value of your paycheck to your company.
Being the technology director of a company means I’m flooded with requests as wide and varied as, “We need a proposal for a wireless warehouse implementation.” to “The printer is jammed and I don’t know how to fix it.” I am fortunate to have a great staff that can deflect a lot of the smaller issues so I can work on proposals for wireless warehouse implementations.
I’ve always been a “if-you-want-it-done-right-do-it-yourself” kind of guy. In this position I quickly found myself buried under a to-do list a mile long. Sure, I might know I’ll do it right, but if I never have time to get it done that’s usually worse! So I lean on my staff…a lot.
All of the small issues that I know are not what I do to bring value to the bottom line I try to delegate down to free me up to work on the projects that keep me in my pay-time.
This is the third trick; Delegate as many no-pay-time tasks as possible.
When you get unnecessary and low-value tasks off your to-do list you’ll feel much better because you won’t be worried about dropping a ball you have in the air by taking on too many tasks yourself.
Since I do have so many people come to me on a daily basis with requests for help, or requests for time on their pet project - whatever it may be - I have to pick and choose what I actually have the time to accomplish and what my staff has the time and resources to accomplish.
This means that some people have to hear the dreaded, “no.”
And this is tough for me - I’m not good at telling people no. It’s one area that I have to constantly remind myself I need to work and improve. I just don’t like to turn people down - maybe it’s a bit of my own “head trash” and inner fear of rejection. Whatever the case, something I have to constantly remind myself is, “It’s okay to say no!”
This is the fourth trick; When asked to take on more tasks that are no-pay-time tasks, just say “no.”
When I keep all four tricks in mind, I find that I spend consistently and considerably more of my time in the pay-time category; and this should be the goal of every high-achieving, goal-setting, self-improving person out there…I mean you!
Plus you can make a competition with yourself by charting your pay-time versus no-pay-time on a day-by-day basis. Your goal should be to improve the ratio a little every day.
In summary, keep these four tricks in mind to improve your pay-time vs. no-pay-time ratio:
1) Be mindful of the tasks you’re working on.
You can’t manage what you don’t measure; so start measuring!
2) Know how you contribute to the bottom line.
Be crystal clear on how your unique talent bring value to the bottom line. Know this whether you are on front-line sales or back-office support.
3) Delegate as many no-pay-time tasks as possible.
Your no-pay-time tasks are very likely someone else’s pay-time tasks.
4) When asked to take on more tasks that are no-pay-time tasks, just say “no.”
No one likes to hear “no”, but taking on too many tasks and getting nothing done is even worse! Plus many of these tasks are no-pay-time tasks.
Finally, keep in mind that if you start to weed out the no-pay-time tasks you’re regularly working on you may feel like you’re weeding out important tasks. Not every no-pay-time task is unimportant and not every pay-time task is important. The trick is knowing which are which, and minimizing your no-pay-time to (ideally) dealing only with the important no-pay-time tasks.
You’ll never get to the point where you spend 100% of your time in pay-time, but the closer you get the more productive and valuable you’ll be!
February 6th, 2006
Does the name Douglas McGregor ring a bell? If it doesn’t you’ve probably still experienced (internally or externally) his work.
In the 1960s he postulated his Theory X and Theory Y to describe attitude toward motivation (specifically in the workplace).
I think that these theories can be expanded to include not only workplace motivation, but motivation in general. These two theories can probably be best summed up as follows: Theory X = pessimistic view of people and motivation. Theory Y = optimistic view of people and motivation.
The basis of the two theories are:
Theory X - people are inherently lazy and will avoid work. They need close supervision and constant management to keep them on track. People prefer to be directed and dislike taking on responsibility and have a high need for security.
Theory Y - work is a natural part of life and people desire to excel and achieve. Job satisfaction is important and responsibility to implement and achieve a desired outcome are important and imagination and creativity are sought after and encouraged.
Of course, this is all just management theory - taught to aspiring BAs and MBAs. But if you look around, can’t you identify and categorize people into these categories pretty easily?
All around me are “X-people” and “Y-people”. The owner of the company I work for is most definitely a Y-person. He fully believes that people want to work hard, will work hard and are driven by responsibility and achievement. He will gladly handout more and more responsibility to anyone who asks for it. This is the filter through which he sees the world - to him everyone looks like a Y-person.
My father is more of an X-person. He believes that unless he’s directing a lot of little details about things happening around him, people will not do what’s necessary to accomplish the task at hand. This is the filter through which he sees the world - to him everyone looks like an X-person.
More than just a management theory, I believe that the “X” and “Y” perspective of viewing the world is something we apply to our own filters. If we believe people don’t want to work and need constant, micro-management we tend to apply this belief (unfairly) to everyone. Conversely, if we believe in personal responsibility, motivation and a sense of accomplishment and achievement by a job well done, we tend to apply that belief (unfairly) to everyone.
It can bite us in the backside both ways. I am a very strong Y-person and several years ago I was in a position where all of the management had an “X” orientation to motivation. Working in that atmosphere was unbearable. I was miserable and withing months of joining the team I was looking for a way out.
On the other side of the street; I had a person working for me a few years ago who would - if left to their own devices - do nothing to further their projects. They needed stronger guidance and supervision than I provided (being a strong Y-person) and subsequently they did not last long in the position either.
My job failed me because the management didn’t change their “X vs. Y” filters. I failed my employee because I didn’t change my “X vs. Y” filters.
The ideal solution is to evaluate people and put them into a situation that’s most comfortable and conducive for them, but most of the time we don’t stop to think about things like motivation factors. We often assume that people are motivated the same way we are, and that’s how we interact with them.
The first step to breaking out of our routine of seeing the whole world through a set filter is to know what the differences are (thank you Douglas McGregor!). The second step is to evaluate the relationships you’re in and the people in them to find out if it’s most appropriate to wear “X” glasses or “Y” glasses.
We have to learn to change our filters from permanent lenses to interchangeable lenses we can switch out when needed.
If you’re reading this article and this web site, I’m going to take the liberty and assume I’m communicating with another strongly oriented Y-person. I try to know my audience and write accordingly. This site is probably not well received by strongly oriented X-people.
Intellectually this makes a lot of sense, but actually doing it takes practice and work. The stronger your predilection towards “X” or “Y”, the harder you will have to work to view people through the other filter.
Sometimes the glass if half-full and sometimes the glass is half-empty, the trick is knowing which it is in the context of those that you interact with. My challenge to you is to work to try and view your “audience” through the appropriate X/Y glasses.
February 4th, 2006
Sure, you’re one bad, goal-setting, success-wielding, achievement-oriented mutha’ - but after you’ve conquered a goal and basked in the glow of success what do you do?
Do you keep an achievement cheat-sheet? Do you keep your “success resume” up to date on a regular basis? If you’re like most people, I’m willing to wager that answer will be, “no.”
It’s easy to get into the habit of setting and achieving goals - that’s the first part of the recipe of success. Accurately recording your achievements when they’re fresh in your mind is the second part of the recipe of success.
It’s easy to let your accomplishments slip by after you’ve enjoyed that “I did it!” moment; when asked what you accomplished last year or the year before you have to spend precious time creating your list, remembering the details, the impact and the results. This isn’t an efficient way to spend your time!
I admit I used to be this way. I’ve been “into” goal setting and personal achievement for a long time, but I never kept my success resume up to date. When I owned my own company, a resume and corporate overview was often one of the first things clients would ask for as we started a relationship.
Every time a client asked for this I had to dust off my last copy, review it, add to it any personal or business accomplishments and then present it to my client. Depending on how long it had been since I last used my success resume, it could take a not insignificant amount of time to get it up to date.
When I sold my business I kicked around as a “consultant” for a while before finally deciding I should get a “real job.” I was in for a shock; I hadn’t bothered to update my resume in a long time - about two years - and pulling it together turned into an all day affair! After this, I decided I needed to keep a current accomplishment cheat-sheet and keep my resume updated much more frequently.
Here’s the process I used to get everything under control:
1) Choose your tools
You will need either a nice notebook or journal that you can dedicate to recording your achievements, or a computer with a word processing application. I prefer the computer for this because I can generally type much faster than I can write.
2) Layout the document
Create a document and name it something creative like “2006 Accomplishments”. Then add four pages and at the top of each page write, Q1 2006, Q2 2006, Q3 2006, Q4 2006. You’re going to track your accomplishments by quarter.
3) Play catch up
If you’re just starting this process the chances are good you’ve not started a new year fresh and ready to go (unless you’re reading this article in January, and then you are starting a new year fresh and ready to go). Spend time outlining all of your major accomplishments for the year so far. At this point just a sentence is good, but get them all captured and try to allocate them to the quarter in which they were accomplished.
4) Stay current
Once you’ve started your accomplishment list you have to stay current; review it and update it (if needed) at least monthly. The entire point is to capture your accomplishments in only a few minutes, while the details are still fresh in your mind. If you stay on top of recording your accomplishments as they happen it will only take you moments to record them. This will save you much time compared to an end-of-year review, plus you’ll be able to capture much more detail and specific fact and figures without having to dig back through your records come December (or worse, the next year!).
5) Update your resume quarterly
You have a list of accomplishments and you’re staying current and keeping your list updated. Now you need to sit down at the beginning of each quarter and translate your accomplishments into your resume. Make sure that the responsibilities you have listed on your resume match your responsibilities on your achievement cheat-sheet. Drop from your resume projects with less impressive outcomes for projects with more impressive outcomes. This is your chance to really make yourself shine.
Once I followed the five steps above I realized that I spent less overall time tending my resume, and I didn’t have that “panicky” feeling of knowing it wasn’t in tip-top shape when asked for it. I knew it was no more than three months out of date, and it had been recently updated with my most impressive and high-impact accomplishments.
You don’ t need to write pages and pages for each accomplishment; you simply need to distill the major elements from the accomplishment down into a sentence or two, with pertinent facts and figures. You want to create expanded bullet points which will eventually make it to your resume or your annual review if you work for a company.
Here is a sample from my 2005 major accomplishment file:
1) Negotiated the purchase of a 16kVA APC Symmetra LX UPS (extended run version) for $10,450 (down from $15,700).
2) Designed company ID badge & created specification for the data and format of company’s ID program to be C-TPAT compliant. Resulting badges & ideas were adopted by US Customs & Border Patrol as recommended guidelines for small businesses looking to certify & comply with C-TPAT requirements.
3) Worked with web design and e-commerce company to implement a new e-commerce engine for company’s online sales. The company’s online sales (Jan – July) were $#.# million and the new e-commerce enabled site was negotiated for $#,### including custom pricing functionality to handle unique per-customer, per-product pricing requirements. R.O.I. on project was calculated at 4.2 weeks based on the company’s YTD (Jan – July) online sales.
4) Read 28 books in 2005 including 16 directly related to self improvement, success or development (goal was 3 books on development per quarter). Books were: January: Split Second, Leadership 101, Attitude 101, As a Man Thinketh, The Doomsday Conspiracy. February: Steal This Book, Babylon Rising, Goal Setting 101. March: Man’s Search for Meaning, Made in America, My Story. April: The Fountainhead. May: The Taking. June: How to Become CEO, It’s Not How Good You Are, It’s How Good You Want To Be, The Fred Factor, Getting Things Done. July: Speaker For The Dead, Xenocide. August: Shadow of the Giant, 1776, Children of the Mind, The Time Trap, Managing for Dummies, How to Talk to Anyone (92 Little Tricks for Big Success in Relationships). November: Rich Dad’s Before You Quit Your Job. December: 101 Great Answers to the Toughest Interview Questions, 301 Management Ideas, Ready for Anything.
I have also found that keeping a written record of accomplishments is an excellent tool to justify requests for raises or bonus programs if you work for an employer. In our modern society we’re only usually as good as our last project - the “what-have-you-done-for-me-lately?” factor. It’s easy for employers to conveniently “forget” about important achievements and contributions, but it’s very difficult to argue with facts and figures.
If you keep your achievement cheat-sheet up to date, you’ll be armed when you ask for a raise or a bonus. You can layout exactly what your accomplishments have been, and you’ll have ammunition that your employer likely will not.
If you’ve also kept your resume up to date you’ll be ready to move on if your requests for a deserved raise fall on deaf ears time and time again.
If you’re self-employed, keeping an achievement cheat-sheet and keeping your professional or company resume up to date is vital too. These days clients are asking to see more and more detailed information from the vendors they use. If you have a professional resume ready-to-go it will give you a definite advantage over your competitors in your market-space.
I urge you to start today; spend the time to get your achievement cheat-sheet caught up and then spend the (minimal) on-going time to keep it current. The rewards will be well worth it!
January 29th, 2006
Scott Ginsberg of “HELLO…my name is Scott” has a free eBook available titled, “66 Priceless Pieces of Business Advice I Couldn’t Live Without.” One of his pieces of advice is, “Give value first.”
I think this is one of the most overlooked, but vital pieces of advice out there. How often have you heard someone complain they’re not paid enough or they didn’t receive a large enough raise?
I don’t know about you, but I hear things like this from people all the time.
Every time I hear someone say they’re not paid enough money for a job I want to ask them what value they’re providing. I’ve found there is usually a correlation between the value someone provides and their compensation; and most people are completely oblivious to this correlation.
On which side of the chart do you fall? The relationship of value-to-income is not a straight 1-to-1 ratio like most people think. There are a few reasons for this:
- value can be a vaguely defined quantity in a relationship
- most people want to see proof of value before they’ll determine (and pay) a price
- intangible factors can affect the worth of your value
Usually the relationship - when plotted on a graph - is a logarithmic curve. When you’re first starting to offer value, you have a lower income (or return on your value).
Once you’ve proven yourself, your product, your service - whatever you need to prove - your income rises. As you provide more and more value, the amount of income relative to your value will increase logarithmically.
This means you will eventually get to a point where your income and value are maximized. Whether we work for someone else or are self-employed, this point of maximum value and maximum income is where we all want to get in our professional lives.
But the “gotcha” of a logarithmic relationship is that when you’re first starting out you have to put more effort and energy into one axis of the relationship to generate output on the other. You have to initially provide more value from which you receive less income.
If your first effort is to maximize your income, you had better have the perfect value proposition. It’s not impossible to do, but it’s extremely difficult.
If you change your perspective just a little and focus not on your result (the income), but on your effort (the value) something special starts to happen; you will notice that the relationships around you are built better, on my solid foundations. You will notice that you care more about providing a better quality product for your customer. You will become input-focused rather than output-focused.
You will be building value first and trusting that income will follow. If you take this approach to life and your business relationships (and even personal relationships) you’ll always come out ahead because income will eventually greatly reward value.
Remember the saying; “if you build a better mousetrap the world will beat a path to your door.” The path doesn’t get beaten to your door because you’ve cornered the market on mouse catching, but rather because you’ve provided great value to people in the form of a better trap.
If you’re like most people, at this point you might be asking yourself, “If I provide all this value up front aren’t I taking a risk on the payback?”
Yes you are. But all of life involves some risk. The proposition is this; prove yourself first and be rewarded. It’s very possible you’ll run into someone who wants to take advantage of you. When this happens you have to learn to quickly trust your gut when starting to deal with someone in a new relationship.
And remember, value is a two-way street; if you’re giving but never getting, you’re free to change the relationship!
When you commit yourself to providing value first, you’ll be more likely to create “win-win” solutions in your relationships. Keep this advice close to your heart, put it in practice everyday and you’ll soon see returns on your value that you never predicted!
January 27th, 2006
Are you a high-wage earner and a big spender? Do you have a “consume” lifestyle? Do you have a lot of material high-status symbols?
If you answered yes to these questions you might be an under-accumulator of wealth (a U.A.W.) and not a prodigious-accumulator of wealth (a P.A.W.). So how do you know if you’re a P.A.W. or a U.A.W., and if you find yourself in the U.A.W. group what can you do about it?
These are questions posed and answered in the book “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko.
To answer this question for yourself - “Am I a U.A.W. or a P.A.W.?” - here is a simple rule of thumb you can use:
- Write down your total pre-tax income, including any investment dividends or assets that produce income.
- Take this number and multiply it by your age.
- Take the total and divide it by 10.
For example; a 41 year old executive who earns $103,000 would end up with an answer of “41 x 103,000 = 4,223,000 / 10 = 422,300″
This number is roughly what your net-worth should be for your age and income. We should expect our executive to have a net-worth of roughly $422,300.00. If our executive’s net-worth was significantly less than this number, he would be a U.A.W. - an under-accumulator of wealth. If our executive’s net-worth was more than double this number, he would be a P.A.W. - a prodigious-accumulator or wealth.
How do you measure up?
I must admit that I was shocked when I ran the numbers for myself - I knew I wouldn’t call myself “financially independent,” but I wouldn’t have figured that I would be as far below the target to be on my way to financial independence as I was.
Stanley and Danko define financial independence as the ability to live on ones wealth - our net-worth - for ten or more years.
I suspect that we all want financial independence - it’s many people’s “ultimate life goal”, but most of us don’t plan for and work towards this end. The authors argue that the biggest culprit that prevents people from achieving their goal of financial independence is living a high-consumption lifestyle.
I know I certainly do! I’m a “stuff” freak - I love my gadgets and electronic gizmos. My wife and I enjoy a very comfortable lifestyle that includes almost any consumer item within reason. We eat at restaurants quite often. We’re living the high-consumption lifestyle and are not on track to achieve financial independence without making some changes to the way we work, earn, save and build wealth.
The keys to achieving financial independence are four-fold:
1) Live on less than you earn. The majority of individuals with a net-worth of over a million dollars save and invest - on average - 15% of their pre-tax income. This requires giving up some of a consumption-based lifestyle for one of saving and investing.
2) Budget, budget, budget. About 83% of millionaire households create a budget for their income and expenses, conversely only about 16% of non-millionaire households create a budget.
3) Invest in what you know. Everyone is knowledgeable about specific subject matter; take advantage of this knowledge when looking for investments!
4) Seek professional advice. Realize when you’re not the most qualified to create an action plan to achieve your goals. Millionaires seek out professional help from tax accountants, CPAs, and financial planners far more than non-millionaires.
None of these keys is new or sensational information; you and I already know this! But seeing all of the steps laid out and presented in “The Millionaire Next Door” is very helpful. It breaks the problem of “how do I get started and what do I do?” down into manageable chunks; this helps prevent the getting-overwhelmed-factor.
I know that as I move down the list I can put a check mark in the “I don’t do that” column next to each of the four keys above. Just like many people, when my income increases, my spending increases. I was living comfortably on a lesser amount prior to my income increasing, so why didn’t the increase go directly into investments and savings? The mentality of a U.A.W. is to consume more as his means go up; this is the habit that needs to be broken.
“The Millionaire Next Door” will help you change your thinking about high net-worth individuals as well as give some good advice to help you change your habits. It’s shaken me up and forced me to look at how I earn and how I consume.
In addition, “The Millionaire Next Door” is filled with insightful and interesting information about high net-worth individuals. Did you know that the average millionaire spent an average of $267 on his watch and less than $600 on his most expensive suit?
Did you know that the average millionaire is more likely to hold a Sears or J.C. Penny credit card than an American Express card?
Did you know that 80% of all individuals with a net-worth of one million or more dollars built their wealth in a single generation? Only 20% of millionaires received their money through inheritance.
I highly recommend you pickup this book and spend time reading it. It’s well written, and refreshing because it doesn’t promise you “riches in 3 easy steps.” It’s good, solid advice.
January 23rd, 2006
I really hate pushy salesmen - the ones who use high-pressure tactics and try to “hard sell” me. Because of salespeople like that I always wanted to distance myself from sales. I never thought of myself as a salesman, and when I did have to wear that hat as a business owner I always tried to let my product do the work for me. I didn’t like “selling.”
But as I got a little older, I came to realize that the old saying, “Everyone in this company is in sales!” isn’t true. The saying should just be, “Everyone is in sales!”
Everyone is selling all the time. If you want to go to Outback and your friend wants to go to Red Lobster, one of you will be sold. When you meet new people you’re going to have to sell your personality. When you want a new job you’re going to have to sell your potential employer on your skills and experience. Everyone is always selling…always.
And what is the number one question you’re asked across all facets of your life? The number one question that starts all the selling in the first place? That question is; “So, what do you do?”
That’s the lead-in question asked when introduced to new people in social settings. That’s the lead-in question asked when you meet new people at business conventions. It’s the lead-in question people ask. And it gives you a perfect opportunity to sell without selling. It gives you an opening to present your “30 second commercial” to get their attention.
Why do you want a 30 second commercial? What will it do for you? How do you write one? Great questions! Let’s start with why you want to have a polished 30 second commercial ready to go when meeting new people.
Why 30 seconds?
Studies show that most people form their first impression of you within the first thirty seconds of meeting you, and first impressions are tough to change. So you want to keep your introduction short - enough to pique their interest without boring them.
If you’re brief, articulate and present some interesting “pain hooks” in your introduction, they’ll ask questions and keep the conversation moving along. They’ll also likely create a favorable impression of you as someone who’s “with it” and “put together.” In business, this can make or break a relationship.
What will a 30 second commercial do for you?
If you’re well rehearsed you will appear extremely confident and poised. You can sum up yourself and your product or service in just a few sentences, many people just ramble on and on and on and on - boring! Even if you’re not feeling particularly sophisticated and confident, this is the appearance you’ll give to others.
It’s also a great way to present your services (or your company’s services) in a way that’s easy for the other person to absorb, digest and respond to. You’ll give them two or three things that can prompt further discussion. If you’ve done your job well, the other person won’t be left scratching their head at your response, while an awkward silence lingers between the both of you.
Your goal should be to give them enough information to keep the conversation flowing smoothly and to make them want to get to know you better.
How do you write a 30 second commercial?
As promised, here are five easy steps to use when creating your 30 second commercial:
1) Start by creating five or six “pain hooks” to use as a starting point. A pain hook is designed to elicit a pain response from your listener (emotionally). It should make them reflect on some business or personal pain they’re currently experiencing.
We try harder to avoid and move away from pain. This drive to avoid pain is much stronger than our drive to find pleasure. If someone has a business pain, your pain hook should make them think about that pain and show them how you can solve their pain.
2) Once you have your pain hooks, you need to find the thing you do that can solve all of them. You might have multiple ways of solving the problems, but you have to make sure you can solve the problem.
3) Pick your top three pain hooks - the strongest ones - these will be the base of your 30 second commercial. These should be the pain hooks that the people you meet most likely encounter.
4) Work your pain hooks into a professional sounding sound-bite and write it out. Keep it shorter than you think you should, when spoken it will take you longer than you think to say everything and you don’t want to sound rushed.
5) Rehearse your 30 second commercial until it feels and sounds natural, and rolling it off your tongue is second nature. You don’t want to sound like you’re reciting a memorized script - you should ad-lib as needed and adjust it to the people you’re presenting your 30 second commercial. Be loose, be fun, but be prepared.
You should get into the practice of using your 30 second commercial whenever you meet new people; they will inevitably ask, “So, what do you do?”
Five years ago I ran an Internet company. We sold dial-up, high-speed, web hosting, web design, application design, and more. Our informal motto was, “If it touches the Internet, we do it.” Of course, most people are not highly technical, and lots of buzz words would make their eyes glaze right over. So I had to have a good 30 second commercial to not confuse people when telling them what we did.
My 30 second commercial sounded something like this:
I own Qserve Internet. We’re a small Internet company and we service both home and business users. A lot of our customers like us because we don’t have busy signals. Others like us for our reasonable web-hosting rates. But I think our biggest advantage is our commitment to quality. We work to maintain a high level of quality so when you do get connected, you stay connected! Plus when you call us, you always talk to a real, live person, not a machine.
In my 30 second commercial I had 4 pain hooks; they were:
“No busy signals” - Our geographic area in the late 1990s experienced an explosion in Internet usage. A lot of the local Internet companies couldn’t keep up with the growth, and busy signals were common. We always worked hard to keep our user-per-line ratio favorable without generating busy signals. It was a metric we monitored like a hawk, and while we didn’t “guarantee” no busy signals, we rarely had them. It was one of the main reasons our referral business was so good.
“Competitive web-hosting rates” - At the start of the Internet explosion web hosting rates in our area were sky-high. As competition came to town the prices came down, but there were a lot of places where the price was much higher than average. We focused on being competitive, but offering a good deal for our customers. We had a lot of customers who moved their web site to our company for this reason.
“Staying connected” - Being in a Midwestern state, we had a lot of rural areas we served. We invested heavily with the phone company to have all digital lines back to our main data center. We had a very good reputation for keeping calls connected, while our competition was only “so-so” at this. It was a big pain-point for a lot of people in our area, and solving it won us a lot of business and a lot of accounts.
“Talk to a real person” - We always answered the phone. We believed that it made a difference since our biggest (and bigger) competitors used auto-answer phone systems. Over the years we received a lot of compliments, email and letters from our customers because of this. We also got a lot of business, and it was not uncommon to get an account solely because we were one of the only companies in town who answered their phones.
I would also tailor my message depending on who I was speaking with. If I was talking to someone on the street, I would emphasis home-service pain hooks and mention business pain hooks. If I was in a networking group, or a business meeting, I would emphasize our business pain hooks and depending on the group I might not even mention home service at all.
The key though was that I was prepared with a handful of pain hooks that I could use. I was also rehearsed and I practiced my 30 second commercial often enough that I sounded very natural, confident and “put together.”
Today I work in an entirely different industry, and I have an all new 30 second commercial. My position isn’t directly involved in sales, but I still use my 30 second commercial and work in pain hooks when answering that oft-asked question, “What do you do?”
I challenge you to create a 30 second commercial for yourself. It might not land you that million-dollar account, but it will certainly make you stand out, sound poised, confident and in control to everyone with whom you’re introduced!
January 9th, 2006
