Fast Company had a fascinating series of articles on Ed Catmull this month. Catmull is the not-particularly-well-known president of Pixar. He has just put out a book called Creativity Inc. which deals with the topic of managing a creative company. Fast Company said Creativity Inc “just might be the most thoughtful management book ever”. Catmull’s track record of success has demonstrated that he knows something about management. Each of Pixar’s fourteen films has debuted at the top of the box office charts. What an amazing track record of success!
Naturally, any business leader would want to know what the secret is to Catmull’s success. In Creativity Inc, he makes it pretty clear. It’s something he calls the Brain Trust. This is a group of advisors from within Pixar – and now at Disney Animation – that are assembled as advisors on every project. He calls it our primary delivery system for straight talk.
“Our decision is made better when we can draw on the collective knowledge and unvarnished opinions of the group. Candor is the key to collaborating effectively.”
What is Catmull’s role in the Brain Trust? He says that “I see my primary role as making sure that the compact upon which the meetings are based is protected and upheld.” At TAB, we find this role to be critical. We call it facilitation. Without this role, you can certainly have a bunch of smart people trying to help each other achieve more. But without someone who manages the compact between the group – confidentiality, fairness, openness, ensuring no one person dominates, and indeed candor – the group just won’t reach its peak potential.
What are some other reasons why Pixar’s Brain Trust has led to an almost unbelievable stretch of blockbusters?
- When Pixar took over Disney, Disney did not have a Brain Trust. “…the deep identification a founder can have with his company is like the identification that a director has with the film he is trying to make. It’s extraordinary to pull yourself out of that equation.” We see exactly this. The other board members – other business owners – provide perspective that the business owner is just to close to see. This is invaluable.
- The movie director does not have to take the advice of the Brain Trust. This complements the candor. It is another part of the compact. The attendees do not have to accept or act on every piece of advice. But the compact does require that members consider the input with an open mind.
- The Brain Trust includes notes to get to the root cause of the issue. We call these clarifying questions. One of the key roles for the facilitator is first ensure that the problem and the underlying cause are very clear. First diagnose, then prescribe.
Catmull’s experience with the Brain Trust is exactly why we established Peer Boards for business owners. Business owners have lots of other people willing to give them advice. They get input from family but that advice is shrouded in emotion. A few businesses have particularly bold employees who will give the owner their straight opinion. They may have great advice but until they walk in the owner’s shoes, their advice can only go so far. Consultants, bankers, lawyers? Sure, they have a lot to offer. But many times they have a vested interest in the outcome of their advice.
As one of our members portrayed the value of a Brain Trust: “Camaraderie that is bound in trust and the astute advice and wisdom from other board members….. is priceless.”
Who do you turn to for the truth about your business? Leave your comments below, or tweet us @TAB_boards!
So far we have discussed the benefits of referral marketing and some great referral marketing ideas to get you started. Now let’s focus on developing your referral marketing system. This post will discuss when and how to ask for a referral, and how to capitalize on those referrals by bringing them on has clients.
When to Ask for a Referral
As discussed in 4 Referral Marketing Ideas to Jumpstart Your Referral Marketing Program, at least 80% of your communication with referral sources should not focus on asking for referrals. Rather, these conversations should focus on the referrer. Naturally, conversations with current clients will mainly focus on the current project. Communications will all sources—client and non-client—can be centered on educational topics (for example, about business, their industry, their target market, etc.) or more personal areas of interest. Take care to learn about your top referral sources’ interests and hobbies so you can develop a more meaningful relationship with them.
The time does come in any referral relationship; however, for you to come right out and ask for a referral! Here are some tips on when it is appropriate to ask different sources:
- Prospects: Whenever you meet with a prospect who declines your service, ask them for a referral. Most people want to say yes, so give them a chance to say yes after they have said no to using your service.
- When you provide something above and beyond your normal service.
- When they say thank you for something, say: “The best way you can thank me is to refer someone to me.”
- At a status meeting or review (if applicable) as part of the evaluation process.
- New Clients: Ask for referrals from new clients shortly after they become your clients. They will be very positive as a brand new client and will be more open/willing to recommend your service to a colleague. Be sure that they have received some value first.
How to Ask for a Referral
5 Steps to Unlimited Referrals recommends you ask: “Would you do me a favor? If you think of anyone that could use my product/service would you mind sending me their name and number so I can follow up with them?” It avoids putting them on the spot.
- Keep Control: If a referral source identifies a referral for you, be sure that you agree to a specific plan to contact the prospect. They may forget to contact them or just send an email. Instead, ask if they’ll take it a step further to place a phone call or arrange a meeting with the prospect.
- Appreciation: Once a referral is received, ensure the referral is treated extra specially and that the referral source is shown great appreciation.
- Testimonials: Instead of asking for referrals too often, you can also ask for testimonials – either written, video, or on LinkedIn.
Some people are naturally reluctant to ask for referrals. You may feel that you are imposing, or perhaps you’re not confident that your product or service is worth referring. John Jantsch explains in The Referral Engine that you need to believe in your heart that you are doing your sources a favor by permitting them to introduce your service to their colleagues.
Always remember that, by ensuring that your business is worth referring, your referral sources will be helping their colleagues, friends, and/or families by referring your business. In Andy Sernovitz’s Word of Mouth Marketing he found that the two main reasons why others recommend you are because 1.) they like to help people they care about and 2.) because it makes them feel good.
Converting Referral Prospects into Clients
OK, you have a referred prospect. Now what? The following are best practices for converting referred prospects to clients:
- Key Question: When you first meet with a referred prospect, ask them this: “Mary suggested that you consider my product/services. Why do you think she referred you?” If someone they respect refers them to you, this question will cause them to thoughtfully consider why they need your product/services.
- Customized Offering: Collect as much detail as you can on the prospect from your referral source. This will allow you to present your service in a customized way that will best fit that prospect’s pain points.
- Special Offers: Offer prospects something special since they were referred. Perhaps they can sample your product or service for a period for free.
- Validation: Allow referral prospects to validate with another positive client of yours. Try to find the client who is the best match for the prospect either through industry, area of expertise or behavioral profile.
That wraps up our series on referral marketing! What are some referral marketing ideas you have tried that worked well? What doesn’t work so well for you?
As a small business owner, you wear multiple hats. Because no one is equally good at everything, some of your hats are a little too big or a little too small – but you wear them anyway. Only people who have run a business can possibly identify with the pressure to be a Jack of all trades in this way.
To the business owner, a peer advisory board is a room full of people who know what it is to wear the hats. They’re the people who know what it takes to steer a business toward success, because they’ve done it – or are in the process of doing it – themselves.
By taking advantage of group knowledge and experience, you’ll be able to:
1. Run your business strategically. There are some pursuits in life which require little to no strategy. What you order for dinner tonight will affect your life for a very short period of time, but who you decide to hire and which departments you decide to expand are decisions that have long-lasting effects. When it comes to your business, you’ve got to take the position of a chess player in the match of his life.
Because running your business is the match of your life, after all.
TAB’s 20 years of experience has taught us that business owners who develop and follow strategic plans are more successful than those who don’t. How do you draft a strategic plan? What should yours look like and what should it entail?
You could draw it up alone, but you’d be cheating yourself out of the feedback of other business owners who have focused on strategic planning for years. How do you know what’s missing if you don’t know what to look for? The sounding board function of a peer advisory board provides small business owners with the opportunity to see outside of their tunnel vision, gaining insight and advice from those with similar challenges.
We’ve found that business owners who utilize peer advisory boards are more likely to have a strategic plan, and are also more likely to be satisfied with the strategic plans they’ve developed. In our recent Small Business Pulse survey, over 75% of entrepreneurs using strategic plans reported that it had heightened the performance of their company. The most frequently reported improvement? Increased revenue.
2. Bring more life to your work/life balance. That place where you feel your working hours charge you up for your play hours and vice versa. A balance between uptime and downtime. Are you there yet? Would you like to be? If you’re already there, you know this simple fact: it’s a constant balancing act – one that you constantly need to focus on maintaining.
In general, the more balanced you are, the better you perform. That’s why it’s crucial that business owners purposely plan to enrich and increase their time spent with family and friends, work on outside interests or just do nothing at all.
We asked hundreds of entrepreneurs about their work/life balance and found that those using peer advisory boards reported higher satisfaction with their time both in and outside of work. They were also less likely to report that they’d been neglecting either their family or themselves. Peer advisory boards have proven to be an ideal place to synergize your work/life balance goals with those who’re walking your same path.
3. Obtain guidance through periods of slow growth, fast growth and stagnant growth. Sometimes it’s hard to see the forest for the trees, and business growth is no exception. As a business owner, it can be easy to get wrapped up in the charts and graphs, obscuring the bigger picture of long-term, sustainable growth.
When we asked entrepreneurs what they expected from the 2014 economy, the majority foresaw either modest or substantial increases in their sales revenue. This is exactly the kind of scenario where a peer advisory board can come into play. During a period of growth it’s important to pinpoint what’s working, what isn’t and what hasn’t yet been tried. Periods of stagnancy call for peer review even more reflecting on your company’s strengths, weaknesses, threats and opportunities.
A strategic plan combined with a peer review board is the guiding compass for any business looking to get and keep a competitive edge. There’s a lot of knowledge to be shared by people who have companies in the same position yours is in – or better. Learn from successful entrepreneurs and share headspace with those who know where you’re coming from as you map out the future of your operations, and your business will benefit from it.
4. Seek the truth about your business. What’s the problem with receiving feedback and guidance from an employee? If you’re the boss, this individual will be less likely to give honest feedback. Pleasing the person who signs the paycheck – you – will remain a high objective, and it will give bias to anything he chooses to say.
The members of a peer advisory board, however, are not beholden to you. This gives them the freedom to be candid and frank, telling you what you need to hear, when you need to hear it. And they will, and you’ll have the chance to offer your feedback and guidance as well.
Additionally, you’ll find greater freedom in what you yourself feel comfortable discussing. Having internal business problems? You may not be too keen on letting other people closely tied to the company know about every internal struggle – and rightfully so. When you’re involved with a peer advisory board, you can uncensor yourself and ask the questions that really need to be asked. And when you hear the answers, you’ll know they’re coming from a place of understanding and experience instead of bias.
5. Leverage a think tank of business experience to solve challenges and seize new opportunities. If you’re up against a government regulation, tax issue, HR problem or anything else business-related, the chances are good that somebody in your peer advisory board will have gone through something similar (or knows somebody who has).
Additionally, are you on the lookout for expansion and partnership opportunities? Your natural tunnel vision may prevent you from seeing all of the possibilities available. Leveraging the perception of multiple professionals will give you a broader perspective of the bigger picture, enabling you to pivot in the right direction at the most opportune time.
In short, the peer advisory board brings the equivalent of a full-scale corporate board of directors to the small business owner, and it’s something that most business owners could see real benefit from. Whether you want to focus on maintaining your edge in a hyper-competitive marketplace, increase profit margins or figure out how to attract and keep the best talent, peer advisory boards are an asset you can leverage to take your company to the next level.
Have additional questions about how to get started with a peer advisory board? Check out our free white paper which details the process to acquiring your own board of directors. Contact us to get started.