Saturday, July 31, 2010

The Michael Masterson Journal

MM Journal

Issue No. 53 - $1.91

Saturday, July 31, 2010

 

"Motivation is the art of getting people to do what you want them to do because they want to do it."

Dwight D. Eisenhower

Motivation

I was once characterized by a book reviewer as a "motivational writer." Apparently he felt that this moniker debased me. It didn't.

I am very happy that my writing sometimes has the effect of motivating people. I find it hard to understand what is wrong with that. If he meant to imply that my work doesn't have substance he should have said so. But I don't think he dared say that because the book he was reviewing was about building businesses -- and that is something I know a great deal more about than the average reader of that book, including him.

Still, a lot of folks have the idea that motivating people is somehow less legitimate than, say, just providing them with information. The thinking seems to go something like this: "Don't try to excite me. Don't try to get me moving. Just tell me the facts."

But knowing the facts is only 20 percent of success. Testing the facts by putting them into action is 80 percent.

I can't say for sure when motivation started creeping into my writing. But it was at least 20 years ago -- well before I started writing books about marketing and business. I think it began when I became a consultant and realized that I couldn't force my clients to execute my ideas. If I wanted them to follow my suggestions, I would have to take the extra step of motivating them to do it.

When I make presentations to a group, I try to motivate my audience to take the action I want them to take by using the persuasive techniques that I teach marketers to use in selling products. For one thing, I express the value of my ideas in terms of how the people I'm speaking to (not me or anyone else) will benefit from them.

I also sell one idea at a time. I have learned that if I try to do more, they (and I) will come away with nothing.

Whenever possible, I present my ideas through stories -- because stories, more than any other information-sharing technique, have the power to inspire.

And I provide proof to support the claims I make. Tangible, relevant, and impressive proof.

All this is good for group presentations. But when I am trying to motivate my clients to implement my ideas, I have to do more. I have to work with all the key people in the company -- the CEO, the top marketers, and the top product people -- on an individual basis. It takes a lot of time, but it's necessary because every one of them has unique problems and concerns that have to be addressed.

Many business owners and senior executives don't bother to sell their ideas to the people who will be responsible for implementing them. They think it's enough that they come up with the ideas in the first place. And they prefer to motivate the troops by rewarding them financially, as well as with such gimmicks as business retreats and "employee of the month" plaques.

One of my clients is a big believer in financial incentives. In fact, he attributes a good deal of his success to the substantial, profit-based bonuses he gives out on a regular basis. But I don't believe he's right about that. I think there are all sorts of other motivating activities going on in his business that he is not fully aware of.

For example, his top people are very much involved with the people who report to them. They congratulate them publicly for achieving their goals and they also privately counsel those who have failed to hit the mark. This constant interaction and support is, I think, the real reason his employees work so hard and keep the business growing.

When I was a young executive I did what my client is doing now. But over the years I recognized that "automatic" financial incentives failed to work as often as they succeeded. I tried to figure out why that was. I talked to my employees. I sought the counsel of my mentors. And I read books -- lots and lots of books about motivation.

One thing I learned was that he best people aren't motivated by money. They certainly appreciate it. And they will not lose sight of the potential for a bonus as they do their jobs. But what really motivates them is what some experts call internal rewards -- the personal pride and gratification that comes from a job well done. In other words, they work hard and smart to please themselves.

You only need to think of Enron to appreciate how things can go bad by attaching business goals to financial incentives.

If you want your business to achieve its true potential you must be willing to give your people personal attention. You have to eschew hard power (the sort of power that Steve Jobs is famous for) and practice the soft skills of listening and coaching and providing a purposeful environment for them to work in. (I've read a lot about purposefulness in recent years -- but almost nothing about how important it is in business.) If you provide financial incentives, you have to make sure they are fair. But you have to realize that they will affect people differently. You can't just establish them and walk away.

I got involved in a discussion recently with a client who, I believed, was making a mistake by ignoring his key people. "They're doing fine on their own," he told me. "They don't need me meddling in their affairs."

Yes, they were doing fine. Still, I argued that he needed to stay in touch with them. He needed to ask them questions and give them suggestions. He didn't need to make demands or commands, but he did need to make sure that they were feeling fulfilled by the work they were doing. If they weren't, he was going to lose them or they were going to stop caring about the business -- no matter how much he was paying them.

I've seen it happen too many times. An executive makes a fast rise and then suddenly breaks though to the upper ranks. He continues to build the business, bringing in smart people to help him. He motivates them with money because it seems to work and because he doesn't know any better.

All the while, his income is getting bigger and he is acquiring spending habits and pastimes that compete with his work. Eventually -- generally after seven to 10 years -- he finds that the business is running itself. He doesn't have to show up every day, so he doesn't. He'd much rather spend time on his hobbies and outside interests. He gets away with it so it becomes a habit.

A year or two later sales flatten out and profits decline. And he doesn't understand why.

If you want your business to grow profitably and consistently, you must understand that your job as chief motivator will never go away. You must be willing to interact personally with everyone who reports to you. You must talk to them constantly. You must give them guidance. You must give them freedom. You must praise them and you must occasionally correct them too.

Let me give you an example of how important employee motivation is to the success of a business.

This past year, I have been very much involved with a client whose business had faltered.

I began by meeting with his key employees and trying to understand what they were doing, what they were proud of, and what was frustrating them.

Based on what I learned, I recommended some radical changes in the structure of the business -- and as a result, some people had to be fired. In deciding which people to keep, my primary concern was whether any of the company's employees would be open to new ideas.

I believed I had the knowledge they all needed but I had to be sure they would listen to me. By eliminating the people who were past being motivated, I made my job possible.

Once I had a good group of people that I could motivate, I knew that my ideas for turning the business around could be tested.

To cut to the chase, they managed a miraculous turnaround in less than six months. The improvement was only partially due to the new ideas we introduced. Most of it was due to the fact that the entire team was motivated to execute those ideas well and quickly.

[Ed. Note: You've just learned the right way to motivate your employees. It's a key element of growing a successful business. And it's a major theme of Michael Masterson's Wall Street Journal and New York Times bestselling book on entrepreneurship, Ready, Fire, Aim.

Brian Tracy calls Ready, Fire, Aim "an extraordinary book -- full of practiced, proven strategies and techniques to help you make more sales and greater profits than you ever imagined possible."

And Robert Ringer says "What sets Masterson apart from most of the gurus who write about how to do it is that he's actually done it -- over... and over... and over again."

In Ready, Fire, Aim, Michael shares the business-building secrets he learned while he took several businesses from scratch to multimillions in revenues. And, as always, his contrarian advice flies in the face of the "wisdom" offered up by most mainstream management and business gurus.

For example, you'll learn why...

  • Coming up with an original product idea... is usually a recipe for disaster

  • Failure is good thing

  • You should cooperate with your competitors

  • And much more...

Early to Rise is offering a free copy of Ready, Fire, Aim to ETR readers today. All you have to do is sign up for a free trial subscription to the Liberty Street League, our premium wealth-building membership service. Get all the details here.]


How I Invest in Gold

Knowing that I consult with several financial publishing companies, one of my son's friends recently asked my advice on investing in gold. Based on advice from the Oxford Club last year, he had purchased a few shares of gold producer New Gold (NGD) and doubled his money.

But these days he's hearing that now is an even better time to get into gold-related stocks. He's not looking for huge returns. Just enough to help pay for his daughters' school tuition. 

What I told him should help you too...

I have invested about one half of 1% of my net worth in gold stocks. It helps, of course, that I've done this through private deals that one of the world's top experts puts together for his friends.

But most of my gold investments have been in bullion coins (as opposed to collectible coins). I began investing in these coins when they were priced at less than $400, and I have plenty now. But if I didn't have at least a year's salary worth socked away, I would continue to buy them.

If you plan to buy bullion coins -- and you should -- don't pay too much of a premium for them. One guy I know and trust is Van Simmons at David Hall's Rare Coins and Collectibles.

Gold bullion coins you should buy for safety -- in case we do go into a spiraling inflation. Gold stocks are merely to play the game. Keep that portion of your portfolio small.

As always, keep in mind that I am not a registered investment advisor. I'm just telling you what I do and what works for me.

And gold isn't the only metal I'm interested in these days.

The researchers at Sound Profits recently sent over a report on a metal that I didn't know anything about (and could barely pronounce) -- one that I found very intriguing. If their analysis is correct, it could be a very smart way to play two of the biggest trends in the markets today (and you know I'm a believer in trend investing).

Check out the full special report and get all the details here.


Read The Pledge Before Anyone Else

We were recently checking out cover designs for my new book, The Pledge: Your Master Plan for an Abundant Life. John Wiley and Sons (the publisher) would probably be mad if I showed them to you. But I can give you an early look at some of the chapters -- and you can tell me what you think.

The Pledge is not a book on "goal setting." It provides a blueprint for fundamental change. Here's some of what you'll learn:

  • Why traditional goal-setting programs seldom work

  • The Four Rules for master-planning your life that will guarantee success

  • How to make quick and correct decisions every day to enrich your life

  • The secret of Accelerated Failure

  • How asking one question will improve everything in your business and life

  • The secret of the 4-Hour Workday (This one really works!)

  • And much, much more...

Just go here, give us your e-mail address (so we can give you exclusive book updates and a special deal when the book is officially released), and you'll download an excerpt from The Pledge instantly. Then read it and send me an e-mail to let me know what you think: AskMichael@ETRFeedback.com. We just might publish you in ETR.


The Not-So-Empty Restaurant

My friend A., a restaurateur, read my Journal essay on "The Empty Restaurant" a couple of weeks ago. It inspired him to share a marketing lesson he learned years ago. I think you'll find it useful -- no matter what business you're in.

"Many years ago, my cafe participated in a rib contest. (You know our ribs are great.) Well, many people were going to the other 20 rib stands. But not so many were coming to ours. It took me a while to figure out why.

"The other booths had lines, and ours didn't. We didn't have lines because my staff was so fast. Lines were forming at the other rib places because they were slow at plating the food and slow in making change. I had my crew slow down and a line formed. The rest of the weekend we worked just slow enough to have a line and just fast enough so customers didn't have to wait too long.

"We did very well. People say that they don't want to wait, but I guess they do."


[Ed. Note: Michael Masterson welcomes your questions and comments. Send him a message at AskMichael@ETRFeedback.com.]

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