I hear some people say translating terms like “nemawashi” into English is difficult. Really? I always thought it was one of the easier ones. Let's just call it “groundwork”. In fact, that is a very accurate description ,from a number of different angles. Japanese gardeners are superstars. There is limited flat space in this country, so over centuries gardeners have worked out you need to move the trees you want, to where you want them. They prefer this approach to just waiting thirty years for them to turn out the preferred way. It is not unusual today to see a huge tree on the back of a big truck ,being moved from one location to another and presto instant garden. The roots of that massive tree will be wrapped up in cloth to protect them. That wrapping process is called “nemawashi”. In business, it means being well prepared for the business meeting – doing the ground work beforehand.

In a Western context being well prepared for the meeting will mean assembling all the data and analysis in order to make an impassioned plea for your idea or suggestion, to be accepted by the big bosses. We all get to the meeting, listen to the different approaches and we make a decision in that meeting. What could be more time efficient and logical? They never do it that way in Japan.

Concepts of time efficiency differ for a start and throwing massive amounts of overtime at a problem is not problem in Japan. The meeting is also a ceremony, because the decision has already been arrived at beforehand and the gathering is just to formalise the outcome. This happens in the West too. Whenever you see global leaders delivering their joint statements or signing agreements, they didn’t arrive at the wording during the meeting. That was all worked out by their minions beforehand, over many hours of debate, negotiation and discussion. The TV cameras just capture the big guys and gals inking the document, after all the “groundwork” has been completed.

I was talking with a Western businessman recently and he was relating how hard it was to get the team behind his ideas. The issue was, he was trying to get it all agreed to, at the key meeting and hadn’t invested the time to do the groundwork. What he needed to do was go to see all the key people, the influencers, the stakeholders with a vested interest and explain the idea. Get their input and agreement and then rinse and repeat with the rest of them. By the time the meeting happens, everyone will recognise parts of their preferences and ideas in the submission. Agreement flows easily in these cases.

In sales, we will probably not have direct access to all of the decision makers, influencers and stakeholders. Our primary contact has to become our champion for sheparding the agreement through the internal nemawashi process. Asking them directly who are these hidden decision makers is insulting. It says, you are a nobody, but I still need your help. We need to be more considerate of their “face” and ask in a way that enhances their face.

Once we have established the trust, have uncovered their needs, shown we can help and have dealt with any hesitations they may have, we are ready to marshal our forces for the final push through to a “yes” to the sale. We explain, we understand that many people will be interested to know about this change in the delivery of product or services. We also know that they will be tasked to explain it to others who cannot join our meetings. We ask how can we help them? This is a rhetorical question because we want to get into the detail of who are the players. So we go straight into asking who do they think would have the most concern about the change and why they would be concerned? We keep repeating this process until we have fleshed out the people who will have the most interest in saying “no”. The next stage is to arm our champion with the tools to deal with the pushback. We try to understand the concerns and then arrive at creative ways of overcoming those concerns.

This is what we mean by nemawashi or ground work. Is it time consuming – yes! Do we have to invest the extra time – yes! There is an internal logic to the way decisions are made in Japan. There is no point railing about how the Japanese business decision making process should be Westernised, so it is more familiar for us. That is never going to happen, so we need to be better and more flexible to understand the system and then become a master of influence within it. We need to become the nemawashi maestro!

Japan is a very hierarchical society. I am getting older, so I appreciate the respect for age and stage we can enjoy here. Back in my native Australia, older people are thought of having little of value to say or contribute. It is a youth culture Downunder and only the young have worth. “You old so and so, you don’t know anything” is reflective of the mood and thinking. As a training company in Japan, we have to be mindful of who we put in front of a class and in front of clients. If the participants are mainly male and older, then it is difficult to have a young female trainer or salesperson allocated to that company.

That young woman is going to be talented and effective as a trainer because our trainer development system is so demanding. She is also going to be highly skilled in sales, because we teach sales. It doesn’t matter. The HR people or the line manager complains, because the class members don’t feel young people have anything to teach them or are qualified to sell them anything.

I was reminded of this recently when trying to allocate trainers and salespeople for certain companies. We have a lot of internal trainers and salespeople who are under 35 and a few who are over 45 and so there is an imbalance. One of my senior guys has suddenly quit. He was performing both functions, so it is a double loss. As our older team members age, they have seen their kids leave the home and then have their aged parents to worry about. The life of a small business owner is always like this. There is never an equilibrium or a period of extended stability with staffing. Just when you think you have it working like a smoothly oiled machine, in goes a wrench and the whole thing comes to a shuddering halt.

The transfer of responsibilities for clients between staff is not that easy. It goes both directions too. We have staff who build strong personal relationships with counterparties and then their interlocutor is moved to another function and a replacement appears. Often, this can mean the end of the relationship with that firm, as the new broom have their preferred suppliers and you are not one of them.

You also imagine that within the client big firms there is a seamless transfer between their staff for that part of the business. Not so. I was dealing with a big multi-national and to my amazement the new person had absolutely no knowledge of what we had been doing for them in terms of training. Obviously there was no hand over of the tasks and things have been going less smoothly as a result.

Normally in Japan, we try to recruit younger people, however we have to also be flexible and look to hire older staff, the venerable grey hairs who can gain the respect of the clients. Trying to maintain the right balance between the generations is not that easy. Also, anytime we have to replace someone as a salesperson, then we can draw a big red line diagonally across each month of the calendar for the next 18 months. They will not be particularly productive for that period of time. Learning the business, really understanding the products and our methodology takes a lot of time. They also have to build their own client base and that doesn’t happen in a hurry.

It takes about the same period of time to see someone make their way through the Dale Carnegie labyrinth of trainer certification. It is an arduous, challenging process and not everyone is suited to become a trainer. The skills for selling and training have similarities but there is also that X Factor of personality needed to become accepted by clients.

The infamous and elusive Plan B needs to be dusted off and then we can move into action. The problem is we don’t spend any time thinking about negative circumstances that require a Plan B. Also, the mix of possibilities across the range of staff is so complex, how can you effectively anticipate what happens next. Nevertheless, I quickly realised I need multiple Plan Bs ready to go, in case of changes in the team complexion. I usually spend a minus amount of time thinking about those myriad possibilities, because I am too busy doing other things in the business.

I will need to do better in this regard and have an update process scheduled throughout the year, rather than leaving it to surprise announcements of staff departure, to stir me to action. How about your case? How are your multiple Plan B development scenarios going?

When we read commentary about how we should be recruiting A Players to boost our firm’s performance, this is a mirage for most of us running smaller sized companies. If you are the size of a Google or a Facebook, with massively deep pockets, then having A Players everywhere is no issue. The reality is A Players cost a bomb and so most of us can’t afford that type of talent luxury. Instead we have to cut our cloth to suit our budgets. We hire C Players and then we try to turn them into B Players. Why not turn these B Players into A players?

This is a contradiction isn’t it, because we always striving and thrusting for the best possible results. If we invest and take a B Player to A Player status, there is a very strong likelihood someone else will admire our handiwork and poach them from us. We have all heard that truism about “what if I develop my people and they leave”, countered with “what if we don’t invest in them and they stay?’. This is correct up to the point of your cash flow reserves. We are not talking about having useless people staying on, sucking up our cash resources.

B Players are very capable and are worth investing in to become even more capable. The additional investment to turn them into A players though, if they have that capability in the first place, may be a case of over investment. Having large portions of your revenue centered around a very small number of clients is recognized as a very dangerous position to be in. In the same way, having one or two people accounting for a disproportionate amount of firm income or expertise is also dangerous.

When the top performers leave it can be very disruptive. Most bosses do not sufficiently explain their departure to the remaining staff. In this vacuum, the other members of the team worry about what the A Players know that they don’t. Is the firm going down and are those most capable of getting another job jumping ship? Will an exodus of A Players introduce fragility into the business? The loss of the contribution of A Players is bad enough, but their departure can be interpreted by staff in ways bosses would never imagine. That is why no matter who leaves, leaders always need to carefully reassure everyone else, that the firm is fine and this was a personal choice by one individual. Don’t allow rumours, imaginings and guesswork to creep into the equation. We need to own the narrative every time.

I have a very carefully designed spreadsheet which allows me to track my sales team’s performance. It includes all of their costs and related costs, to give me a clear picture of what each sales person’s contribution to the company actually is. This allows me to see the amount of leverage they represent. I want to know what is the multiple of their revenue return against their total cost. The bigger that multiple the better, up to a point.

If the multiple is fantastic, but the overall income volume generated is too low, then we can go broke in short order. So there has to be a balance between raw volume of funds coming in and the effectiveness of return on their efforts. This is where B Players can excel. They produce multiples which work for the business and generate a positive profit result. The A Players can have bigger numbers, but their multiples may not be that outstanding. They also point to their big numbers and say rude things like “I want more money”. That pay rise to keep them will hammer the attractiveness of their multiple pretty quickly.

A Players are like an oasis in the desert. The vision through the heat haze can lure small business owners to invest, when that may not be the best idea. It can be better, over time, to build the ranks of the B players from the within the ranks of the C Players. This is the classis bootstrap approach to building companies. We all do it at the beginning don’t we, but then with some success comes hubris and we start to imagine we can extrapolate our genius. Before you know it, the multiples have swung in the wrong direction. For this reason, it is wise to track the multiples down to the last cent and determine to keep on tracking.

When you are small, love your B Players and hold them close. Invest in them, but don’t over invest. Where is that elusive line of demarcation? Experience watching newly minted A Players, who were once your B Players, heading for the exits and more money, helps to establish it in your mind. Monitoring the multiple components will create an algorithm indicating how much is enough and how much is too much. We won’t always get it right, but we can get pretty close if we pay careful attention to the issue. Remember this is art, but with big servings of science tossed into the mix.

If we try to hide the bad news for the buyer will that work? How long with it work for? Bernie Madoff died in prison, his wife left in a perilous state, one son dead from suicide and the other from cancer. I call that family devastation. He got away with his lies and cheating for quite a while. He offered modest, but steady returns. He told people he had no capacity to take their money, then rang them back at a later stage to say there was an opening. They were grateful for the chance to give him their money. The 2008 recession showed who was “skinny dipping” in the markets, as Warren Buffet termed it and Bernie could no longer sustain the fraud.

If we are loose with the facts and the truth with our buyers, how will that go toward fostering the re-order culture we want to create? The usual ploy is to downplay the costs by offering the best case example and not offering the most realistic case. I was reminded of this the other day, while watching a video from the President of this particular organisation. He wanted more money, a lot more money for this project. Let’s park the fact he was a hopeless advocate for his case, bumbling his way through his pitch. The examples he offered were very carefully culled to make the pain look miniscule. The obvious problem with that though was the vast majority of the stakeholders did not fit into that minimum damage category.

He was trying to avoid the pain, but that came across as dodgy and duplicitous. We have to reach for our financial calculators and work out the damage for ourselves and we are left to our own conclusions. It would have been much better to meet the elephant in the room head on and explain why the bigger number was a good decision. That way the seller controls the narrative, not the buyer. Call out the number, then justify the living daylights out of it. Talk about the long term benefits and the opportunity costs if we take no action now. Pile on the value of the proposition in the context of the number.

Trying to talk about the value proposition unrelated to the number doesn't fly. We need to connect them together as we explain the value. We unveil the ugly number but wrap the pain up in the value to come, to the glorious future, to the sunny uplands, the better days hereafter. Context is everything here. Our hero didn't do that and I believe he missed a great opportunity to get people to back his proposal.

When we are selling there is a number attached to the service or good. Actual tangible objects are easier to understand from a pricing point of view. Services though are nebulous. I was selling some training to a major corporation and the people I was dealing with were HR folk located outside Japan. If you live here, you understand the cost of living and all the relativities which apply around pricing. If you are in Hong Kong or Singapore you don’t. Living in these low tax, low cost environments makes Japan’s numbers look stratospheric.

They told me our pricing was much higher than this Hong Kong located from who delivered for them in English speaking countries in Asia. I asked them why they didn’t use them for Japan. Of course, they didn't know Japan, had no capacity to deliver here in cultural and linguistic contexts, so that is why they were talking to me. Yet the expectation was my pricing would fit in with this other vendor, based in Hong Kong. Who were these people? I checked them out and they are nobodies. They are not global, they don’t have 109 years of credibility or 60 years on the ground in Japan.

In the end, I had to do a demonstration of what we would deliver. It blew them away because the value proposition was so much greater than the other firm. Now the cost, the higher price, the bigger ask, that larger number made sense. I didn't fold on the price for two simple reasons. I know our value and I know what companies here will pay for the value we generate. Yes, it is Covid and yes it is perilous for training companies at the moment, but you have to believe in your value based pricing and you have to be prepared to fire the client.

Don’t run away from the hard conversations. Instead find ways to demonstrate and show your value. Keep honing your persuasion skills to sustain the narrative about why they should buy from you and buy from you now and keep buying from you.

If we try to hide the bad news for the buyer will that work? How long with it work for? Bernie Madoff died in prison, his wife left in a perilous state, one son dead from suicide and the other from cancer. I call that family devastation. He got away with his lies and cheating for quite a while. He offered modest, but steady returns. He told people he had no capacity to take their money, then rang them back at a later stage to say there was an opening. They were grateful for the chance to give him their money. The 2008 recession showed who was “skinny dipping” in the markets, as Warren Buffet termed it and Bernie could no longer sustain the fraud.

If we are loose with the facts and the truth with our buyers, how will that go toward fostering the re-order culture we want to create? The usual ploy is to downplay the costs by offering the best case example and not offering the most realistic case. I was reminded of this the other day, while watching a video from the President of this particular organisation. He wanted more money, a lot more money for this project. Let’s park the fact he was a hopeless advocate for his case, bumbling his way through his pitch. The examples he offered were very carefully culled to make the pain look miniscule. The obvious problem with that though was the vast majority of the stakeholders did not fit into that minimum damage category.

He was trying to avoid the pain, but that came across as dodgy and duplicitous. We have to reach for our financial calculators and work out the damage for ourselves and we are left to our own conclusions. It would have been much better to meet the elephant in the room head on and explain why the bigger number was a good decision. That way the seller controls the narrative, not the buyer. Call out the number, then justify the living daylights out of it. Talk about the long term benefits and the opportunity costs if we take no action now. Pile on the value of the proposition in the context of the number.

Trying to talk about the value proposition unrelated to the number doesn't fly. We need to connect them together as we explain the value. We unveil the ugly number but wrap the pain up in the value to come, to the glorious future, to the sunny uplands, the better days hereafter. Context is everything here. Our hero didn't do that and I believe he missed a great opportunity to get people to back his proposal.

When we are selling there is a number attached to the service or good. Actual tangible objects are easier to understand from a pricing point of view. Services though are nebulous. I was selling some training to a major corporation and the people I was dealing with were HR folk located outside Japan. If you live here, you understand the cost of living and all the relativities which apply around pricing. If you are in Hong Kong or Singapore you don’t. Living in these low tax, low cost environments makes Japan’s numbers look stratospheric.

They told me our pricing was much higher than this Hong Kong located from who delivered for them in English speaking countries in Asia. I asked them why they didn’t use them for Japan. Of course, they didn't know Japan, had no capacity to deliver here in cultural and linguistic contexts, so that is why they were talking to me. Yet the expectation was my pricing would fit in with this other vendor, based in Hong Kong. Who were these people? I checked them out and they are nobodies. They are not global, they don’t have 109 years of credibility or 60 years on the ground in Japan.

In the end, I had to do a demonstration of what we would deliver. It blew them away because the value proposition was so much greater than the other firm. Now the cost, the higher price, the bigger ask, that larger number made sense. I didn't fold on the price for two simple reasons. I know our value and I know what companies here will pay for the value we generate. Yes, it is Covid and yes it is perilous for training companies at the moment, but you have to believe in your value based pricing and you have to be prepared to fire the client.

Don’t run away from the hard conversations. Instead find ways to demonstrate and show your value. Keep honing your persuasion skills to sustain the narrative about why they should buy from you and buy from you now and keep buying from you.