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.