CHAPTER

9

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The Tests of Being an Entrepreneur

So, with the recognition from the Buick Motor Division of General Motors, the glowing article in Automotive News, and some clients who were stalwarts in the automotive industry, Caliper was off and jogging, if not quite running yet.

“The first and loudest response to what we were doing came from the automotive industry,” Herb says, “So there was a certain irony that we were from New York and our clientele was centered around Detroit. But we were thrilled to have any clients centered around anywhere,” he adds, smiling broadly.

“Then we got our first Wall Street clients, and we felt like things were starting to open up,” he says. “Jack Nash and Leon Levy, who were partners of Oppenheimer & Company, became intrigued by the possibility that we could help them select successful salespeople. (In 1982, Nash and Levy sold their company for $163 million and started the hedge fund Odyssey Partners which also became a client of Caliper’s.) But back then, in the beginning, they were probably just testing our approach and measuring the outcomes. Then eventually, the slow trickle started to flow. They became our largest client for quite a while, and have been with us for over a half-century.”

At that point, it was just Herb and David who were rifling through the morning mail (remember, this is still the early 1960s, so commercial fax machines would not be introduced for several more years); sorting out the personality assessments that had come in; interpreting the results of each assessment; and calling the hiring manager on the telephone to talk about whether the prospect would fit in with the company’s culture, relate to the sales manager, and succeed in cultivating existing clients, while bringing in new business. After the telephone consultation, Herb or David would type highlights from the conversation, including a description of the individual’s primary motivational strengths, along with an appraisal of his or her inherent sales talents; then mail the written assessment back to the client so that they could review it and keep it for their records.

The in-depth telephone consultation became a distinct differentiation of Caliper’s service. It is interesting to think that if Herb and David had been less outgoing, they might have skipped the part about talking with the client. But they developed an appraisal process that was, in many ways, a reflection of their own personalities. They both shared an unusual combination of being academically proficient, while also knowledgeable of business practices.

“Whenever the phone rang,” Herb says, laughing at the memory, “David and I would both lunge for it. ‘You got the last one,’ one of us would call out to the other. We both wanted to talk with the clients, to get a clear understanding of what they were looking for, to glean insights into what was working for them, and to explore with them how we might help them most effectively.”

Those consultations with each client also created an unusually close bond.

The thought of selling their invention was now a distant memory. They were now developing and refining a business model that, between the two of them, they could deliver in a way that created a meaningful impact for their clients.

At the same time, they were trying to grow the business.

So whenever an important meeting was arranged with a prospective client, they both attended, which meant that the work back in the office had to be caught up when they returned, and before they left for the day.

“It was ‘round-the-clock,” Herb says, remembering.

When Herb and David were not advising their clients on how to hire successful salespeople, they were both trying to bring on new clients themselves.

However, they were not just entrepreneurs; they were trailblazers, trying to bring science to a recruitment process that had relied on initial impressions. As they tried to change old ways, they found themselves turned away from places where they thought they would be welcomed, then, occasionally, when they least expected it, surprised by an opportunity that would open like a skyline.

At the time, Sales and Marketing Management was the magazine that all sales professionals turned to. The magazine published an article about these two young upstarts and their psychological approach to hiring sales representatives with untapped potential. This broadened their base and appeal beyond the feature article they had in the automotive industry. In this new article, Herb says, “We talked about how, in the hiring process, we had found there is, almost universally, entirely too much concern with external superficialities (what salespeople are supposed to look like) and not enough concern with what is inside (whether they are motivated to succeed in sales).”

Highlighting this phenomenon, an article in the premiere issue of Sales and Marketing Management 90 years ago noted, “Large men command attention, providing that they are physically well organized and their muscle tone and health is all that it should be. Large salesmen are more likely to depend upon their size and bluff to succeed than they are to make sure of every ounce of their gray matter. Smaller salesmen must make up for this deficiency in height and brawn by using their minds more effectively. They must either have more courage and self-reliance, more tactfulness and friendliness, or more intellectual resourcefulness.”

Little had changed in the way sales managers were looking at applicants since that article was written.

Herb says, “In trying to convey our approach, we knew that what we were up against was a predominant lack of understanding that sales is fundamentally a game of motivation.” He shakes his head knowingly, then adds, “People knew that what we were saying made sense and was true, on one level; but they also figured that if they and everyone else were doing it the same way for years—why change?

“This new article helped lay the groundwork for explaining our approach—which was logical and academically sound but was defying preconceived notions. What we were conveying is the fundamental belief that succeeding in sales has to with what is inside of someone. The need and pleasure of getting someone else to say ‘yes’ is essential for successful salespeople. It drives them, like nothing else. When push comes to shove, no one can give a salesperson the desire to succeed, the need to persuade, the ability to bounce back from rejection, and the ability to understand the needs of others,” Herb says. “These are all inherent gifts that some of us have in larger quantities than others. But they are not gifts that we can neatly package and give to someone else.”

Beyond expanding awareness of their concept, the article also opened the door to an article highlighting their theories that Herb and David coauthored for the Harvard Business Review, which appeared in 1964.

“What we were most intent on conveying,” Herb says, “is that succeeding in sales has to do with what is inside you.”

At this point, the idea that successful salespeople all needed to start out with at least two basic qualities (empathy and the need to persuade) was starting to gain credence. The article demonstrated the validation of their hiring approach in the automotive, insurance, and mutual funds industries. People who were recommended based on the results of their personality assessment were significantly outperforming those who were not recommended—six months as well as eighteen months after being hired.

With that validation and the imprimatur of the Harvard Business Review, the company had the most stellar academic and commercial credentials. It was a perfect blend. They were not just academicians with an interesting theory that they wanted to test. They were also entrepreneurs who were able to connect with the real problems that other business executives were all facing.

Inside the article, they also learned to face their dilemma head-on. If they were going to be perceived as iconoclasts, as running against the grain, then they had to act the part. Rather than apologizing for believing and promoting a concept that most executives seemed to not quite understand, they would go after it full force. Be provocative. Engage the executives in the controversy.

In that article they said that in the hiring process entirely too much emphasis was placed on experience. By looking for experienced applicants, they noted, “what is accomplished can only be called the inbreeding of mediocrity. We have found that experienced people who are pirated from competitors are most often piratable simply because they are not succeeding well with those competitors.” They challenged executives to “seek individuals with basic sales potential,” cautioning that “experience is more or less easily gained, but real sales ability is not.”

“Prior to our article appearing in the Harvard Business Review,” Herb says, “we were doing just shy of 200 assessments a month. After the article appeared, we shot up to about 900 a month. It was like a skyrocket.”

With that, Herb and David realized they had no choice. They needed to bring in their first employee. While exciting, this was not a decision they took lightly. It meant they were becoming a real company. They would no longer be just two guys giving it their best shot. They would be responsible for someone else’s paycheck. And that person would impact their corporate culture, as it were. Prior to that, the corporate culture was just two bright guys trying to make their way as entrepreneurs. They knew each other inside out, got each other’s jokes, and could complete each other’s sentences. But they needed someone to free them up as they continued to grow the business.

They needed time to meet with their current clients, pursue new ones, and service the day-to-day business. As it turned out, whenever they could get away to visit a client or present their concepts and findings at a conference, they both had their hats on and were out the door.

“The truth is,” Herb says, “we were probably more alike than different—which might not be the ideal situation for business partners. More typically the best partners are bookends—with one being more of the outgoing salesperson and the other being a more button-down head of operations. That way, because of their strengths and natural inclinations, there is more of a clear delineation between roles and responsibilities. And that way partners might not trip over each other. But for us, at least in the beginning, it was all working.”

They genuinely enjoyed each other’s company. On one typically crowded subway ride, a woman, seeing Herb standing, asked David if Herb would like to have her seat. Knowing that Herb had heard her request, David leaned into Herb’s ear and, speaking in a language he was making up, as if from another planet, he asked, “Obalo-goomi-santa-gablew?” And Herb, knowing where he was going, responded, “Gablooma-sokola-la-soma-cola!” Then David turned toward the woman and said, “No. He said, ‘No thanks.’ “ In that secret language, David was playing along with Herb, letting him know that he understood that such requests, while well-meaning, were often off-putting. It was not harder for Herb to stand simply because he was blind. So he did not want to be treated a special way because of it. He just wished people could see past his blindness.

So, as they progressed from being two guys who were just testing the water to becoming an actual company, how did they determine who they would add to their team?

“Like everything we were doing at the time, it was on the fly,” Herb says. “We knew we needed someone who could answer the phone in a way that was very welcoming and engaging. We also needed someone who could take dictation, then type our reports and make sure they were sent out appropriately and on time. But we were also looking for someone who could grow with our company. We wanted someone who was intrigued by what we were doing and saw him- or herself as being part of something that they believed in—just like we did.” Herb pauses, adding, “That, I believe, has always been at the heart of who we are as a company. Whenever we hire somebody today, we are not just looking to fill a position, but we are looking for someone who we feel ‘gets it.’ We are looking for someone who is genuinely enthused about what we do. And who wants to contribute and grow with us.”

After assessing and interviewing countless applicants, they hired Joan Ward as their executive assistant. “She was excellent at keeping us organized and on track,” Herb says, smiling, “which was a yeoman’s task.” Over the course of time, Joan learned how to interpret the psychological assessments and consult with the fledgling company’s clients. “Eventually, she went on to get her Ph.D.,” Herb says, “of which I am very proud.”

Herb’s son, Mark, who was born when Herb was teaching in Texas, remembers that during these early days of the company, his dad would go to work very early in the morning. “I mean, he wasn’t around much during the week. But I always found him fascinating. We would take him to the New Brunswick train station early in the morning, and, with his cane, he would walk up those stairs by himself. And I would imagine him getting on the train with no one’s help, and finding a seat. Then getting off in Manhattan, and taking a subway, then walking to his office. All by himself. It was just fascinating to me,” he adds, smiling at the recollection. “Then my mother would keep a plate warm for him in the oven, and he would eat dinner whenever he got in at night. It was usually quite late,” says Mark, who is now president of Caliper. “I was always fascinated by his sheer determination and fierce independence,” he adds.

One of Mark’s earliest memories of being with his father was when the power went out in their house. “Everything went completely dark,” Mark says. “It was as black as can be. My mom was there also. And I was going, ‘Aaaaaaahhhhhh!’ And my dad was just laughing, because he thought it was all very funny. He, obviously, was accustomed to walking around the house without any lights. So he just kept laughing, as we were holding on to him, and he led us around the house. We were slowly getting from room to room, being totally disoriented, with him as our guide. It is a very funny memory.”

Mark also remembers that as his father talked about his work, early on, there was a “mystique” in the way Herb spoke about salespeople. “There was a message that gets filtered through the head of a kid that if you’re not a salesperson, you’re not fully whole,” says Mark, who describes himself as more of a “teacher.” “But there was a message that I hope you grow up to be a great salesperson one day. You know, it was a subtle message.”

What can you do with those messages?

“You don’t do anything with them,” Mark says. “You explore your own options and make your own conclusions in life. And you end up, hopefully, doing what works for you. That’s what anybody should do. We all have our messages that we get from growing up. We all have to filter which ones we want to keep, and which ones we want to say, ‘This doesn’t work for me.’ “

At the end of the day, Mark says, “I was probably the only nine-year-old who could tell you the three qualities needed to succeed in sales.” Smiling, he adds, “But I also learned a lot about business from listening to his stories about the people he met and the opportunities he was pursuing. And that opened my eyes.”

Hire Every Employee Like You Hired Your First

In addition to asking entrepreneurs to describe what motivates them and keeps them going, one of my favorite questions is to ask them to tell me about the first person they hired.

I enjoy asking that because, inevitably, whether that individual is still with them or not, they recall the first person they hired with incredible fondness.

For one thing, that person meant that the new venture was really a company. It was no longer just an individual trying to fulfill a dream.

And equally important, that first person they hired invariably shared their enthusiasm, their hope, and their optimism.

And that’s how the company started.

Then, maybe they lucked out and a couple of jobs came in at once. And they had to hire a number of people. And the enthusiasm was everywhere. It permeated the company.

Then something unexpected happened.

A few people left for greener pastures. And their seats were left empty.

Those empty chairs can become very scary for leaders. A sinking feeling can settle in, with the clamoring message that something is missing; efficiencies are being lost.

“That is a fear with which leaders need to comfortable,” Herb says.

Otherwise, they will become overly concerned and say something like, “We have to fill those seats quickly.”

And the worst thing that can happen is to fill that empty chair with the wrong person.

“It is much better to leave it empty,” Herb cautions.

Otherwise, the first pessimist will be hired. Then a critic will be brought on. Then someone will be hired who is just cynical and negative about everything. Then, one day, the leader will turn around and say, “Wait a minute. What happened to my company? Why has this become a nine-to-five place to work? Where’s the enthusiasm? The creativity? The energy? The optimism?”

Herb advises, “If we could leave you with just one message, it is to make sure that the next person you hire is an optimist.” Optimists change everything. They change what is possible. Optimists will confirm your best ideas about what your company can become.

“Let those chairs go empty until you come across your next optimist. They are worth waiting for—because they can help grow your company,” Herb adds.

But filling those chairs with pessimists will only bring you down. And they could literally bring your company down. Avoid the pessimists, the naysayers, and the critics. They are always out there. You do not have to pay to have them with you.

Instead, surround yourself with people who can lift you, and those around you. They make everything you do much more interesting; certainly, more fun; and they can open up unlimited possibilities.

Be at Least Slightly Provocative

When Herb and David were given the opportunity to write an article in the Harvard Business Review, they knew it could raise the profile of their company significantly. They were prepared to feature a study they had undertaken that demonstrated that applicants whom they evaluated as having sales potential significantly outperformed those whom they did not recommend.

In addition, they also saw it as an opportunity to be thought-provoking—if not outright provocative. That they paused in the midst of pursuing this opportunity made all the difference in the world for their fledgling company. Rather than just let their facts speak for themselves, they also challenged conventional wisdom. They were bringing a perspective—a unique point of view, which helped position them as experts.

Essentially, they said that when it comes to hiring, we are all trapped by the past. Experience is the first thing we look for, they noted. If there are two seemingly equally qualified candidates for a position and one has slightly more experience, the decision seems easy. Experience wins.

After all, they asked, how often have you come across someone who has 10 years of experience that is really just one year’s bad experience repeated 10 times?

To hire top performers, the first lesson is: Do not steal from your competitors. Unless you want them to thank you.

With that thought, Herb and David had moved beyond being academicians with a great new idea to become entrepreneurs who were challenging conventional wisdom.

This is an important lesson for an entrepreneur trying to distinguish him- or herself in a crowded field. Be willing to challenge those you are trying to help. Tell them they’ve been asleep at the wheel. Shake them out of their slumber. That is how you will get their attention. Even if people disagree with your provoking thoughts, at least they will become engaged. You will have their attention. Then things can happen.

How Have Your Thoughts Evolved?

With so many jobs requiring unique technical capabilities and expertise that can only be acquired over time, do you still believe that too much emphasis is based on experience in the hiring process?

“I absolutely do,” Herb says. “If it is an overstatement, it is only a slight one. Think about it for just a minute. When you’re putting together a help wanted ad, what’s the first thing you write? ‘Need a manager—or salesperson or whatever you are looking for—with at least one year experience.’ No. Wait a minute. This is a much more important job than that, let’s say, ‘Need five years experience.’ “

“Conventional wisdom is that an experienced individual will hit the ground running. But the price can be high for taking this easy road,” he adds.

The truth is, we have a tendency to think of experience in a way that is really too limiting. What we should be looking for is not direct experience, but transferable skills. It is not whether people have sold the same product or service before, but what have they carried with them? Are they able to initiate relationships easily? Can they get a client to open up? Do they know how to identify and solve problems? These are some of the transferable skills that can take an individual successfully from one position to another—and even from one career to another.

In the end, effective hiring has less to do with experience and more to do with potential.

“I’m not saying to forget about experience. Obviously it counts. But, as Aldous Huxley said so well, ‘Experience is not what happens to you . . . it’s what you do with what happens to you.’ “

Look for what applicants have learned from what they’ve done. How have their experiences altered their lives, formed their philosophies, and defined who they are?

The point is to look beyond the past. Look to the potential of applicants. Do they have the same qualities that distinguish your current top performers? That’s what you want to know. That’s the potential you’re looking for.”

Do You Trust Your Gut to Make
Important Decisions?

As leaders, we tend to pride ourselves on our ability to make decisions by trusting our guts. Do you trust your gut? How many times have you heard or said to yourself, “I’m going to go with my gut on this one”?

Just what is it about following our guts that helps us assess possible outcomes?

Have you ever stopped to think about what that phrase really means? Just consider for a moment that your gut is basically your intestines or stomach.

All in all, it’s not a very appealing way to go about making a decision.

It turns out that the nerve cells in our guts are stimulated when the brain releases stress hormones in response to an uncomfortable or frightening situation. It causes a physical reaction. This is the old fight-or-flight mechanism that has enabled us to survive since prehistoric times.

So it makes sense that if your “gut feeling” is that something is wrong, then, by all means, you should listen to it. Our gut reactions help us get out of dangerous situations, jams, and tight spots. Fair enough. That makes perfect sense.

However, what doesn’t make any sense is to decide we are going to make an important personal or business decision based solely on our gut telling us that this just “feels right.”

The anxious feeling we get in our gut (or the pit of our stomach) is there for the exact opposite purpose. Our gut reaction is not there to help us feel right. It is to help us avoid danger. It is there to tell us to run for the hills. If your gut says, “Get out of here,” then, by all means, listen. Stop, drop, and roll. Your gut is there to help you run away from or overcome your adversaries.

That is very different from making an informed business or personal decision about two very distinct possibilities. Our gut is not the body part we want to call upon for making a refined decision. This is where we want to call upon our intuition, which takes its signals from a unique blend of our emotions, experiences, hopes, and dreams.

When the stakes are high—and we don’t have to flee or fight—we should turn to our hearts and our minds, weigh all the information we have gathered, take time to feel, then reflect upon the possible outcomes, seek counsel from the people we have chosen to surround ourselves with, then walk away from the problem, sleep on it, and leave spaces in between for our subconscious to inform us.

When you are not on the run, and you have a really big decision to make, open yourself up to using all the resources you have available. Then tap into your inner wisdom and move forward.

Questions to Ask Yourself About Risk Taking