Everyone who prospects in the selling business will experience call reluctance from time to time. Although there are several reasons, many experts say the primary ones can be broken down into two distinct categories: repeated failure and repeated rejection.
Repeated Failure
Atychiphobia: Fear of Failure Phobia
The first reason for call reluctance is the fear of repeated failure. This can happen when the salesperson attempts to schedule appointments with the contacts on a prospect list and is repeatedly turned down. When the salesperson continues to fail to schedule the appointment, the next contact becomes harder because of the increasing fear of failure.
Repeated Rejection
Agathoraphobia: Fear of Rejection Phobia (related to)
The second reason for call reluctance is the fear of rejection. When a salesperson calls on a prospect (by phone or in person), they will usually ask a series of probing questions. Often, the prospect may become defensive, negative, or will even cease communicating with the salesperson.
Following that response, many times the salesperson will feel rejected. Even though it is the product or service that is the subject of rejection, many salespeople will take it personally. Ultimately, the fear of being rejected may potentially stop the salesperson from prospecting (often ending their career).
Then what?
Way back in the day…I read a book called the Influence of Fear on Salesmen by Frank Budd. I was driven to this and other resources because I moved from being an independent producer to a sales manager.
Oddly enough, I discovered that it was not just me who was struggling with this issue. Many on our team were also experiencing the same problem. And, if I could point to one book and methodology that offered a turning point, it was Budd’s book and his message.
Budd’s antidote to fear boiled down to this: being authentic.
The definition of authenticity: undisputed credibility, genuineness, legitimacy, believability, the quality of being believable or trustworthy.
Enter the “Process”
Following a process methodology is: “Initially you may not trust me…but you may well trust my process” (which is a far more objective start). Demonstrating your process will really help to take the focus off of you and your product/service and highlight how you operate beneficially for them. That results in the rejection potential becoming more impartial and far more objective. Your process (MO) can be the major link in proving your authenticity and in lessening your fears.
If You Do Not Have a Process
It would not be too surprising. Even after all these years and a plethora of sales training programs, many do not include the step of demonstrating how you operate to your prospect’s benefit. Consequently, that step will be the first object to be evaluated. If that meets resistance…it’s your option to continue.
If you elect not proceed, walk away, and carry more confidence from having been completely authentic in presenting your factual process to the prospect. Over time, your fears can be replaced with confidence. That may be one of the keys for long term success in the selling business.
And finally, if you would be interested in a template of our process, please email me, and I will send you the “Tale of Two Interviews.”
As always…you decide.
Zillion Dollar Thinking
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Please visit me at ProducersWEB.com
Thursday, March 31, 2011
Wednesday, March 30, 2011
News Update: A Sticky Situation: Forensic Decisioning?
Zillion Dollar Thinking Post Dated 5-27-10
Now: BP execs could face manslaughter charges
By Brett Michael Dykes
In the first days of the BP oil disaster last year, one of the big questions of accountability (decisioning) was, "Could oil execs face criminal prosecution for the spill?"
Today Bloomberg is reporting that, according to three unnamed people "familiar with the matter," the Justice Department is considering whether it should charge certain BP executives with manslaughter for their roles in the lives lost to last summer's Deepwater Horizon explosion.
Reports Bloomberg:
Authorities are examining actions (decisions) by BP managers who worked both on the rig and onshore to determine whether they should be charged in connection with the workers' deaths, according to the people. Prosecutors have been looking at charges of involuntary manslaughter or seaman's manslaughter, which carries a more serious penalty of up to 10 years. The manslaughter investigation is focusing on decisions by BP managers leading up to the explosion that may have sacrificed safety in favor of speed and cost savings, one of the people said.
The report goes on to note that "investigators are scrutinizing e-mails and other documents to determine what BP officials and the company's drilling partners knew when they testified before Congress in June and whether they withheld information." Still, it's the opinion of many familiar with the case that gaining convictions against individuals could be extremely difficult.
But as we noted last year, David Uhlmann, who headed the Justice Department's environmental crimes unit under Clinton and Bush, said that he'd "be shocked if there were no criminal charges filed in this case. There are so many things that went wrong out there." Uhlmann said at the time that criminal proceedings would hinge on proof that the companies involved had willfully engaged in negligence of safety measures and knowingly violated drilling regulations.
ZDT Author’s Note: Decisions have consequences. Stay tuned.
Full Article and credits:
http://news.yahoo.com/s/yblog_thelookout/bp-execs-could-face-manslaughter-charges;_ylt=AssvpnmKdEHw2c49lnp1obdH2ocA;_ylu=X3oDMTQ4N29sOGN1BGFzc2V0A3libG9nX3RoZWxvb2tvdXQvMjAxMTAzMjkvYnAtZXhlY3MtY291bGQtZmFjZS1tYW5zbGF1Z2h0ZXItY2hhcmdlcwRjY29kZQNyYW5kb20EY3BvcwMxMARwb3MDMTAEc2VjA3luX3RvcF9zdG9yaWVzBHNsawNicGV4ZWNzY291bGQ-
Now: BP execs could face manslaughter charges
By Brett Michael Dykes
In the first days of the BP oil disaster last year, one of the big questions of accountability (decisioning) was, "Could oil execs face criminal prosecution for the spill?"
Today Bloomberg is reporting that, according to three unnamed people "familiar with the matter," the Justice Department is considering whether it should charge certain BP executives with manslaughter for their roles in the lives lost to last summer's Deepwater Horizon explosion.
Reports Bloomberg:
Authorities are examining actions (decisions) by BP managers who worked both on the rig and onshore to determine whether they should be charged in connection with the workers' deaths, according to the people. Prosecutors have been looking at charges of involuntary manslaughter or seaman's manslaughter, which carries a more serious penalty of up to 10 years. The manslaughter investigation is focusing on decisions by BP managers leading up to the explosion that may have sacrificed safety in favor of speed and cost savings, one of the people said.
The report goes on to note that "investigators are scrutinizing e-mails and other documents to determine what BP officials and the company's drilling partners knew when they testified before Congress in June and whether they withheld information." Still, it's the opinion of many familiar with the case that gaining convictions against individuals could be extremely difficult.
But as we noted last year, David Uhlmann, who headed the Justice Department's environmental crimes unit under Clinton and Bush, said that he'd "be shocked if there were no criminal charges filed in this case. There are so many things that went wrong out there." Uhlmann said at the time that criminal proceedings would hinge on proof that the companies involved had willfully engaged in negligence of safety measures and knowingly violated drilling regulations.
ZDT Author’s Note: Decisions have consequences. Stay tuned.
Full Article and credits:
http://news.yahoo.com/s/yblog_thelookout/bp-execs-could-face-manslaughter-charges;_ylt=AssvpnmKdEHw2c49lnp1obdH2ocA;_ylu=X3oDMTQ4N29sOGN1BGFzc2V0A3libG9nX3RoZWxvb2tvdXQvMjAxMTAzMjkvYnAtZXhlY3MtY291bGQtZmFjZS1tYW5zbGF1Z2h0ZXItY2hhcmdlcwRjY29kZQNyYW5kb20EY3BvcwMxMARwb3MDMTAEc2VjA3luX3RvcF9zdG9yaWVzBHNsawNicGV4ZWNzY291bGQ-
Tuesday, March 29, 2011
Deciding on SWOT
Strengths
Weaknesses
Opportunities
Threats
Although it is sometimes painful, revealing and probing, there is a reason that the SWOT exercise is now a standard program in most business and/or marketing planning software.
It works.
As a consultant, I have memorable associations of using this method. It cost me my first big assignment. But in retrospect, it was probably the best decision for both of us. It served as a compatibility devise. The company feared their weaknesses to the point of avoidance and dysfunction. And, I was able to discern that we could never have made it past the first quarter. It saved us both considerable time and money.
While our group relies on the four distinct steps of the MODELTM System, we routinely include the SWOT steps in the due diligence (first) phase. From experience (above), we would rather know, early on, if this exercise maintains or rejects them as legitimate prospects.
A different take: From SWOT to SQUAT?
As an acronym, SQUAT could stand for “Should the Question of Use work At this Time?” In other words, maybe the issue of timing should be one more seriously considered. Let’s say everything is looking good for the business on paper, but the accountants just called with some bad tax news creating a problem that will take time to solve with undetermined costs and consequences. Or, the proprietor’s wife just found out she has a potentially terminal illness. In many cases, these threats are not obvious or current, but still have the capacity to distract and affect results.
Whether it’s physical, mental or other, what is at stake here is to be aware and sensitive to the timing of the SWOT exercise, and to be considerate that this process could become a bombshell that could cost way more than if avoided in a particular case?
You decide.
Weaknesses
Opportunities
Threats
Although it is sometimes painful, revealing and probing, there is a reason that the SWOT exercise is now a standard program in most business and/or marketing planning software.
It works.
As a consultant, I have memorable associations of using this method. It cost me my first big assignment. But in retrospect, it was probably the best decision for both of us. It served as a compatibility devise. The company feared their weaknesses to the point of avoidance and dysfunction. And, I was able to discern that we could never have made it past the first quarter. It saved us both considerable time and money.
While our group relies on the four distinct steps of the MODELTM System, we routinely include the SWOT steps in the due diligence (first) phase. From experience (above), we would rather know, early on, if this exercise maintains or rejects them as legitimate prospects.
A different take: From SWOT to SQUAT?
As an acronym, SQUAT could stand for “Should the Question of Use work At this Time?” In other words, maybe the issue of timing should be one more seriously considered. Let’s say everything is looking good for the business on paper, but the accountants just called with some bad tax news creating a problem that will take time to solve with undetermined costs and consequences. Or, the proprietor’s wife just found out she has a potentially terminal illness. In many cases, these threats are not obvious or current, but still have the capacity to distract and affect results.
Whether it’s physical, mental or other, what is at stake here is to be aware and sensitive to the timing of the SWOT exercise, and to be considerate that this process could become a bombshell that could cost way more than if avoided in a particular case?
You decide.
Discovery Commitment Solution Action
Wednesday, March 23, 2011
Zillion Dollar Questions
“If con is the opposite of pro, is congress the opposite of progress?”
“If electricity comes from electrons, does morality come from morons?”
“Why is it that our children can't read a Bible in school, but they can in prison?”
“If electricity comes from electrons, does morality come from morons?”
“Why is it that our children can't read a Bible in school, but they can in prison?”
Tuesday, March 22, 2011
Deciding on a Mentor
Some say, advice is cheap. In my case it was free, yet it was some of the best wisdom I ever received. I was fortunate early in my career to meet a highly effective and influential professional executive. Routinely, he generously gave me the benefits of his experience and sage guidance at very critical times. Many of his directions were game changers.
Although he was vital to many successes, he also said “don’t stop with me.” He stressed repeatedly, that to be exceptional, one needs to have exceptional people in their circle to both advise in direction and assist in the execution of their plans. What that meant was that in spiritual matters, have a spiritual mentor…have a business mentor…and develop selected others that you are willing to trust and commit to.
Once chosen, each mentor should be held to the same MODEL. You will want to establish your own. My criteria was/is four steps:
Due Diligence - The deliberate search for expertise and relationship connections
Commitment - The continuing bond/responsibility that each party will vow to uphold
Solution - The definable positive production results of the association
Action - The constant challenge/encouragement that effective mentorship requires
Please see the post dated Friday, May 14, 2010: In the MODEL System
(The four primary words that fill each step of the MODELTM System)
Various other articles and perspectives on this subject:
http://www.breakfastwithfred.com/library/article/93/how-to-find-a-mentor/
http://www.thecoachingassociation.com/communication-choosing-effective-mentor/
http://ezinearticles.com/?The-Difference-Between-a-Coach,-Mentor,-and-Consultant?&id=1054218
Although he was vital to many successes, he also said “don’t stop with me.” He stressed repeatedly, that to be exceptional, one needs to have exceptional people in their circle to both advise in direction and assist in the execution of their plans. What that meant was that in spiritual matters, have a spiritual mentor…have a business mentor…and develop selected others that you are willing to trust and commit to.
Once chosen, each mentor should be held to the same MODEL. You will want to establish your own. My criteria was/is four steps:
Due Diligence - The deliberate search for expertise and relationship connections
Commitment - The continuing bond/responsibility that each party will vow to uphold
Solution - The definable positive production results of the association
Action - The constant challenge/encouragement that effective mentorship requires
Please see the post dated Friday, May 14, 2010: In the MODEL System
(The four primary words that fill each step of the MODELTM System)
Here’s the deal: Today, everything is at digital speed. It’s getting harder to gain objectivity and perspective. It’s also becoming more challenging to find people you can trust. You see the picture. Question is…would it make your life better and/or easier if you had specific mentors?
Transferable concept:
Decide on mentors.
Various other articles and perspectives on this subject:
http://www.breakfastwithfred.com/library/article/93/how-to-find-a-mentor/
http://www.thecoachingassociation.com/communication-choosing-effective-mentor/
http://ezinearticles.com/?The-Difference-Between-a-Coach,-Mentor,-and-Consultant?&id=1054218
Discovery Commitment Solution Action
Monday, March 21, 2011
If You Decide To Go Into Selling
The first thing to understand is that all selling has a degree of resistance, and some product/service categories are far more resistant than others. And for some, these levels of resistance can be high enough to affect or even derail their career.
Additionally, you will also need to consider the nature of what is being sold.
For example:
Tangible vs. Intangible products
Wholesale vs. Retail
Individuals vs. Groups
Direct vs. Indirect
Perishable vs. Non-perishable
High tech vs. No-tech
On and on…
And further…consider this:
Tangibles (which can be handled and demonstrated…usually products) are generally easier to sell than intangibles (which are often simply projections and/or ideas…usually services). Wants are easier to sell than needs. A one time purchase is easier to sell than a commitment to make a payment over a long schedule (e.g. insurance premium). Point of purchase (direct) is quicker to sell than through a (consultative) formal meeting/presentation. Then there is commission versus non-commission.
All this to say, after spending (investing) 30+ years in the selling profession, I want to turn the spotlight on to one league of selling because of its unique difficulties, professional requirements and narrow chances of success. Some even say that if one can succeed in this highly challenging field, they can succeed in most any of the others (as above). So, it’s worth considering these particulars:
It has been estimated that only half (or less) of the adult population may be suited to be in any phase of selling. Following that, less than ten percent actually make a living at selling over a long period of time. Then, when we inject the “resistance quotient” (above) into the equation, it surely gets to be a narrow field.
In terms of difficulty, the sector of selling individual life insurance is a very rejection oriented, difficult and complex profession. As a percentage, very few who enter this field of selling can or do make it for the long haul. Then from a designation perspective, the very elite category of the Million Dollar Round Table narrows that success even further…and then the real rarified air is gaining the badge of Life Member of the Million Dollar Round Table (some liken it to the Selling Hall of Fame). The criteria and persistence to get these titles is extraordinary. We are talking about roughly ½ of ½ percent of all those who may enter the selling business achieve these precise goals.
Here’s the challenge. If you do decide (and you are suited) to go into the business of selling, why not learn from the best (some say…Where the Eagles Flock)? Those who have made it to the top of their profession in the insurance and financial services business have to be considered as exceptional in their field.
As a heads up, today, they seem to be meeting and interacting at http://www.producersweb.com/. Check it out.
Since these pros go through the tough playing field of resistance (the highest) and yet persist and excel on a daily basis, I can think of no better place to start if you are considering a career in selling.
You decide.
Additionally, you will also need to consider the nature of what is being sold.
For example:
Tangible vs. Intangible products
Wholesale vs. Retail
Individuals vs. Groups
Direct vs. Indirect
Perishable vs. Non-perishable
High tech vs. No-tech
On and on…
And further…consider this:
Tangibles (which can be handled and demonstrated…usually products) are generally easier to sell than intangibles (which are often simply projections and/or ideas…usually services). Wants are easier to sell than needs. A one time purchase is easier to sell than a commitment to make a payment over a long schedule (e.g. insurance premium). Point of purchase (direct) is quicker to sell than through a (consultative) formal meeting/presentation. Then there is commission versus non-commission.
All this to say, after spending (investing) 30+ years in the selling profession, I want to turn the spotlight on to one league of selling because of its unique difficulties, professional requirements and narrow chances of success. Some even say that if one can succeed in this highly challenging field, they can succeed in most any of the others (as above). So, it’s worth considering these particulars:
It has been estimated that only half (or less) of the adult population may be suited to be in any phase of selling. Following that, less than ten percent actually make a living at selling over a long period of time. Then, when we inject the “resistance quotient” (above) into the equation, it surely gets to be a narrow field.
In terms of difficulty, the sector of selling individual life insurance is a very rejection oriented, difficult and complex profession. As a percentage, very few who enter this field of selling can or do make it for the long haul. Then from a designation perspective, the very elite category of the Million Dollar Round Table narrows that success even further…and then the real rarified air is gaining the badge of Life Member of the Million Dollar Round Table (some liken it to the Selling Hall of Fame). The criteria and persistence to get these titles is extraordinary. We are talking about roughly ½ of ½ percent of all those who may enter the selling business achieve these precise goals.
Here’s the challenge. If you do decide (and you are suited) to go into the business of selling, why not learn from the best (some say…Where the Eagles Flock)? Those who have made it to the top of their profession in the insurance and financial services business have to be considered as exceptional in their field.
As a heads up, today, they seem to be meeting and interacting at http://www.producersweb.com/. Check it out.
Since these pros go through the tough playing field of resistance (the highest) and yet persist and excel on a daily basis, I can think of no better place to start if you are considering a career in selling.
You decide.
Wednesday, March 16, 2011
Decisioning: Your Virtual Think Tank
Most of us may know of Thomas A. Edison as the genius who invented the light bulb, but did you know he also developed a system for inventing? He applied the wisdom of the old saying: "two heads are better than one.” Edison (a mastermind) was consistently ahead of his time. He brought together teams of people having different areas of expertise, and got them working together on problems and projects.
History says that he set up an "Invention Factory" (in New Jersey) and chose the best minds from around the world to join him. Over time, Edison and his Mastermind Groups were prolific in their production of ideas.
Forming Your Mastermind Group of Famous Advisors
Sometimes, circumstances will not allow you to build a Mastermind Group like Edison did. Maybe you live in a situation where there are very few people around you with the skills that will challenge you and encourage ideation.
You can still make use of the Mastermind principle to stimulate your own creativity and decision making ability. You do it by creating an “imaginary” group of experts. Even if you currently have a group supporting you, this concept could bring you countless additional benefits.
The advantage of this concept is that you get to purposely choose all your heroes and mentors, whether they are living famously today, or they are a celebrity achiever from yesteryear. It will be your decision whether you want Jesus, Gates, Shakespeare, Disney, Churchill, or Elvis as part of your Mastermind group.
You are not limited by how many are on your inner team, and you can always form different Mastermind groups for different purposes. You can design the group that specializes in your chosen area of interest.
Due Diligence of the Members
If you don't currently know very much about your selected team members, you should get to know them. The net is the quickest source of information. The point of all this is that you want to get all the research and information you can about that member.
How many people should be in your internal mastermind group? The experts supporting this concept recommend between three and twelve members…maybe six as an average.
Once you have chosen your unique team, you can also create an imaginary meeting place. Wherever it is, make it extraordinary to you. From a famous boardroom to a secluded restaurant (with food), you may get real creative here depending on the nature of the challenge or goal.
How you organize your meeting is up to you. Set a purpose for each meeting. state your case, and then let each personality contribute. Don't be surprised if after a while these meetings take on a life of their own. Now, you have created your own “Virtual Dream Team.”
The goal: Use the power of your Mastermind Groups to improve your creative power, productivity and prosperity, and most importantly…your decisioning!
It could be game changing...you decide.
History says that he set up an "Invention Factory" (in New Jersey) and chose the best minds from around the world to join him. Over time, Edison and his Mastermind Groups were prolific in their production of ideas.
Forming Your Mastermind Group of Famous Advisors
Sometimes, circumstances will not allow you to build a Mastermind Group like Edison did. Maybe you live in a situation where there are very few people around you with the skills that will challenge you and encourage ideation.
You can still make use of the Mastermind principle to stimulate your own creativity and decision making ability. You do it by creating an “imaginary” group of experts. Even if you currently have a group supporting you, this concept could bring you countless additional benefits.
The advantage of this concept is that you get to purposely choose all your heroes and mentors, whether they are living famously today, or they are a celebrity achiever from yesteryear. It will be your decision whether you want Jesus, Gates, Shakespeare, Disney, Churchill, or Elvis as part of your Mastermind group.
You are not limited by how many are on your inner team, and you can always form different Mastermind groups for different purposes. You can design the group that specializes in your chosen area of interest.
Due Diligence of the Members
If you don't currently know very much about your selected team members, you should get to know them. The net is the quickest source of information. The point of all this is that you want to get all the research and information you can about that member.
How many people should be in your internal mastermind group? The experts supporting this concept recommend between three and twelve members…maybe six as an average.
Once you have chosen your unique team, you can also create an imaginary meeting place. Wherever it is, make it extraordinary to you. From a famous boardroom to a secluded restaurant (with food), you may get real creative here depending on the nature of the challenge or goal.
How you organize your meeting is up to you. Set a purpose for each meeting. state your case, and then let each personality contribute. Don't be surprised if after a while these meetings take on a life of their own. Now, you have created your own “Virtual Dream Team.”
The goal: Use the power of your Mastermind Groups to improve your creative power, productivity and prosperity, and most importantly…your decisioning!
It could be game changing...you decide.
Friday, March 11, 2011
Attributes of a Critical (Zillion Dollar) Thinker
From some of the experts who follow and report on this subject, the following are primary traits of critical thinkers…
They:
Ask pertinent and penetrating questions
Assess statements and arguments through due diligence
Are able to admit a lack of understanding or information
Are interested in finding the most fitting solution
Are able to clearly define a set of criteria for analyzing ideas
Are willing to examine beliefs, assumptions, and opinions and weigh them against facts
Listen carefully to others and are able to give feedback
See that critical thinking is a lifelong process
Suspend judgment until all facts have been gathered and assessed
Look for evidence and proof to support their assumptions and beliefs
Examine and analyze problems closely
Are willing to reject information that is incorrect or irrelevant
Please add or comment. We would welcome your critical thoughts.
They:
Ask pertinent and penetrating questions
Assess statements and arguments through due diligence
Are able to admit a lack of understanding or information
Are interested in finding the most fitting solution
Are able to clearly define a set of criteria for analyzing ideas
Are willing to examine beliefs, assumptions, and opinions and weigh them against facts
Listen carefully to others and are able to give feedback
See that critical thinking is a lifelong process
Suspend judgment until all facts have been gathered and assessed
Look for evidence and proof to support their assumptions and beliefs
Examine and analyze problems closely
Are willing to reject information that is incorrect or irrelevant
Please add or comment. We would welcome your critical thoughts.
Tuesday, March 8, 2011
What Color is Your Decision?
PEOPLE WHO SEE THE WORLD AS BLACK AND WHITE TEND TO...
Speak their mind or make quick decisions.
Be more predictable in making decisions (e.g., who they vote for).
Be less anxious about making wrong choices.
Have relationship conflicts that are less drawn out.
Be less likely to consider others' points of view.
PEOPLE WHO SEE THE WORLD IN SHADES OF GRAY TEND TO....
Procrastinate or avoid making decisions if possible.
Feel more regret after making decisions.
Be thoughtful about making the right choice.
Stay longer in unhappy relationships.
Appreciate multiple points of view.
Seeing the world as black and white, in which choices seem clear, or shades of gray can affect people's path in life, from jobs and relationships to which political candidate they vote for, researchers say. People who often have conflicting feelings about situations—the shades-of-gray thinkers—have more of what psychologists call ambivalence, while those who tend toward unequivocal views have less ambivalence.
High ambivalence may be useful in some situations, and low ambivalence in others, researchers say. And although people don't fall neatly into one camp or the other, in general, individuals who tend toward ambivalence do so fairly consistently across different areas of their lives.
One of the most widely studied aspects of ambivalence is how it affects thinking. Because of their strongly positive or strongly negative views, black-and-white thinkers tend to be quicker at making decisions than highly ambivalent people. But if they get mired in one point of view and can't see others, black-and-white thinking may prompt conflict with others or unhealthy thoughts or behaviors.
Ambivalent people, on the other hand, tend to systematically evaluate all sides of an argument before coming to a decision. They scrutinize carefully the evidence that is presented to them, making lists of pros and cons, and rejecting overly simplified information.
For full article and credits:
http://online.wsj.com/article/SB10001424052748703694204575518200704692936.html?mod=WSJ_hp_mostpop_read
ZDT Author’s Comments:
Interesting...
Speak their mind or make quick decisions.
Be more predictable in making decisions (e.g., who they vote for).
Be less anxious about making wrong choices.
Have relationship conflicts that are less drawn out.
Be less likely to consider others' points of view.
PEOPLE WHO SEE THE WORLD IN SHADES OF GRAY TEND TO....
Procrastinate or avoid making decisions if possible.
Feel more regret after making decisions.
Be thoughtful about making the right choice.
Stay longer in unhappy relationships.
Appreciate multiple points of view.
Seeing the world as black and white, in which choices seem clear, or shades of gray can affect people's path in life, from jobs and relationships to which political candidate they vote for, researchers say. People who often have conflicting feelings about situations—the shades-of-gray thinkers—have more of what psychologists call ambivalence, while those who tend toward unequivocal views have less ambivalence.
High ambivalence may be useful in some situations, and low ambivalence in others, researchers say. And although people don't fall neatly into one camp or the other, in general, individuals who tend toward ambivalence do so fairly consistently across different areas of their lives.
One of the most widely studied aspects of ambivalence is how it affects thinking. Because of their strongly positive or strongly negative views, black-and-white thinkers tend to be quicker at making decisions than highly ambivalent people. But if they get mired in one point of view and can't see others, black-and-white thinking may prompt conflict with others or unhealthy thoughts or behaviors.
Ambivalent people, on the other hand, tend to systematically evaluate all sides of an argument before coming to a decision. They scrutinize carefully the evidence that is presented to them, making lists of pros and cons, and rejecting overly simplified information.
For full article and credits:
http://online.wsj.com/article/SB10001424052748703694204575518200704692936.html?mod=WSJ_hp_mostpop_read
ZDT Author’s Comments:
Interesting...
Monday, March 7, 2011
You Decide.
Win: The Principles That Take Your Business from Ordinary to Extraordinary
In his new book, Frank Luntz emphasizes the eleven words in 2011 he deems significant. He frames these around “Words matter.” He further states:
“The most powerful words have helped launch social movements and cultural revolutions. The most effective words have instigated great change in public policy. The right words at the right time can literally change history.
Most of you know me as a wordsmith. From time to time my memos and language guides have appeared on these pages -- sometimes with my blessings and sometimes against my will. I realize that my work is often controversial, and often you like to attack the messenger, but it's the message that matters.
For those who care about words, I'm going to make it easy for you. No need to dig through my trash or shuffle through my papers. I will voluntarily open up my computer files to give you the "11 for 11"... the 11 most powerful words and phrases for 2011. This comes straight from my new book.
These are the phrases that you should or would be hearing if the political leaders were listening and communicating effectively. These are the words that matter most in business, politics, the media and culture:
"Imagine" is still the most powerful word in the English language because it is inspiring, motivating, and has a unique definition for each person. When you want to inspire, imagine is the language vehicle.
"No excuses" Of all the messages used by America's business and political elite, no phrase better conveys accountability, responsibility and transparency. This phrase generates immediate respect and appreciation.
"I get it" This explains not only a complete understanding of the situation but also a willingness to solve or resolve the situation. It's short, sweet and effective -- and too few leaders use it.
"If you remember only one thing..." is the surest way to guarantee that voters will remember the one point that matters most to you. This is essential in complicated situations like the upcoming debt ceiling vote.
"Uncompromising integrity" Of all the truthiness words, none is as powerful as "integrity," but in today's cynical environment, even that's not enough. People also need to feel that your integrity is absolute.
"The simple truth" comes straight from billionaire businessman Steve Wynn, and it sets the context for a straightforward discussion that might otherwise be confusing or contentious. It's the perfect phrase to begin and end the budget-deficit-debt debate.
"Believe in better" comes from BSkyB, the satellite television provider owned in part by Rupert Murdoch's Newscorp Empire. Of all the corporate mission statements of the Fortune 100, "believe in better" is the second-most popular -- and it applies to politics as well. People don't want quantity. They want quality.
"Real-time" This is not a pitch for Bill Maher. Many American were furious that they couldn't get the details of the health-care legislation in a timely fashion. "Real-time" communicates receiving information at the speed of life.
"You decide."
No, this is not paying homage to Fox News. The lesson of 2010 is that Americans want control of their lives back, and they don't want Washington or Wall Street (or anyone else) making their decisions for them. So add the phrase "you're in control" and you've said exactly what Americans want to hear.
"You deserve." This comes from DNC Chairman Tim Kaine and it was first employed by him in his highly praised 2006 SOTU response. It tells voters precisely what they should expect from their politicians and their government.
"Let's get to work" was employed by Florida Governor Rick Scott in his successful campaign. No other end-of-speech rallying cry is more motivational to voters.
These are 11 phrases that will be shaping the public discourse over the coming year. You won't find a similar list from a liberal wordsmith (there aren't any) so you might as well use these. And if you want the other 89 words and phrases that really matter, you'll just have to buy the book.”
Dr. Frank Luntz is the author of Win: The Principles That Take Your Business From Ordinary to Extraordinary. His two previous books have been New York Times Bestsellers. http://news.yahoo.com/s/huffpost/20110301/cm_huffpost/829603_201103011002
ZDT Author’s Notes:
Good on Frank. Of course we have been preaching this concept for years. It is amazing that, in this threatening environment, wordsmiths and others are now emphasizing the importance of decisioning (e.g. Decision Points By George W. Bush).
Bottom line is that decisioning will never go out of style. On the contrary, decisions will only gain in significance in every year ahead. And, that will be true, no matter who has to make them? So, instead of being a number in the middle of the pack, decisioning should be at the very top of any category.
Why?
The effect of any and every decision will have current and/or lasting consequences for each of us. There really is no substitute for decisions and the freedom to make and execute them. From the growing weight of personal decisions to the decisions of world leaders that will affect all of us…decisions will rule.
Our ZDT consistent mantra is that we need all the help (personally and corporately) we can get because the stakes are getting higher by the day.
You decide.
In his new book, Frank Luntz emphasizes the eleven words in 2011 he deems significant. He frames these around “Words matter.” He further states:
“The most powerful words have helped launch social movements and cultural revolutions. The most effective words have instigated great change in public policy. The right words at the right time can literally change history.
Most of you know me as a wordsmith. From time to time my memos and language guides have appeared on these pages -- sometimes with my blessings and sometimes against my will. I realize that my work is often controversial, and often you like to attack the messenger, but it's the message that matters.
For those who care about words, I'm going to make it easy for you. No need to dig through my trash or shuffle through my papers. I will voluntarily open up my computer files to give you the "11 for 11"... the 11 most powerful words and phrases for 2011. This comes straight from my new book.
These are the phrases that you should or would be hearing if the political leaders were listening and communicating effectively. These are the words that matter most in business, politics, the media and culture:
"Imagine" is still the most powerful word in the English language because it is inspiring, motivating, and has a unique definition for each person. When you want to inspire, imagine is the language vehicle.
"No excuses" Of all the messages used by America's business and political elite, no phrase better conveys accountability, responsibility and transparency. This phrase generates immediate respect and appreciation.
"I get it" This explains not only a complete understanding of the situation but also a willingness to solve or resolve the situation. It's short, sweet and effective -- and too few leaders use it.
"If you remember only one thing..." is the surest way to guarantee that voters will remember the one point that matters most to you. This is essential in complicated situations like the upcoming debt ceiling vote.
"Uncompromising integrity" Of all the truthiness words, none is as powerful as "integrity," but in today's cynical environment, even that's not enough. People also need to feel that your integrity is absolute.
"The simple truth" comes straight from billionaire businessman Steve Wynn, and it sets the context for a straightforward discussion that might otherwise be confusing or contentious. It's the perfect phrase to begin and end the budget-deficit-debt debate.
"Believe in better" comes from BSkyB, the satellite television provider owned in part by Rupert Murdoch's Newscorp Empire. Of all the corporate mission statements of the Fortune 100, "believe in better" is the second-most popular -- and it applies to politics as well. People don't want quantity. They want quality.
"Real-time" This is not a pitch for Bill Maher. Many American were furious that they couldn't get the details of the health-care legislation in a timely fashion. "Real-time" communicates receiving information at the speed of life.
"You decide."
No, this is not paying homage to Fox News. The lesson of 2010 is that Americans want control of their lives back, and they don't want Washington or Wall Street (or anyone else) making their decisions for them. So add the phrase "you're in control" and you've said exactly what Americans want to hear.
"You deserve." This comes from DNC Chairman Tim Kaine and it was first employed by him in his highly praised 2006 SOTU response. It tells voters precisely what they should expect from their politicians and their government.
"Let's get to work" was employed by Florida Governor Rick Scott in his successful campaign. No other end-of-speech rallying cry is more motivational to voters.
These are 11 phrases that will be shaping the public discourse over the coming year. You won't find a similar list from a liberal wordsmith (there aren't any) so you might as well use these. And if you want the other 89 words and phrases that really matter, you'll just have to buy the book.”
Dr. Frank Luntz is the author of Win: The Principles That Take Your Business From Ordinary to Extraordinary. His two previous books have been New York Times Bestsellers. http://news.yahoo.com/s/huffpost/20110301/cm_huffpost/829603_201103011002
ZDT Author’s Notes:
Good on Frank. Of course we have been preaching this concept for years. It is amazing that, in this threatening environment, wordsmiths and others are now emphasizing the importance of decisioning (e.g. Decision Points By George W. Bush).
Bottom line is that decisioning will never go out of style. On the contrary, decisions will only gain in significance in every year ahead. And, that will be true, no matter who has to make them? So, instead of being a number in the middle of the pack, decisioning should be at the very top of any category.
Why?
The effect of any and every decision will have current and/or lasting consequences for each of us. There really is no substitute for decisions and the freedom to make and execute them. From the growing weight of personal decisions to the decisions of world leaders that will affect all of us…decisions will rule.
Our ZDT consistent mantra is that we need all the help (personally and corporately) we can get because the stakes are getting higher by the day.
You decide.
Thursday, March 3, 2011
Are You Paying Your Dues?
Sector: Due Diligence
Dues: Stated obligation; Payable when due.
Considering this bit of Wordsmithing, the key point is that due diligence is the first and most principal obligation to satisfy when making most any decision of substance.
Here’s the question: Before you make any important move, purchase or decision, can there be too much due diligence?
As an example…consider that you are about to buy a business (a typical small business in U.S.). What would be the minimum steps that you would impose on the acceptance or rejection of the deal? Try these for starters:
All Related Past/Present Records
1. Articles of Incorporation, Determination or Organization (or similar documents), including any amendments.
2. By-Laws, operating agreements, partnership agreements (general or limited) or similar documents, including any amendments thereto.
3. Minute Books, consents and resolutions (since inception) for Shareholders, Members, Board of Directors and any committees.
4. Schedule of officers, directors and committees of the Board of Directors.
5. Stock Books and Ledgers.
6. Shareholder agreements, proxies, voting trusts and similar agreements.
7. Agreements to purchase or re-purchase any class of security.
8. Agreements relating to registration or preemptive rights for any class of security.
9. From the current date, the following information:
(a) Number of, and record ownership of, outstanding shares (common and preferred);
(b) Number of shares held in treasury;
(c) Options, warrants and other rights outstanding, including detail of holders, grants, grant dates, exercises, unexercised, vesting schedules, strike price, fair market value on grant date, and acceleration or cash out events; and
(d) Ownership by officers, employees and directors.
10. Stock option plans and stock option, warrant and other similar stock purchase agreements.
11. Schedule of any DBA's and fictitious business names, and all filings and registrations.
12. Schedule of predecessor corporations or entities.
13. Offering materials and closing documents from prior financing.
14. All applications and permits for issuance/transfer of securities, including any Form D or similar federal or state forms.
15. List of jurisdictions (domestic and foreign) where the Company is (or should be qualified) to do business.
16. Schedule of locations (by street address, city, state and country) at which the Company has offices, conducts business or stores inventory or equipment, since inception.
17. Schedule of owned real property.
18. Schedule of leases and subleases for real property and facilities, including location, square footage, rent and lease term and renewal options.
19. Schedule of material suppliers and other third party service providers.
20. Schedule of property, key man, liability, and worker's comp insurance policies (including current and pending insurance carrier, policy limits, deductibles, retroactive premium adjustments and other special arrangements), and copies of all such insurance policies and contracts.
21. Press releases relating to the Company, its management or its products and services.
Intellectual Property
1. Schedule of owned or proprietary technology (including software, databases and systems).
2. Schedule and copies (if applicable) of the following (common law, registered and issued, and foreign and domestic):
(a) tradenames, brand names, trademarks, service marks, logos and slogans;
(b) internet domain names (including lower level domain names);
(c). patents, patent rights, innovations and designs;
(d) copyrights;
(e) trade secrets and other industrial property rights, including all processes, know‑how, technical data and shop rights; and(f) registrations, issuances, applications, additions, affidavits, continuations, divisionals and other filings related to the foregoing items.
3. Copies of searches, counsel's opinion letters and application file histories (or file wrappers) for the items requested in the preceding Item 2.
4. Schedule of all material ongoing or planned software, databases and/or network development projects.
5. Schedule of third party intellectual property sold, licensed or otherwise distributed by the Company.
6. Schedule of third party software and other intellectual property incorporated in, embedded in or otherwise necessary for the use of the Company's intellectual property.
7. Product documentation and manuals for the Company’s software, databases and networks (or other description of primary capabilities).
8. Schedule of third party intellectual property necessary for the Company to conduct business in the ordinary course.
9. Schedule of software authors and other creators of the Company's software products and other intellectual property, with a notation next to each name indicating whether such author/creator made his/her contribution (a) as an employee within the scope of his/her employment, (b) outside his/her scope of employment or (c) as a consultant or other independent contractor.
10. The name(s), address(es) and phone number(s) of counsel and any other person(s) responsible for application, maintenance and protection of trademarks, copyrights, patents and other intellectual property rights.
11. Internal memoranda, correspondence and other documentation setting forth or relating to Year 2000 compliance of the operating codes, programs and other software, database, hardware and systems sold or licensed by or to the Company, or otherwise used by the Company in its business.
Material and Other Related Agreements
1. Agreements with customers and clients, including end‑user license agreements, beta test agreements, warranties and guarantees.
2. Consulting, development and work-for-hire agreements with, or for and on behalf of, customers and clients.
3. Web-site hosting and connectivity agreements.
4. Web-site linking, affiliate, co‑branding, promotional, advertising, content provider and other agreements relating to Companys e-commerce initiatives.
5. Electronic data interchange agreements and other Internet, electronic mail and on-line service agreements.
6. Trademark usage guidelines, privacy policy, terms of use, Aclick-wrap@ agreements and similar web site use agreements and policies.
7. Marketing agreements, distributorships, sales representatives, co-packaging, reseller (VAR), OEM, systems integrators, franchises and referral agreements.
8. Agreements with employees, independent contractors or other third parties relating to the development for or on behalf of the Company of software products, websites and other intellectual property.
9. Software escrow agreements or other arrangements providing third parties with source code access or use.
10. Independent software vendor agreements.
11. Agreements whereby the Company licenses software or other intellectual property from third parties, including run time licenses.
12. Agreements for software support and maintenance by or for the Company.
13. Assignments of software and other intellectual property rights.
14. Leases with respect to tangible personal properties (including equipment).
15. Agreements that involve the performance of services or delivery of goods or materials to the Company which are not terminable on 30 days prior notice without liability, or which contain provisions relating to ownership rights in intellectual property assets of the Company or the provider.
16. Joint ventures, joint development agreements and other working arrangements.
17. Non‑competition, exclusivity and non‑solicitation agreements, in favor of the Company or by which the Company is bound, or by which the Companys key employees or consultants may be bound to third parties.
18. Confidentiality, assignment of invention and similar agreements with employees, independent contractors and other service providers.
19. Other confidentiality and non‑disclosure agreements, in favor of the Company or by which the Company is bound.
20. Employment (including incentive and severance agreements), agency and independent contractor agreements.
21. Indemnification agreements for the benefit of officers, directors and employees.
22. Agreements or arrangements with management, employees, shareholders and other affiliates (including any loans or management fee arrangements), or with which any of them have a relationship.
23. Outstanding agreements or commitments for capital expenditures.
24. Agreements with investment bankers, brokers and similar advisors.
25. Inter-company agreements.
26. Leases and subleases (including all amendments, supplement and addendums).
27. Contracts, rights of first refusal or options to purchase, sell or lease real property.
28. Loan agreements, lines of credit, indentures and other debt instruments, including notes payable and guarantees (by or in favor of the Company), and any other agreements collateralized or secured by the assets.
29. Security agreements affecting assets or properties, and all currently-effective financing documents, such as sale and leasebacks and installment sales, and all liens and financing statements.
30. Agreements relating to past, current or proposed mergers, acquisitions or dispositions, including transactions involving subsidiaries, divisions, product lines and other substantial assets.
31. Powers of Attorney.
32. Consents and approvals required under law or contracts, leases, licenses and other agreements necessary for the Company to complete the present transaction.
33. Other material agreements to which the Company is bound or which are necessary for the conduct of the Companys business.
Personnel and Employee Benefits
1. Schedule of officers, directors, employees, independent contractors and consultants, and their respective titles, length of service, current compensation and benefits, compensation history since employment or engagement, and contractual severance obligations.
2. Schedule of employee benefit plans, including pension, bonus, commission, profit-sharing, stock option, deferred compensation, incentive, retirement, 401(k), medical, disability, salary continuation, executive benefit, fringe benefit, management perquisites or golden parachute/change-of-control payments (the "Plans").
3. Copies of Plan documents, trust agreements and insurance contracts (including all amendments and Section 125 arrangements) and summary plan descriptions.
4. IRS Form 5500's (including schedules and attachments) for past 2 years and most recent IRS determination letter.
5. Description of special insured arrangements (e.g., retrospective rating arrangement, premium delay, etc.).
6. Evidence of compliance with state or federal COBRA (including form of COBRA notice).
7. Copies of requests for audits of employees made by the U.S. Department of Labor, OSHA, OFCCP and any other federal, state or local agencies during the past 2 years, and documents summarizing the results of any such audits and any disposition of violation or citations issued as a result of such audits.
8. Policy and personnel manuals, including policies and procedures with respect to vacation and sick time, harassment and equal opportunity.
If the Company has more than 25 employees:
9. Information on confidentiality or non-competition agreements to which key employees and consultants may be a party currently or from prior employment or engagements.
10. Management perquisites or arrangements, contracts or loans between the Company and any shareholder, officer, director, employee or consultant or any entities or persons with which such persons have a relationship.
11. Any information on retiree welfare benefits other than COBRA or state continuation coverage requirements.
12. If there are at least 50 employees, evidence of compliance with FMLA.
If the Company has been in place for more than a short period:
13. Financial statements for any plan assets for the past two years and any actuarial statements for the past two years.
14. For welfare plans, an indication of premiums paid, claims incurred, claims paid, reserves and administrative expenses.
15. FAS disclosure statements for the past two years.
16. Any communications to or from any governmental or regulatory agency with respect to any plans.
If the Company or any affiliate of such Company (at an 80% ownership level) has entered into any collective bargaining agreements with a union:
1. Information with respect to any multi-employer plans that the Company or any affiliate has any obligation to contribute to or has had an obligation to contribute to during the past six years.
2. With respect to such multi-employer plans, the following: record of contributions for the last three years, calculation of potential withdrawal liability pursuant to ERISA Section 4221(c), and a description of pending claims against the employer for complete or partial withdrawal.
If there are affiliate companies (at an 80% ownership level):
1. Information with respect to any multi-employer plans that the Company or any affiliate has any obligation to contribute to or has had an obligation to contribute to during the past six years.
2. COBRA and HIPAA compliance information.
3. Any information on the transfer of plan liabilities from the Company to a related entity.
4. Any defined benefit pension plan maintained or transferred out of the controlled group at anytime within the prior six years.
Rights, Permits and Other Regulatory Matters
1. Filings, registrations, reports and correspondence filed with local, state or federal regulatory agencies (e.g., DOL, EEOC, IRS, PBGC, FDA, NLRB, OSHA, FCC, BXA and EPA), and any reports issued by such agencies.
2. Governmental licenses, permits, approvals and authorizations necessary to conduct business (including any export licenses).
3. Export classification matrix and other product classification analysis (internal or from third party suppliers of customers), and product classification rulings from the BXA.
4. Expert compliance procedures or manuals, including any procedures relating to encryption items.
5. Summary of the transport, use, handling, location, storage, treatment and/or disposal of any hazardous substances (including by any predecessor).
Litigation, Investigations and Other Disputes
1. Schedule and description of pending or threatened litigation, claims and other disputes.
2. Schedule and description of government, regulatory or administrative proceedings, inquiries or investigations.
3. Pleadings, filings and correspondence relating to the matters requested in the preceding Items 1 and 2.
4. Legal opinions rendered to the Company in the last 3 years.
5. Inquiries with respect to the Company’s rights or ownership in or to internet domain names.
6. Judgments, consent decrees, injunctions or other orders.
7. Settlement agreements.
8. Schedule of warranty claims.
General Financial Information
1. Previous (up to 3 years if available) annual audited / unaudited financial statements as well as interim period (monthly / quarterly) for current year.
2. Current prospective financial data (i.e., budgets / forecasts) with detail of assumptions.
3. External and internal auditors' reports (annual and quarterly), workpapers, permanent files, management letters and regulatory examination reports received / issued in the last 3 years.
4. Consolidating general ledger or trial balance for detailed accounts for the latest 2 fiscal years, current year quarters and stub period.
5. Schedule of prepaid expenses and other assets (e.g., deferred charges and intangibles) with related amortization methods.
6. Schedule of financing arrangements such as guarantees, pledges, factoring arrangements, credit lines, letters of credit, etc.
Cash, Investments and Other Financial Data
1. Latest annual and interim / current cash flow statements.
2. Detail of latest quarterly and monthly cash and cash equivalents balances.
3. Description of short-term and long-term investments and copies of investment statements for latest annual and interim periods.
Accounts Receivable
1. Schedule of accounts receivable by category for the latest annual and interim periods and comparable periods.
2. Credit policy and collection procedures.
3. Latest annual and interim period aging analysis and trends, allowance for uncollectible accounts and past write‑offs.
Property and Equipment
1. Fixed asset policy including depreciation methods and lives used for book and tax purposes.
2. Maintenance procedures and expenditures.
3. Schedule of fixed assets for the latest annual and interim periods including date acquired, original cost, accumulated depreciation, net book value and appraised value (include appraisals).
Purchased and Developed Software
1. Accounting policy for software development and purchased software.
2. Schedule of purchased and developed software as well as the amortization schedule and write-offs for the latest annual and interim periods.
Accounts Payable and Accrued Liabilities
1. Detailed schedule of accounts payable and accrued expenses for the latest annual and interim periods.
2. Schedule of the top 5 vendors from latest 12 month period.
3. Schedule of commitments to customers - product deliverables, consulting agreements, etc.
Revenues
1. Copies of the 5 largest contracts for the current year.
2. Description of the procedures for contracting and billing maintenance.
3. Detail of revenue for last 12 months.
4. Pipeline information.
5. Description of the sales force, including sales offices and service facilities, including compensation structure.
Product Expenses & Other Operating Expenses
1. Operating expense detail for the last annual period and latest comparative interim periods.
2. Listing of outside contractors.
3. Current year and future years budget of operating expenses compared to current year / interim actual results.
4. Detail listing of current and budgeted research and development expenditures.
5. Detailed schedule of general and administrative expenses and payroll expense.
Taxes
1. Schedule of states and local jurisdictions in which the Company currently files tax returns and pays taxes, including income, property (personal and real), payroll and sales and use taxes.
2. US Federal income tax returns for the past 2 years, and all state tax returns filed during the past 2 years.
3. Schedule of completed tax examinations/audits from the past 5 years and all tax examinations/audits in progress or scheduled to be performed. Include related correspondence and other written materials.
4. Description of the Company's use of and policies regarding independent contractors. With respect to long term contracts, include amount of payment in prior year.
Question: With this volume of due diligence required, do you still want to buy a business? It is a true test of your commitment to make that decision.
In decisioning, if approached with the greatest upside potential and the least downside, the right amount of due diligence is hard work. The greater point is that no matter what method, system or approach you use to make better decisions, provably, it must require detailed due diligence as the very first and most important requirement.
Botom line: The commitment to the proper amount of due diligence can spell the difference between the amateur and the professional.
Full article and credits:
http://www.astutediligence.com/Diligence_Checklists.htm
Dues: Stated obligation; Payable when due.
Considering this bit of Wordsmithing, the key point is that due diligence is the first and most principal obligation to satisfy when making most any decision of substance.
Here’s the question: Before you make any important move, purchase or decision, can there be too much due diligence?
As an example…consider that you are about to buy a business (a typical small business in U.S.). What would be the minimum steps that you would impose on the acceptance or rejection of the deal? Try these for starters:
All Related Past/Present Records
1. Articles of Incorporation, Determination or Organization (or similar documents), including any amendments.
2. By-Laws, operating agreements, partnership agreements (general or limited) or similar documents, including any amendments thereto.
3. Minute Books, consents and resolutions (since inception) for Shareholders, Members, Board of Directors and any committees.
4. Schedule of officers, directors and committees of the Board of Directors.
5. Stock Books and Ledgers.
6. Shareholder agreements, proxies, voting trusts and similar agreements.
7. Agreements to purchase or re-purchase any class of security.
8. Agreements relating to registration or preemptive rights for any class of security.
9. From the current date, the following information:
(a) Number of, and record ownership of, outstanding shares (common and preferred);
(b) Number of shares held in treasury;
(c) Options, warrants and other rights outstanding, including detail of holders, grants, grant dates, exercises, unexercised, vesting schedules, strike price, fair market value on grant date, and acceleration or cash out events; and
(d) Ownership by officers, employees and directors.
10. Stock option plans and stock option, warrant and other similar stock purchase agreements.
11. Schedule of any DBA's and fictitious business names, and all filings and registrations.
12. Schedule of predecessor corporations or entities.
13. Offering materials and closing documents from prior financing.
14. All applications and permits for issuance/transfer of securities, including any Form D or similar federal or state forms.
15. List of jurisdictions (domestic and foreign) where the Company is (or should be qualified) to do business.
16. Schedule of locations (by street address, city, state and country) at which the Company has offices, conducts business or stores inventory or equipment, since inception.
17. Schedule of owned real property.
18. Schedule of leases and subleases for real property and facilities, including location, square footage, rent and lease term and renewal options.
19. Schedule of material suppliers and other third party service providers.
20. Schedule of property, key man, liability, and worker's comp insurance policies (including current and pending insurance carrier, policy limits, deductibles, retroactive premium adjustments and other special arrangements), and copies of all such insurance policies and contracts.
21. Press releases relating to the Company, its management or its products and services.
Intellectual Property
1. Schedule of owned or proprietary technology (including software, databases and systems).
2. Schedule and copies (if applicable) of the following (common law, registered and issued, and foreign and domestic):
(a) tradenames, brand names, trademarks, service marks, logos and slogans;
(b) internet domain names (including lower level domain names);
(c). patents, patent rights, innovations and designs;
(d) copyrights;
(e) trade secrets and other industrial property rights, including all processes, know‑how, technical data and shop rights; and(f) registrations, issuances, applications, additions, affidavits, continuations, divisionals and other filings related to the foregoing items.
3. Copies of searches, counsel's opinion letters and application file histories (or file wrappers) for the items requested in the preceding Item 2.
4. Schedule of all material ongoing or planned software, databases and/or network development projects.
5. Schedule of third party intellectual property sold, licensed or otherwise distributed by the Company.
6. Schedule of third party software and other intellectual property incorporated in, embedded in or otherwise necessary for the use of the Company's intellectual property.
7. Product documentation and manuals for the Company’s software, databases and networks (or other description of primary capabilities).
8. Schedule of third party intellectual property necessary for the Company to conduct business in the ordinary course.
9. Schedule of software authors and other creators of the Company's software products and other intellectual property, with a notation next to each name indicating whether such author/creator made his/her contribution (a) as an employee within the scope of his/her employment, (b) outside his/her scope of employment or (c) as a consultant or other independent contractor.
10. The name(s), address(es) and phone number(s) of counsel and any other person(s) responsible for application, maintenance and protection of trademarks, copyrights, patents and other intellectual property rights.
11. Internal memoranda, correspondence and other documentation setting forth or relating to Year 2000 compliance of the operating codes, programs and other software, database, hardware and systems sold or licensed by or to the Company, or otherwise used by the Company in its business.
Material and Other Related Agreements
1. Agreements with customers and clients, including end‑user license agreements, beta test agreements, warranties and guarantees.
2. Consulting, development and work-for-hire agreements with, or for and on behalf of, customers and clients.
3. Web-site hosting and connectivity agreements.
4. Web-site linking, affiliate, co‑branding, promotional, advertising, content provider and other agreements relating to Companys e-commerce initiatives.
5. Electronic data interchange agreements and other Internet, electronic mail and on-line service agreements.
6. Trademark usage guidelines, privacy policy, terms of use, Aclick-wrap@ agreements and similar web site use agreements and policies.
7. Marketing agreements, distributorships, sales representatives, co-packaging, reseller (VAR), OEM, systems integrators, franchises and referral agreements.
8. Agreements with employees, independent contractors or other third parties relating to the development for or on behalf of the Company of software products, websites and other intellectual property.
9. Software escrow agreements or other arrangements providing third parties with source code access or use.
10. Independent software vendor agreements.
11. Agreements whereby the Company licenses software or other intellectual property from third parties, including run time licenses.
12. Agreements for software support and maintenance by or for the Company.
13. Assignments of software and other intellectual property rights.
14. Leases with respect to tangible personal properties (including equipment).
15. Agreements that involve the performance of services or delivery of goods or materials to the Company which are not terminable on 30 days prior notice without liability, or which contain provisions relating to ownership rights in intellectual property assets of the Company or the provider.
16. Joint ventures, joint development agreements and other working arrangements.
17. Non‑competition, exclusivity and non‑solicitation agreements, in favor of the Company or by which the Company is bound, or by which the Companys key employees or consultants may be bound to third parties.
18. Confidentiality, assignment of invention and similar agreements with employees, independent contractors and other service providers.
19. Other confidentiality and non‑disclosure agreements, in favor of the Company or by which the Company is bound.
20. Employment (including incentive and severance agreements), agency and independent contractor agreements.
21. Indemnification agreements for the benefit of officers, directors and employees.
22. Agreements or arrangements with management, employees, shareholders and other affiliates (including any loans or management fee arrangements), or with which any of them have a relationship.
23. Outstanding agreements or commitments for capital expenditures.
24. Agreements with investment bankers, brokers and similar advisors.
25. Inter-company agreements.
26. Leases and subleases (including all amendments, supplement and addendums).
27. Contracts, rights of first refusal or options to purchase, sell or lease real property.
28. Loan agreements, lines of credit, indentures and other debt instruments, including notes payable and guarantees (by or in favor of the Company), and any other agreements collateralized or secured by the assets.
29. Security agreements affecting assets or properties, and all currently-effective financing documents, such as sale and leasebacks and installment sales, and all liens and financing statements.
30. Agreements relating to past, current or proposed mergers, acquisitions or dispositions, including transactions involving subsidiaries, divisions, product lines and other substantial assets.
31. Powers of Attorney.
32. Consents and approvals required under law or contracts, leases, licenses and other agreements necessary for the Company to complete the present transaction.
33. Other material agreements to which the Company is bound or which are necessary for the conduct of the Companys business.
Personnel and Employee Benefits
1. Schedule of officers, directors, employees, independent contractors and consultants, and their respective titles, length of service, current compensation and benefits, compensation history since employment or engagement, and contractual severance obligations.
2. Schedule of employee benefit plans, including pension, bonus, commission, profit-sharing, stock option, deferred compensation, incentive, retirement, 401(k), medical, disability, salary continuation, executive benefit, fringe benefit, management perquisites or golden parachute/change-of-control payments (the "Plans").
3. Copies of Plan documents, trust agreements and insurance contracts (including all amendments and Section 125 arrangements) and summary plan descriptions.
4. IRS Form 5500's (including schedules and attachments) for past 2 years and most recent IRS determination letter.
5. Description of special insured arrangements (e.g., retrospective rating arrangement, premium delay, etc.).
6. Evidence of compliance with state or federal COBRA (including form of COBRA notice).
7. Copies of requests for audits of employees made by the U.S. Department of Labor, OSHA, OFCCP and any other federal, state or local agencies during the past 2 years, and documents summarizing the results of any such audits and any disposition of violation or citations issued as a result of such audits.
8. Policy and personnel manuals, including policies and procedures with respect to vacation and sick time, harassment and equal opportunity.
If the Company has more than 25 employees:
9. Information on confidentiality or non-competition agreements to which key employees and consultants may be a party currently or from prior employment or engagements.
10. Management perquisites or arrangements, contracts or loans between the Company and any shareholder, officer, director, employee or consultant or any entities or persons with which such persons have a relationship.
11. Any information on retiree welfare benefits other than COBRA or state continuation coverage requirements.
12. If there are at least 50 employees, evidence of compliance with FMLA.
If the Company has been in place for more than a short period:
13. Financial statements for any plan assets for the past two years and any actuarial statements for the past two years.
14. For welfare plans, an indication of premiums paid, claims incurred, claims paid, reserves and administrative expenses.
15. FAS disclosure statements for the past two years.
16. Any communications to or from any governmental or regulatory agency with respect to any plans.
If the Company or any affiliate of such Company (at an 80% ownership level) has entered into any collective bargaining agreements with a union:
1. Information with respect to any multi-employer plans that the Company or any affiliate has any obligation to contribute to or has had an obligation to contribute to during the past six years.
2. With respect to such multi-employer plans, the following: record of contributions for the last three years, calculation of potential withdrawal liability pursuant to ERISA Section 4221(c), and a description of pending claims against the employer for complete or partial withdrawal.
If there are affiliate companies (at an 80% ownership level):
1. Information with respect to any multi-employer plans that the Company or any affiliate has any obligation to contribute to or has had an obligation to contribute to during the past six years.
2. COBRA and HIPAA compliance information.
3. Any information on the transfer of plan liabilities from the Company to a related entity.
4. Any defined benefit pension plan maintained or transferred out of the controlled group at anytime within the prior six years.
Rights, Permits and Other Regulatory Matters
1. Filings, registrations, reports and correspondence filed with local, state or federal regulatory agencies (e.g., DOL, EEOC, IRS, PBGC, FDA, NLRB, OSHA, FCC, BXA and EPA), and any reports issued by such agencies.
2. Governmental licenses, permits, approvals and authorizations necessary to conduct business (including any export licenses).
3. Export classification matrix and other product classification analysis (internal or from third party suppliers of customers), and product classification rulings from the BXA.
4. Expert compliance procedures or manuals, including any procedures relating to encryption items.
5. Summary of the transport, use, handling, location, storage, treatment and/or disposal of any hazardous substances (including by any predecessor).
Litigation, Investigations and Other Disputes
1. Schedule and description of pending or threatened litigation, claims and other disputes.
2. Schedule and description of government, regulatory or administrative proceedings, inquiries or investigations.
3. Pleadings, filings and correspondence relating to the matters requested in the preceding Items 1 and 2.
4. Legal opinions rendered to the Company in the last 3 years.
5. Inquiries with respect to the Company’s rights or ownership in or to internet domain names.
6. Judgments, consent decrees, injunctions or other orders.
7. Settlement agreements.
8. Schedule of warranty claims.
General Financial Information
1. Previous (up to 3 years if available) annual audited / unaudited financial statements as well as interim period (monthly / quarterly) for current year.
2. Current prospective financial data (i.e., budgets / forecasts) with detail of assumptions.
3. External and internal auditors' reports (annual and quarterly), workpapers, permanent files, management letters and regulatory examination reports received / issued in the last 3 years.
4. Consolidating general ledger or trial balance for detailed accounts for the latest 2 fiscal years, current year quarters and stub period.
5. Schedule of prepaid expenses and other assets (e.g., deferred charges and intangibles) with related amortization methods.
6. Schedule of financing arrangements such as guarantees, pledges, factoring arrangements, credit lines, letters of credit, etc.
Cash, Investments and Other Financial Data
1. Latest annual and interim / current cash flow statements.
2. Detail of latest quarterly and monthly cash and cash equivalents balances.
3. Description of short-term and long-term investments and copies of investment statements for latest annual and interim periods.
Accounts Receivable
1. Schedule of accounts receivable by category for the latest annual and interim periods and comparable periods.
2. Credit policy and collection procedures.
3. Latest annual and interim period aging analysis and trends, allowance for uncollectible accounts and past write‑offs.
Property and Equipment
1. Fixed asset policy including depreciation methods and lives used for book and tax purposes.
2. Maintenance procedures and expenditures.
3. Schedule of fixed assets for the latest annual and interim periods including date acquired, original cost, accumulated depreciation, net book value and appraised value (include appraisals).
Purchased and Developed Software
1. Accounting policy for software development and purchased software.
2. Schedule of purchased and developed software as well as the amortization schedule and write-offs for the latest annual and interim periods.
Accounts Payable and Accrued Liabilities
1. Detailed schedule of accounts payable and accrued expenses for the latest annual and interim periods.
2. Schedule of the top 5 vendors from latest 12 month period.
3. Schedule of commitments to customers - product deliverables, consulting agreements, etc.
Revenues
1. Copies of the 5 largest contracts for the current year.
2. Description of the procedures for contracting and billing maintenance.
3. Detail of revenue for last 12 months.
4. Pipeline information.
5. Description of the sales force, including sales offices and service facilities, including compensation structure.
Product Expenses & Other Operating Expenses
1. Operating expense detail for the last annual period and latest comparative interim periods.
2. Listing of outside contractors.
3. Current year and future years budget of operating expenses compared to current year / interim actual results.
4. Detail listing of current and budgeted research and development expenditures.
5. Detailed schedule of general and administrative expenses and payroll expense.
Taxes
1. Schedule of states and local jurisdictions in which the Company currently files tax returns and pays taxes, including income, property (personal and real), payroll and sales and use taxes.
2. US Federal income tax returns for the past 2 years, and all state tax returns filed during the past 2 years.
3. Schedule of completed tax examinations/audits from the past 5 years and all tax examinations/audits in progress or scheduled to be performed. Include related correspondence and other written materials.
4. Description of the Company's use of and policies regarding independent contractors. With respect to long term contracts, include amount of payment in prior year.
Question: With this volume of due diligence required, do you still want to buy a business? It is a true test of your commitment to make that decision.
In decisioning, if approached with the greatest upside potential and the least downside, the right amount of due diligence is hard work. The greater point is that no matter what method, system or approach you use to make better decisions, provably, it must require detailed due diligence as the very first and most important requirement.
Botom line: The commitment to the proper amount of due diligence can spell the difference between the amateur and the professional.
Full article and credits:
http://www.astutediligence.com/Diligence_Checklists.htm
Tuesday, March 1, 2011
Zillion Dollar Thought
Average number of people airborne over the U.S.
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