Having a third-party vision of your business can sometimes be helpful. Having somebody that would take a step back and take a look at your company to see if you have things figured can be a way to know the holes in your business plan. That is the beauty of consulting. Former CEO of Picture Tel, Lew Jaffe, shares how consulting helped his previous company to grow. A philanthropist, professor, and executive coach, Lew reveals the approach to take to get clients to consult, the ways to continue delivering value to your clients, and the best practices to implement to see better results.
I’m very excited to have Lew Jaffe joining us. Lew, welcome.
Thanks for having me.
Lew, for those who don’t know you, take a moment and explain what you do.
I have what I refer to as a portfolio career. I do a lot of things. I’m going to do a takeoff of a great line from Iron Man. When someone asks Tony Stark who he is, he says, “Billionaire, genius, philanthropist, playboy.” I am a former CEO, but I’m a clinical professor, coach, futurist, philanthropist, and board member. I’ve got a lot of different balls in the air, which is cool because it gives me multiple perspectives where I can help my clients, my boards and my students. It’s well-positioned at this stage in my life.
I’ve been looking forward to this interview for exactly that reason. You bring an interesting perspective to business growth because you’ve been a CEO of multiple companies, professor, executive coach, consultant and everything else that you’re doing. Let’s go back a little bit first and start at the beginning. How did you first get into business and entrepreneurship?You've got to create buyers because that's where value creation is. Click To Tweet
Out of college, I worked for Intel Corporation back when it was a small corporation. I’m a tech guy. When I was eight years old, my parents took us to the World’s Fair in New York. I saw a video phone. I said, “One day, that’s what I’m going to do.” I am now considered to be the godfather of video conferencing because my company, PictureTel, was the first company to do video conferencing over public telephone lines. I am unusual that I knew what I wanted to do and it was surrounding myself with the best and smartest people to help me achieve it because business is about people. It’s not about doing it yourself.
You started PictureTel. You’re the godfather of video conferencing. This was before Skype and Zoom, all other stuff. How did you go about getting clients for that business?
I’m a firm believer in there has to be a product market fit and that’s now hindsight looking backwards. There was pent up demand because people have been talking about the concept forever. The fact that we were able to do it and especially large companies that were globally disparate thought it would be a great thing to have. They were using basically television where large companies would hold corporate meetings and they were outrageously expensive. Instead of public telephone lines, they are using a very purpose-built network telephone that is called tie lines, which were outrageously expensive and they would go to television studios. There was a pent-up demand for somebody who could do it and we recognize that pent up demand. We tapped into our marketing folks and we talked to the TV stations that were doing this as a business so we knew who the customers were and we went to them with a better alternative.
Some people might go, “That makes sense. You are in the right place at the right time. People wanted what you had,” but you still had to get into the front door. You still have to be able to set up an actual meeting and make your pitch or have that initial conversation. That’s an area that a lot of consultants struggle with. Was it as simple as picking up the phone and saying, “I want to come and show you what we have,” or was it a little bit more challenging than that?
All of the above. I was very fortunate that I had a great mentor, who once told me something. He said, “Everything you do every day in life, you’re in sales. Accept the fact that you’re selling and now I want you to stop selling.” The idea is you’ve got to create buyers because that’s where value creation is. If you look at the public markets, when they’re selling, the pressure price goes down and when they’re buying, the price goes up. We told stories and we made some mistakes. Our story was, “You can now go around the world without ever leaving your office.” It’s a phenomenal story. You can see your customers, your clients, your partners, your vendors and you don’t have to travel constantly.
The mistake we made was we sold on a budget, “You don’t have to get on an airplane. Think about all the money you can save. You’re going to save money by doing video.” What we learned was that got some of our sales, the video actually enhanced the travel. It didn’t replace travel. We created our own problem because often people would look for an ROI out of their travel budget. The lesson out of that is messaging because if you point somebody down, here’s where you’re going to get your ROI and you limit it to that one area, it’s hard to convince them, but there are ten other intrinsic values. Telling the story where you show all the intrinsic value and let people come to their own conclusion as opposed to we put an end to a conclusion.
Rather than sitting in your office and coming up with the perfect messaging, getting out there and testing your messaging and validating what you initially believed to be the best approach, which may be later turn out not to be the most effective. The act of getting out of the office rather than thinking, planning and having conversations with your actual ideal clients and buyers, that’s what ultimately made the difference and allowed you to acquire that realization?
100% because you can’t put four engineers or eight engineers or ten engineers in a room because we have a tendency of if we will build it, they will come. We changed our philosophy into what we called CCD, customer-driven design. We’ve got customers more involved in telling us the features and the functions that they wanted, which is also a fine line because you better understand not just what they want but what they want to pay for. We’re getting users involved in the experience. We created this thing called the APUG, PictureTel User Group. We help our users talk to each other to create better use cases, better workflows, so we could take that information back to new potential customers and show them all the value. In the beginning, in the early stages, we were a little too inwardly-focused. We had a couple of more mentors and possibly great consultants that would show us a different path because we ended up changing more often than not evolutionary as opposed to tectonic. We’d learn something and then we’d make a change based on what we’ve learned, but it was very inwardly-focused at the beginning.
We fixed that over time, which is why we became the largest in the industry. Ultimately we sold, but looking outside was important and having people help us. This is the real beauty of consulting. I use the expression “passionately dispassionate,” because a consultant doesn’t necessarily get caught up in your story. When I’m telling the PictureTel story and how we wanted to change the world, I’m blinded by my own passion. Having somebody to be able to take a step back and say, “Let’s marry your passion with someone else’s passion without being passionate in it.” It’s the old adage, “Don’t read your own headlines. They may not be true.” Having sometimes that third-party vision was incredibly helpful.
I definitely want to come back to that because you’ve had the opportunity. You’ve been in the buyer’s shoes, buying consulting services in some of the companies that you’ve run. Let’s now shift from you building this product-based company to now selling executive coaching and consulting services. You went from products and fast forward many years later into services. Is the approach that you take to get clients as an executive coach and consultant different from what you did when you were running technology companies?
I would like to think I’m a little smarter now so the answer to that is yes. To me, all businesses are the same. Gain and retain customers profitably in order to create value. Whether you’re selling a product or a service, it’s like you have aspirin and your potential customer has a headache. It’s how do you get that aspirin in alignment with the headache, whether it be selling a product or selling a service. It’s the same thing. It’s how you package it, but it gets to product market fit. My product is me and so when I’m looking for clients or when clients come to me, I want to make sure what I bring to the party fits with what they want and what they’ll pay for.
What’s your approach now? What’s working for you right now to acquire new clients?People will only do business with us for three reasons: they know us, they like us, they trust us. Click To Tweet
I have the benefit of I’ve been a CEO. I know exactly what it’s like in there at their desk. I can pitch almost as a peer. That does give me somewhat of a difference. We’re all different. The key is to be importantly different. My importantly different is I’d been in your chair. I’d been up late Thursday night wondering if I’m making payroll tomorrow. I hear your pain. The other thing is talking about the ability to listen to what somebody’s problem is. Often, it’s easy to miss what the problem is or not understand the unintended consequences. With years of experience, you see where those consequences can occur and I try to help when I’m talking to clients and they describe their problem.
There’s a difference between what I refer to as input and outcome. I try to help a client and I give a lot away for free because I create value even before I ask them for money. I want them to see I’m focused on their issues and building a relationship. I might not be the right person for them. I’ve taken lots of golf lessons over my life and I had one early golf coach that said to me, “You need to tighten your grip.” I thought what he meant was to squeeze the club harder, but what he meant was turn my hand to the right. We didn’t speak the same language and it was problematic. I try to understand what the language of the person on the other side of the table is. When I understand their language, I can listen to what their outcomes are and then we can talk about the things you need to do to get there.
How do you approach getting a seat at the table?
Networking, you’ve got to be out there. I go to a lot of events. Sometimes I am fortunate enough, I do a fair amount of public speaking. I’m the guy at the front of the room, so that builds credibility. I have a presence online, LewJaffe.com, where I’m always posting videos. For example, I do this thing called Meme Mondays. There are all these great memes that go around the internet. I take one that I think is important to the business. I do a two-minute discussion on what it means to me, what I got out of it from a business perspective. People can comment on it. We share information. When you can have that conversation that you were in the center, that you’re trying to share and you’re trying to help them, they see the way you think. People only will do business with us for three reasons. They know us, they like us and they trust us. It’s a combination of I’m fortunate enough now having mileage. I’m known, but I continue to want to be known but also building trust. The best way to build trust is to give value to someone with no expectation.
Many consultants intrinsically understand the value of giving advice, but many people are also concerned about, “If I give too much, then will they still need me? Will they still have a need for my services and my expertise if I have already given them? Aren’t they going to take what I provide them and run off and try and do it themselves?” What’s your mindset around that?
If somebody is going to take what I give them and run it off and do it by themselves, I would never one of them as a client, to begin with, because they have no integrity. There’s a conversation around that. I don’t give all the keys to the kingdom. What I try to do when I’m giving is I try to have a conversation that’s thought-provoking. I say, “Have you ever thought of it this way?” and get their mind working because then they want to have discussions with me. I don’t go in to resolve someone’s problem because the truth is I may not know all the intricacies of their business. I want to have intelligent discussions and ask them, “Have they thought about it this way or that way?” and get them thinking or bringing other people into the conversation and helping them take their game to the next level. I do it more on coaching. A lot of people that do consulting go in, they fix the computer, they fix the software and they do the implementation. That’s not the kind of consulting I do. I started doing this four years ago when I sold my last company. I have a client that’s been with me for almost four years because we’re always talking about new things. We’re always exploring new things. He likes the way I helped them through a process of eliciting ideas or giving him perspective.
You’ve found a way to continue to deliver value for clients over the long-term. That’s a great source of business. Too many people focus on attracting new clients when they have opportunities just sitting at their feet with their current clients. What approach do you use or how do you ensure that you are providing value consistently for your clients so they want to stay with you for many years in this case?
We have conversations about outcomes. The question I ask on a regular basis, “How do you define success?” One of my closest friends, who was a very large turnaround consulting practice, has this amazing story. Somebody brought him in to help turn around the business. Within 48 hours of looking at the financials, he knew there was one division that was losing more money than all the other divisions were created. The simple answer is shut down the division. It’s a no-brainer. The man’s son was running that division so saying shut down that division exacerbated his problem. What is the outcome? If you understood the outcome, it’s “I get that but we have to figure out what do we do with my son because that’s important to me.” Understanding how somebody defines success, how somebody understands and defines what the outcome needs to be, then it’s easy to work backward and figure out, “These are the things we’re going to do and let’s check in.”
How often are you having that conversation with this client or in general with all of your clients that you work with over a longer period of time? Is it happening quarterly, monthly or weekly?
With all of my clients, I do what I refer to as a Quarterly Business Review, QBR, “On a quarterly basis, where’s your business?” That also helps me understand where there may be other opportunities. When I’m looking for other opportunities, I’m not even talking about me. I’m talking about how to improve that person’s business because maybe there’s somebody in my network that could help them. I’m not necessarily looking for me, I’m trying to add value to my client. There was a great book, Harvey Mackay’s Swim With Sharks Without Being Eaten Alive. He used a dead word. He said, “Save the Rolodex.” Young kids don’t know what a Rolodex is. It’s a contact list, but that’s the most valuable asset that we have. If I am bringing great people to my clients, whether it be bringing them a customer or bringing them a vendor or bringing them ideas, why would they ever not want to have me in their inner circle?
It’s not necessarily about me. The Quarterly Business Reviews help me get a full 360-degree view of their business as opposed to whatever issues we’re dealing with in our sessions. At some point in time, I’m always checking in. It’s something that I do that I don’t think a lot of the consultants do. I live in LA so sadly I spend an awful lot of time in a car unnecessarily. I will pick up the phone and check in with a client, “How’s it going? I was thinking of you. I saw this article or I heard this and it made me think.” It’s adding value in between our sessions, so they know and it is true, I care about their success and I care about them.The best way to build trust is to give value to someone with no expectation. Click To Tweet
It seems like a little phone call here or there, how that has such a big impact. I’ve seen this play out in many different situations. These days, a lot of people shy away from picking up the phone or sending a text message in certain cases like, “We’re going to email. I’m going to try and avoid checking in if I don’t need to because I don’t want to stir the pot or I don’t want to cause any issues.” The folks on value are such an important one.
One of the things I tell my MBA candidates all the time, “To the best of my knowledge, nobody has ever closed a deal on text, pick up the phone.” It’s not always easy and people are busy and I get it. My thing is I pick up the phone, they see there was a missed call and then I’ll send them a text message, “I was thinking about you.” That’s all they needed to know. I wasn’t asking for anything. I wasn’t upselling. I was there for them. That’s making sure all of your clients know that it is a relationship, it’s not transactional. If you were hired specifically, “We’re doing an implementation of this ERP system.” Maybe that’s a little more transactional. The type of work I do is holistically in the business. It’s helping the executives become a better executive.
Even the consultants who are selling ERP implementation or whatever it might be, there’s still a relationship behind that. That always needs to be valued. Let’s shift for a moment here, because you’ve also been on the other side of the table. You’ve been in the CEO seat leading teams and signing the check to hire consultants in the past. What have you seen? What have you experienced as maybe the most effective approach from a consultant to win your business? Maybe they didn’t even have a relationship with you or someone in your organization, but they made their way in and it left a mark on you.
I’m going to divide the question into two halves. The new person that I’d never done business with before, the first time they show up, they had done their homework.
What does the homework look like?
They know who my customers are. They know my corporate culture. They understand my place in the industry. They ask intelligent questions about my business and not, “What year were you started?” When I was growing up, it was annoying to do research because if you want to look up elephants in the eVersion of the encyclopedia and it was missing. You couldn’t find out about elephants, you had to go to deer or fox because the elephant was out. The answer to every silly question is on your phone. Don’t show up and ask silly questions because that means you didn’t do your homework. There is so much great information out there. Show up and ask intelligent questions. I’m a big fan of people that ask me how or why not when or where.
Give us a bit more example of the how part. What would that look like?
How did you realize that your customers are not giving you maximum value? What was the impetus of that thought? Because then we can engage in a conversation on how do we fix that problem or a conversation about, “I read that you did this acquisition.” When I was a chairman of the board of Benihana, we bought a restaurant chain and I named RA Sushi, because Benihana did not attract people in their twenties and early 30s. We bought an Asian-themed restaurant that was countercyclical. They had the same food products so we could get a lot of value out of it, but we got a different demographic so it wasn’t cannibalizing what we had.
Having the conversation about why didn’t you think that was important could lead to other kinds of things? Then you’d talk about, “Were you counterprogramming this? Have you ever thought about counterprogramming? Look at that particular community. Maybe in that community, they want a late happy hour as opposed to an early happy hour because it’s a later crowd.” We brought up the concept of counterprogramming. It’s asking that question and not like, “What year did you buy RA Sushi?” Anybody that comes in and asks me a question that they could have gotten without needing me in the room, I know that they’re looking for business, but I wonder if they were doing the deeper homework.
What other tips can you offer? Being on that side of the table, having a lot of consultants knocking at your door, what are some best practices that people could implement to see better results?
First and foremost, don’t ask the easy question. You can do your research. Number two, bring me some value right at the get-go, “I looked at your company and I was comparing it to these three companies and this is how I saw the difference. Am I understanding your company correctly?” They’re showing me they’ve been thinking about me, but they allow me the opportunity to say, “Maybe you want to look this way or this way.” All of a sudden, we’re engaging in the conversation. We’re building a relationship. Bring me something, bring some value right to the get-go whether I’m going to hire you or not. The truth of the matter is even if I don’t hire you, I respect you and I’ll probably going to refer you to somebody else. It’s not the meeting. It’s showing that you’re good at what you do. Maybe this deal’s not the right one for you, but there’s going to be a deal three months later or six months later. It’s not just the moment but if you show up prepared, the moment goes way better.Don't show up and ask silly questions because that means you didn't do your homework. Click To Tweet
Talk to us about follow up for a moment. Being on the CEO side, how did you feel when a consultant or a firm continued to reach out to you? Even after their first outreach that maybe landed no response for them, but they kept reaching out to you over and over again. Was that okay? Was that bad? How did you see that? How do you follow up for a consultant?
I’m going to go down the same path. If to follow up is adding value like, “We’re thinking of you, we saw this or here’s an opportunity. We’d love to bring you to speak at an event or we have this great speaker you may want to see, why don’t you come to visit us on such and such a date?” I love that. If I felt like I was a transaction, that’s when it goes horribly wrong. “We want to bring in some more people to meet you,” and do what? Tell me what you want to do. How are you bringing value to me and start the value chain as opposed to detracting the value chain, “I want more of your time?” What’s the quid pro quo? I’m not saying I’m all about quid pro. I’m about a relationship. Let it be two ways. Anybody that shows me they’re thinking about me and they want to help, always gets to the top of the pile. Anybody that is like, “I want to drink at your well,” goes to the bottom of the pile.
This is great advice. There are so much more than we can dive into here. We’re going to have to look at part two or have you come back on the show another time. I’m looking at your career. Your website says and you mentioned you’d created over $1 billion in shareholder value. You’ve been involved in multiple companies that have been sold. It’s clearly a very successful track record. Some people might wonder, “Lew has done very well for himself. Why not kick back and relax?” What keeps you going?
What keeps me going is I live a life of service. For any of the audience of this show, if I can add value to you, that’s what gets me out of bed in the morning. That’s why I accepted a professorship. That’s why I work with coaching. That’s why I’m a futurist because I’m helping people look down the road in making great things. I have been incredibly fortunate. I know I’ve been fortunate. It’s paying back. That’s what excites me. It’s helping others. If there’s something I can do for you or one of your readers, I’m here for them. If there’s an economic advantage to me, I’m all in. If there’s no economics, that’s fine too, because karma is an interesting thing. When you put favors in the favor bank, it doesn’t necessarily come back from exactly where you put it in, but you get a reputation for being a good person and that’s who other people want to do business with.
That’s such a great message there to end up this episode. I want to thank you for coming on and sharing some of your wisdom. We’re going to have to look at ways to continue that conversation so much more that we can dive into. I also want to make sure that people can learn more about you, your work, see some of your videos. Tell us where’s the best place for people to go to access all of that?
They can go to LewJaffe.com is my website. You get my email there as well. Write to me. I love having business conversations. I’m a student of business because I teach it, I need to learn constantly.
Lew, thank you so much for coming on.
Michael, thank you so much for having me. It’s been a pleasure and an honor.