Garrett Mintz: We need to change how we approach business development

Over the past month, I have been obsessing and diving deeper into research from Daniel Kahneman and Amos Tversky—specifically Kahneman’s Prospect Theory (for which he won the Nobel Prize in Economic Sciences in 2002) and the two men’s research on loss aversion.

Despite this research being out for 20-plus years, I believe most sales and business development professionals are practicing outdated methodologies. Up until now, these professionals were able to achieve some semblance of results with brute-force tactics. They still race to see who can provide a product or service cheapest, or cycle through business development representatives instead of building relationships with prospects and then pass that prospect to someone else to try to get a deal signed. Or they are spending money on Google Ads or other ads with the hope of booking conversations.

With the tightening of spending by companies and increased private-equity scrutiny around how budgets are spent, I believe a gap is widening between business development professionals who understand this information and those who don’t.

And business development isn’t isolated to just professionals in sales. It includes anyone looking for a job, or trying to convince dotted-line team members to get their work done in the manner they want it, or any behavior change that one might want to see in another person.

Loss aversion is the concept that people will do more to avoid pain than to gain pleasure.

From a business perspective, this means professionals would rather do more to avoid getting fired than do something that could make them a hero and swiftly work up their company’s organizational hierarchy.

Here are some examples:

◗ Getting a company to purchase your consulting services

A company has decided it needs consulting services to improve performance and operational abilities. Company officials have a $100,000 budget for this service and have appointed a leader in the organization to decide which consulting company to go with.

Outdated perspectives would assume, “If I can deliver more than what they are asking for in my proposal and come in way under their budget, they would have no choice but to choose me and my consulting firm.”

That perspective would be wrong. Why?

Because the decision-maker in this scenario didn’t choose to pursue this consulting. In fact, if it were up to them, the company likely wouldn’t change anything about the way the business operates. Why? Because change represents time and energy, and as long as that decision-maker continues to get paid, they aren’t exactly motivated to change the way the company operates.

However, because the company appointed them to make a decision, it is essentially forcing this decision-maker’s hand. Company officials are essentially saying, “If you don’t make a change in this area, we will make a change for you.”

This decision-maker also doesn’t see a dime of savings from the budget allocated for this service.

The No. 1 factor the decision-maker is contemplating in terms of whom to hire for this consulting work is, “Who represents the least likelihood of getting me fired?”

That is it! And if they can get away with stalling the decision and ultimately get to no decision without putting their job at risk, that is their No. 1 option.

◗ Landing a job

This can also be applied to people seeking a job. If you are a candidate with a lot of experience AND you fall within budget, you are much more likely to land the position than someone who doesn’t. Taking a risk on a candidate you like but who doesn’t have the qualifications creates risk for the business. If that candidate fails or leaves, in a post-mortem, we can observe, “Were there flaws in our hiring process?”

◗ Getting a dotted-line team member (a team member who doesn’t directly report to you, but you need their work to get your work done) to change their behavior

The same holds true for getting a dotted-line team member to change the way in which they behave so you can get your work done more effectively. If you are waiting on another team member or an entire other department to get work done in a specific way, and they consistently come up short, elongating the time and energy it takes for you and your team to complete the work, your respective mid-level managers might jump in and try imploring their respective teams to be more amenable to the change but this oftentimes doesn’t happen. Why?

Because a mid-level manager isn’t going to fire a teammate for not adjusting their work output to make it easier for a team in a different department to get their work done. As long as the incentives and metrics they are being measured against are consistently achieved, it is really hard to achieve a behavior change.

However, if the person who wants to see the behavior change from the other team can quantify the financial impact this extra time and energy has on the bottom line and take that information to the CFO, and the CFO determines this minor behavior change from the other team is a much less painful adjustment than the financial costs of hiring an extra team member to account for this, you can bet the behavior change is about to be permanent.

Therefore, if we are business development professionals, we need to think differently about how we make ourselves more attractive to our prospects. This starts with understanding who feels the pain that you can relieve the most. It is then followed up with having high proximity to those decision-makers in an environment that shows off our knowledge and capabilities, but not in a way that seems like braggadocio; rather, in a humble way.•

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Mintz is founder of Ambition in Motion, a firm that helps companies increase employee engagement and collaboration by implementing corporate mentor programs.