mktg@msft

Grading on the Curve

I've gotten a few comments back, and followed links to more discussion about my previous post on Forced Ranking. Again, let me point out that Microsoft has no policy of "getting rid of the bottom tier". There are, however, many who "agree with grading on a curve."

Chris Anderson says "Ranking on a curve is a good thing. We live in a competitive world and having to compete for the promotion, raise, bonus, review score, is all part of it." He goes on to give some great reasons why managing poor performers is imparative (I think nobody disagrees with him there).

Paul Vick says: "I also believe pretty strongly in grading on the curve but I still have lots of reservations about it. That's because a curve can so easily be misused in a way that is damaging to employees, the company, or both. But the alternative, inevitable grade inflation, seems to be worse."

And John Moore speaks of "the dangers of running businesses by crude interpretations of numbers... how superficial metrics can cover a rich tapestry of human issues and guide businesses down crazy paths."

Lawler's article (free from strategy+business after registration) explains why a "normal distribution curve" doesn't work with a relatively small (less than at least several hundred) group of humans.

"Normal distributions consistently occur only when they involve random events and a large sample. This is not typical in companies. A large sample for statistical purposes means not 10, 20, 30, or even 100, but thousands of individuals. Further, in most work situations, each employee’s performance is a planned and controlled event. Individuals are not randomly placed in positions and expected to perform; they are carefully selected, trained, and motivated to do their jobs.

Because employee performance patterns in organizations often do not follow a normal distribution, identifying poor performers using a forced ranking system is fraught with difficulties. First, a very real danger exists that some satisfactory employees will be misidentified as poor performers. For example, some divisions, departments, or teams are always better staffed than others. In those areas, individuals who are satisfactory or even outstanding performers on a company-wide basis may be judged to be underperformers just because they happen to be among a group of very good employees. The right thing to do is to strengthen weak areas where there are a large number of poor performers by replacing them, rather than removing “the worst of the best” from areas dominated by high performers. Most forced distribution systems do not produce this result because every area, regardless of the quality of its employees and its performance, is required to make the same percentage of cuts."

Cranium's Secret Sauce

Almost famous! I was quoted in a piece that almost made it into Fast Company Magazine (one of my current personal goals). Of course, I had a passing mention as I shared my impressions of Richard Tait. (I'm just going to have to keep working on having something Heath or others find quote-worthy...) :)

From the Cutting Room Floor
It's not uncommon that articles get cut -- or that sidebars get dropped -- while we edit each monthly issue of Fast Company. If stories don't fit in the magazine and contain ideas still worth sharing, we usually try to publish them online in addition to the material in the magazine. In recent months, two Company of Friends news items were trimmed.

In one, members of the Seattle CoF meet with Richard Tait, Grand Pooh-Bah for the board game maker and Fast 50 winner Cranium, who shares the company's "secret sauce." And in the other, a CoF member and Fast Company reader based in Turkey explains the war in Iraq's economic impact on neighboring countries.

The "cut" article (worth repeating):

Play Date

Early this summer, about 70 Seattle Company of Friends members and Microsoft Corp. employees gathered in an auditorium on the company's Redmond, Washington, campus to meet with a business leader and innovator who'd left Microsoft in 1998. It was the first time Richard Tait, Grand Pooh-Bah for the board game maker Cranium -- and a 2002 Fast 50 winner -- had returned to visit the company since his departure to start his own company. Why'd he come back?

Tait returned to Microsoft to share his Fast 50 story with Fast Company readers -- and to outline what he calls Cranium's "secret sauce." He explained that Cranium's business activity is closely tied to its purpose (to lighten and enlighten), promise (fun moments and memories), and principles (clever, high quality, innovative, friendly, and fun). "His talk was inspiring and touching -- especially because the company was founded around the idea of creating moments," says John Porcaro, a Seattle CoF member and group manager in Microsoft's home and entertainment division.

Here are some of the ingredients that make up Cranium's "secret sauce":

Have a clear sense of mission. Make it relevant, easy to understand, and something that people are passionate about - and that they can rally around.

Create a culture and celebrate it every day. What makes your culture and organization special? What is the culture that can bring the mission to life? Reinforce that culture. Make it your own.

Don't be afraid to change the rules. In fact, encourage it. The best way to win a game can be to change how it is played. Support and celebrate well-calculated risks.

Hire for smarts and rent experience. Identify candidates for how they think, not what they know. We need folks who can adapt and change quickly. The best idea wins.

Focus on your core competencies. Know what you're good at. Don't burden or blur the organization's focus.

Your customers are your sales force. Cranium's success has been built on word of mouth as a marketing vehicle. Craniacs fuel our growth, and every interaction they have with the company must result in a sense of delight, enthusiasm, and pride.

Beware of the giant hairballs. Identify the issues and dynamics that could crater your business. Anticipate them and mitigate surprise.

Be a company with a heart. Give back as your company does well. The Cranium fund has given more than $700,000 to after-school arts programs for at-risk youth.

Lead by example. I try to lead with speed, passion, and a sense of discovery. Orville Wright did not have a pilot's license. Give employees the freedom and empowerment to embrace and apply those qualities.

The Real Goal of Marketing

I'm sad.

I just read Chris Sell's post called "The Real Goals of Marketing?" After spending lots of time on Chris's weblog, I can tell you I get the impression he knows a lot about marketing. I love that Chris has enough passion for our customers that he thought about a job in marketing.

When he asked a long-time friend about marketing, here's what he was told (and here's why I'm sad...):

""Marketing is not about giving the customer what he wants, or even finding out what the customer wants and trying to get engineering to create it. It's about trying to sell the customer what you already have -- whether that's product, talent, or pre-conceived notions. If the needs of a customer occasionally overlap with an actual product, that's merely random coincidence.

"Marketing people are customer-focused in the sense of always thinking about why customers aren't buying enough stuff, and how to get them to buy more. You're customer-focused in the sense of caring about what customers need, and helping them accomplish it, even if that doesn't result in selling anything.

"But don't take it so hard. It's not as if I said you were too honest to be a banker, or too smart to be a teacher. (God, what if girls thought you were too handsome to be sexy?)"

WRONG WRONG WRONG WRONG WRONG.

Problem is, lots of folks in the profession agree with the statements above. Too many still subscribe to the old "broadcast" model of marketing (throw out a message or product to enough people and a lot of it will stick).

But in focusing on understanding and meeting customer needs, marketing becomes a synergistic, simple proposition, a win-win partnership where you're exchanging value for value. A "marketplace" in the purest sense. I've seen far too much success when I was sincerely listening and meeting customer needs to ignore that doing it that way is the easiest way to make money, to sell product, to get visitors to websites, to drive demand.

Chris just nails it:

"My hope is that it's about taking a solution and letting folks that have the matching problem know so that you can trade your solution for their money and both consider yourselves lucky. Is this a naive view?"

No way is that naive. It's insightful and wise.

And for those of you among my marketing peers, please drop Chris a note to let him know how right he is. Folks like him cannot afford to listen to the wrong kinds of influences... :)

Spiritual Six Sigma

Brian Miller wonders if Six Sigma can be used in a non-traditional setting, like a church. I'm not any kind of expert here, but it was a fun exercise to see how flexible the concepts could be. The reason I think they're so relevant to marketing is that the underlying concepts are pretty simple.

Now remember, I'm not a Six Sigma expert, but here's what I remember off the top of my head.

Using the DMAIC process, we can go through the basic steps:

DEFINE: Start with really defining a problem (attendance, spirituality, contributions, obedience, engagement with scriptures, etc.). Is it a real problem? What would success look like? What's critical to the customer about what you're trying to improve?

MEASURE: Could you put it into a goal that's attainable but challenging? Make it something that can be measured, very exactly. Number of members attending 3x a month, or donation per member, or number of pages of scripture read by member per month?

ANALYZE: Why is the problem occurring? Use "5 why's" to get to the real root of the problem. Again, what's critical to the customer? If it's attendance, why are people staying home? Because they have better things to do on a Sunday? Why? Because watching baseball is more exciting than sitting in a sermon? Why? Because baseball provides social stimulation? It's exciting? Folks don't have to dress up? Etc. Get to the root of the customer expectations.

IMPROVE: The easy part, once you've really found the problem. Map out the process to find out every relevant step taken in the existing process. What one thing could you do to solve the underlying problem?

CONTROL: Continue to measure, to see if the steps you've taken are working. Stay in tune with the customer to see if they percieve the problem improving. Control the improvements, and continue tweaking. Now, move on to the next problem.

Sounds pretty simple, and in some ways, it is. Biggest "aha!" for me was taking the time to really break apart the problem into bite-size chunks.

Consumer Focus Groups

Fascinating stuff tonight. I won't go in to too many details, but I find it's so interesting to be "behind the glass" listeining to "real" customers.

I was talking with some co-workers who are with me here, and we decided that a lot of the value of the focus groups isn't getting the research report (although that's good), it's hearing the passion in the voices our customers, seeing their expressions, hearing their descriptions of what they think of our products, our marketing, our partners.

There were a few times when we were hearing the pain these guys experience that I wanted to go in and give someone a big hug, and tell them we're listening. As it is, they didn't know it was Microsoft doing the research, but we heard plenty of comments about our products and our channel partners.

I know after tonight's group my team here won't look at our customers quite the same. They're more human. More jaded, yet more vulnerable, and in some ways more trusting. And certainly more real.

If you have a small firm (or small group in a big company), or even if you own your own company, find a way to hear (really audibly hear) the voice of your customer. You can hire great facilitators like the guys from B/R/S Research, or any number of reputable companies. Or you can get together your own group from your own mailing lists and contacts. It only takes a handful (6 or 8), and as long as you can keep the conversation flowing, ask lots of open-ended questions, and get at what uour customers are thinking and feeling, you can do your own. And you'd be surprised at what you'll find out.

New Economy Depression Syndrome (Revisited)

Getting around to editing my notes from my Tablet PC. This breakfast speech was sponsored by the Northwest Entrepreneur Network.

Tim Sanders, the Chief Solutions Officer of Yahoo!, and author of "Love is the Killer App: How to Win Business and Influence Friends". His book shows that nice, smart people succeed by sharing three critical elements of themselves: their knowledge, their networks, and their compassion. “The most powerful force in business isn’t greed, fear, or even the raw energy of unbridled competition,” Sanders explains. “The most powerful force in business is love [the promotion of growth in another]. It’s what will help your company grow and become stronger. It’s what will propel your career forward. It’s what will give you a sense of meaning and satisfaction in your work— which will help you do your best work.”

Tim revealed some tips for defeating “New Economy Depression Syndrome (NEDS),” a form of work-related stress that is caused by information overload, constant interruption, and increasing personal isolation. NEDS is best understood, in a workplace scenario, as carpel tunnel syndrome of the mind. Think about it: today’s business world is armed with technological tools designed to make communication effortless and enhance productivity, yet we all seem to be suffering from a downward spiral of information overload, no-nonsense rationality, and social shyness.

He spoke of a world of constant "info-ruption," where stuff is coming at us all day long. In fact, at the time of the US colonies were first settled, our forefathers read as much in their lifetimes what we scan in a single day (about 500,000 words)!

Tim quoted several studies that showed that people who spend a lot of time online, especially those that substitute online contact with "human" contact, tend to be more depressed. He defines NEDS as a combination of three things:
1) Information Overload (overwhelmed); 2) Constant Interruption (helpless); 3) Reduced Relationship Quality (isolated).

In fact, many who are victim to these problems try to use technology to solve them (a cell phone at the hip, a computer online at all times, and a "crackberry" device to stay "caught up."

The problem with all the information coming in is that in today's world, most of it is critical, leading us to feel even more frustrated and behind. He told of a report where 1/3 of all managers feel "overwhelmed," and nearly half of all "information workers" could be considered technically "depressed."

The problem with online relationships, Tim suggests, is that many tend to replace "strong relationships fraught with problems with weak relationships that are safe, distant, and somewhat anonymous." He suggests that is one of the primary reasons the Internet grew so quickly, it seemed like a quick fix to maintain social connection (send a quick email, etc.).

Studies show that 5 hours a day of "screen time" is the tipping point that leads to significant problems if not addressed.

How do you fight it? Resiliency comes from what Tim calls "warm living."

He points out that there are three kids of personalities:
1) Where people have a great personal life, and work is impersonal (50% warm, 50% cold). The problem there is that research shows the "effects" of a vacation wear off in 3 days, and a kiss from the wife and kids will last until about 10AM (if there's no traffic).
2) People who have a life where 90% is cold, 10% is warm (work hard all day, get an hour with the kids, some time on the weekend). He estimates there are 14 million like this in the US (hardest hit)
3) People who have a life that's 30% cold, 70% warm. This is the goal. You get there by making work "personal."

Tim has several suggestions for making work more personal. He suggests "refresh stations" along the way. Take a break every two hours (10AM, noon, 2PM) to recharge, and spend time with one nice, positive person. Make sure your teams take this seriously.

COMPANY SOLUTIONS:
- Open the environment. Cubicles instead of offices, low walls, lots of open space. Require face-to-face meetings. Discourage email when a phone call will do. Encourage human contact.
- Provide breaks from technology. There are companies that shut off email at 2PM, and disallow cell phone/email on weekends.
- Encourage Human Contact. Take SWA as an example. Hug people. Touch appropriately, even if it feels uncomfortable to you.
- Heartmath. Repair to your heart occurs when rhythms are normal, not sporadic.

PERSONAL SOLUTIONS
- Build your buffer. Create an environment 24/7 that is supportive and has human connection
- Learn to disconnect. Push back when technology replaces human contact. Turn off your Internet when you're working on a project. Disable "incoming mail" sounds and "toast" popups. Turn the monitor off when you're in a meeting. Turn the computer off on weekends, or during family times.
- Monitor your life patters. Are your relationships stronger than they were a year ago? By finding more love in your work environment, you'll be happier, and your career will grow too. N.V. Peal said "you'll achieve more success in two months becoming interested in two people than you will in two years getting two people to be interested in you."
- Follow the advice in "Love is the Killer App." Build Your Knowledge (Read!). Share Your Network. Be Compassionate. Read at least one book a month (the average manager with 5 or more direct reports reads 0.7 books every FIVE YEARS!). Read a book for someone else's benefit, then share it with them. Build your network by solving someone else's problem with your network.

You have the chance to "unlock the little boy or girl who sent 30 valentines in grade school by being open and real. Did the guys who just won the world cup send an email to each other saying "nice job on the victory." ? Celebrate!

He ends with a way he cut his email at work in half. He told co-workers to make sure mail sent to him was "CLEAR" Is it C: Connected to my job (he filters out FYI email); L: List what you want me to do; E: Expectations, what is success?; A: Avenues for me (resources); and R: Return on my time investment.

Six-Sigma-ize Your Marketing

Bryan Eisenberg of Future Now has an article in ClickZ called 'Six Sigma' Web Marketing.

I personally think Six Sigma is highly under-rated among marketing folks, and is a lot more applicable than most think. Once you've discovered the customer's pain, finding the things to "six-sigma-ize" are pretty easy.

Six Sigma (3.4 defects in 1 million opportunities) isn't an impossible goal. It doesn't mean that you have no defects. Our goal, for example, is that a customer (or internal employee, etc.) can find what they?re looking for in our website in 30 seconds or less, 90% of the time (because what?s most painful is NOT finding what they want). It's not that there are zero defects on our web site.

I was surprised by how relevant this is to marketing planning. I initially signed up to see if I could learn how to better manage improvements in our processes (for example, reducing the number of "errors" in data feeds to our B2B partner site). I learned that this will be valuable to almost any discipline that requires improving an existing program, process, or product. I'd recommend this to other marketers because:

- Six Sigma offers a framework for determining what?s critical to a project, and prioritizing to what has the most impact.
- The entire mindset was entirely focused on addressing things critical to customers
- Underlying this is a disciplined structure of using measurements before, during and after.
- Most Six Sigma projects can be started and completed within four months.
- The approach works for any area where there are problems that impact a customer's perception of quality (even if our customers are channel partners, sales associates, other employees, etc. For example, Canada is running a Six Sigma project to improve forecasting for licensing.).

What is Microsoft?s Six Sigma Vision?
Drive sustained improvements in productivity, customer satisfaction and loyalty in order to reduce cost and increase revenue and profit.

What is Six Sigma?
Six Sigma is a problem solving methodology that helps drive improvement to the bottom line by designing and monitoring business activities in a way that minimizes waste and resources while increasing customer satisfaction. It focuses on driving defects out of the product and/or services provided to our customers as well as the processes used to create these product and services.

Six Sigma originated at Motorola in approximately 1979 and has since been adopted by a number of companies including: General Electric ($2 billion annual savings attributed to Six Sigma), Texas Instruments ($600 million), Johnson and Johnson ($500 million), Honeywell ($1.2 billion) and Sun Microsystems.

The term Six Sigma comes from statistics, and (using standard deviations), measuring defects per million opportunities. By definition, Six Sigma is less than 3.4 defects per million (99.9997% success). Most companies perform at a 2 (69.10%) to 3 (93.5%) sigma level. 4 Sigma is a pretty good goal for most companies, with only 6,210 defects per million (99.38% success).

Where can I find out more?
A good external site: http://isixsigma.com

What is the Six Sigma Philosophy/Mindset
- Identify what is Critical to your Customer
- Understand how well you are performing today
- Leverage facts and data to drive process improvement
- Sustain improvement

What are the major steps in Six Sigma
- Define (D): Zero in on specific problem with defined return on effort
- Measure (M): Determine current performance of process
- Analyze (A): Validate key drivers of performance (root cause of problem)
- Improve (I): Improved performance and validated realized results
- Control (C): Implement controls to ensure continued performance

How could Six Sigma help with Marketing and Sales?
- In Defining our charter, it forces us to be very clear on exactly what we want to improve. For example, with our intranet site, we can think about not just "improving efficiency" or even measuring "number of page hits" to focus on what's critical to quality for the customer. We may choose to improve the amount of time it takes to find a relevant document, contact, or piece of information from 2.3 minutes to less than one minute, in 90% of cases.

- In Measuring, we can then focus on gathering information that leads to better controls and improvements. In asking "5 Why's" using a measurable goal, we can find variables that might not have been obvious. The goal of Six Sigma is to improve quality by eliminating opportunities for failure along the way. Instead of reducing the cost per head of a given online training module, we focus on improving the % of instances of an sales associate recommending a Microsoft product to a customer. We then find all the "opportunities for failure" of that happening, and fix those.

- In Analyzing, we focus on the clear customer outcome, and avoid fixing problems that don't impact the outcome. It takes a lot of the guesswork out of things. Since we don't have any relevant data yet, we shouldn't make guesses at what to improve (unless opportunities are obvious, which often they are).

How long does it take to implement a Six Sigma project?
The goal of the group is to implement projects in 4 months or less. In fact, the team has created a "Rapid DMAIC" process to drive measurable results (with a benchmark of at least $250,000) in a matter of weeks. By involving the right people (and only the right people), a clear charter, strong sponsorship (at a VP level), and following a structured process, key projects can be identified and implemented in a few weeks.

What Resources can the company provide?
We have dedicated Black Belts whose job it is to implement Six Sigma projects. Part of their charter is driving projects, and mentoring Green Belts (part-time project leads). If we have a project, we can involve them early on. In addition, our internal Green Belt training takes place regularly for any interested employee.

How does someone get certified as a Green Belt?
To be eligible to receive your Green Belt certificate you must have completed at least one Six Sigma project, where you were the project manager, that has a value of $250k or greater. The process for applying for your Green Belt certification is as follows;

- Six Sigma GreenBelt workshop completed
- Six Sigma Project completed, documented and approved by sponsor
- Project template completed
- Document tools used
- Submit the completed project template or other project documentation as appropriate to your course instructor.

In Your Client's Shoes

Just got a note from my brother, who works in Human Resources at an auto manufacturer.

"This past week we had a "job share" event where the UAW workers on the assembly line (assembling rear axles) traded places with the management team. I worked on the line putting axle shafts into the tubes in the axle assembly. It was a lot of work (I was sore the next day) and a real eye-opener and I gained an appreciate for what an auto worker has to do day in and day out."

I think this is just a great, great idea. We've done this on a limited basis here at Microsoft, but I've entertained the idea of doing something more formal. How great would it be if we could work in a retailer, answering customer questions and stocking shelves? Or travel with the sales folks and present the marketing material we produce to our partners? Would we learn more about what our clients, partners and customers go through if we could really live in their shoes for a day or two?

Benevolent Leadership

More from the 5 Patterns of Extraordinary Careers. Sorry to ramble on, but this stuff is golden. I'd re-print every word if I wouldn't be breaking every known copyright law in existence. I wish wish wish I'd had this book when I was 24. As it is, I'm probably 5-7 years behind where I should be (I'm 39, and am where I should have been at about 32)... Better late than never!

Practice Benevolent Leadership A leader is best when people barely know that he exists. He is the teacher who succeeds without taking credit. And, because credit is not taken, credit is received. -Lao Tzu, 6th Century B.C.

The curse of the highly talented person is that everyone wants him to do everything. ... Rather than go it alone, become fanatical about wooing, hiring, and retaining the most talented people in (the) business. Create an environment that would be the most attractive to the very best people, one of open communication and deep trust, in which (your) subordinates' success will be more important that even (your) own. (48)

We are reluctant to let go of the belief that if I am to care for something, I must control it. So many people progress in their careers hoping to ensure short-term success by tight oversight, while long-term success slips away.

Extraordinary success is achieved by makthosehose around you successful.

The benevolent leader maximizes performance through facilitation. She eliminates barriers for subordinates and leads with authority, even though at times appearing to be just one of the pack. It's easy to know when a benevolent leader is in charge. The telltale signs? Information and authority flow freely. Honesty abounds. People are free to question authority without retribution. Creativity reigns. Each member of the team feels just as accountable to the other team members as to the leader. (50)

Nearly 90 percent of extraordinarily successful executives were described as being concerned about their careers of their subordinates as much or more than their own careers. (52)

To put this lesson another way: The extraordinary executive does not claw his way to the top, he is carried there. (53)

So what really motivates the best and the brightest? In our survey we asked how respondents personally defined career success. Two key factors emerged. The first, one of the most often cited, was "freedom in my job to do the things I want." ... The second was "to be well regarded in my company or industry." (55)

Successful executives ask "How will this job, working for this boss, help me achieve the level of respect and impact that I desire? He asks, explicitly or implicitly, about each new opportunity. Highly successful individuals also add another question: "If I am successful, will the organization or team be successful?" (55)

Professionals understand the importance of joining the best program and actively seek it out. This becomes a virtuous circle--the best people create the best results, which in turn attract the best people. ... Professionals who create a winning environment, usually end up winners. (58)

Of the four leadership styles, I find myself probably in the "Good Citizen" block. As I gain experience and confidence, I'm sure I'll move more into the "Benevolent Leader" box, since it so closely aligns with my own personal values.

By the way, for a clue on how I got a pre-release copy, look here.

5 Patterns of Extraordinary Careers

I've gotten several requests for more information about The 5 Patterns of Extraordinary Careers. I found the first chapter online here: http://www.bzzagent.com/downloads/5patterns_intro.pdf.

At the 5 Patterns website is also a PowerPoint deck with the key points here: http://5patterns.com/files/UnlockthePotential.pdf. Worth a read, and goes into more detail than I can.

Some of the key points of the books I've found helpful so far:

After doing a lot of research (2,000 executives interviewed), the authors found a handful of patterns. One thing they found was that executives "never took their job descriptions too literally and had always found ways to expand their responsibilities within their organizations (p. 4).

Extraordinary executives, in a process similar to compound interest, achieved success slowly and consistently, with each phases building on the prior one. (8)

THE FIVE PATTERNS OF EXTRAORDINARY CAREERS
So what are the five patterns of extraordinary careers? As the five chapters that follow will detail, they are to:
1. Understand the value of you. People with extraordinary careers understand how value is created in the workplace, and they translate
that knowledge into action, building their personal value over each phase of their careers.
2. Practice benevolent leadership. People with extraordinary careers do not claw their way to the top; they are carried there.
3. Overcome the permission paradox. People with extraordinary careers overcome one of the great Catch-22s of business: You can't get the job
without experience, and you can't get the experience without the job.
4. Differentiate using the 20/80 principle of performance. People with extraordinary careers do their defined jobs exceptionally well but don't
stop there. They storm past predetermined objectives to create breakthrough ideas and deliver unexpected impact.
5 . Find the right fit (strengths, passions, and people). People with extraordinary careers make decisions with the long term in mind. They willfully
migrate toward positions that fit their natural strengths and passions and where they can work with people they like and respect. (9)

The average professional with thirty-five years of experience has worked for just over six different companies during his or her career. Yet those with only ten years of experience have, on average, already worked for four companies. (11)

Understand the Value of You
The most successful professionals have come to understand the underlying factors that determine value in the job market, and how to maximize their market value at different stages of professional life, and why some careers prosper while others peak and decline (15).

Your value in the talent marketplace is derived from two distinctly separate elements: the value of your potential and the value of your experience. ... The trick is to fill the bag of experience before you empty the bag of potential.

Experiential value is usually more highly compensated than potential value for the simple reason that it is much easier to measure what you have done than what you can do. ... Even if you find yourself considering a role similar to the one that you have been in, it is important to look for and discuss the growth potential of the new role itself and you in it. ... You must turn your potential value into valuable experiences, which together can be converted into renewed potential. (21)

The Potential Versus Experiential Promotion:
The critical element to potential promotions is trust. It should be noted that potential promotions ... are relatively rare. Because these are promotions of trust earned over time, they seldom occur when changing employers, since senior people in the new organization are usually not yet familiar with you or your capabilities. (27)

The pattern of leveraging successful experience in one company or industry for the opportunity to do something similar in another plays itself out in a majority of the four thousand searches that Spencer Stuart conducts annually. (29)

The Promise Phase
The key to building experiential value in your career is straightforward: Gain experiences that really matter. (29)

Understanding when it is in your long-term interest to do something in the short run, such as going for a potential promotion within your current organization to position you for an experiential promotion later on , is a key trait of extraordinarily successful executives.

Executives switch employers every 4.6 years on average. ... When an individual is recruited to a new employer, the appointment is typically accompanied by an increase in compensation of between 15 percent and 30 percent. In general, potential promotions tend to be accompanied by the more typical 5 percent to 10 percent pay raises. (29)

Value changes throughout your career, shifting from potential to experiential to potential again.

The path of successful professionals often visibly diverges from that of the less successful in the middle of a career. (31)

The importance of the first stage is often underestimated. Start something that will begin the process of building experiential value. Early professional experience will provide feedback and input into what you enjoy and are good at. And it will certainly create the most freedom and alternatives later on. (33)

If you choose not to use your potential, you will have still spent it. Working in the promise phase is in fact one of the best times to identify your strengths and passions. ... An individual's ability to convert potential into valuable experience is one of the most important elements to achieving long-term success. (33)

There is a twofold goal for the end of the promise phase: to have achieved the endorsement of having worked for at least one recognizable company or institution while having learned enough about yourself to become directed toward a situation that plays to your strengths and interests in the years ahead.

One executive interviewed said "Looking back (in the promise phase), I am convinced that not taking a risk at that point in my career would have been an even riskier strategy, because I would have been just another associate." (35) "It's amazing how seemingly minor differences in momentum and perspective that you establish very early on in your career can led to such major differentiation later in life." (36)

The Momentum Phase:
Your potential value is steadily converted into experiential value as you master functional skills, develop a track record, take on broader responsibilities, manage other professionals, and cultivate a network of business relationships. This is the phase (usually in your mid-thirties, when you shift into the momentum phase of your career. This phase corresponds to the downward fall of the swing, or the point of greatest acceleration. The momentum phase is when many professionals approach their maximum experiential value. (36)

If you are on the right track by this middle stage of your career, then you are in a position to take maximum control over your career's direction. ... The most successful executives in the momentum phase achieve positive impact an accelerating rate. (37)

Unfortunately, those who haven't managed this phase are at serious risk of seeing their career stall. If you have been unable to migrate your career toward roles that play to your strengths and passions, enabling the kind of impact to attract the most important opportunities, then you may have lost your greatest opportunity for momentum. (38)