The Prospecting Professor

Gus Gustafson: Networker Extraordinaire

Over the course of his 54 years of life, Gus Gustafson built his network...without really trying. When he died, in January of 2003, more than 1000 people attended a two-hour service that celebrated his life. A few weeks ago...almost 3 years after his death...more than 250 friends, family, and fellow artists, gathered together to remember his rich, generous spirit.

That's a network...and here is his story.

In the mid-1970s, the Warehouse District of Minneapolis was not an appealing place for the "beautiful people" and the property developers (unlike today). It was a slightly seedy section off the main downtown drag...and a hub for artists' studios, galleries and bohemian hangouts. Moreover...large, vacant buildings offered refuge for hundreds of artists to set up their homes and studios.

Gus Gustafson had recently graduated from the University of Minnesota where he studied painting and photography. Within the Twin Cities artists' communities, Gus was a ubiquitous attendee at every art opening and gallery show. Gus loved all mediums of art, dabbled in several, but quickly surfaced as a photographer with great sensitivity and mechanical command. His reputation as an artist of consummate skill soon reached the Twin Cities' thriving advertising community. By the mid-1980s, Gus was in high demand, with an ever-growing client base.

However, it was within the burgeoning Twin Cities arts community, that Gus displayed his singular talent at networking. His big-hearted, gregarious spirit embraced everyone he met...artists, architects, politicians, restaurateurs, business executives, and panhandlers. His standard greeting to many a woman was a heartfelt, "Hello darling, you're looking beautiful." He was known to carry a pocket full of quarters so he could stuff empty parking meters as he strolled down the street. At the end of the day, he held court and traded stories with the regulars at the New French Bar...Gus' favorite hangout and a popular watering hole for like-minded, thirsty, creative-types.

During these "after-hours sessions", Gus became known as the photographer-of-choice for the dozens of artists who needed slides and transparencies of their art...for grants, professional opportunities, etc. Gus made time for every artist who sought his services, and became an invaluable resource to many an artist in need of quality images for their creative efforts.

Gus was good at photographing artwork, liked working with artists, and was open to the barter system. As word spread, he found himself inundated with requests to shoot artists' work...in trade  for one of their pieces. Over the years, he amassed one of the largest and most comprehensive private collection of contemporary Minnesota art to be found anywhere.

For more than 25 years, Gus exemplified the single most important characteristic of effective "networkers"...a generous, giving spirit without the "hands held out" expectation of receiving anything in return. He brought people together...to share ideas, friendships, opinions, and art. His life-long friendships created a vibrant, community nexus that resonates beyond his time on this earth.

We should all be so lucky.

(For those of you interested in learning more about Gus, "Remembering Gus Gustafson: Artist, Collector, Friend" is an exhibition that will continue at the Minneapolis Institute of Arts through March 19, 2006.)

Most Salespeople are Troglodytes

"Most salespeople are cave dwellers. They get into their little cave with four wheels, get into a bigger cave with computers and telephones, then drive back to their home cave. And they can't figure out why no one is referring them. Networking is a contact sport; you have to connect with people, build a relationship.

There's a process to effective business networking. VCP, or Visibility, Credibility and Profitability. Only when you've gone through visibility and credibility can you get to the profitability phase, which  is where you are passing reciprocal referrals on a credible basis. If you get a referral, you are giving away a little bit of your reputation."

So says Ivan Misner, Ph.D., founder and CEO of BNI, (Business Network International)

If the concept of "networking" has acquired a bad name, that's because many salespersons approach networking like a scavenger hunt...scurrying around a room collecting business cards without ever actually connecting with a person. A better networking model is based upon sharing knowledge, personal experiences...and leads. Quid pro quo. Networkers who don't give...won't get.

Tomorrow...a story about the best networker that I ever knew. Stay tuned.

"Birds of a feather..."

"Bird of a feather will gather together."...Robert Burton

Here's an interesting exercise that will help you think and consider the make-up of your own personal network.

Consider all of the persons in your personal network. These are people who you rely upon for:

• Exchange of (private) information
• Specialized expertise
• Advice
• Creative inspiration

These folks may be business colleagues, friends, family members, neighbors, individuals where you share an interest/hobby, etc.

How did you meet them? Were you introduced by someone else? Or did you meet this person on your own?

Most likely, you have introduced yourself to your key contacts in your network without the introduction of a third person, i.e. a mutual friend or acquaintance. This is true for most of us. The majority of the people that we know, who are within our personal network, have been self-selected by us.

Moreover, many of the persons that we gravitate towards resemble us in terms of :

• Worldview
• Experiences
• Training
• Background
• Etc.

If your network is built like this...if the nexus of people who you know/trust resemble you in some or many ways...then you are building your network using the Self-Similarity Principle.

The advantage of the self-similarity principle is that it is easier to know/trust people who think and act like ourselves. Working and interacting with "clones" of ourselves is more efficient due to the minimal friction in the interchange of ideas.

The disadvantage of the self-similarity principle is that it can create networks that are too inbred. Beyond that, if you have met all of the people  in your network by virtue of your own efforts...it's not really a network at all. It's simply a collection of people that know you...who have no connection to each other. In this way, there is no synergy.

A collection of people who all know you, without knowing each other, is not a network. It's a wagon wheel. A wagon wheel without a hub (you), will fall apart. In other words, when you go away, so will your network.

This is not the worst thing in the world, yet it is not the optimal use of the collective energies of the people who you have diligently assembled over the years.

Bill's Billions: Thanks Mom!

As of today, December 5, 2005...the market cap of Microsoft is about $300 billion. Bill Gates' share, 9.32%, is worth about $28 billion.

In a small way...in fact, maybe in a BIG WAY...Bill Gates can thank his mother for one of the initial connections that got him going.

Mary Gates passed away on June 10, 1994. She had been a tireless community-service advocate and one of Seattle's most prominent civic figures. In 1975, the year that her son co-founded Microsoft, Mrs. Gates became the first woman president of United Way of King County.

In 1980, IBM launched its top-secret program, Project Chess, to develop its own PC. It need an operating system. IBM sent a team to Redmond, Washington to help on Project Chess. After two meetings held under promises of confidentiality, IBM offered a hardware and software consulting deal to the the fledgling company. IBM wanted the rights to a desktop operating system for a small sum. Bill Gates was willing to oblige...on condition that he be given rights to sell copies to other computer makers for whatever the traffic would bear.

Why did IBM even go to Redmond, WA in the first place? At the time, IBM president John Opel served on United Way's national board...as did Mrs. Gates. In 1980, when someone mentioned Microsoft to John Opel, he responded, "Oh, that's run by Bill Gates, Mary Gates' son." Behind the scenes, Mary Gates had spoken with John Opel about the new breed of small companies in the computer industry, which she felt were under-appreciated competitors of the larger firms with which IBM traditionally partnered.

It is interesting to note that Bill Gates, and his Microsoft colleagues, were not the pioneers of the first operating system for personal computers. Nearly ten years before Bill Gates signed the epochal deal with IBM, Gary Kildall, a computer science professor had developed his own system...the Control Program for Microcomputers.

Kildall and Gates had known each other from their years...freely sharing ideas in the Home Brew Computer Club, a group that Kildall had founded. Why IBM connected with Bill Gates, and not Kildall, is not widely known. However, one can speculate that Mary Gates' connection to IBM's John Opel played an important, if not critical, role.

Thanks mom!

John Cromwell, Jr.: Pioneering CPA

In 1921,  John Cromwell, Jr. became the first African-American CPA. He came from one of the more prominent African-American families in the country. His father was an attorney and the chief examiner for the U.S. Post Office. His older sister, was the first African-American alumna of Smith College, and went on to earn a Ph.D. in English from Yale. John Cromwell graduated from Dartmouth in 1906 as the best student in science.

Fifteen year passed, following Cromwell's graduation, before he became a CPA. He was not allowed to sit for the CPA exam in Washington, D.C., Virgina or Maryland. Moreover, since all places had experience requirements, the biggest barrier to African-American CPAs was a Catch-22.

After becoming a CPA, Cromwell taught high school accounting in the District of Columbia. He worked exclusively within the black community. In 1930, he became comptroller of Howard University. In the early 1960s, 40 years after he earned his certificate, John Cromwell was still the only African-American CPA in our nation's capitol.

The discrimination that John Cromwell faced paralleled the challenges that existed for other CPAs of color. For most of the twentieth century, CPA firms would not hire minority CPAs, claiming that their clients would not tolerate a person of color being involved in their financial affairs.

This may be changing, albeit slowly. In 1969, the National Association of Black Accountants, www.nabainc.org was formed. At the time, there were only 169 African-American accountants in the entire country. Today, there are more than 5000 black CPAs, which is still a low percentage as compared to other professions. African-Americans comprise less than 1 percent of CPAs in the U.S., as compared to 2.7 percent for lawyers, and 4.2% for medical doctors.

The American Institute of Certified Professional Accountants, AICPA, has recognized the lack of parity in CPA diversity, and is taking steps to close the gaps. The AICPA has undertaken a number of initiatives that raise awareness about the CPA profession in minority communities, and increase the number and visibility of role models.

The Association of Latino Professionals in Finance and Accounting, www.alpfa.org, was founded in 1972 and now has 26 chapters around the country. Surprisingly, Asian-American CPA associations have been founded only recently...the Chinese American Society of CPAs, www.cascpa.org, and the National Asian American Society of Accountants, www.naasa.org.

To the extent that you are a financial advisor who is networking with CPAs, it would make sense to recognize the diversity that is growing within the CPA profession. Opportunities may exist within your own community to further closer working relationships...creating win-win situations for all.

Networking is Not a Scavenger Hunt

Great quote! I wish it were mine. It isn't...it's from the Cubicle Culture column from the WSJ, July 14th, 2005. "see the article".

The originator of this quote is referring to the following story. At a networking event, two women who happened to be old friends were deep in conversation. A fresh-faced young man (who happened to be starting a career as a financial advisor) interrupted their talk by introducing himself to the both of them. After a long awkward silence, the young man spoke up. "Well, can I get your business cards?" he asked them. "My boss told me I could only come to this event if I collect a certain number of business cards."

Of course, this is an extreme example of the ridiculous manner of a kid that doesn't get it. Building a relationship at a networking event is not about keeping score, it's about making a connection with another person, one-to-one.

Effective networking means adopting the "networking mindset." Here are some guidelines:

• Be patient.
• Remember, networking events are not sales calls.
• Persistence pays.
• Volunteer yourself, and your time.
• Networking is referral-based marketing.

The "networking mindset" is also about quid pro quo. Literally translated from Latin, quid pro quo means "something for something." Effective networking means being prepared to Give before you Get. Trolling a room for business cards is ineffective and artificial...and people will see you coming a mile away.

Today is the birth anniversary of Ernest Hemingway who was born in Oak Park, Illinois in 1899. Hemingway's first work, In Our Time, a collection of 32 short stories, was published in 1925. Hemingway once said, "Never mistake motion with action." Good words for all of us.

Deep Throat & Bob Woodward: A Remarkable Networking Story

For those of us of a certain age, it is hard to believe that Watergate happened 33 years ago.

Some Watergate History. Early in the morning of June 17, 1972, police discovered five intruders inside the headquarters of the Democratic National Committee offices, in the Watergate building, just off the Potomac River in Washington D.C. The burglars were there, it turned out, to adjust bugging equipment they had installed during a May break-in, and also to photograph additional Democratic documents.

The Washington Post assigned reporters Bob Woodward and Carl Bernstein to cover the story...which ultimately led to investigating ties between the break-in and the Nixon administration. Woodward, although only at the Post for nine months, was an up-and-comer on the staff, coming from Yale and the Navy. Bernstein had gone to the school of hard knocks, a college drop-out who had worked at newspapers since he was 19 years old. As part of  their research, Woodward and Bernstein used an anonymous informant (Deep Throat...so-named by their managing editor), who was able to substantiate information that the reporting team had already gathered as well as encourage their investigation into different areas.

When all was done, the duo unraveled a web of political spying, sabotage, and obstruction of justice that had all the dramatic elements of a fictionalized Hollywood potboiler. In the end, 40 government officials were indicted...a president was forced to resign...and the country survived the most serious constitutional crisis since the 1868 impeachment of Andrew Johnson.

It all started with a chance encounter in 1970.

Serendipity. In 1970, Bob Woodward was a lieutenant in the U.S. Navy. One of his periodic assignments was to courier documents to the White House. One evening, he was sent to deliver a package to a small waiting room on the lower level of the West Wing of the White House. During the long wait, another man entered the room. This man was W. Mark Felt...who has only recently revealed himself, after 33 years of silence, as Deep Throat.

Bob Woodward has compared their encounter to two passengers stuck together on a long plane flight. During the conversation that Woodward initiated, he displayed the terrier instincts that would later serve him exquisitely well during his reporting career...making small talk, peppering Felt, with questions, and extracting Felt's phone number.

Soon after this first meeting, Woodward called Felt for career advice on law schools. Some months later, he solicited Felt's thoughts on whether he should enter the newspaper business. When he became a reporter, Felt was the source for two juicy tips...on Spiro Agnew, and on the lunatic who tried to assassinate George C. Wallace in 1971. In fact, before Watergate, Woodward had met/talked with Felt some 20+ times. In other words, when Woodward began using Mark Felt (now Deep Throat) as a source for Watergate, it wasn't as if Felt had dropped from the sky. Woodward had diligently cultivated this relationship for more than 2 years.

It All Came Down to Networking. Today, Bob Woodward is the best-known journalist in the United States. He has authored or co-authored 12 books. He shares two Pulitzer Prizes. Bob Shcheiffer of CBS News has called him the "best reporter of all time." He is a multimillionaire celebrity author who writes profile books on presidents. He is on the A+ list of Washington D.C. society.

However, as hard as Woodward has worked since, it was a chance encounter in 1970 with Mark Felt that got it all started. It is interesting to speculate on what would have happened to the Watergate story had they not met. Would their story have come to a brick wall? Would they have found another source to duplicate the deep background tips that came from Deep Throat? Would they have accumulated the series of revelations that forced the resignation of Richard Milhous Nixon?

Yet, you can't minimize the effort that Woodward used in building his relationship with Felt. A good perspective is provided by Chris Mathews of MSNBC. We now know Mr. Mathews as the belligerent host of  "Hardball". Previously, Mathews was the top aide to Tip O'Neill, the Speaker of the House. Mathews says, "Serendipity is a big part of our lives, but it grows in direct proportion to sociability." Bob Woodward has maximized both.

Networking with Investor Relations Officers

For regular readers of of The Prospecting Professor, you will know that we are strong proponents of focused networking to niche audiences. (Side comment: This is somewhat scary. The Prospecting Professor is now referring to himself in the third person.)

Yesterday's entry , "CFO Networking", was a great example of this. We identified a topic that might be of interest to a Chief Financial Officer, and demonstrated how a financial advisor could use this topic to make a connection with a wide array of financial officers of publicly-traded companies. Today, we would like to discuss how this same topic could be used to engage additional executives within publicly-held corporations.

The topic that we referred to was hedge funds...or more specifically, the fact that hedge funds have become a day-to-day reality for all officers who come in contact with the investment public. The issue is discussed in the June issue of CFO magazine, in an article entitled, "How to Talk to a Hedge Fund".

What additional niche groups of corporate officials would be interested in this topic? How about Investor Relations Officers?

The National Investor Relations Institute, www.niri.org, is the national association for Investor Relations Officers. There are 4600+ members nationally, in 35 different chapters. The membership list is a veritable Who's Who of publicly-traded corporations in the US...from Abbott Laboratories to Zions Bancorporation.

Can you think of a better way of engaging an Investor Relations Officer than by discussing a topic like "How to Talk to a Hedge Fund"? Actually...I  can. How about joining the National Investors Relations Institute directly? The organization does offer Affiliated Professional Memberships for $475 annually. Seems like a cost-effective investment for those financial advisors who have made corporate executives one of their niche markets...and are looking for creative strategies to begin networking within new corporations.

Hope this gives you some 'food for thought'. Have a great day! Ciao.

CFO Networking

Here's a thought for advisors who have clients who are CFO's, Treasurers, Controllers, Finance VP's, etc...or who have made financial executives a targeted niche.

In the June issue of CFO magazine, there is an article entitled, "How to Talk to a Hedge Fund" Pretty good article too. The audience for the article is financial executives who talk to the press. The main points that the article brings up are:

• Hedge funds aren't going away any time soon...with 8000+ of them with more than $1 trillion in assets, and growing by another 17% in 2004,
• Although not all hedge funds are model professionals, for a financial executive at a publicly-traded company who, they present more opportunity than danger,
• The best way to manage behavior is to make sure that they are making decisions in a fully informed fashion,
• Keep the lines of communication open.

As I said, a pretty good piece, although a bit short on specifics. However, for advisors who are interacting with CFO's and their ilk, the content of the article could be used as grist for Small Talk. Example:

• Advisor: I was reading an article in the June issue of CFO on how financial officers should deal with hedge funds from  a communication standpoint. The author's main point seemed to be that, since hedge funds are here to stay, companies better get used to talking with them.
• CFO: Hedge funds! They're the devil incarnate! Their holding periods can be measured in hours...not years.
• Advisor: The author also says that, with $1 trillion in assets, even shortsighted short-sellers are too powerful to ignore.

The essential point is that the topic of Hedge Funds is probably a pretty hot one for any financial executive at a publicly-traded firm. Advisors can use the article to get a dialogue going...and maybe even provide the CFO with information that they haven't seen yet.

By the way, if you are networking with CFO's, you may want to refer to the website of Financial Executives International, www.fei.org. This is an organization of 15,000 CFO's, Treasurers, Controllers, Finance VP's. The website is rather inclusive in discussing the pertinent topics of the day for this niche audience. If this is one of your target markets, I would encourage you to check it out.

Ciao!

Breakfast at Tiffany's: Networking with Jewelers

Holly Golightly: You know those days when you get the mean reds?

Paul Varjak: The mean reds, you mean like the blues?

Holly Golightly: No. The blues are because you're getting fat and maybe it's been raining too long, you're just sad that's all. The mean reds are horrible. Suddenly you're afraid and you don't know what you're afraid of. Do you ever get that feeling?

Paul Varjak: Sure

Holly Golightly: Well, when I get it the only thing that does any good is to jump in a cab and go to Tiffany's. Calms me down right away.

• Audrey Hepburn as Holly Golightly in Breakfast at Tiffany's

Jeweler Facts:

• U.S. retail sales of diamond jewelry climbed 8.2% in 2004 to $31.4 billion.
• Diamond engagement ring price averages $2,600...an all-time high.
• Within the retail sector, jewelers have been the hottest category over the past 18 months with regard to leasing space...up 70% over the last year.
• At the same time, the number of jewelry retailers has been shrinking for the past decade. There are now 24,765 jewelry retailers, versus 28,497 ten years ago. The larger retailers have been branching out, while the smaller independents have been falling away.
• Jewelers sweet spot: Consumers, aged 50-55.

Slow Summer Months. Typically, most jewelers have two selling seasons...spring and fall. During the summer months, sales can tail off dramatically. However some retailers take advantage of the lull by engaging in off-season activities. For example:

1. Sales staff will be taken off the floor and will 'work the phones', making social calls to existing customers, updating client records, enticing new customers into the store, etc.
2. Develop direct-mail campaigns that give clients a reason to come into the store, e.g. percentage off purchase, an alluring gift, free tank of gas, etc.
3. Upgrade of staff's professional skills with sales/product training.
4. Special Events!!!

Sales Networking Idea. Savvy financial advisors might consider collaborating with a jewelry retailer to take advantage of the off-season down time...and create a special event that generates traffic and publicity for BOTH the retailer and the advisor. Special events that might attract a jewelry retailer would be: a designer trunk show, an invitation-only store party, a themed selling event that targets specific professions or niche groups, a charitable event, etc. (Although I'd love to claim credit for this sales idea, it's not exclusively mine. In fact, it is featured in an article in the May 16 issue of National Jeweler entitled, "Turning your down-time to up-time.")

No-Miss Appointment Getting Script:

• You: Hi...this is (your name) with (name of firm). You don't know me from a sack of potatoes, yet I have an idea for a special event that could help you add some lustre to your sales during these tarnished summer months.
• Jeweler: Those are some REALLY bad puns. I hate bad puns.
• You: Yeah...but I bet you hate slow sales even more. I was reading in National Jeweler that the summer months are a terrific time for jewelers to hold special events that can generate traffic and publicity. One of my target markets are baby-boomers, ages 50-55. I have an idea or two for how we could collaborate on a special event that could help both of us. If you have a minute, I'd love to tell you more.
• Jeweler: Sure...and I take back my crack about the "bad puns."
• You: No problem. How about if I stop by your office tomorrow at 10:00?

If you aren't able to generate a face-to-face meeting with a jeweler using this approach...I'll eat my hat! One last point...for a list of jewelry retailers, you can go to this site, (www.jewelers.org). Plug in your city/state...and you'll get a list of retailers, and their websites.

Hope this helps. Talk to you again soon.