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How To Take On "Good Works" Customer Education Assignments Without Taking It In The P&L.

Software Engineering wants you to develop an ambitious curriculum to support an oddball new operating system that they can't even find beta testers for.

Sales wants you to continue to schedule courses for a dwindling legacy base of customers who adamantly refuse to upgrade to your firm's latest release.

Industry Marketing wants you to develop a niche version of your systems administration course to suit the needs of traveling tent shows.

You'd like to help them -- you really would. But you've got a P&L to achieve. And you'll never succeed if you take on high risk customer education assignments -- no matter how strategic and noble the cause. So, politely and diplomatically you say "no" -- and attract a torrent of threats and character assassination that would make a political primary seem like a love-in!

Next thing you know, the issue gets elevated and you wind up having to throw resources at a customer education opportunity that makes another group look good -- but costs you dearly in terms of empty classrooms and declining margins.

Or maybe you're able to hold your ground -- at the expense of being viewed as a shortsighted stovepipe who cares more about protecting your behind than supporting the future of your company.

Here's an even worse scenario. You know that long shot technology you dug in your heels and refused to support? Guess what, it turns out to be a huge hit, and you're left standing at the alter while 3rd party training companies swoop in for the kill.

There's got to be a better way -- and there IS.

Next time another business unit confronts you with an "unreasonable" customer education request, don't say "no." Say, "great, we'd be delighted to help you! Now let's jointly see what's the best way to proceed."

Then take a page out of the Open Book Management approach. Explain, simply, the financial ground rules you are operating under and encourage the other unit to partner with you and share the risk. Begin by preparing a simple model of your business like this:

  MINIMUM ACCEPTABLE 12-MONTH
COURSE PERFORMANCE MODEL
 
     
  $ %   
     
Revenue(1) 200,000      100.0       
     
Delivery Expense(2) 100,000      50.0       
Course Development(3) 20,000      10.0       
Other Expense 40,000      20.0       

Profit Contribution 40,000      20.0       
     
Assumptions  
(1)
- 500 SW licenses with 20% training participation
- 100 students @ $2000 average tuition
- 10 classes @ 10 students/class
(2)
- delivery expense is $10,000/class regardless of attendance
(3) 
- $60,000 amortized over typical 3-year course life

Then roll up your sleeves and begin negotiating. Here's how:

A. SW Engineering wants you to develop a new course from scratch to support a new software launch. You question whether they will be able to sell the 500 licenses you typically need to yield your minimum requirement of 100 students. They totally disagree, and feel that not offering education will kill any chances they have of succeeding. So you propose:

  THEY:

 - 

put up $60K (the full cost of developing the course)  
     
YOU:

 - 

agree to promote a minimum of 10 course sessions
 

 - 

run every session if you get at least 5 participants
 

 - 

return their $60K if you achieve $200K your first year
     
B. Sales wants you to offer a high-end course 10 times a year to appease several key accounts who have complained about session cancellations. You explain there's so little demand for this course that you'll wind up teaching empty classrooms. Sales says you are dead wrong -- and offers to help fill the classes. So you propose:

  THEY:  -  agree to promote and run the course 10 times even if only one individual attends  
     
YOU:  -  agree to help you fill each class
   -  award you $1000 in expense relief for each participant less    than 10 (to cover your delivery costs)
     
The variety of partnering arrangements is almost infinite. Just don't try and be too creative. For instance, offering to split all revenue and costs down the middle could get you in trouble with your company's revenue accounting people.

Will other organizations go along with your requests for them to open their wallet to offset your risks? Chances are, so long as you're not too greedy and self serving, they'll be delighted. Sales, engineering and product marketing groups spend big bucks on promotion and sales support -- and they're likely to see customer education as a lot more tangible and valuable than many of their other sales promotion options.

However, the biggest advantage of an Open Book Management partnering approach is never having to say "no." It lets you be a big picture visionary rather than a parochial sourpuss. In fact, there's no good reason why, armed with this approach, you shouldn't take the initiative to go looking for business from special interest groups you would have previously gone to great lengths to avoid.

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