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Vote of Confidence – Fast Company – Jun Shao

by on October 16, 2007

Article Summary
Linda Tischer took a tour across the United States, visiting people and companies that were playing with confidence and playing to win. Linda believed the three stories might boost readers’ confidence, an essential characteristic of business nowadays.

The first story was about Benioff. He launched salesforce.com in 1999 against the economic turmoil of the recent years. In 2002, its revenue skyrocketed from $23 million last year to a projected $50 and $60 million.

Benioff’s new business model contributed to the company’s triumph. Instead of installing software on each user’s PC, salesforce.com rented out its service by the month for between $65 and $125 per user, depending on the sophistication of the application. That approach eliminated the up-front investment required by enterprise software and overwhelms its competitors, such as the Siebel System.

Benioff exuded his confidence and insisted that salesforce.com would thrive for the following unique features of the company.

It had a radically different technology, which was the utility idea.
It had a radically different business model — the idea that you could pay as you went.
It had a radically different philanthropic model, the salesforces.com Foundation, nonprofit organization that provided technology and software to young people in disadvantaged communities.

The second story was about coaching confidence. Loehr worked as performance psychologist of LCE Performance Systems Inc. to teach executives to cope – to rebuild their confidence – by building and managing their energy.

Participants were forced to compare their stated values with how they lived their lives and to figure out where they were in conflict. When the tension between the vision and the reality became intolerable, Loehr taught participants to build rituals that brought those disparate goals together. Thus those participants would have an uptick in energy, balance, and attitude that could fuel high workplace performance. The ideal was that Loehr suggested that workdays were defined periods of that high workplace performance alternating with short intervals of recovery.

Loehr’s work was high evaluated as to recovering confidence. He also mentioned that one secret of confidence was simply acting as the winner.

The third story was about Panera, a darling of both customers seeking an alternative to fast food. It was investor hoping to find that rare company whose stock had been rising like a loaf of sourdough.

Shaich, the CEO of Panera, became a licensee of Au Bon Pain, the Boston-based company that put croissants on the American fast-food map. He and his partner, Kane, invented “quick casual”, which saved Au Bon Pain from struggling situation and expanded to 200 stores, for white-collar folks. However, the market was limited and real estates near where white-collar folks were expensive.

Shaich and the team kept looking for new business opportunities. They discovered the start of a backlash against the communization of food that began in 1950 and spawned a coast-to-coast sameness. They believed that their new bought bread company, Panera, would meet the trends and thus have huge potential. The team decided to sell Au Bon Pain and turn their full attention toward growing Panera.

Panera were proved to have the right formula of qualified people, food, and environment. It could very easily become a 1,000 unit chain. But Shaich and the team work hard to keep challenging the existing assumptions to reach the goal that they have the best bread in the country.

Discussion
Confidence, a positive feeling of change
We have already learned in classes that feelings, such as frustration, anger, anxiety, and pessimism[1] might hinder the launch of needed changes. These are the negative feelings in changing people’s behavior. How about the positive ones? This article explores how confidence contributes to changes.

There are gaps between current states and desired states. Confidence drives people to make the leap, enabling them to change their behavior. Without confidence, Benioff would not load salesforce.com against the recent depression of the information technology industry. He would either stay in Oracle (No change to his career) or accept the offer of his former colleague Tom Siebel (No change to the traditional software model). Shaich and his team would still work in Au Bon Pain, even when it reached its market limit. They would make no change to their business. Let us go to the definition of the confidence: It is a mental process that arises from considering if a person or thing is capable of something[2]. It is the feeling of momentum to change.

Loehr’s program is definitely to rebuild their confidence that you can change in the mental perspective. The participants have to find out the divergence between what they want to do and what they are doing now until it becomes intolerable. Loehr does not simply tell the participants how to eliminate the divergence. He taught them how to prepare the change from divergences to consistencies easily by defined periods of that high workplace performance alternating with short intervals of recovery. Some tips are also shared such as acting as a winner.

Like Rip Coburn’s change function[3], I present my understanding of feelings with a similar change function.

Change = f (sum (positive feelings), sum (negative feelings))

Confidence is definitely one of the positive feelings. We make decisions based on the consideration which one is more important, the positive feelings or the negative feelings. As Rosanne Cash said “The key to change is to let go of fears” [4], confidence is the magic pill to cure negative feelings, such as fear.

Achieve confidence in change
When I go back to the book “the Heart of Change” and the eight stages of successful changes, I found those stages also contribute to achieve confidence.

Saleforces.com and Panera have wonderful guide team. Benioff is so tough that he took the risk to fire his CEO while Loehr and his team are very good at catching new business opportunities.

Benioff’s story concerns how people achieve confidence at the beginning of the change. He has the right vision. The market paid back to his unique model. Also, he had the wonderful idea of the non-profit foundation, which contributes to his employees’ confidence since they want to be part of something big not for IPO.

Panera is in the later stage of changes. The organization simply makes change stick. They create waves of changes to improve their quality of products and services, such as bread, the environment, wireless networks, and etc. More radically, if they find that they can not meet the goal, they will make a big wave of changing from the previous business flow to a new one, just like they sold Au Bon Pain and then turned their full attention toward growing Panera.

Loehr’s tips were so called short term wins. He defined much easy goals, such as training his athletes in the “matador walk” to build up confidences, the first momentum of changes.

Confidence is not merely a mental factor in change.
I would like to say that confidence contributes to business, especially stock markets[5]. The world is of changes. What makes us adapted to changes? One of the answers is confidence. The more successful changes we make, the more confidence we have to make changes. It is a change and feeling cycle.

Related articles
Pratt, C. (2005). How to Easily Achieve Confidence and Success – Guaranteed. Retrieved Oct. 14, 2007, from http://www.life-with-confidence.com/achieve-confidence-and-success-guaranteed.html
Pratt, C. (2005). Life Change – 6 Reasons Why We’re Afraid to Change. Retrieved Oct. 14, 2007, from http://www.life-with-confidence.com/life-change.html
Coburn , P. (2006). The Change Function. Retrieved Oct. 14, 2007, from http://www.fastcompany.com/magazine/105/next-essay.html
Clegg, F. (2002). Rebuilding Canadian Business Confidence. Retrieved Oct. 14, 2007, from http://www.microsoft.com/canada/media/speeches/speech_clegg_01_28_2002.htm
Grieder, E. (2003). Confidence, Simplicity and Openness to Change: Keyes for Leadership – Press Releases – McCombs School of Business – The University of Texas at Austin. Retrieved Oct. 14, 2007, from http://www.mccombs.utexas.edu/news/pressreleases/keyes_wrap.asp

[1] Kotter, J., & Cohen, D. (2002). The Heart of Change. Boston, MA: Harvard Business School Press.
[2] Wikimedia Foundation, Inc. (2007). Confidence – Wikipedia, the free encyclopedia. Retrieved Oct. 14, 2007, from http://en.wikipedia.org/wiki/Confidence
[3] Coburn , P. (2006). The Change Function. Retrieved Oct. 14, 2007, from http://www.fastcompany.com/magazine/105/next-essay.html
[4] Pratt, C. (2005). Life Change – 6 Reasons Why We’re Afraid to Change. Retrieved Oct. 14, 2007, from http://www.life-with-confidence.com/life-change.html
[5] Gordon , A. (2006). Maintaining Shareholders Confidence In Volatile Stock Market. Retrieved Oct. 14, 2007, from http://ezinearticles.com/?Maintaining-Shareholders-Confidence-In-Volatile-Stock-Market&id=376711

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