Good News is No News

“Good News is No News; No News is Bad News; Bad News is Good news..” – Jim Morgan, Chairman, Applied Materials

Picture this: You are thinking about purchasing a new Applicant Tracking System (ATS). You are at the “pitch meeting”. The salesperson tells you that their application can slice and dice, never gets dull and comes with a lifetime warranty. You want to jump out of your seat and scream “Yes! I want that! Give me twenty of them!” But before you can even move, you hear the magic words: “Wait, there’s more!” More? More? How can there possibly be more? And then you hear “If you order now you’ll get…”

Good software sales people will make you take the shirt off your back and throw it at them, screaming like a 1960’s Beatle’s fan the whole time. That’s why they get paid the big money. Salespeople do this using many methods, including great looks, fantastic hair, tailored suits and perfect smiles. But one technique they all share is the “Good News” method. “Good News” is where the salesperson barrages you relentlessly with the great news about them and their software. Things like “The last company that bought my ATS was so successful that they have a statute of me in the lobby” or “People who use our ATS actually get smarter by ten IQ points and regrow lost hair.” I remember the first time I fell for that one. It wasn’t true.

(And while the subject of this article is picking the right Applicant Tracking System, it should be noted that the concept discussed here works with any potential sale or partnership, including interviewing a candidate for a job.)

The reason salespeople do this is because we, the prospective customer, ask for it. Actually, we beg for it. When was the last time you rewarded someone who delivered bad news? We penalize salespeople who tell the truth. If the salesperson came in a tattered plaid suit with bad hair and crooked teeth and said “Actually, we have determined that our customers think our application has some problems” then you wouldn’t buy it and they wouldn’t make the big money they need to get the orthodontics that their more successful brethren have already secured.

It all seems logical at face value. We want to know why we should buy, not why we shouldn’t. Buying a major software application is risky while procrastination is usually safe. Buying is usually a big, emotional decision, and we want to be enthusiastic about the hell we are about to put ourselves through. But while it may seem logical to reward good pitches and penalize the bad news, it is almost always catastrophically wrong. We can all tell that it’s wrong because most companies report that they are unhappy with their present ATS implementation. If you hang around the industry long enough it almost starts to feel inevitable. This is strange since ATS buying decisions are examined seven ways to Sunday, with countless hours spent by the project team and RFPs that extend into the hundreds of pages.  It seems like every contingency gets covered. Except for the bad news.

Jim Morgan, the Chairman of Applied Materials (the world’s largest semiconductor equipment manufacturer) used to tell his executives: “Good news is no news; no news is bad news; bad news is good news.” In other words, if someone is telling you good news it is probably of little value; if you don’t hear anything, its probably because something is wrong; and if you get bad news that is great, because you are finally getting the truth. Jim’s approach appears to have been right: during his tenure Applied Materials has gone from near bankruptcy in 1976 to a Fortune 500 company today. Apparently he heard a lot of bad news.

Keep that in mind as we take a quick detour to review some software sale’s basics. A software sale is a partnership between your company and the company that is selling the software. Partnership always represents cost and risk. It may be a risk that your company is willing to take because they expect the outcome to be fantastic, but that doesn’t mean that it isn’t a risk. Buy a pack of gum for $.25 and you have risked your money for minty-fresh breath. If the gum tastes like a spring morning the risk was worth it. And if the gum tastes like unwashed feet, then the risk wasn’t.

Everyone knows this at some level or another, so everyone actively engages in partnership risk, making the call about whether the probability of reward outweighs the probability of risk. Risk evaluation is highly personal (no matter how systemized implementation, strategy and finance gurus try to make it), and so everyone uses different standards for making decisions about whether to buy or not: emotional comfort, references, previous experience and critical analysis are all ways that people evaluate risk. But rarely, if ever, do buyers evaluate the most critical risk factor of all: lack of information.

The biggest risk you face in any sales situation (and especially in major software sales) is lack of knowledge. In any transaction information is king, and when your partner has more than you do, you are at a disadvantage.

Most buyers have some inkling of this, but they assume that because they are the “customer” that they have the upper-hand and can either discover the truth through talking to other customers or badger the potential partner into disclosing all their nasty secrets. Neither of these is true, for the simple reason that buyers often really don’t want to know the bad news. The salesperson is just so scintillating that you make up your mind that you have to get that ginsu knife set no matter the price. Or maybe your boss is all over you to solve a problem (“Get that new ATS installed before the merger!”) and you just want to lunge to the first reasonable option that comes your way. Or maybe you just like Armani suits and good haircuts. Whatever the reason, people usually crave an emotional connection before they demand a bullet-proof analysis.

This is a pretty serious problem, because, to bring us back to Mr. Morgan, “Good News is No News.” In other words, good news is practically worthless in helping you evaluate whether a piece of software will actually meet your needs. This is the reason most people buy stuff that breaks, or enter willfully into obviously bad partnerships. (The other key reason is that most people don’t really know what they want for tomorrow, just what they needed yesterday – but that is another article altogether.)

The really valuable information in any sales transaction is the bad news, and you (the prospective customer) are penalizing the people who deliver what you really need. “Bad News is Good News.” Further, no partnership can work without some level of trust. And yet how many ATS / customer partnerships end in disaster because the buyer hides from the bad news up front and then screams their head off once they discover it after the sale is made? (Answer: Many of them.) Why? Because surprises usually make the buyer feels like they can’t trust the seller, when the fault usually lies as much with the buyer for not asking as it does with the seller for not telling.

In order to solve this problem, you must first convince yourself of the basic truth that there is always, always bad news. Nothing is perfect. Every single vendor who brings both the dog and the pony has skeletons in their closet. All of them. No exceptions. Repeat it to yourself 50,000 times and then say it one more time for good measure. There is no perfect partner, there is no perfect software system. Period.

Once you come to acceptance of this fact, then you can put the “Bad News is Good News” plan into action:

 The Ground Rules

• Start by letting each ATS vendor know the ground rules:

• The sales person can tell you the “Good News” (the reason you should buy from them), but they have a set time to do it. Frankly, an ATS vendor that can’t make a compelling statement of value within an allotted period of time doesn’t know their business or your needs well enough to deserve your business.
• Tell them that at the end of the “Good News” section that you are going to expect them to make an equally concise report on where they see a difference between what you are looking for and what they are providing (the first phase of bad news).
• Once they have told you some potential potholes in the yellow-brick road of your potential relationship, have them identify the top 5 complaints you are going to hear from their present customers. Tell them that the more detailed and exact they are, the higher they will be evaluated.
• Now ask them to let you know what you are going to find out when you talk with former employees, industry analysts and competitors. Again, the more detailed and compelling their answer, the more trustworthy they are, and the higher they get rated in the process.

Once they peel themselves off the ground, tell them that you will heavily weigh your decision based on how convincing their bad news is, rather than how compelling their good news is. Really. Remember, finding out that a vendor has a particular bell or whistle that you want is a lot less valuable than finding out that only 5% of the registered users log into the system every week. Your job is to get them to give up the bad news.

Reassure and Reward

Back up this statement with the two R’s – Reassuring and Rewarding.

Reassure – Constantly reassure the salesperson that their woes are not unique and that in-and-of themselves their “bad news” will not be a reason for sending them packing. Ask them to explain their strategies for tackling the issue, or ways that their other customers have dealt with it. This is a great way to figure out whether the vendor’s management can tackle tough issues or just tries to cover them up with the sales pitch.

Reward – Whenever the potential partner / sales person discloses something especially noteworthy you should stop the conversation and say, “I really appreciate you disclosing that. While it is something that we will want to discuss more before moving forward, the fact that you are telling me means that I am more likely to trust you to partner with me effectively in the future.” Reward them for telling the truth.

Once the Good News / Bad News discussion has ended, tell the salesperson that you are looking to develop a partnership, not just buy a product, and that the most important component of any partnership is trust. Show them that by their actions they have / have not created the sense of trust that will be crucial to any potential partnership that could develop. You may even find that the salesperson is relieved to finally have a rationale prospect that wants to talk turkey.

Let’s be clear: it’s not that you won’t use bad news in evaluating the risk of a partnership. It’s just that bad news you don’t know is always riskier than bad news you do know, and since trust is the single most important component of the sound working of any partnership, getting bad news early is always better than getting bad news later.

So the next time you are thinking about going into the market for an ATS, remember “Good news is no news; no news is bad news; bad news is good news.” It may be the start of a beautiful relationship.