1. The common sense approach
Six tips to assess problems and find solutions. By Sid Kemp
If you want to solve a problem internally, learn to do three things: Listen to yourself; listen to your team; do what makes sense. 90% of advanced tools like process re-engineering, project management and quality management are just common sense.
1. Don’t pass blame. The economy is bad, suppliers mess up, and customers can be difficult. That is as true for your competitors as it is for you. What makes winners different is what we do about the problems we can solve, and how we inspire our team to take a can-do attitude and do good work.
2. Fix the right problem. Think like a doctor. You wouldn’t be happy if your doctor gave you stomach medicine for a heart condition. In business, though, we often fix the wrong problem. For example, when sales are low, we push the sales people. Most likely, they’re already doing a good job, and the problem is in marketing. Remember: The cause of a problem is almost never where the symptom shows up. Find the cause and fix it; you can’t fix a symptom.
3. Fix the problem, not the symptom. Say you have some defective parts in your products. Getting rid of them isn’t enough. How do you know more defects won’t arrive with the next order? Instead:
- Check with your supplier: How can they confirm that there will be no future defects?
- Change your contract: Add a penalty for defective parts.
- Change the way you choose suppliers: Go for quality, and prevent the problem.
Now that you know how to fix problems, you just need to find the problems that need fixing.
4. The power of complaints. There’s a great technique for finding your problems – and blowing off some stress – from Barbara Sher’s book WishCraft. She calls it the power of negative thinking. Stand in front of a friend and deliver a stand-up comedy routine titled ‘What’s Wrong With My Business?’ Complain about everything. Be specific. Rant, rave and get it out of your system. Have your friend write down every complaint. There’s your list of problems. Now start solving them. Which problem do you solve first? It doesn’t matter. If you have time and energy, fix the one that will be the biggest boost to your bottom line. If you’re running around like a chicken with your head cut off, then fix the one that is bugging you the most.
5. Listen to your team. Go to your team, and tell them you want to make a fresh start. Tell them you want them to enjoy their jobs more and get more done. Ask each person on the team for three problems that you can fix to make their lives easier. If you haven’t done this before, it may take a while before they take you seriously, but you’ll get there. And when you do, you’ll find that after you help them, they’ll be ready to help you.
6. Ensure maximum flow. Be the plumber for your business. When you fix all big leaks, things start to flow. When you fix all the small problems, profits shoot through the roof. What flows in a business? Products, services, and solutions flow to your customers and money flows to you. Don’t be in business just to make money. The purpose of a business should be to do what we love, love what we do, make our customers happier and better off, and the world a better place. But money is the measure of a business. Track money – gross revenue, expenses and net revenue – to find what is working, and what is not.
2. Become a Master Problem-solver
Five steps to sharpen your problem-solving skills – and save time and money, too. By Scott Halford
Your ability to make money is directly proportionate to how well you solve problems for your customers. Problem-solving is one of the most highly valued characteristics you can have as an entrepreneur. Hone this skill and you reap the benefits of saving time, making money and finding the next big idea for your business.
Focus on fact, not fiction
There are three myths about problem-solving that should be shot before we talk about how to become good at it.
Myth No. 1: Problem-solving and critical thinking are the same.
Fact: Problem-solving is a sub-set of its larger cousin, critical thinking. Problem-solving deals with the immediate issue, and critical thinking is required for long-term strategic issues.
Myth No. 2: Good problem-solvers intuitively shoot from the hip.
Fact: Intuition is an important part of the process, but research shows that the more systematic problem-solver has a better return with accurate and successful solutions.
Myth No. 3: If you come up with a good solution, you’re a good problem-solver.
Fact: There are five steps to good problem-solving, and you need to follow through on each to be deemed a pro at it.
Following these five steps will help you become a master problem solver.
1. Identify. Identifying the correct problem to work on is often where people trip up. It’s not as simple as you might think – breeze over this step at your own peril. Think about a business that has revenue issues. There could be a few hundred reasons for that issue. Asking the right questions and being a smart detective help you zero in on the problem with precision. The good problem-solver asks a lot of questions about what the problem really is, instead of guessing and making snap decisions about it.
2. Ideate. Now that you have a short list of what the problem might be, brainstorm all the possible solutions. The best brainstorming happens when you have the opportunity to bounce ideas off others. Get the right people in the room and think of as many solutions as you can. This is not the time to evaluate. The physiological brain process of generating ideas is not the same as evaluating them, and they cannot be switched on at the same time. They are both critical processes, but don’t turn off the ideation by turning on the evaluation.
3 Evaluate. This is when you evaluate the ideas you came up with during the ideation phase. Evaluate ideas first based on their impact on a goal, and secondly, on the complexity of the idea. Complexity is not about difficulty. Instead, it is determined by only two things: time and money. Can the idea bring about successful results in the time constraints you have, and does it fit any known budget constraints you have? Ask yourself how large an impact the idea has. If you’re trying to cut R50 000 out of a budget and you come up with an idea that saves R1 000, the impact is relatively low. One with R10 000 becomes a higher-impact solution. You are looking for high–impact, low-complexity ideas.
4 Execute. This is another step average problem-solvers often skip. It does no good to come up with a great idea and then bungle execution on it. We’ve all been in those meetings where ideas are brainstormed and funneled into a few doable deeds, only to walk out of the meeting and never know when or how the ideas will be executed. Fruitless. Come up with a plan to get your idea done. You don’t have to be the executor of the full idea, but as a problem-solver, you have some responsibility for implementing the solution.
5. Re-examine. The final step is to check in with the solution’s progress and determine if it is still the right one. There will be times when the problem still exists because the solution wasn’t right. Don’t throw in the towel. Go back to step two and get going on the next solution.
Problem-solving is a skill that pays handsomely. Practice the steps so that you become efficient at them. Require it of others you work with. Then execute. Get them in the habit of always bringing at least one solution idea for every problem you identify. No problem.
3. The action team approach
Creating action teams is one of the best ways to attack and solve your most pressing business management problems. By John Mautner
Action teams are a structured way to attack business management problems. If you truly want to change your company, then adopt the action team concept – it’ll give you a base to solve problems and improve systems for many years to come. An action team is created to solve a particular problem, and its focus is to come up with solutions to the problem, then implement the best solution(s) found. A team will normally meet for four to six weeks, concentrating on just a single problem. Meetings should be held once a week and limited to one hour. At the end of each meeting, if needed, assignments are given to team members to complete before the next meeting. This keeps everyone actively involved in solving the problem.
Let’s address who should be on an action team. A team normally consists of four to six people, and each member should have some stake in the assigned problem, but it can be peripheral. For instance, if the problem happens to deal with inventory, you may have people from shipping, manufacturing, inventory management, purchasing and accounting since they each deal with inventory in one way or the other. What you don’t want is a team made up entirely of the responsible department, in this case, inventory management. In addition, team members should come from a variety of levels, not just from management. During team activities, all team members should be considered to be on the same level, rather than on their level in the company outside the team. On an action team, each member is equal – there is no rank on the team.
Assembling a team
When it comes to the roles that your employees will hold on the team, the first one to fill is the team leader. This is the person who must keep the meetings moving forward and on track and make sure that all members are involved. They are not to allow ‘war stories’ to dominate the meeting. The focus should be to look forward to solutions rather than rehashing problems once they’ve been clearly identified. The team leader must also be ready to step in and hold the team members accountable for their performance when required.
When choosing a team leader, select someone who has a history of putting out a higher-than-average effort in their jobs in an effective and productive manner. Another critical role on the team is the scribe. This person is responsible for capturing the information that comes out during the meeting and, in particular, noting the assignments that team members are given during the meeting to accomplish. These written minutes and assignments should be distributed to every person on the team no more than 24 hours after the meeting so that everyone knows their tasks for that week. The scribe can be selected by the leader at the first team meeting.
The Team in Action
To start the problem-solving process with an action team, choose a problem. Be sure to carefully word your ‘problem to be improved’ so there’s a clear understanding of the expected results of your action team. Then send out an email to all selected members of the team, requesting their participation on the team. At the first meeting, you should brief team members on the importance of their assistance on the team, noting that it’s just as important, if not more so, than their normal responsibilities. Hold the meetings during working hours so that your employees understand that you’re willing to pay them to work on this important task.
Each action team project should be scheduled as a standard four-week process, although some flexibility may be required which is why as many as six weeks are allowed. (On projects that require more time, the majority of that time will go toward completing the second and third bullets below.) The process should typically follow this outline:
- Week one involves clearly defining the problem and researching the issues and related data. This may include figuring out cost items and looking at different, possible solutions.
- Week two is used to review the issues and the data, identifying new or modified procedures, and to identify updates or changes required to reporting systems. You want to track how the changes are affecting the business, so you need to establish some kind of measure to monitor.
- Week three is used to finalise the new procedures through group interaction. In other words, the team is starting to establish written procedures on new, required actions.
- Week four culminates with the final draft of all new procedures and an implementation of the plan.
The result should be a new standard operating procedure and training on how to use the new process that’s been created.
Learn From The Best: This System Helps Google Measure Their Success
Setting goals within a company is easy. Communicating these goals effectively and measuring the extent to which they have been attained is not nearly as easy, though. That’s why Google uses Objectives and Key Results.
During the (very) early days of Google, ex-Intel employee John Doerr introduced the young company to a management system called Objectives and Key Results — OKRs for short.
Rise of the OKR
“Kleiner Perkins had just invested in Google, and as a strong advocate of OKRs, I offered to introduce the OKR system to Larry, Sergey, and the leadership team,” recalls Doerr. “The entire company was standing around a Ping-Pong table and I walked them through the goals, benefits and implementation details of OKRs. Larry and Sergey saw the value immediately.
“They liked the idea of having a quarterly set of priorities for the company. It took a couple of iterations, but we figured out the right cadence and model and to this day, Larry writes his own personal OKRs and Google’s corporate OKRs every quarter. In my experience, this is a trial-and-error process and it usually takes a company one to two quarters to figure out.”
The concept wasn’t new, not even during the early days of Google. In fact, it had been around since the 1970s. Intel COO and business legend Andy Grove was looking for a way to improve focus within the organisation. How could he keep all employees accountable and focused on the same goals.
The answer was a new system called Objectives and Key Results, which had been created inside the organisation. It was a great success and many prominent business people became huge fans of it (including John Doerr), but it was really when Google started using it that it truly gained widespread appeal. Google, after all, is seen by many as the Platonic Ideal of the modern organisation.
Basics of the OKR
So what are Objectives and Key Results exactly? There is nothing particularly novel or groundbreaking about the system, but it packages typical management ideas in a way that makes them accessible and measurable.
Here’s how it works. Around five objectives are selected every quarter (the timeframe is important), and each objective is given a set of ‘key results’ that are measurable and can be scored.
So it might look something like this:
Increase traffic to the company’s website.
- Create a Facebook page and Twitter account that can drive traffic to the website
- Build an audience on Facebook and Twitter through regular posting and sponsored posts
- Write at least four blog posts per month for the website
- Create effective Google ads promoting the website
- Create three items of sponsored content for posting on popular new sites that will drive traffic to the company website.
From the above it should be fairly clear what ’objectives’ and ‘key results’ are, and how they are related. An objective, within the OKR context, is an outcome that is specific and highly desirable, but not particularly measurable. A result, meanwhile, is a measurable activity that will assist in the achievement of the objective. In other words, key results are a list of actionable items that will lead to the achievement of the overall goal.
Employees are scored on each key result, with the maximum score being 1, and the minimum 0. A good score would be 0,6 or 0,7 (any higher than that and you have to question whether the chosen key result was too easy.
Key results should be tough but attainable), but the process is much more important than the actual score. Also, low scores should be used to reassess what the company is spending its time and resources on. Why are scores low? How crucial are these results? Should we be focusing on different key results to get to our objectives?
OKR in practice
Although the implementation of OKRs will differ slightly depending on the company you look at, most systems tend to have the following things in common:
OKRs are selected on a quarterly basis: To maintain momentum and ensure that everyone is always actively working towards the achievement of a goal, the timeframe of an OKR should be relatively short. Knowing that a deadline is always on the horizon keeps everyone focused and accountable. Some companies have monthly OKRs, but most tend to settle on quarterly objectives.
They have hard, non-negotiable deadlines: There’s no point in setting monthly or quarterly OKRs if employees know that deadlines can be shifted if necessary. In order to maintain focus and urgency, deadlines need to be absolute.
Everyone gets about five quarterly OKRs: Give employees too many objectives and they’ll lose focus, or become utterly overwhelmed. John Doerr recommends four to six OKRs per quarter.
OKRs are public: A lot of companies — including Google — choose to make OKRs public. Google makes all employees’ OKRs (including those of the founders and other C-suite executives) available for everyone to see. They can all be found on the organisation’s internal directory. Scores are also public, which reinforces commitment and ensures accountability.
They can exist on different levels: OKRs need not only exist at the level of the employee alone. Teams, departments or even the company as a whole could be assigned quarterly OKRs. It’s important, though, not to overcomplicate things — the whole aim of OKRs, after all, is to keep things simple. Start adding layers and layers of OKRs on top of each other, and the whole system will start breaking down. The aim is to increase focus, so keep things simple and straightforward.
The benefits of OKRs
If all of the above sounds like a lot of work, it’s worth taking a moment to consider what the advantages of OKRs are. According to John Doerr, implementing Objectives and Key Results in a company offers the following benefits:
It encourages disciplined thinking: By focusing on objectives and key results, you learn to look at your business in a very disciplined way. The unimportant things fall away and you start to notice what the major goals should be.
Assists with communication: Public OKRs give people a good idea of what the rest of the organisation is working on, which helps to keep all employees on the same page. There’s less chance of a communication breakdown if everyone knows what the responsibilities of everyone else are.
It makes things measurable: Even the most focused goals can be tough to actually track. What does success look like? When can you tick it off the list? OKRs provide measurable indicators that allow you to track the progress of employees in a meaningful way.
It encourages focus: Making OKRs public not only improves communication, but also keeps everyone in step and focused on the same goals.
By using OKRS, you allow the important objectives within your organisation to reveal themselves. This won’t necessarily happen immediately. There will be some trial and error, but by sticking with the process, you should reach a stage where you have a very good idea of what you should be focusing your time and resources on.
Expand Your Business View By Stepping Into Your Competitor’s Shoes
How do your competitors see your strengths and weaknesses? The answers just might surprise you.
I’ll never forget the level of frustration I felt a few years ago when I arrived at my monthly meeting with my mentor. My team and I had pitched for a major deal, attended meeting after meeting following the pitch, and were then shortlisted for the final round where we had to present once more.
At the final presentation, one of the awkward questions we were asked was to define why we were better than the other two finalists.
Initially, I resisted responding to this question, and instead answered by highlighting the strengths and benefits that we as an organisation offer. They pushed and pushed for an answer, but I stood firm on my decision not to answer the question directly. Eventually, someone across the table said: “But your competitors answered the question without flinching.”
I settled into my seat at the table and asked my mentor how he would have approached that particular situation. “Secretly answer the question from your competitor’s point of view,” he said.
The confused look on my face encouraged him to elaborate on that comment. “You did the right thing by not criticising your competitors in public, but ironically, the gift is in the scenario. You need to be able to anticipate what their answer would be if asked about your weaknesses, and then ensure that you acknowledge, list and work on those weaknesses.”
After a long pause, during which I sat and considered his advice, he looked up and concluded: “Most importantly, also anticipate the answer they would have when answering the question: What does your competitor have that you do not currently have to offer?”
Place yourself in your competitor’s shoes (company B), and then answer the following questions about your own business (company A), from company B’s point of view:
- What does company A actually do?
- What makes company A better than company B?
- What are company A’s weaknesses?
- What should company A be concerned about?
You’ll be surprised by the information you evoke by partaking in this exercise. Too often, entrepreneurs suffer from the side-effects of drinking too much of their own marketing ‘Kool-Aid’, and as a result, become blinded to not only their weaknesses, lack of competitive edge, and product flaws, but they also end up failing to identify and highlight their less conspicuous strengths, competitive edges, and product benefits.
Entrepreneurs often follow a mechanical routine of only selling the strengths that are listed in their marketing brochure to investors or clients, and very often forget about their other strengths, which their competitors are all too aware of, and have listed as notable threats.
As a business owner, you should be selling and driving all of your strengths, even if they are not all listed in your brochure.
When planning your next pitch, don’t focus solely on the script of your marketing brochure. Spend the day in your competitor’s shoes and use this new lens to identify and list your strengths and weaknesses as your competitors may view them. This is vital information that must be added to your next pitch.
2017-Proofing Your Business: 3 Tips For The Year Ahead
How did 2016 go for your small business? Whether it was plain sailing or a rocky road, it’s essential that you’re prepared for whatever 2017 will throw at you.
It’s safe to say that 2016 has been a bit of a mixed bag. From Donald Trump’s shock US election win, and the subsequent hit to the Rand, to the Springboks’ worst year ever, 2016 has had its fair share of upsets – it’s even merited its own meme.
In South Africa though, the outlook for 2017 is cautiously optimistic, with Finance Minister Pravin Gordhan projecting GDP growth of 1.3%. Small businesses will play a vital part in this recovery and it’s essential that they’re prepared for the coming year, whatever it brings.
Fortunately, there are encouraging signs. According to research from cloud accounting software Xero and World Wide Worx, 58% of South African small business owners expect to grow in 2017 and half intend to grow sales.
Related: Your Top 10 Growth Moves For 2017
If you want to successfully weather 2017, keep these three tips firmly in mind and ensure that nothing stands in the way of your success.
1Review your business plan
The most profitable businesses plan ahead. They define their targets, they pursue them relentlessly, they regularly monitor their progress – but they also remain flexible enough to change direction if necessary.
So if you’re looking to start 2017 on the right foot, it’s vital that you create a clear plan for your company’s growth.
This plan should contain defined goals and milestones – with enough room to account for unforeseen events and changing circumstances.
2Update budget and cash flow forecasts
Establishing a budget before the new year gets underway is an essential strategic move. Knowing where your resources are and how to allocate them will give you a considerable advantage as you move forward.
Without solid budget forecasts in place, it’s easy to just throw money at problems as they arise – inevitably wasting it in the process. Plan ahead and you can avoid this.
If you have forecasts in place already, it’s a simple matter of updating them using insights and data compiled in the previous months. Whatever you do, stay on top of it: A healthy cash flow is often the difference between weathering unforeseen events or economic uncertainty, or being swept away by it.
3Make sure you’re ready for the tax year end
Finally, while the calendar year may be over, you’ve got a little while before the end of South Africa’s tax year on February 28th.
There’s a fair bit of work involved in getting up to speed, but if you take care of it in advance, you can save yourself and your business a great deal of frustration.
Follow these steps to make sure you’re ready:
- Firstly, confirm your tax deadlines and determine whether or not you’ll need an extension.
- Then, check your cash reports to find out how much cash you have in hand, and pay all vendors and contractors in full before the end
- of the period.
- Review past and present payroll information, withhold the required tax from your employee bonus payments, and use cloud accounting software
- to gain accurate estimates of how much you’ll need to pay.
- It may also be worth consulting an expert accountant or book keeper to see if there’s any way to mitigate your tax payments and avoid
- any compliance issues.
These aren’t the only steps, but they’re a good start. As you take your business into 2017, be positive, prepared, and forward-thinking and you won’t go far wrong.
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