• Innovative Strategies That Create More Profits

Tag: Strategy

Leverage Strategy Through Inertia and Entropy

Posted on by harborcapitalgroupinc

In business, inertia is a company’s unwillingness or inability to adapt to changing circumstances. 

Even with change programs in place and running, it can take a long time to change direction, and for large companies, it could take many years to change the way the company functions. If you recognize this inertia early, you can add leverage to your strategy. 

Why? Organizational inertia is the reason. A well-adapted corporation can remain healthy and efficient as long as the outside world remains unchanged. 

But another force–  entropy — is also at work. Entropy measures an organization’s degree of disorder and increases in isolated systems or organizations.  

According to Richard Rumelt, Professor and author, companies with inertia and entropy tend to become less organized and focused. Entropy makes it necessary for leaders to constantly work on maintaining an organization’s purpose, form, and methods, even if there are no changes in strategy or competition. Inertia and entropy have several important implications for strategy:

 

  1. Successful strategies often owe a great deal of their success to the inertia and inefficiency of rivals. For example, Netflix pushed past and now bankrupt blockbuster because the latter could not or would not abandon its focus on retail stores. 
  2. A company’s most significant challenge may not be external threats or opportunities but the effects of inertia and entropy. In such a situation, organizational renewal becomes a priority. 
  3. Transforming a complex organization is an intensely strategic challenge. Leaders must diagnose the cause of effects of entropy and inertia, create a sensible guiding policy for effecting change, and design a set of coherent actions designed to alter routines, culture, and structure of power and influence.

Inertia

Organizational inertia generally falls into one of three categories: the inertia of routine, cultural inertia, and inertia by proxy. Each has different implications for those who wish to reduce inertia or those who seek to gain by attacking a less responsive rival.

The inertia of routine

The heartbeat of a business is the rhythm and pulse of its standard procedures for buying, processing, and marketing goods. The company may not be consciously aware of these actions but is guided by them nonetheless. As the company grows in size and age, these routines become embedded in layer upon layer of impacted knowledge and experience. It’s the way things are done here.

These familiar routines both filter and shape everyday actions and filter and shape managers’ perceptions of issues. These standard routines and methods also act to preserve the old ways of processing information.

Sudden outside shocks can reveal inertia created by standard routines: a tripling of the price of oil, the invention of the microprocessor, telecommunications deregulation, and so on. The shock changes the basis of competition in the industry, creating a significant gap between the old routines and the needs of the new regime.

With a sudden change like deregulation and leadership is convinced change is necessary, routines can change quickly.  One way is to hire people with the essential skills, hire consultants, or re-design your routines. You may also have to re-organize business units. 

The inertia of culture

The problem may not be the competence of individuals but of culture. The use of the word culture means the elements of social behavior which tend to be stable and strongly resist change. It is not realistic to think you can change a company’s culture quickly or easily.

 The first step in breaking cultural inertia is a simplification. Think about complex routines, processes, waste, and inefficiency. Strip out any unnecessary administration or operations or outsource some services. A more straightforward structure will expose inefficiency. 

After the first round of simplification, it may be necessary to break down operating units to analyze each unit in-depth and use creative thinking to improve the situation further. You may even need a new structure or business model. You will want to look at both performance and culture. Also, remember that changing units can also change work norms and related values.

 Inertia by proxy

The lack of response is not always an indication of sticky routines or a frozen culture. A business may choose not to respond to change or attack because responding might undermine values and profit streams. The streams of profit persist because of customer inertia, a form of inertia by proxy. 

For example, in 1980, the prime interest rate was 20%, and banks were free to create money market accounts. With this new freedom,  smaller banks jumped at the opportunity to create these high-interest deposit accounts. However, larger banks with long-established customers id not, 

Smaller and newer banks seeking retail growth were happy to offer this new type of high-interest deposit account. But many other banks with long-established customers did not. If their customers had been perfectly agile, quickly searching for and switching to the highest interest accounts, they would’ve had to offer higher interest accounts or disappear. But their customers were not this agile.

However, when an organization decides that adapting to change is more important than hanging onto profit streams, everything changes. And this change can happen suddenly.

Entropy

It is not hard to see entropy at work. For example, with the passage of time, great works of art blur and crumble; unless a skilled artisan can restore the artwork. In a business where the firm is not keeping its product line up to date, it can begin to crumble also. The product often becomes less focused and reduces prices, customer response times may have become longer, and eventually, profits decline.

An excellent example of entropy is General Motors. They blurred the designs of their cars,  brands, and divisions. They were essentially offering the exact vehicle under several model brand names. In 2001 they closed the Oldsmobile line of cars because Oldsmobile lost any distinction in either style or price.   

Remember, product-market fit is not a permeate status. In this Covid environment, think about how digital products are being created and changing how we live and work. Are you keeping up with technology and changing preferences?   

 

 

 

What Is A Good Strategy

Posted on by harborcapitalgroupinc

First of all, If you have a strategy, you have a natural advantage because your competitors often do not have one, and they don’t expect you to have one either. For many companies, their strategy is to “spend more and try harder.

 Strategy is not only about what you want to do. It is also about what you don’t want to do as well. There are not enough resources or enough time to do everything. You have to stay focused.  A good leader must be willing to say no to a wide variety of actions and interests. Strategy is as much about what a company does not do as it is about what a company does.

According to Richard Rumelt, in his book “Good Strategy/Bad Strategy”, you want to gain insight into new sources of advantages and opportunities as well as weaknesses and threats.

A good strategy is about discovering power

Wal-Mart is a good example. Common knowledge was that a full-line, discount store needs a population base of at least 100,000 people. They put big stores in small towns and broke conventional wisdom. 

They created a store distribution system that had trucks taking products (just-in-time inventory) to small-town stores daily – in a designed loop that brought the trucks home again each night. Stores had enough inventory but didn’t need the massive floor space of the big box stores. Their trucks would also pick up inventory to bring back to the warehouse on their way home. 

But, their strategy didn’t stop there. They had low prices, used barcodes — when that technology was new — to keep track of inventory and sales daily. 

Their competitor, K-Mart failed to see or acknowledge the dynamic changes Wal-Mart was making. Wal-Mart had a network of 150 stores and reached a population of millions. K-Mart went out of business and today, this strategy is called supply-chain management. 

You can see this situation happening again and again. Blockbuster didn’t want to give up their 9,000 retail stores even as Netflix was eating their lunch. Blockbuster owned the stores but Netflix owned the customers.

 .What is a bad strategy?

Bad strategy is long on goals and mission statements and short on policy and action. A good strategy defines a critical challenge, the policies the company will use to position itself in the minds of the customers and use a coherent, focused execution plan.

There are many bad strategies out there. I have already mentioned so many are goals and mission statements that are simply wishes, not strategies. Also, a lot of strategies are filled with meaningless fluff. We will be the number one company in this industry, but have no strategy,  or execution plan to back up this statement. 

What they are doing is ignoring the problem that needs to be solved or the opportunity they want without a creative strategy or the resources to back it up. Or they have a lofty, BlueSky objective with no idea how they are going to achieve it.

A good strategy takes a lot of work.

A strategy takes diagnosis, creative insight, a well thought out general policy on what the company will do and what it will not do. Pus, focused, cohesive use of company resources. It involves focus and therefore choice. And choice means setting aside some goals in favor of others.  

Template-style strategy

A lot of people think you can simply get a template and write out your strategy. It’s not that simple. Yes, it takes lots of research, data, and analysis. But it also takes creative problem solving and creative opportunity ideas to get a strategy that will make your company, your products, and services the valued leader of your industry. 

Be sure to read the articles on strategy in this section. E-mail us if you have a question.

 

What Is A Strategy?

Posted on by harborcapitalgroupinc

The basic definition of strategy is overcoming obstacles. Following  is the definition of strategy according to Richard Rumelt, the professor at UCLA and recognized as an exceptional strategist, “The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.”

Strategy is a term that has been so widely used that its meaning has been diluted to the point that many CEOs define it as a goal or mission statement. Strategies are not goals or mission statements. Strategy is a cohesive response to an important challenge.

Also, you cannot have a strategy if you don’t have implementation. If your strategy does not have a plan of coherent action it is missing an important part of the strategy.

A good strategy according to Rumelt has a logical structure that he calls the “kernel. This kernel consists of three parts: a diagnosis, a guiding policy, and coherent action. 

The guiding policy specifies the approach to dealing with the obstacles called out in the diagnosis, It defines the general way forward but without specific details.

Coherent actions are feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.

Once you understand the definition of strategy, diagnosis, general policy, and coherent action, you will be able to detect bad strategies. And there are plenty of bad strategies around. Many people treat strategy as goal setting rather than problem-solving

A good strategy doesn’t just draw on existing strength, it creates strength through the coherence of its design. The creation of new strengths is done through subtle shifts in viewpoint.

Now, when you think of strategy, think about the kernel –diagnosis, general policy, and coherent action. Does your strategy include those components?

How to turn negative problems into positive results

Posted on by harborcapitalgroupinc

How to turn negative problems into positive results

If you are in business, problem-solving is a constant part of your business life.

No problem is simple, or it wouldn’t be a problem.

Some problems are critical to the success of your company.

One way to make solving problems easier and more effective is to turn a negative problem into a positive result. 

Start With These Questions

Start the process by answering the question, “what is your goal?”

Is this problem important enough to spend time and energy on it? 

If yes, you need to state the problem in writing so it is clear and you can focus on it. For example:

1. How could we differentiate our product or service from competitors?

2. What new product should we be developing? 

3. How can we improve our service?

Next, turn the problem into a challenge statement.

Michael Michalko, in his excellent book, “Thinkertoys,” explains this creative process

and that the challenge statement has to be written as a positive challenge.

For example, “why have revenues slowed down?” focuses on finding the negative reasons.

But, if you restate the problem into a challenge

such as “In what ways might I get customers to buy more?” you focus on finding positive answers. 

For each problem or challenge, state your problem as a positive challenge or statement. For example, instead of: 

Old statement: “How can we reduce costs to improve cash flow?

New positive statement: “How could we boost margins on current offerings?’   

Why can’t we stay on plan?” vs. “What could we do to meet consistent deadlines? 

Why is onboarding so complicated?” vs. “What could we do to simplify onboarding?”  

Note: Mr. Michalko recommends your challenge statement use the phrase.

“In what ways might I …..? He also recommends spending time crafting your challenge statement.

The more time you spend refining your challenge statement, the closer you will be to the solution.

You should be able to generate many different answers or ideas from these questions.

Make a list of every idea, and select some that you think have promise. 

Then, substitute keywords to broaden your view. 

Identify keywords in your challenge statement and substitute other words for them.

For example: instead of reducing costs, use eliminate costs. Instead of boost margins use to raise prices.

Each word change should give you a broader view of the problem, a different viewpoint, and different ideas.

Keep making word changes until you run out of ideas.

Your success in creating new problem-solving ideas depends in part on how you define your problem. 

 You can also create broader perspectives by asking “Why? to each of your ideas or answers.

Ask Why

For each “answer”: Why do you want to improve your service?

Then, Why do you think improving service will add value?

Then, Why will this value enable us to increase prices? Etc.  

Now, break your Broadview down to specifics.

With all this information, you can now get down to specifics by breaking each answer into subcategories.

These subcategories will generate even more ideas.

For example, “When will this new product be ready?”

Who could design the new product?

These kinds of questions will give you more ideas and make it easier to solve the problem. 

 Conclusion

This thinking process enables you to restructure existing information into new patterns and ideas and turn these problems into opportunities.

You start with your goal, identified the problem, and then turn the problem into a challenge statement that you can analyze in depth.

This will enable you to see the problem through several lenses and get different perceptions of the problem. 

After reading this blog post. select a problem and go through the exercise for practice.

That is how you will learn to do it and it’s fun!

How to turn negative problems into positive results

Posted on by harborcapitalgroupinc

If you are in business, problem-solving is a constant part of your business life. No problem is simple, or it wouldn’t be a problem. Some problems are critical to the success of your company. One way to make solving problems easier and more effective is to turn a negative problem into a positive result. 

Start the process by answering the question, “what is your goal?” Is this problem important enough to spend time and energy on it? If yes, you need to state the problem in writing so it is clear and you can focus on it. For example:

  1. How could we differentiate our product or service from competitors?
  2. What new product should we be developing?  
  3. How can we improve our service?

Next, turn the problem into a challenge statement.  

Michael Michalko, in his excellent book, “Thinkertoys,” explains this creative process and that the challenge statement has to be written as a positive challenge. For example, “why have revenues slowed down?” focuses on finding the negative reasons. But, if you restate the problem into a challenge such as “In what ways might I get customers to buy more?” you focus on finding positive answers. 

For each problem or challenge, state your problem as a positive challenge or statement. For example, instead of: 

  1. Old statement: “How can we reduce costs to improve cash flow? New positive statement: “How could we boost margins on current offerings?’   
  2. Why can’t we stay on plan?” vs. “What could we do to meet consistent deadlines? 
  3. Why is onboarding so complicated?” vs. “What could we do to simplify onboarding?”  

Note: Mr. Michalko recommends your challenge statement use the phrase. “In what ways might I …..? He also recommends spending time on crafting your challenge statement. The more time you spend refining your challenge statement, the closer you will be to the solution.

You should be able to generate many different answers or ideas from these questions. Make a list of every idea, and select some that you think have promise. 

Then, substitute keywords to broaden your view. 

Identify keywords in your challenge statement and substitute other words for them. For example: instead of reducing costs, use eliminate costs. Instead of boost margins use to raise prices. Each word change should give you a broader view of the problem, a different viewpoint, and different ideas. Keep making word changes until you run out of ideas. Your success in creating new problem-solving ideas depends in part on how you define your problem. 

You can also create broader perspectives by asking “Why? to each of your ideas or answers. For each “answer”: Why do you want to improve your service? Then, Why do you think improving service will add value? Then, Why will this value enable us to increase prices? Etc.  

Now, break your Broadview down to specifics.

With all this information, you can now get down to specifics by breaking each answer into subcategories. These subcategories will generate even more ideas. For example, “When will this new product be ready?” Who could design the new product? These kinds of questions will give you more ideas and make it easier to solve the problem. 

Conclusion

This thinking process enables you to restructure existing information into new patterns and ideas and turn these problems into opportunities. You start with your goal, identified the problem, and then turn the problem into a challenge statement which you can analyze in several depths enabling you to create solutions.

 

How You Approach Problem-Solving Matters

Posted on by harborcapitalgroupinc

No matter who you are, a seasoned businessman or an entrepreneur, you continuously face different problems on that pathway to success. And you can add to that the challenge of not enough time to do everything. We want to change that by getting you off on the right foot with how you initially approach problem-solving. It’s important because the way you approach problem-solving matters.   

 Most problems need a timely solution. Some linger because we don’t know how to solve them. It often happens when you suddenly have to face somethings that you did not expect. So, choosing the best path to reach an effective solution matters.  

Following are several approaches to problem-solving. Understand them, and you will be able to see the changes in how fast and effective your problem-solving techniques will become.

 A Team Approach To Problem-Solving

If you are working with a team, everyone on the team must know and understand the problem from their own perspective. And every person on the team must be able to express their point of view and without criticism freely. 

Leadership means that you remove all the fear in people’s minds of any repercussions if their idea is ridiculed. The good news is it often happens that some off-the-wall comment is picked up by someone else and turned into a potential solution.   

If you find that you cannot find “the” solution after a reasonable amount of time, compile a list of all the suggested solutions. You can then analyze which one has the potential to solve your problem. A day or two later, when people are not intensely focused on the problem’s details, someone often comes up with an insightful solution.  

Having an open-minded, kind approach is needed to develop transparent communication. With an open mind, you can see things more clearly and see the bigger picture. Finding and assigning important tasks to all the open-minded people will help in reducing the problem-solving time. People with open minds can take you forward in your quest to find the best solution to any of your problems. Creating a team of people who know exactly where to look when a problem occurs is always an interesting approach towards problem-solving.

Mindsets Make A Difference In Approach And Outcomes   

Next, let’s take a look at different mindsets and how these mindsets approach problem-solving.  

Analytical thinking:

People who think analytically generally consider every aspect of the problem. From here, they can move forward in a calculated way. People with analytical thinking mindsets find it very easy to take on and solve any problem, so they proceed step by step. They make assumptions and considerations because they have expertise in discovering new things, and they are sure about it.

Logical thinking:

People who think logically and straightforwardly learn from their actions from past actions. Logical thinking can get you the solution you seek for any of your problems. Logical thinking is the basis of their solution. They approach the problem from what they think a normal person would view the problem. They try to see the long-term solution.  

Rational thinking:

It is a kind of thinker who would use its knowledge and assumptions. He would not look for any experience or any other factor. From his perspective, he may be like the problems, and he would solve them in this way that others may find questionable.

Absolute thinking:

The absolute thinker wants surety for everything. He has just two solutions, and one is right while the other is wrong. He only selects from two of them, and for that, he always seeks permission from higher authorities. He does not live with probabilities.

Creative thinkers:

Creative thinkers do not remain limited to one or two solutions based on their judgments or past experiences. They can create solutions from scratch. And they do not focus on one thing when there are so many potential solutions. They will also take tier time in coming up with these solutions.  

Conclusion:

Your approach to problems tells how you will solve your problem. Identifying and agreeing on the problem rather than working on a symptom is critical to your success. Learning how to solve problems creatively is a crucial talent and a toolbox for anyone who wants to succeed in business.  

 Solutions, no matter how difficult the problem or challenge, can be solved — some instantly and some like solving the theory of relativity took Einstein 10 years. Always choose your method or technique according to the complexity of the problem.

Lastly, remember that trying to approach and solve a problem as a team can be fragile because you have to give space and freedom without criticism to each member.  

We hope this information gives you some food for thought as you approach a specific problem. We would love to hear your comments on this approach and if it works for you.  

 

How You Approach Problem-Solving Matters

Posted on by harborcapitalgroupinc

How You Approach Problem-Solving Matters

No matter who you are, a seasoned businessman or an entrepreneur, you continuously face different problems on that pathway to success.

And you can add to that the challenge of not having enough time to do everything.

We want to change that by getting you off on the right foot with how you initially approach problem-solving.

It’s important because the way you approach problem-solving matters.   

 

Most problems need a timely solution. Some linger because we don’t know how to solve them.

It often happens when you suddenly have to face some things that you did not expect.

So, choosing the best path to reach an effective solution matters.  

Following are several approaches to problem-solving.

Understand them, and you will be able to see the changes in how fast and effective your problem-solving techniques will become.

 A Team Approach To Problem-Solving

If you are working with a team, everyone on the team must know and understand the problem from their own perspective.

And every person on the team must be able to freely express their point of view without criticism.

Leadership means that you remove all the fear in people’s minds of any repercussions if their idea is ridiculed.

The good news is it often happens that some off-the-wall comment is picked up by someone else and turned into a potential solution.   

 

If you find that you cannot find “the” solution after a reasonable amount of time, compile a list of all the suggested solutions.

You can then analyze which one has the potential to solve your problem.

A day or two later, when people are not intensely focused on the problem’s details, someone often comes up with an insightful solution.  

 

Having an open-minded approach is needed to develop transparent communication.

With an open mind, you can see things more clearly and see the bigger picture.

Finding and assigning important tasks to all the open-minded people will help in reducing the problem-solving time.

People with open minds can take you forward in your quest to find the best solution to any of your problems.

Creating a team of people who know exactly where to look when a problem occurs is always an interesting approach to problem-solving.

 

Mindsets Make A Difference In Approach And Outcomes

Next, let’s take a look at different mindsets and how these mindsets approach problem-solving.  

Analytical thinking:

People who think analytically generally consider every aspect of the problem.

From here, they can move forward in a calculated way.

People with analytical thinking mindsets find it very easy to take on and solve any problem, so they proceed step by step.

They make assumptions and considerations because they have expertise in discovering new things, and they are sure about it.

Logical thinking:

People who think logically and straightforwardly learn from their actions from past actions.

Logical thinking can get you the solution you seek for any of your problems.

Logical thinking is the basis of their solution.

They approach the problem from how they think a normal person would view the problem.

They try to see the long-term solution.  

Rational thinking:

It is a kind of thinker who would use their knowledge and assumptions.

They would not look for any experience or any other factor.

From their perspective, they may be like the problem,

and he would solve them in a way that others may find questionable.

Absolute thinking:

The absolute thinker wants surety for everything.

He has just two solutions, and one is right while the other is wrong.

He only selects from two of them, and for that, he always seeks permission from higher authorities.

He does not live with probabilities.

Creative thinkers:

Creative thinkers do not remain limited to one or two solutions based on their judgments or past experiences.

They can create solutions from scratch.

And they do not focus on one thing when there are so many potential solutions.

They will also take tier time in coming up with these solutions.  

Conclusion:

Your approach to problems tells how you will solve your problem.

Identifying and agreeing on the problem rather than working on a symptom is critical to your success.

Learning how to solve problems creatively is a crucial talent and a toolbox for anyone who wants to succeed in business.  

 Solutions, no matter how difficult the problem or challenge, can be solved — some instantly and some, like solving the theory of relativity, took Einstein 10 years.

Always choose your method or technique according to the complexity of the problem.

Lastly, remember that trying to approach and solve a problem as a team can be fragile because you have to give space and freedom without criticism to each member.  

We hope this information gives you some food for thought as you approach a specific problem.

I would love to hear your comments on using this approach. 

 

 

How To Turn Problems Into Opportunities

Posted on by harborcapitalgroupinc

How To Turn Problems Into Opportunities

Being a founder or CEO of a growing company means you are always stressed to do more.

There is too much to do, too many problems to solve, and too little time to do it all.

Yet, on top of all that stress, you have issues that crop up almost daily.

So, how can you turn problems into opportunities and move forward?

 

Anyone can turn problems into opportunities using problem-solving techniques, and you don’t have to be a genius to do it.

However, you have to learn a little about the different kinds of problem-solving strategies and techniques. 

 20+ Problem-Solving Techniques

We are working on creating a series of over 20 ways anyone can turn problems into opportunities.

We explain how each one works. You can’t simply read one after another and understand that technique well enough.

You need to know if that technique works for you or if a different one would be better.

We encourage you to try each one. Some methods you can do quickly, and others take more time.

But, each one will teach you how to become a better problem-solver.

 Your Mind Is Pre-Wired To Solve Problems

According to Danial Kahneman’s book: “Thinking Fast And Slow,” Your mind is pre-wired to go problem-solving.

It can switch your thoughts from thinking fast (having an instant answer or a Eureka! Moment)

to thinking slow (digging deep into your knowledge base for breakthrough ideas).

For example, Einstein’s theory of relativity. Your mind switches back and forth between the two thought processes as it searches for the answer.

This process lets you see a bigger picture and more problem-solving options.

 In addition to fast and slow thinking, you need to have a positive attitude to solve problems.

You can’t focus on the negative (“why are sales slowing down”).

You have to reframe the negative problem into a positive (“how do we get customers to buy more”). That way, you are focusing on a positive solution. 

 Pretty easy so far, right?

Next, you can begin to look at the many problem-solving techniques that will help you solve your problems.

A good place to start is with Michael Michalko’s books, especially the “Thinkertoys” book with many problem-solving techniques. 

He divides the techniques into two groups.

One group focuses on a linear method using words and illustrations to probe your thoughts.

Some people are more comfortable working with word concepts.

The second group of techniques is more intuitive and relies on intuition and insight to arrive at the solution.

People generally prefer one group over the other just based on their individual preferences.

There is no right or wrong technique. 

You can use any of the techniques to solve your problem. You do want to become familiar with all of them.

Each has a unique way to structure and process information that leads to a solution.

Some techniques will seem easy, and you will like using them. Others may give you answers, but the process isn’t as comfortable as some others. 

Also, some techniques will give you the confidence you need to believe that you will solve the problem.

Never underestimate the power of confidence. You have to believe you can solve the problem.

So you pick the technique that works best for you or try several of them on your problem to see what results you get.

All Problem Solving Techniques Will Be Covered

We will be covering all of these problem-solving techniques on our advisor platform.

But, you can’t simply read about a method and quickly move on to the next one.

You need to go through a problem-solving example so you can get the idea and feel of how that technique works.

Working through an example is the only way you can judge how they work and if you are comfortable with that specific problem-solving technique.

Three Factors That Will Help You Turn Problems Into Opportunities

Brian Tracy, in his book “Creativity and Problem Solving,” offers three factors, among many good ideas. That helps you be creative:

1. How intensely you desire a goal (the more you want to achieve that goal the more ways you will find to achieve that goal).

2. How serious the problem is to your life or business. Once you have identified what is holding you back from an important goal,

your mind will start generating ideas to solve that problem. 

3. How do you focus on the question. (the more precise and focused you are on the question, the more rapidly your creative reflexes operate to generate workable answers

 Using these problem-solving techniques, you will be able to

1. Generate ideas at will

2. Create new business opportunities

3. Modify ideas until you come up with innovative and powerful ideas

4. Improve old products, services, and processes

5. Develop solutions to complex business problems

6. See problems as opportunities,And much, much more

Conclusion

As an entrepreneur or CEO, our hectic lives are continually being interrupted by challenges and problems that need creative solutions, short-term, and long-term solutions.

And everyone is capable of innovative solutions.

It’s a matter of learning the methods and techniques of creative problem-solving and practicing them.

Remember, the worth of the idea you create will depend to some degree on the way you define your problems.

For example, write down the problem. Translate it into a positive opportunity. It is impossible to be creative if you are focused on a negative.

You have to look at the problem broadly. This broad approach is true for problem-solving techniques as well.

Try all of them and select the ones that work best for you.

We would love to hear your comments about problem-solving, good or bad.

How To Find Out If Your New Idea Will Sell And For How Much

Posted on by harborcapitalgroupinc

How To Find Out If Your New Idea Will Sell And For How Much

Most entrepreneurs are confident their new product or service idea will be a big winner. But you would like to find out if your new idea will sell and for how much before you invest lots of time and money.  So, to be safe, you tell your Mom or wife about the idea and ask what she thinks. Guess what? She says it could be a great idea. She may not be sure, but she doesn’t want to hurt your feelings or dampen your enthusiasm.  

Still not sure, you decide to ask more people and get additional “facts.” Again you tell them your idea and ask if they think it’s a good idea? Do they think people will buy this product or service? Not surprisingly, almost everyone agrees with your Mom. Great. Now you have the facts to validate your hypothesis. 

Not All “Facts” Are True

But, there is a big problem, you don’t have real facts. The “facts” you have are only “opinions” from people who don’t want to hurt your feelings or dampen your enthusiasm. Just like your Mom, people want to be nice. Besides, they are not committed to buying it, so there is no downside for them.  

If you start your business using these false facts, your chances of succeeding are slim. But, there is an answer. Rob Fitzpatrick, author, and entrepreneur, started several companies that failed using this traditional customer research. He finally realized what the problem was, and here is what he found. 

Talking to potential prospects is critical, but you have to speak to them in a way that they will give you real facts, not just opinions. So the first step to getting real facts is not to tell them what your product idea is.   

Don’t Talk, Listen

Set up a casual meeting or coffee, so they are comfortable. And remember, you are there to listen, not talk.

Ask them about themselves and their job. People love to talk about themselves.

During that conversation, find a way to bring up a question related to the problem you want to solve.

For example, here are some opening questions, “that part of your job sounds difficult.

Is that a big problem?” or “I’ve been told that X is a problem. Do you have that problem?”

Then based on their answer, keep probing about the problem and how they dealt with it.  

 

This explanation is experience talking about their problem and how they handled it — this is how you get factual information rather than just opinions.

They verify if the problem exists, how painful it is, and how they dealt with the problem.

Maybe it’s a minor problem, and they have a way to deal with it now. Perhaps it’s a significant problem that is costing the company time and money.

This approach will verify if there’s a problem and if the pain is severe.

You get facts, not opinions, which will give you actionable insights.

Here are some of the problems with the traditional approach:

1. We spend too much time collecting data that’s too unreliable for important decisions.

2. Sometimes we don’t realize the data we are collecting is worthless (even misleading)

3. Asking customers what they think of your idea almost always leads to bad data.

4. We assume customer feedback is scientific, and whatever they tell us is scientific and counts as learning. 

5. But, it’s easy to bias the people we are talking to. Once you tell them you have an idea, they are already biased beyond repair because they don’t want to crush your dreams,   

6. If people tell you your idea is terrible, that may not be useful data either. Why? People are bad at predicting both: which ideas are good and what they,

as customers are going to do, buy, use in the future,

7. Even Venture Capital firms credited with being the best predictors are wrong more often than right.

And If their judgment is worse than a coin toss, how seriously can you take anyone’s opinion? 

8. If you are going to get your “facts” faster (e.g., focus groups, surveys, etc.), it could be a big mistake.

The problem is this information is not robust enough to bet your company on it.  

Get them to talk about costs

During your questioning, you will ask how they solved the problem and how expensive it is to solve the problem.

Now, you have an idea of the cost parameters to determine if the product will be profitable. 

This approach does take some time as you will want to interview people until you begin to get repeated information.

However, it is less expensive than starting development and having to end the project later.   

 

Get facts, not opinions

You can get broad industry views and some facts and figures from Google information,

but the insights you need only come from face-to-face conversations with prospects.

It’s the insights into your customers’ worldview and decision-making that tell you to build it or not.

You need real insight into what customers want.

 

There is also a problem if you put together a small group of people to do these interviews.

You will end up with several opinions as to what they heard and what is essential.

These variations in view make defining the most critical problems difficult.

You do need to keep everyone informed of the information. 

Conclusion

You can get the real facts you need if you don’t bias the potential customer by telling them your idea.

Ask questions about a problem they might have and what they did to solve the problem.

Get them to say to you, based on their experience, the problem, and how they solve it or don’t solve it.

Also, what they currently pay to get it solved now.

At this point, you are only trying to verify that the problem you want to solve is a real problem, and the customer would be willing to pay to get it solved. 

 

Once you have your product concept designed, the second step is to follow up with customer interviews

with your product or service design to determine your solution’s validity.

You will also ask for some commitment, not necessarily money, maybe a referral to another user in the company

to determine if the person’s positive response is factual or just being friendly. 

 

We would love to hear your thoughts on this blog or this topic. Or a topic you would like us to discuss. You can reach us HERE.

Jim Zitek

P.S. If you know someone else that would like this information, pass it on. 

Why Business Stories Drive Success

Posted on by harborcapitalgroupinc

Why Business Stories Drive Success

 

Why don’t more entrepreneurs use stories to explain their business?

The reasons may be they don’t understand how powerful stories are and defining, and crafting a story takes time.

Another misconception is that stories are what the marketing department does. True.

 

But your story needs to start long before there is a marketing department.

If it doesn’t, you could be trying to wordsmith your sales communications later for short-term tactical gains because you don’t have a competitive advantage. Why?

Most companies have competitors and everyone is selling the same product at the same price with the same service.

Here is what Ben Horowitz, venture capital firm, Andreessen Horowitz says:

“The mistake people make is thinking the story is just about marketing, No. The story is the strategy. If you make your story better, you make your strategy better.”

The story is the engine that drives successful companies.

And with today’s technology, you can tell your story, many times for free, to individuals anywhere in the world.

That makes stories more important than ever.

Benefits Of A Story-Based Strategy 

Business stories drive success and will help you build and grow your company and your brand.

According to Kevin Smith the world’s most valuable, innovative, and fastest-growing companies,

regardless of age, industry, or size – know the story behind the brand. (Airbnb, Apple, Facebook, Tesla, etc.) delivers success.

Simon Sinek, author of the book “Start With Why” described the value of your story another way.

He stated that “people don’t buy what you do; they buy why you do it, And what you do simply proves what you believe”.

The following are some benefits you will get from a well-crafted story

Stories help you develop and sell your idea

1. Stories simplify big ideas in a way that sticks in one’s mind.

2. Data can persuade people, but data doesn’t inspire them to act.

3. Stories help you attract and keep talent

4. Stories help you transfer your beliefs to your audience

5. Stories help you keep all employees on the same page and focused on the same mission

6. Stories give your company a short- and long-term advantage over competitors

7. Facts are important, but stories connect and motivate people

8. People remember stories but not many facts.

 

Stories help you build a brand

1. Stories will build a foundation of trust, but a customers’ personal experience will cement that trust into something that lasts,

2. Buyers often look to the story to justify the purchase 3.

3. Stories can raise the value and therefore the price you are able to charge. If you can’t get a higher price for your brand, you need a better story.

Stories help you market your brand to potential customers

1.  Stories when done right can significantly boost lead generation by many times normal.

2. Stories grow your sales pipeline

3. Stories shorten your sales cycle and increase your  sales ratio

4. Stories make it easier for your ideal customer to recognize your value

5. Stories Improve the quality of your sales forecast because they attract better-qualified prospects.

Conclusion

If you are looking to use business stories to drive success and take your company to the next level, stories are a great way to accomplish that objective.

More information on stories is available on our advisor platform.

Also, see our blog,” Five Quick, Effective Ways To Tell Your Business Story”

Jim Zitek/ Harbor Capital Group

We empower entrepreneurs with the information, insights, and conviction they need to turn their ideas into a successful business.