“Judge a man by his questions rather than by his answers.”
“Strategic thinking is like showering— you have to keep on doing it.”
Reevaluating strategy is an essential activity for success in any business. Each year, however, thousands of entrepreneurs struggle unduly or fail altogether because they ask far too few questions and overlook possibilities for improvement. I’ve found however, that reducing any business operation down to three interrelated components can stimulate fresh thinking and help to identify possibilities for improvement.
Coping with complexity
Regardless of what business you’re in, you’re dealing with a lot of “C’s”: Complexity, competition, and change, for starters. And let’s not forget chaos. In the messy economic environment that we all have to operate in, an effective business strategy is essential for survival.
Strategic planning is never a “one & done” activity— intense competition and rapid change combine to force even the most successful businesses to reinvent themselves time and time again. Those that are unable to do so fall by the wayside.
I understand this from personal experience. Back in the 1970s I took a position as an industrial engineer with corporate giant Bethlehem Steel, didn’t like what I saw, and decided that I’d do better to seek my fortune elsewhere. Twenty years after I left, there was no Bethlehem Steel.
Asking the right questions
Effective strategic planning stems from asking the right questions, which can only be done if one has a functional overview of one’s business. An approach that I’ve found to be quite useful starts by simplifying the totality of an enterprise into three basic components: “People,” “product,” and “process.”
If you first reduce your business to the simplest terms in which it might be described, you can then proceed from there and ask increasingly more complex questions about what it would take to improve it. The right questions will generate options on how to proceed.
People, product, & process: Intimately connected
Before I go further, let me clarify— in this scheme of thinking, “product” is a figure of speech. It’s whatever you intend to sell, which in many cases may actually be a service. Don’t let that nuance trouble you. The logic still applies.
In any case, the advantage of viewing a business in terms of people, product (or service, if applicable), & process, is that it makes it easy to generate questions about (1) the integrity of each of the above components in its own right, and (2) how well these components function together in a coordinated way to attract and satisfy potential customers.
Please note also that attempting to scrutinize the three components separately will reveal just how interdependent and intertwined with one another that they actually are. Like the organs of a living body, the interactions and alignment among the components determine the viability of the whole.
If your bottom line is not all that you think it could or should be, then analyzing your business in terms of people, product, and process may suggest possibilities for improvement that might otherwise be overlooked. Let’s take a look at each of these components and their implications for business success.
People: Preparation and placement
It goes without saying that the attitudes, skills, and knowledge of those who staff a workplace are crucial to its operation. And yet research suggests that (1) these are problems in many workplaces; and that (2) these would be less problematical if top executives asked more questions regarding the preparation and placement of their people. “People problems” usually start at the top and trickle down.
Some years back a Harris Poll of 23,000 American workers revealed some startling realities regarding the relationships between people and their places of employment. I’ll relate just some of what was expressed by participants.
Only 15 percent felt that they were enabled to contribute as much as they could and wanted to, while only 17 percent reported that their workplaces fostered the openness and tolerance it takes to generate and implement new and better ideas. Apparently, many organizations neutralize what could be very productive human talent and energy.
Jim Collins, author of Good to Great: Why Some Companies Make the Leap… and Others Don’t, emphasized the importance of having people in the roles that suited them best as a key to business success. Equally important was providing the support they need to function in those roles.
According to his research, those businesses that “made the leap” were those whose strategic planning was driven by the answers to questions regarding how to meet these two criteria. Careful attention to the “people” component shows up on the bottom line.
Product: Supply & demand revisited
What will and won’t sell can range from the obvious to the completely unpredictable. Who’d have ever thought that the “Pet Rocks” of the 1970s (if you’ve been around along to remember them) could possibly have generated the millions of dollars that they did? It makes you wonder about people, but it also suggests that there are other unexplored possibilities out there.
Pet Rocks aside, assessing the demand for your product or service is an essential component of any strategic planning process, and needs to be ongoing. Apple, Inc., for example, has reinvented itself time and again by asking, “what’s next?” in the domain of marketable technologies.
Granted, Apple is a tech giant, not a small business. But no matter what the size of your operation, the continuous reevaluation of your offerings is essential to long-term success.
Find a need and fill it
Note that product-related considerations are driven by questions related to consumer demand. What do people value enough to part with money to obtain? What do they need? Want? How are trends in economics, technology, and society likely to affect buying decisions in the future?
There are also obviously additional questions regarding quality, pricing, and competition for the market niche’ related to any specific product or service involved. Can you ask too many questions? Possibly— but more often than not, businesses that struggle do so because they’re asking too few.
Process: Combining creativity and practicality
Intimately intertwined with the “people” and “product” components are issues associated with process. Process includes anything associated with getting your product out (procedures, hardware, rules, policies, etc.). Crucial to having an effective process is the ability to ask the right questions about anything and everything related to how your business produces and delivers what it sells.
This is where hard, cold practicality needs to mix freely with openness, imagination and creativity. And this is precisely where many businesses stall. Rigidity and adherence to existing policies and procedures often prevent much needed innovation. History, however, shows that it is the questioning of traditional methods that leads to positive change.
Henry Ford revolutionized manufacturing by asking questions about the organization of production lines. Walmart revolutionized inventory management by asking how many ways bar codes could be used. Toyota insists that employees question existing practices and suggest alternatives.
Underlying innovation is always a willingness to reconsider any or every aspect of whatever process is involved. What kinds of questions can you ask regarding your own operation that just might yield insights into ways to improve your bottom line?
In search of simplicity
In this age of complexity, chaos, and change, every business owner I know is concerned with finding ways of simplifying their outlooks without overlooking information that might be useful in their search for ways to increase their profitability. Analyzing your own business in terms of people, product, and product is one means of accomplishing this goal.
This alone won’t solve your problems, but if employed with more conventional methods of review, it may trigger some valuable “aha!” experiences that may not happen otherwise. In any case, the more ways you can think about your business, the better. The old adage about leaving no stone unturned applies as much today as it ever has.
Albert Einstein, whom many regard as having one of the most complicated minds of the 20th Century, has been quoted as offering this tidbit regarding coping with the problem of complexity: “Everything should be made as simple as possible, but no simpler.” In a world in which many business owners are overwhelmed by the complexity they face, that’s good advice.