Thursday, 13 December 2018 05:59

Do You Own the Problem or the Solution?

Walt was clear: He felt that missing his targets someone else’ fault. As his boss, Ellen didn’t care. She wanted him to set aside blame and accept that he owned the problem.

Ellen’s question for me was: “Is that the right position to take with Walt?” I’m thinking: “We can do better.” Let’s look at this.

There are three positions I can take when there is a problem:

1 - I can blame someone else,

2 - I can own the problem, or

3 - I can own the solution.

For me, I don’t want to blame someone else. Sustainable success starts with owning the solution.

 

Who Should Own the Solution?

Clearly someone has to own the solution. In many organizations, that would be Ellen covering for Walt. That works but it impedes growth for your business. It also impedes growth for Walt.

Ellen wants strong people on her team, so she wants Walt to work from a place of strength. That means internally driven. That in turn means Walt owning the solution.

The difference between owning the problem and owning the solution? It is the difference between treading water and growing. The good news is that we can make the choice to own the problem every day. We can share that with our team. Bypassing blame is obvious. And moving past owning the problem to owning the solution is a way to help grow your team and your business.

 

Thursday, 14 February 2019 02:59

Not Invented Here vs Not Invented Yet

Saving Your 2019 Initiatives

It’s happening all over. 2019 initiatives are dying. If this is happening to you, you aren’t alone. Can you save one or more of yours?

We often ask people to accept that change is good. In practice it works more like:

            - Change is good when I suggest it,

            - Change is bad when someone suggests it for me.

Take this as Peter’s change axiom. If everyone felt as good about change as you might, this would be easy. But if everyone was a good at this as you, well they would all have your job wouldn’t they?

How key people on your team view change can be the rock on which you build this year. Or it can be the rock on which new initiatives crash and sink.

 

Crash: The Assumption of Limited

People might offer a whole list of excuses of why a new idea can’t work. People don’t usually say that they can’t do something because it was Not Invented Here (NIH.) What’s the reason beneath those excuses? Usually a sense of being limited.

This is not something to be vilified. Almost all of us get some early training in the assumption that we are limited. Many of us keep that sense of ourselves into our work years. It impedes personal growth, and it also impedes business growth.

When you get resistance to your 2019 program, it might be because the idea actually sucks. It might also be because people feel limited and vulnerable to change that they did not sponsor. They don’t feel ownership. To you it feels a lot like Not Invented Here.

 

Building: The Assumption of Growth

Growing revenue, people, and time all work from a different assumption: That growth is not only possible, it’s our natural state. Peter’s second axiom is that people love progress when they are the ones making it happen.

One of the underlying theses of my postings and articles is that the people who successfully grow businesses live and express an assumption of growth. It is a very common denominator of leaders in growth businesses.

Here’s a story that shows how this starts.

Julie builds a house out of blocks in her pre-kindergarten play time. She does this happily, with a sense of the power of making.  Andy comes over, still not fully sure on his feet, and knocks the house down. He’s feeling and showing the power to stop something.

The next day Julie builds it again. Andy cheerfully knocks it back into individual blocks.

This same pattern continues for days. Andy’s parents say that boys will be boys. Julie’s parents congratulate her on her art. Each day Julie and Andy get the pleasure of expressing their power.

This happens at all ages, doesn’t it? Andy’s role in this is easy. No creativity is required and he gets to express his power. Does this resonate with your own corporate experience? It feels like Not Invented Here.

Julie takes a different role. For companies that should grow, this is a great example. Many initiatives fall apart at least once on the way to success. What keeps them going is the expression of the sense of growth. If you will, an attitude of Not Invented Yet.

Eventually, Julie stops Andy. How can she do that as an adult in your business? Perhaps the best answer is to help Andy build his own house with blocks. What if she is tempted to bring it down with a well placed blow? Best to not do that. If Andy gets a taste for construction as well as destructing he may become an ally.

Does that mean that Andy has to entirely change? No, like all of us Andy has both limit and growth assumptions in his sense of self. It is a choice that he, and only he, can make. Julie just wants to help him choose growth this time. As a colleague her work is to help Andy try growth.

 

Improving the Chances of Change’s Success

Daryl Conner and I wrote an article summarizing some of the best real world strategies for change: Lessons From the Real World of Major Business Initiatives (http://www.meyergrp.com/index.php/articles/growing-your-executive-team-s-future/62-lessons-from-the-real-world-of-major-business-initiatives) The strategies are important. The underlying assumption is just as critical.

What if you assume that every person on whom you rely has a mix of a sense of limitation and a sense of growth? If they have both, you can treat them as Julie might treat Andy.

What does that mean? If you sense a Not Invented Here response, you can:

- Help others to see how they have grown, and connect to that feeling of growth.

- Help others sense that they can manage this, that it is within their current limits.

This is not about what they might build. This is about whether they feel that they can build it. You and Julie are supporting a sense of ability, not an outcome.

One other alternative? You can stop your initiative. Sometimes that is the exact right choice. You always have to allow for the possibility that your idea sucks.

 

A_ Not Invented Yet Team

There are myriad techniques to bring a team together to work to be Not Invented Yet team individuals. (Again, check out the Conner/Meyer article noted above.) All work from one assumption, that we are not vulnerable to what we invent. The best way to help others start there may be when we demonstrate exactly that. For all projects, large and small, we can improve our growth by assuming that it is natural and acting that way.

Einstein said that “Failure is success in progress.” The message isn’t to fail again. It is to assume that progress is the natural state. To assume that we are not automatically limited. That is an assumption that we can only make for ourselves as individuals. The good news is that each of us has gotten here, we have lived that assumption for at least a little while. If you want a Not Invented Yet team, help each member get in touch with that.

 

Can you use price as both a cost based calculation and a tool to define your market? Do you need to discount to get a deal? Let’s step back and think about how to use price as a tool to define and then create a new market.

This is not about market disruption (for more on that, please see http://www.meyergrp.com/index.php/articles/growing-your-revenue/86-building-a-disruptive-business). This is about market creation. Sometimes the best way to compete is not to compete. Instead it is to create a new space, one where you are the only supplier and your customers are very focused on getting a solution that only you offer.

Your price is always part of positioning your product. Sometimes you want the sense of value to be high, where you get the image and get increased margin. The question is: Can you get both of those without losing sales?

 

Yes, you can raise prices and still gain sales. The key is to solve the right problem.

The answer is: Yes, you can raise prices and still gain sales. The key is to solve the right problem. The good news is that the right problem to solve is not your price.

Choosing the right problem sets up your success in twists and turns in business. You set yourself up to choose the right view and then hold that line. It is like driving into turns when you cannot know where the turn comes out. If you want to succeed, you can either slow down (and how likely is that in this market?) or you can set yourself up for success before you enter the chicanery. How you set up the turn defines how well you can come into and out of the unknown.

 

Pricing Internal and External Views

Fundamentally you have two price views to consider -- one internal, the other external. In the internal view of pricing, you price to cover fixed and variable costs with a bit of profit. This process is internally focused, defined by the needs of your business and your strategies.

In the external view, your price is a tool to define your market and position yourself around your competitors (if you have any.) When you price in one range, you may find that you will compete in the existing market. However, if you set your price at a significantly higher or lower level you may create a market where none existed before. As paradoxical as it may seem, pricing higher may increase your volumes and your margins.

Looking internally when you decide to compete in an existing market you may need operational excellence to keep costs low and margins acceptable. For example, if you choose to enter the market for over-the-counter painkillers, your ability to stay within a certain price range is important. The good news is that you know the price point before you start. The downside is that so does everyone else and this usually leads to thin margins.

If you choose to sell into a space where there is little competition, margins may be easier to maintain. If you choose to sell into a space where there is no competition, then your price and margin can be set by how important your solution is to a customer. In other words, you get rewarded for the quality of your solution even more than the quantity of your operational excellence.

 

When you choose the right external problem, you don’t need to be excellent to get rewarded with high margins.

Put more starkly, when you choose the right external problem, you don’t need to be excellent to get rewarded with high margins. You can still get growth by sloppily solving the right problem. In the external pricing view, you price according to the value of your solution as the customer sees it. And how the customer sees that is going to be dependent on her view of the problem instead of how you might wish she sees another problem

 

The Problem Isn’t Yours

In the internal view, all the problems are yours. If things go well, your customers will buy according to how well you help them sense the problem. Your price should reflect the intersection of where you make money and customers still buy.

In the external view, you find the right problem. What is right? The critical problem that your customer will pay to solve. The problem isn’t yours, it is theirs. And if they feel that it is a highly pressing problem they will pay extra to solve it. Your job is not to make it seem urgent, it is to uncover what is truly urgent.

We all have more than one problem on our desk. If I turn to you and offer to fix problems 11, 12, and 13, you may pay attention. If I offer to fix just one problem, but it is one of your top three, you may pay much more attention. And you will probably be willing to pay more to have it fixed.

 

When the problem is the customer’s and it’s truly pressing they will invest to solve it.

To be clear, the payment for fixing a top problem isn’t just about money. If the problem seems very real to the customer, they will pay in time and people as well as money. The key is that when the problem is the customer’s and that it’s truly pressing they will invest to solve it. That is when you want to be right there with a good solution

What problems tend to be truly pressing? When my firm asks they are problems about time (as in time to market or time to production) or people (as in “I need to clone my best people.”) The third level problem is cost. Cost is always in last place.

However every customer says that they want to save money. As you know they do not act that way. Most of us invest in gaining competitive advantage. Time and people are key to that.

 

Inside the Curve

When you drive well you set your turn up before a curve. The right starting line for a turn makes a faster and safer turn. The same is true here. How you set up your pricing around a strongly held problem defines how you will enter and exit a difficult and perhaps invisible turn in business.

What is the best set up for the turn? The one that gets you closest to the problem as the customer sees it.

How does this affect your price? You don’t enter the turn (set your price) until you know that your customer agrees on a value on the solution. If the problem feels very real to the customer, she will invest time and people for this.

If the problem is one of the top few for your customer she will assign a value that is much higher than if it is number 10. Your assignment is to price to that value.

Then drive your solution to match her sense of value. The worst case is that you will have to bleed some speed (price) because of an issue that you didn’t expect. The most likely case is a smooth turn and a strong exit to set up the next turn. And more sales at high margin.

If you set your price based on internal costs and spreadsheets, it is like entering the turn while looking at spreadsheets on your phone. You know what is going on in your own world but you do not know what is going on in the turn.

If you set your prices based on the customer’s sense of value of their most important problems you will be using external views. This does not guarantee your success, but it certainly improves the likelihood of exiting that turn at full speed with a smile on your face.

 

Driving the Price

What drives the price that you will charge? How well you understand a key customer problem, and then how well you set up your solution. If you do both well before you enter the turn you will give yourself a chance to command a price that feels fair to your customer and that rewards you. And you can keep up your speed and your success.