Failure demand is a false demand from customers for your services. It’s the opposite of value demand. But if value demand is when customers demand a service they’re willing to pay for, does that make failure demand something customers “want” but would rather not pay for?

In a sense, yes. But it’s much more than this.

Failure demand is, “The demand caused by a failure to do something…right for a customer”. (Medium, 10 Sep 2020) It was introduced by John Seddon in 1992 to highlight the distinction between systems that satisfied customer needs versus command and control-oriented management.

Value demand looks like quote requests, purchase orders, or the sound of the cash register’s ka-ching. It’s what happens before your customer writes an appreciative testimonial. These are the activities in your business that are driven by customers wanting what you’re selling.

On the other hand, failure demand is a buggy product to be repaired, a billing query to be answered, an unfathomable user guide that needs explaining, or making another call to the dispatcher to re-schedule the service consultant who didn’t show up. Again.

It’s the vague, generic job ad that garners 100s of CVs, each earning an impersonal template rejection email or, worse, the insulting last line in the job ad, “If you don’t hear from us, your application was unsuccessful.”

Both types of demand use up your business’s capacity. The one satisfies customers and earns revenue, but the other eats profits straight off your bottom line. Naturally, we’d want to reduce failure demand to free up more capacity for value demand.

But while it’s easy spotting failure demand activities in your business, it’s much harder doing something about them. The more you focus on them, the more you’ll get. Especially as you scale your business.

Failure demand thrives with management controls like activity-based costing, growing customer support call centres, standardised job descriptions, or rigid processes that remove decision making power from customer service. This is especially problematic in service-oriented businesses, where the one-size-fits-all service is almost guaranteed to fit no one.

This is the trap of failure demand, when management attention is mis-directed at inward efficiencies instead of systemic effectiveness in satisfying the customer’s need the first time around.

Failure demand is not fixed by addressing failure demand.

Don’t set targets to control the turn-around time or cost to fix errors. Don’t build admin and reporting software to monitor fault resolution. This just entrenches failure demand.

The only sustainable solution is to focus on the system that gave rise to failure demand.

So how do you know where your system is broken and where it needs fixing?

It starts with tuning in to your customer. Ideally, if every customer is satisfied and there are no come-backs, then you’ve eliminated failure demand.

The gains are typically much better than marginal. Many service-based businesses waste over 50% of all customer service activities on fixing errors. (Vanguard Consulting) The problem with failure demand is not the demand from failures, it’s your systems that aren’t meeting customer expectations.

Eliminate failure demand and you’ll probably discover all the capacity you need to build loyal fans and grow your business.

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References:

1. “Failure demand vs Value Demand”, Medium, 10 Sep 2020.
2. “Failure Demand”, Vanguard Consulting, sourced 08 Oct 2021.

Image credit: Business News Daily

Why do we hire people? As an entrepreneur, it should fundamentally be to increase profit. If a job’s output is less than its input, then that job is eating your profits.

This is the fundamental tenet of sustainability. Anything that needs more energy than it puts out will eventually die.

As a business owner, profit should be a critical metric on your dashboard. (Otherwise why are you in business?) It’s obviously a financial measure, but we could also supplement it with other dashboard indicators, like customer retention, quality, social impact etc. But ultimately these all lead to profits.

Whatever your preferred metric, do you know how each person you’ve hired adds value versus deducts from your profits?

It might be easier to answer this in a small businesses. It’s more likely that one or two dozen people will know what everyone is doing and share accountability than in a company of 20,000 people.

That being said, though, I’ve yet to meet a small business owner who can readily answer how each job in the business affects profits.

The inability to model a role’s value to the organisation’s strategic imperatives is, I believe, a fundamental reason why managers make marginal hiring decisions and why businesses ultimately fail.

It’s most noticeable in big organisations. Think government! The bigger the business, the easier it is for mediocrity to shelter in the shadows, sucking value from the system.

Of course, it’s easy to see how a sales job adds to revenue, or how a quality controller saves costs. But think beyond the individual: if teams succeed due to synergy, do you know how to attribute profits to that team’s effectiveness?

On what basis do you make hiring decisions? If you can’t model how a job—or a team or department—increases revenue or reduces costs, how do you know that job adds more value than it takes?

If you’re a small business owner planning on growth, now is the time to get clear on how each job influences profits. Do it before indifference calcifies. Model it. Quantify it. Talk about it. Make it part of the culture and everyday conversation.

If your people can’t clearly describe how their role adds to profits, don’t expect to stay in business for too long.

Is bad grammar costing you? Yes and no—it depends.

Whether you spell it correctly as lay-by, or lay-buy, laybuy, or even lay bye (!), I suspect the audience likely to buy with lay-bys probably won’t notice the difference. (American: “layaway”. A lay-by sale is where the seller lays the product by, or away, until the buyer has paid all instalments.)

This is more than merely a grammar Nazi’s concern with language rules, though. If your sales copy is riddled with errors, what does it say about your lack of care for the actual product or service you’re trying to sell me? Or worse, is it an indictment of your lack of care for me, your customer?

In the management consulting work we do, I review countless business websites, contracts, presentations, financial reports and policies and procedures. While I expect an occasional typo or convoluted line editing, severe errors jolt the flow of reading. When I can’t resolve the writer’s intention by the context of the sentence, bad language leads to ambiguity and uncertainty.

Typos happen to us all, especially in quick-fire replies on text apps and tiny screens. I’ve often hit “Send” before proofreading, so I try to not be too judgy—people in glass houses and all that.

In fact, some auto-corrects are quite endearing, or they make for serendipitous metaphors. (Some are hilarious: google the “DYAC” memes for a little dopamine distraction.)

And some rules should be broken. A micro message or Zoom chat is more personal with slang or text speak than the starched tone if we spelt words in full, like “tmrw”, “pls”, or “BRB”.

Regardless of the medium, though, error tolerance is easier when there’s a strong relationship between reader and writer. But without this relationship, first impressions count. In a prospective customer’s first contact with your brand—your website or a social media post—there’s only that first message to judge you by. Errors can literally cost you money.

For example, a UK-based stocking retailer, then named Tights Please, improved sales conversions by 80% after correcting a misspelling of “Tihgts” to “Tights” on their catalogue page. (CXL, 2020).

Even copy that you did not author can affect your business’ credibility. When I’m searching online for accommodation or a pricey gadget, I rely heavily on other customers’ reviews. I’m usually much more likely to trust a well-written review than reviews filled with unqualified hyperboles (“amazing”, “best ever”) or with language errors.

A 2017 study reported by Indiana University supports this, where the researchers note how 2 types of errors affect a reviewer’s credibility. Misspellings, like “lite”, “radicle” or “definately”, are more easily forgivable as “errors of knowledge”, a typical challenge for non-English speakers or artsy creative types.

Conversely, typographical errors, like “wsa” (“was”) and “regualr” (“regular”) are seen as “errors of carelessness”, which more easily erode our confidence in the writer’s authority.

Beyond first impressions, ongoing impressions count, too. A Harvard Business Review article (2013) reported a study where professional success was correlated with language proficiency. For example, “Professionals with fewer grammar errors in their profiles achieved higher positions,” and, “Fewer grammar errors correlate with more promotions.” Further, “Grammar skills may indicate several valuable traits, such as . . . accuracy in their work . . . critical thinking . . . intellectual aptitude.”

Whatever you publish—your website, content marketing, or internal company reports and emails—you want your reader to not just like, but want to, engage with your writing. You want to strengthen trust and credibility.

Ultimately, you want each message to achieve its purpose, like educating a customer and influencing their buying decision.

So does bad grammar cost you? For each error, the context suggests “it depends”. But given enough errors over time, the answer is surely “yes”.

If your copywriting is fraught with errors, how much credibility, influence, or revenue are you losing?

“Have you thought about appointing non-exec directors to support your strategy execution?”

“Nah, I don’t need that. I’m just a small business.”

Does that answer sound familiar?

I’ve heard entrepreneurs fob off their shortcomings too often with that type of sentiment. If that’s you, you have no right to complain that you’re struggling in your business.

It’s a popular myth in small business that, because it’s “only” a small business, everything can be done informally and supervised by the owner.

If you are the business, then the business has no value without you.

The more dependent the business is on you as the owner-manager, the less likely you’ll be able to sell it. Or if you don’t plan to exit, being indispensable might feed your ego, but it locks you into working long hours for too little pay.

Once you’ve grown beyond the start-up stage, your top priority is to get help. Not “help” as in employees or consultants, though that’s a logical starting point. I mean get yourself independent advisors who serve you either as your virtual board of directors, or appoint official, CIPC-registered non-executive directors.

We’ve run boardroom programmes for small groups of entrepreneurs since 2010 and acted as non-exec directors with many clients – compared with the solo, I’ll-do-it-my-way approach, we’ve seen first-hand how much more likely a business will achieve its growth targets when you have allies in your corner. Don’t be a martyr.

A popular belief is that growth must happen before hiring professional managers and forming a board of directors.

No! Growth is much more likely because you’ve first built your leadership team. For many of our clients wanting to scale, especially through acquisition growth, building their leadership team is invariably one of the top priorities we recommend.

A balanced board of directors is roughly one third to 50% home-grown talent, with the balance being non-exec experts with a solid industry track record.

Your board of directors is your sanity check, your accountability, even a shoulder to cry on. If you’re feeling stuck in your business, that’s the Peter Principle showing up. It’s a clear sign that growth is unlikely unless you grow your business’ leadership team beyond yourself.

If you want to build a business that has value, it’s time you got yourself out of the way – get help to grow.

Short-termism doesn’t pay off in the long term, and that’s not just an adage. In 2017, Harvard Business Review published convincing data from a 2001-2014 longitudinal study (of course!) of 615 listed companies in USA.

If you ever needed proof that long term is better, you’d surely be interested in the data to defend your stance. For example, what’s interesting is that in 4 critical dimensions of measuring value – revenue, after-tax earnings, business value, and economic profit – the long-termers substantially outperformed the baseline short-termers on aggregate by between 36% and 81%.

In part, proving the case against short-termism is a revolt against the relentless drive for public companies to hit their profit-before-everything earnings targets each quarter year. But for privately-owned small businesses that aren’t compelled to report as frequently, the principle is equally relevant, though obviously for different reasons.

Here are 4 key tips for the small business owner in staying focussed on the long term.

1. It's OK to miss earnings and dividends targets by a little.
2. Invest heavily in assets and IP.
3. Short-term crises seldom need long-term goals to change.
4. Be opportunistic, but don't be a hustler.

First, don’t throw out the baby with the bathwater. Regular reporting to business owners and executive-level management, whether monthly, quarterly or annually, is still vital. It’s just that, to assure governance, you need to shift your reporting priorities to what matters more.

Which leads us to our first tip in how to long-term. To classify each company into either the long-term or short-term group, a metric the researchers used was how often quarterly revenue targets were narrowly missed.

The reasoning is that diverting resources could have easily had them hit their targets. Not diverting resources and, instead, allowing a narrow miss demonstrates the prioritisation of other, usually long-term criteria, over short-term targets.

Building long-term value, by definition, takes a long time.  That’s why another key factor the researchers relied on was measuring capital expenditure and investment in research & development. Generally, the more you invest in assets and people, whether R & D, patents and processes and other IP, the more you build the “machine” that creates customer and shareholder value.

But what about crises, like the effects of the 2020 lockdowns? Bear in mind that the study’s review period includes the 2008 global financial crisis. Maybe surprisingly, the research proves again that a long-term approach is better. The long-termers fared only marginally worse around 2008, and by 2014 they collectively outperformed the short-termers by 36% or better.

Responding to an urgent crisis shouldn’t necessarily force a deviation from our long-term goals (even though it might cost a little in the short term).

This is a critical concept for many entrepreneurs. A common trait of most entrepreneurs is opportunism, but the risk of over-flexing the opportunism muscle leads to hustling. It’s precisely the opposite of investing in long-term assets and IP.

As we wrap up this weird year of 2020, how could you apply these 4 tips to ensure your short-term COVID-19 tactics fit with your long-term goals?

In the scramble to preserve revenue and cut costs to survive, it seems many business owners are losing sight of the long game. Obviously, there’ll be no tomorrow if we don’t look after today. But this shouldn’t mean we do things today that are out of sync with our plans for tomorrow. Nor should it mean we focus exclusively on today.

In fact, that last point is a common myth of strategic management, that it’s something that happens a long time from now. Because it’s not urgent, it’s convenient to be interruption driven, allowing our attention to be pulled to each crisis that pops up. It takes mental and emotional discipline to make time for non-urgent tasks, like working on strategy.

“Working on strategy” is hard not only due to external factors, like a lockdown crisis, but internal deficiencies in planning. For example, we typically find entrepreneurs have clear-enough long-term plans and good-enough operational systems, but what’s lacking is a clear decomposition of strategy into shorter and smaller targets. This leads to strategic mis-alignment. Unless you break down your 5-year plan into annual, monthly and daily goals, your daily work is unlikely to pull you closer towards your long term vision.

(Of course, it starts with having the right strategy. If you want a logical starting point, we’ve written previously about this here: “Learning From Universities’ Mistakes” (14 May 2020), and “Is Your Strategy Broken?” (28 July 2020).)

That’s why, in our conversations with past and current clients, we love hearing their stories of implementing urgent solutions to the COVID-19 challenges that are consciously guided by their long-term strategies.

These might well be quick fixes, but because of their strategic alignment, they’re not temporary stop-gaps to be thrown away in better times. The money and effort implementing the solutions generate a return on not only surviving, but furthering the strategy.

A satisfying case study is Kerston Foods, a food distributor to the hospitality sector. In a recent call with owner, Richard Kershaw, he shared just how beautifully uncomplicated strategic alignment can be. To cope with the lockdown challenges, Richard and his team implemented an online solution to make it easier for customers to order from them.

The solution is a simple ordering platform, hosted by Food Supply Network (FSN), which lets customers place orders online instead of by phone or email. Customers continue to settle their invoices the old way, by EFT. (Full e-commerce was not a priority because most e-commerce systems are capable of exclusively credit card transactions, which doesn’t suit B2B billing and collection methods.)

Specifically, the ordering system solved 3 sales challenges:

1. better accuracy in delivering what customers want by eliminating “broken telephone” errors with email and phoned-in orders,

2. faster fulfilment by reducing the effort in verifying each order before picking and packing, which reduced lead times for customers, and

3. better reporting visibility, which improve inventory management and reduce stock-out events.

The system also pre-emptively solved a problem that wasn’t a problem yet. Because customer experience is improved, the features that achieve this are also new selling points in Kerston Foods’ value proposition.

The choice of ordering system partner was also a strategically-informed decision. With Naspers’ recent investment in FSN (Naspers press release, 16 Sep. 2020), this is usually a good sign that FSN is likely to stick around. Also, we should expect FSN being able to fund R & D to introduce additional features and services, which can further enhance Kerston Foods’ customers' experience.

Kerston Foods not only solved their immediate stay-alive goals, but multiple strategic intentions around internal efficiencies, customer retention and marketing growth.

In other words, what can you learn from this case study to ensure your strategic imperatives drive how you solve today’s challenges?

Red Bull's success seems to be its singular focus on selling just one thing. Clearly It dominates the energy drink market. It sold roughly 1 can for every human on the planet in 2019 – 7.5 billion cans (Wikipedia) – being 10% of the 75 billion cans sold since founding in 1987.

As good entrepreneurs know, success is more likely when focussing on a single niche – a specific product or service for a narrowly-defined market segment. Rather than trying to be a one-stop-shop for everyone, a niche business ensures each function – like brand positioning, marketing message, quality, production systems and supplier relationships – reinforces other aspects, concentrating and magnifying the effect in each area.

In a niche business you’ll more likely get one thing right for one type of customer rather than spreading yourself thin across diverse product lines and markets.

So it might be surprising to know that with such a strong brand and product, Red Bull the business does not manufacture Red Bull the drink.

Every aspect of production and distribution of the Red Bull product is entirely outsourced. Red Bull is not in the energy drinks industry, and not even the soft drinks or beverage business. As one author puts it, “Red Bull doesn’t make anything…except money” (Harvard Business School).

And in making money, Red Bull has many revenue lines. From owning more than just one Formula One team to several soccer teams, other sports teams and various extreme sporting events, Red Bull draws revenues from a variety of sources and businesses. For example, having bought the soccer team “New York Bulls” for $25m in 2006, its value has 10-Xed to $290m today (Athletic Interest).

Although Red Bull benefits from being the first in its market – co-founder and CEO Dietrich Mateschitz created the energy drink market – there’s no shortage of competing products.

So what exactly is Red Bull’s continued success?

The one thing that puts Red Bull ahead of the rest is its singular focus on marketing.

After launching, students were hired as brand ambassadors to hold parties and build market traction. As you may have noticed, this quickly grew into sponsoring athletes and extreme events like Red Bull Air Race and Red Bull Rampage (Red Bull Bike).

Its marketing is so effective, for example, that although Red Bull invested an inordinate $50m in Felix Baumgartner’s 2012 breaking of the sound barrier in freefall from a balloon, the value of publicity achieved was estimated at over $6 billion.

And that’s why Red Bull doesn’t distract itself with production and distribution.

In fact, so good is Red Bull’s marketing as a premium drink that, unlike the product, profits are quite healthy. While it costs just 9 US cents to make one can, they wholesale at $1.87 and the suggested retail price is $3.59.

Yet earning that premium price doesn’t come cheaply. Of Red Bull’s revenues – $6.1b in 2018 – roughly one third goes toward marketing costs. That may seem like a high cost, but the return on investment is equally impressive, proving that the business model and focus on the core business of marketing pays off.

Red Bull’s success is indeed its focus – its focus on its core business of growing and maintaining the Red Bull brand. In short, everything and everyone at Red Bull, from capital to labour, is focussed on just one thing: marketing.

When it comes to focus in your business, it’s not enough to think about your niche – your product-market combination. You need to focus your entire business model around your core business.

[Image credit: Mountain Bike Action Magazine, Christian Pondella/Red Bull]

An important driver motivating our work at Growth Surge is helping entrepreneurs achieve economic self-reliance and financial freedom. This can be measured by each client we help as well as in macro terms: the health of a country’s small business sector is a useful predictor of economic resilience. That’s why improving entrepreneurial success ought to be a key driver of economic growth.

So it’s good to see media quotes that president Ramaphosa and other top politicians seem to agree. But that’s about as far as my alignment with government goes. The problem is that government is prioritising some bad metrics.

Take for example the rhetoric around job creation and alleviating unemployment. Although it’s a blunt instrument, the unemployment rate* is nonetheless a good-enough indicator at a national level in measuring our collective progress or failure in addressing raging unemployment. (* Defining “unemployed” depends on the spin doctor.)

Except, there are two critical problems with the job creation metric: 1. it’s an output mis-used as an input and, 2. government’s macro targets trickle down the bureaucracies and are mis-applied at the micro level. Both these issues prejudice the small business.

For example, Small Enterprise Development Agency (SEDA) is measured on how many jobs it helps create through its clients, small businesses. Hence, an explicit criterion in SEDA’s grant funding decisions is a venture’s job creation propensity. For every small business funding application reviewed, SEDA asks, “How many jobs will this funding create?” The more jobs forecast, then perversely, the better the scorecard.

Why “perversely”?

If job creation is a relevant criterion in a funding decision, I’d be inclined to penalise it.

All other factors being equal, if only one of two companies can be funded, I’d expect the company with fewer workers to be more likely to succeed. The business with more workers will likely suffer higher management overheads and – importantly from an investor and growth perspective – it’s much harder to scale a business that’s heavily reliant on talent.

And job creation is simply not a priority for entrepreneurs. In all my mentoring and consulting, I’ve not met one business owner who started or expanded their business in order to create jobs. Entrepreneurs’ drivers are either self-preservation or self-enrichment. Benefitting others or at least not harming others is merely an incidental bonus.

There are far more relevant metrics at a micro level that ought to be counted, all of which are standard questions relevant to any investor, including the business owner. E.g. ROI on the funding amount requested, market traction, detailed forecasts built on solid customer- and technical research, and management’s track record, to name a few.

In short, government has FUBARed the cause-effect relationship between the economy and unemployment. Here’s the reality:

Creating more jobs does not grow an economy; instead, jobs grow when the economy grows.

Whether applied at the micro or macro level, the job count (or unemployment rates) is only ever an output metric. The success of neither small business nor the national economy is predicated on creating jobs.

Even at the most micro level where the entrepreneur is the only employee, that worker has a job only because other business factors are in place, notably, there’s at least one paying customer. Hiring more people won’t be justified unless the business can grow its revenue base. Business success drives jobs.

So, whether you’re in business or government, the message is the same: fix (your) business first, then job creation will follow.

If a person dies with COVID-19 present, it’s convenient to blame it all on COVID-19. Not just human deaths, but companies, too.

It’s been widely and reliably reported that many of the deaths attributed to COVID-19, sad as each one may be, were of patients who already had one or more morbid conditions. For these patients, medical professionals say COVID-19 merely brought the day of reckoning forward a few years or months; the “real” killer had done most of the damage already.

The same is true for business. Seeing many companies scale down or close down, it’s easy to point the finger at the current whipping boy, the so-called pandemic. Although it might well be true that the last straw for most closures was the lockdown effect, it would be inaccurate to apportion all the blame to this one factor.

A good example of this is Hertz in USA, which filed for bankruptcy in May. The proximal cause of failure appears to be the decimation of travel and related car hire volumes, but the rot started years earlier. (Hertz SA says local operations are not affected. (fin24, 25 May 2020))

After buying out Hertz USA in 2005, the new owners sucked out a $1b dividend payment, loading its debt obligations in the process. They also invested heavily in sedans when the American rental market was clearly favouring SUVs.

Among many similar strategic errors, this set up Hertz USA with a weakened “immune system” – marginal free cash flow from operations (coupled with high debt repayments) – that had it crumble under the COVID-19-induced lockdown shock.

In the triage to save the company, Hertz has laid off thousands of workers. It’s also offloading assets like smaller business holdings and 180,000 of its over-500,000 rental car fleet. Except, “volumes in the new and used passenger market have dropped by 71% year-on-year from Q2 2019.” (BusinessTech, 1 Aug. 2020) So, flooding the market pushed down prices further, making it even harder to satisfy creditors and stay the executioner’s blade.

Blaming the economic downturn and not examining internal factors implies an external locus of control by management. When success depends on only external causes, there can be no collective learning by management. Those same leaders are destined to repeat their mistakes.

The biggest mistake at Hertz was to prioritise wealth extraction for shareholders when the business couldn’t afford it. Don’t pay dividends if it increases your debt burden. Not all debt is a problem – “good” debt is debt that grows the business and generates wealth. Increasing debt to pay dividends is clearly not a good type of debt.

Pulling value from your business might be due to greed, vanity or, in the current trying times, desperation. Whatever the reason, if it doesn’t support your overall strategy, expect problems down the line.

As a popular science fiction author, Theodore Sturgeon laboured for decades defending good science fiction from critics who claimed all science fiction was bad. He argued that science fiction was no different from any other literature: while most are indeed bad, some are excellent.

This principle should apply to all endeavours, from creative literature to film and advertising, medicine, law, software apps, and even leadership. In every field, only a few exemplars rise above the morass of mediocrity.

As Sturgeon highlighted, if all you’re looking for are bad examples, there’s plenty to find. Hence his eponymous law, “nothing is always absolutely so”, more popularly cited as Sturgeon’s Revelation, “90% of everything is crap.”

This could just be another way of articulating the Pareto effect, AKA the 80-20 principle. But I think it’s more nuanced than simply an objective measure of what we do and the results we get.

Thing is, who decides what’s good or bad? Who’s the observer doing the measuring? And what are their criteria?

It seems most sources I’ve found on Sturgeon’s Law reference generalised ratings, like a travel establishment’s stars, how many accolades are lavished on a TV commercial, or how many weeks a book listed as a best seller.

Closer to the work of entrepreneurs, we love to cite the Big Four as paragons of the consulting world, the stars to aspire to emulate. But they’re good examples for only a specific audience – usually big corporates with big budgets. I can’t think of too many scenarios where a small business hiring a Deloitte or E&Y would be good. It would be really hard to churn out anything that's both appropriate to small business and within a reasonable budget.

Within each rating system, behind each average rating is a collection of high and low individual reviews. High-ranking billets on Trip Advisor have a collection of poor reviews. Low-ranked restaurants often have a few good reviews.

Affirming Sturgeon’s Law, there are very few of anything that are all atrocious or all excellent. If you look deeper at individual ratings, I often see that bad ratings come from people who shouldn’t be there – they’re not the target market.

In your business, “good” is defined by your audience. Just like the Big Four are good only for some clients, your work could be the best thing for just your niche, but 90% crap for everyone else. Whether it’s your internal leadership, your advertising, or the thing you sell to your customers, you don’t get a say in defining “good”. Only your target audience has that right.

Applying Sturgeon’s Law to your business, you have 2 priorities:

1. define exactly who it is you’re trying to please and,

2. get their regular input and feedback on how you’re doing.

Without this, having a business that rises above the 90% crap would be a crapshoot.

If you’re feeling stuck trying to make a big decision, a terrible way to resolve the stuckness is to avoid the decision. Not making a choice is, in itself, a choice to keep the status quo.

In coaching and consulting with thousands of clients, I’ve noticed that we tend to get stuck with how to decide. How do we compare two incomparable choices – the apples and oranges conundrum? How do we weigh up the feelings of comfort or social status against the functional economic value of a luxury product? Or how do we work with the uncertainty of how a decision might turn out?

No doubt about it, decisions are stressful and take conscious energy to resolve. In fact, the greatest value of habitual routines is to free our cognitive resources to focus on the rare exceptions of novelty in our lives. When last did you change your routine for brushing your teeth, how you don a jacket, or the routes you follow for frequent local trips? Imagine how exhausted you’d be if you changed your routines every time you did these things.

Most times, we get stuck in big decisions because of their high novelty. But whether we’re thinking about a bold strategic change in our business or uprooting our lives to emigrate, there are decision-making tools to help us organise our thoughts and tame the overwhelm.

Here are 4 reliable decision-making tools I use regularly for myself and clients, listed from easiest to complex:

• Force field analysis: at its most basic, this is a simple two-column table listing the pros and cons for a decision.
• Paired comparison analysis: if you’re choosing between multiple options, simply compare each option against every other option and pick the winner of each pair. It’s like a round-robin sports tournament, like a football league. After all binary comparisons, the one with the most wins bubbles to the top of the list.
• Decision matrix: this starts as a simple table of criteria in the rows, like price, convenience, availability, safety etc., and options in the columns. Then in the intersecting cells, use a rating scale to score each option against the criteria. Total the columns and the highest score wins.
• Cost-Benefit Analysis: brainstorm all the costs and benefit factors relevant to the decision and estimate their monetary value. Total the costs and deduct them from the benefits to work out whether the benefits outweigh the costs sufficiently. If you’re comparing 2 or more options, the option with the highest net benefit is the winner.

If you google any of these tools, you’ll find they each have more evolved versions that can be applied to highly complex and high-impact decisions in your business and life. But if you’re new to any of them, start simple to build your comfort with them.

After all, being decisive is easy when the decision process feels familiar.

Krulak’s Law of Leadership states that the future of an organisation is in the hands of the privates in the field, not the generals back home. To grow a business that can make a difference in the world and create ownership wealth for you, it’s imperative that you grow your people

Charles Krulak is a retired US Marine Corps general who, in a 1999 Marines Magazine article, coined the term “strategic corporal”. His article introduces the Three-Block War concept, where troops simultaneously engage in full-out battle, peacekeeping and humanitarian aid all within three city blocks.

Mission failure – and the death of your team and civilians – is almost guaranteed if decisions cannot be made in the moment at ground level. It’s near-impossible to write policies and train unit leaders for every possible situation that might arise. Instead, the corporals – the lowest-ranking leaders – must be able to think for themselves and immediately lead their teams to execute their decisions.

Increasingly, the world of work is pushing us into situations where it’s not possible to succeed if we must wait for an answer to, “What do I do next?” Agility depends on split-second decisions to exploit time-critical information, and this could have a major impact on your company’s reputation, good or bad.

As the general of your business, you’ve invested your sweat and money in building your business and looking after hard-earned, loyal clients. That could all be decimated in seconds by a junior employee whose public relations blunder is videoed and plastered all over social media. Not only is this an entrepreneur’s nightmare, we see major brands hurt by this almost every week.

Or the right decision by an employee to solve a problem for a delighted customer could be worth thousands in the PR and brand-awareness effect. That worker has  a multiplier effect where their value far exceeds their salary.

In other words, as a high-level leader, it’s your job to empower your front-line leaders to make independent and high-impact decisions.

But how do you do this? Krulak offers 5 principles:

Offer them the freedom to fail and with it, the opportunity to succeed.

Micro-management must become a thing of the past.

Supervision must be complemented by proactive mentoring.

Empower them, hold them strictly accountable for their actions.

Allow the leadership potential within each of them to flourish.

(Brand Minds)

“Leaders are judged, ultimately, by the quality of the leadership reflected in their subordinates.” — Krulak.

Are you employing biological robots, or are you leading leaders?

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(Image credit: UN News Women in Peacekeeping https://news.un.org/en/story/2019/04/1036511)