Problem Solving PDCA (Photo credit: Luigi Mengato)

Mr Friga provides a framework for team problem solving and gives real life examples from various McKinsey consulting engagements. He uses the acronym TEAM FOCUS to describe the approach.

T – Talk

E – Evaluate

A – Assist

M – Motivate

F – Frame

O – Organize

C – Collect

U – Understand

S – Synthesize

There are so many valuable take-aways from this book. With my background in science, the idea of creating a hypothesis really resonated with me. The “F” in focus is stands for “Frame”. It is critical to frame the business problem correctly. You do this by identifying the “right” question you are trying to answer and formulating the correct hypotheses. This scientific process forces you to make sure you are effective, efficient and aligned as a team to solve your problem. If the problem is not clearly defined, you can spend time going down rabbit trails that don’t lead to a solution. Once the problem / hypothesis is clearly defined, you can work to collect data which will either prove or disprove the hypothesis. This requires a more disciplined approach, but is necessary for solving complex business issues.

People use the word “love” all the time. I LOVE this pizza. I LOVE my Ipad. I LOVE going to the movies. The true meaning of the word “love” can get diluted and lose its meaning if we’re not careful. So what does it mean to “love and serve each other” when it comes to business? I think that this is an extremely important and powerful value if it is lived out in our lives.

I “love” the Wikipedia definition of the word: “The unselfish loyal and benevolent concern for the good of another”

It’s interesting that Wikipedia uses the term “unselfish”. In order for an enterprise to truly be successful, the participants must be unselfish. Under a high pressure environment, selfishness can easily creep in. Employees (and owners for that matter) can begin to overvalue their contribution and undervalue the contribution from other members of the company. It’s amazing how we can judge what other people do, when we’ve never actually held that position. There is a natural human tendency to look at someone else’s job and compare it to our own. We know all the details and nuances which make our job difficult and only see what’s happening on the outside for one of our colleagues. Take sales for example. Before I started my first company, I was an analytical chemist. I NEVER sold anything. My only exposure to sales was the annoying guy at Best Buy. Sales “looked” easy – until I tried it myself. Until I actually tried to cold call someone, set up an appointment, create a presentation, drive to their office, give the presentation, convince them to buy and collect their check – I had NO IDEA how hard it was (by the way what an incredible feeling when someone says, “yes”!). As they say, don’t criticize someone until you’ve walked a mile in their shoes.

This type of selfish attitude can be a killer in a company. If it gets too embedded you can have departmental wars. You see this sometimes between sales and production. It happened all the time when I ran a laboratory. The folks doing the testing often got frustrated with sales because of out of the box requests which the testing team had to perform. The sales team didn’t really care because they made a sale and were on to the next thing.

If the entire company has “unselfish loyal and benevolent concern for the good of” each other, what an amazing environment. How can that go wrong? This will be infectious to the customer and create a place where people “love” to work. So the next time you think your job’s much harder than anyone else’s, think again and try to love your coworker.

I immediately thought of several areas where a simple DO-CONFIRM checklist could help improve customer service and results for Astonish clients. The concept is simple. Checklists ensure the stupid, but critical tasks are not overlooked. Are there any “stupid but critical” tasks in your business? I’m sure there are. In a fast paced environment, memory and judgment can be unreliable. Checklists help make sure tasks which are critical to success happen every time without fail.

My suggestion is to examine your business for areas where your employees drop the ball. Every business has these areas. Put a simple checklist in place. It doesn’t keep your employee from thinking, but allows them the freedom and security of knowing balls are not dropped.

So how do the best businesses deal with problems? Let’s dive a bit deeper into the way we as individuals deal with problems for some insight.

If you think about your own life for a second, you could probably indentify a few areas where you are stumbling. If you look even deeper and are honest with yourself, you might even say you are ignoring problems.

If you’ve ever watched the TV show Intervention you can see this pattern first hand. The show chronicles the life of a drug addict who is at the end of his/her rope. At the beginning of the program, you get to see how this person first encountered a major problem in their life (divorce, abuse, death in the family etc) which became the trigger for their drug abuse. Instead of facing the problem head-on, they used drugs to numb the pain and avoid the problem. Of course, this never works and they end up having to face an even bigger problem. A good friend of my once told me, “if you leave a hungry dog in the basement, eventually it will get out”.

The truth is; we ALL do this. We ALL avoid problems both in our lives and our businesses. The best businesses have a deep understanding of their problems and are honest about them. They don’t deflect criticism or blame someone else. They are teachable and seek out mentors that can help them.  It takes a humble person to admit when they are the one who is limiting the growth or progress of their own company. Sometimes, the biggest problem is you.

So what to do?

1. Write down the top 10 issues your company is facing
2. Review these issues with a trusted colleague to ensure you are seeing the right issues
3. Honestly admit if YOU are the problem
4. Pick ONE item from the list and WRITE DOWN a detailed action plan to fix it. Don’t move on to the next problem until you’ve fixed the first one

The key here is not to IGNORE your problems. You are going to have to face them one way or another. Start attacking them head-on. Now go solve some problems.

SAS helps large to midsized business analyze their data so they can make better decisions. The author asked Jim the following question:

“What do businesses want to analyze today?”

Jim’s response was, “Businesses are looking at customer data to gain insights into cross-selling and up-selling.”

This sounds very familiar. It’s the old adage, “it’s cheaper to KEEP the customer you have than to acquire a new one”. Businesses are starting to realize that they need to objectively understand their customers better. Every customer leaves clues (data), based on their profile and behavior. If you can read these clues, you can tell how likely and when they are are ready to buy.

Start Collecting Data Today

In order to analyze data, you MUST have some way to collect it. For most agencies, that collection process involves their agency management system and their staff. After working with over 500 agencies and their data, I can tell you that most agencies do a poor job of ensuring that they are collecting as much accurate data on their customers as possible. Accurate data is essential to solid data analysis. Having a system to collect your customer’s profile and engagement with your agency is key.

There are several data points you can collect. One such point could be your customer’s policy profile (i.e. an auto policy and a home policy). Combine this with the customer’s online behavior (they visited visited your website and opened an email recently) and you have enough data to begin to predict customer behavior. You can actually develop a digital signature of each client and rank them accordingly. The is very similar to RFM ( recency frequency and monetary value) method of ranking customers.

With increased pressure from direct writers and lead gen companies, independent insurance agencies need to do all they can to KEEP the customers they already have. Being tuned into the profiles and online behavior of your customer base will give you a huge competitive advantage. This concept is not just taking place in the insurance industry, but one that small businesses are starting to leverage in increasing numbers.

According to Wikipedia, the law states the following:

“Two countries (or other kinds of parties, such as individuals or firms) can both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods. Even if one country is more efficient in the production of all goods (absolute advantage), it can still gain by trading with a less-efficient country, as long as they have different relative efficiencies.”

In Bussgang’s blog, he applied this law to start-ups. I’d like to expand the law to all small businesses. To quote Bussgang:

“As such, they [owners] get sucked into spending time doing things that they may be better at than the others in their organization on an absolute basis, but that, comparatively speaking, they are worse at in relation to the handful of things that they are uniquely suited for.”

This is a similar concept that is brought out in “The E-myth” by Michael Berber. In the book, Gerber writes about the “Entrepreneurial Myth”. The main point of the book is that people start companies and end up working “in” their businesses instead on “on” it. Owners end up being employees of their own companies. They become trapped and want to quit.

Let me give you an example. I was speaking with a friend this weekend. He runs a large printing company. His lament was that he was on the hook for all the sales. He wished he had more time to focus on bigger picture items that would propel the business forward. He couldn’t find the right people to sell and ended up doing all the selling himself. He was stuck working “in” his business and not “on” it.

I see this often. Small businesses have trouble growing because the leadership / ownership can’t (or won’t) delegate tasks. Maybe you’re a great salesperson, but you’re stuck doing operational tasks. Wouldn’t it make sense to hire someone and delegate those operational tasks to, so you can focus on sales? How much more could you sell? Furthermore, maybe you’re amazing at sales, but you’re the only one who is. Wouldn’t it make sense to document and detail your sales process then train someone else so you’re not the only one on the hook for sales? I know, this takes time and involves risks. It’s scary, but it must be done if you want to grow.

Make and assessment of your strengths and weaknesses and delegate everything you’re not good at. According to Bussgang (and I agree):

“there are two areas a founder should not delegate:  product and people.  Product-related activities include developing customer intimacy (studying the “voice of the customer”), designing features, thinking through product strategy and setting priorities.  People-related activities include hiring, setting the culture, coaching and mentoring.”

If you truly want your business to grow, obeying the law of comparative advantage is key.

I also found myself thinking this way in my personal life. I would look to the future, and say to myself, “If I could only get to this point, things would really be great.” If I could only make $100K in income, have that huge house with a pool or you fill in the blank. Do you ever catch yourself thinking this way?

Then one day it hit me. When I actually get to the place I’m striving for, there will be new challenges waiting for me. The act of striving for a goal is really the fun part. I think we were made to grow and be stretched. Life is really boring when there are no challenges.

Ralph Waldo Emerson said, “Life is a journey not the destination”.

So what about your business? Are you OK with change? Change is the only way we progress. New ideas, thoughts and strategies stretch us and make us better. I’ve decided to embrace change and to expect it. I’ve decided to enjoy the journey, the process of facing problems. I think this is a key component for success given the environment we are in. New technologies are cropping up all the time. If you’re going to survive as a business you need to embrace change and change faster that your competition. You need to get better at adapting to change because the rate of change in accelerating. The businesses that will win are the ones who adapt the fastest.

Last month we talked about renewals. Astonish Results is a SaaS (software as a service) business. Clients pay us monthly for a fixed period of time. At the end of their contract, they can choose to stop the service. Obviously, we want them to continue with us since it’s much cheaper to keep a client than it is to get a new one (see my previous posts on this subject). The fact is, every business should be concerned with renewals.

It’s really important for ALL employees to understand this. Think about it this way. If a new customer signs a 36 month agreement, you have 36 months to prove to them that staying with you is a good idea. If every employee clearly understands the impact they have on renewals, it can only mean good things.

Some companies have disconnected from the reality of customer loyalty. Others ignore renewals alltogether. At Astonish Results, we see this sometimes with our customers. They are actually affraid of proactively contacting clients coming up for renewals.

Obviously, the bigger a company gets the more disconnected the employee can be from the importance of renewals. The interaction usually goes like this: the customer get’s ticked and there is an effort to try to “win them back”. Therein lies the problem.  If the entire company was focused on “winning” customers every day, renewals wouldn’t be a problem.

During our lunch, I asked everyone to think about what they do and how what they do contributes to our client’s results. In other words, how does what they do each day cause our clients to either want to stay with us or leave us? Each employee must have this clearly defined in their minds so they can execute. Managers are responsible for clarifying the message.

At the end of the day all that matters in renewals, even if you’re not a SaaS company.

Geico.

These guys are literally everywhere. I cannot go a day without hearing a radio commercial, seeing them on a billboard, seeing a TV spot, or being confronted by one of their SEM ads on Google. I’m out for a nice day with the family and I see them at the air show. These guys are aggressive. They are going for market share. They are committed to being anywhere and everywhere consumers show up. It’s almost to the point of being ridiculous.

Let’s contrast this with what’s going on in the independent insurance agency space.

I recently spoke at the YBA in Napa, CA put on by the IBA West. The YBA stands for the “Young Brokers & Agents”. The topic was “SEO and Social Media”. In preparation for my speech I struggled about the content. I didn’t want to get too technical, but wanted to give folks enough “meat”. I ended up removing a lot of technical details and was concerned that I had taken too much out. Would the listeners feel that what I was sharing was too basic?

I began, by asking, “By a show of hands, who blogs at least once a month?” One person raised their hands. “What about Facebook pages for your business, how many have those.” Two raised their hands.

I was shocked. Here was a group of “young” agents. None of which were using even the basic SEO or social media techniques.

I’ve read forums posts by agents who still do not see the value of the Internet and are skeptical that any of the tools available (blogging, solid websites, SEO, SEM, Facebook, etc) can help them. All the time Geico, direct writers and lead providers are eating their lunch. It’s amazing.

The Internet is just as much about defense (keeping customers) as it is about offense (finding customers).

Some agents seem to ignore the fact that their current customers are using the Internet. They are being bombarded by the constant branding efforts too. It’s not just about having “great customer service”. You need to play defense. Agencies need to aggressively protect their customer base if they expect to survive.

I found this neat little application http://www.spreeder.com which allows you to past text into the interface and set the speed at which it flashes single words or groups of words before you. I started at 240 wpm and a 91% comprehension rate. I’m now reading at 325 wpm! I can still comprehend what I’m reading extremely well.

I use my Google Reader to track all the blogs I’m interested in. I just copy and paste the text into the speed reading application and hit start. I can bang through my reading much faster and I keep upping the speed each day.