The Pontiac Division of General Motors once received the following complaint: “This is the second time I have written you, and I don’t blame you for not answering, because I kind of sounded crazy. We have a tradition in our family of ice cream for dessert after dinner each night.
But the kind of ice cream varies so, every night, after we’ve eaten, the whole family votes on which kind of ice cream we should have and I drive down to the store to get it. It’s also a fact that I recently purchased a new Pontiac and since then my trips to the store have created a problem.
You see, every time I buy vanilla ice cream, when I start back from the store my car won’t start. If I get any other kind of ice cream, the car starts just fine. I want you to know I’m serious about this question, no matter how silly it sounds: ‘Why does my car seem allergic to vanilla ice cream?'”
The team at Pontiac was understandably skeptical about the letter, but sent an engineer to check it out anyway. The latter was surprised to be greeted by a successful, obviously well-educated man in a good neighbourhood. He had arranged to meet the man just after dinner so they could go together to the ice cream store. It was vanilla ice cream that night and, sure enough, after they came back to the car, it wouldn’t start. The engineer returned for three more nights.
The first night, the man got chocolate. The car started. The second night, he got strawberry. The car started. The third night he ordered vanilla. The car failed to start. Now the engineer, being a logical man, refused to believe that this man’s car was allergic to vanilla ice cream. He arranged, therefore, to continue his visits for as long as it took to solve the problem. He also started to test and measure – he collected all sorts of data, time of day, type of gas used, time to drive back and forth, etc. Soon he got his first clue: the man took less time to buy vanilla than any other flavour.
Vanilla, being the most popular flavour, was in a separate case at the front of the store for quick pick up. All the other flavours were kept in the back of the store at a different counter where it took considerably longer to find the flavour and check out. The power of this data driven insight was to immediately change the question from – “Why is my car allergic to vanilla ice cream?” to a more sensible, “Why does the car not re-start when it takes less time?” Once time became the problem – not the vanilla ice cream – the engineer quickly understood the answer: vapour lock. It was happening every night, but the extra time taken to get the other flavours allowed the engine to cool down sufficiently to start.
When the man got vanilla, the engine was still too hot for the vapour lock to dissipate. Here was a genuine technical problem that could be solved. There are several messages here for the business owner. First, the customer is always right! Thinking about every issue raised by a customer will go a long way towards improving the quality of your own product/ service.
Next, we often confuse correlation with causation. While the customer thought that buying the vanilla ice cream was causing the car not starting, these were merely correlated events and that made the initial complaint a lot more sensible. Finally, the first step to identifying a solution to any problem is to ask the right question.
The more time spent in identifying the right question, the easier it will be to find the solution. Remember – Questions are often the Answers.
“The truth is that the first changes are so slow they pass almost unnoticed, and you go on seeing yourself as you always were, from the inside, but others observe you from the outside.” ― Gabriel García Márquez
If you place a frog in a pot of boiling water it will understandably scramble out pretty quickly. However, if you place it in a pot of water at room temperature and don’t scare it too much, it will stay put. If you then set the pot on a stove and gradually turn up the temperature, something very interesting happens.
As the temperature gradually increases, the frog will do nothing. In fact it will show every sign of enjoying itself. As the temperature continues to increase it will start becoming groggier until it no longer has the strength to climb out of the pot. Though there is nothing physically restraining it, it will sit there and boil. The frog’s psychological apparatus for sensing threats is geared to sudden changes in its environment, not to slow gradual changes. In psychology, this phenomenon is called sensory adaptation. The frog’s ability to adapt to the slowly increasing temperature is definitely not a good thing for it in the long run. But is this not how a lot of change creeps up to us in life? Change is in fact more often than not slow and gradual rather than sudden.
In helping businesses deal with change, I have discovered this phenomenon repeated – we get accustomed to terrible situations and don’t realize how hot the water is getting. If we were to describe our current situation to a 10 years younger self, our younger self would probably be shocked beyond belief. Why do we stay in water that is approaching the boiling point? Is it because it is a lot more difficult to look inside and self evaluate? Quite often it takes someone from the outside to see the gradual change building up and awaken the slumbering entrepreneur. Sometimes however, we fear that any attempt to jump out of the water will land us straight into the fire.
We are paralyzed by the prospect of change. So, instead of jumping, we tread water hoping that the heat will soon stop. Is it risky to try to change the environment or jump out of the pot? Or is it riskier to continue to adapt to the increasingly unpleasant environment? We will not avoid the fate of the boiled frog until we learn to slow down and see the gradual processes that often pose the greatest threats. We need to constantly question how comfortable we are and whether the situation is good for us and our business.
What kills the frog is not the boiling water but its own inability to decide when it had to jump out. We all need to adjust with people and situations, but we need to rethink when to adjust and when to change the situation. There are times when we need to face the situation and take the appropriate action. We have to decide when to jump. Deciding not to jump is also a choice. Blaming the water for changing around you is pointless.
How much do you earn from your business per hour? And how much do you charge out? Unless you are in a business charging per hour, this might seem hard to know or even irrelevant. And even if you do charge an hourly rate, chances are that not all your hours are billable.
Most business owners never think of how much their time is worth per hour. This leads to the fallacy that you save more money in the business by doing stuff yourself and not hiring an extra hand. Here’s a simple calculation – If your profit after tax (and before you take any money out of the business) is £50,000 for the year and you are working 50 hour weeks, with a couple of weeks of holiday every year, your per hour rate is only £20 (£50K/ 250). Now the interesting questions – What should you be doing which earns you more than £20 per hour for yourself? If you went looking for and found a new key customer, how much will they be worth over the next few years?
How many hours of work would that take and what is the difference on a per hour basis? If you look at the value of time recruiting a new member of staff, training staff to be as good (and valuable) as you, what is the per hour return of this effort? Most business owners agree that these are all incredibly high-value activities… but then they tell me they don’t have time to do them! It’s not rocket science – the higher the value of the work that the business owner does, the more profitable the company. What should you not be doing to make sure your per hour rate does not decrease further? Make a list of all the things that you spend an incredible amount of time on each week.
These could be answering the phone, doing quotes, manning the counter, bookkeeping, administration etc. Against each activity, write down what you could pay someone hourly to do this. If the hourly rate is less than you can be worth when doing your most valuable work….employ someone to do the lower-paid work. The question is not “Can I afford to employ someone?”, it’s “Can I afford to not employ someone?” As a business owner, you have a remarkably high level of control over your level of income. Why then would you choose to do minimum wage work? You need to pay someone else to do the lower value work so that you can do the more valuable work and earn more money for the business.
Take action. Make a list today, identify one thing that you can outsource and ask your coach or other trusted adviser to recommend someone to give the work to. Don’t do work with a lower hourly rate than you could be doing. Identify one item which is the clearest high value work in your business. Make time for this at the expense of the low value work. If you focus on using more of your time to earning a higher rate per hour, your business will be more profitable – or you’ll be able to work less hours – whichever is more important to you. Which brings us to another set of interesting questions – How much per hour would you pay for extra leisure time? How much per hour would your partner/ child pay you for an hour of your leisure time? Is £20 per hour worth the sacrifices you make?
I received a mail today from a client’s employee which reminded me of an old story that had puzzled me when I first read it and continues to puzzle me today in very different ways.
It is the story of Bartleby, the Scrivener, by Herman Melville.
In the story, an elderly Manhattan lawyer employs the forlorn looking Bartleby. At first, Bartleby appears to be a boon to the practice, as he produces a large volume of high-quality work. One day, though, when asked to proofread a document, Bartleby answers with what soon becomes his stock response: “I would prefer not to”.
Soon he is doing fewer and fewer tasks around the office and despite several attempts to reason with him offers nothing but his signature “I would prefer not to”. After a while, Bartleby stops working completely. Tension gradually builds as the lawyer’s business associates wonder why the strange and idle Bartleby is ever-present in the office – he is now even living there.
Sensing the threat of a ruined reputation but emotionally unable to throw Bartleby out, the exasperated lawyer finally decides to move out himself, relocating his entire business and leaving Bartleby behind. Soon the new tenants of the old space start trying to unsuccessfully evict Bartleby until he has to be forcibly removed and imprisoned.
Towards the end of the story, despite access to plentiful food, Bartleby is found dead from starvation, having apparently preferred not to eat.
What really causes our employees to close themselves to change and to Action? How may times do our team members imply “I would prefer not to” and then don’t do something even after committing to do it. Does this attitude in a team reflect on the leader’s own attitude and attributes? Why does a business owner close himself/herself to new ideas and fresh thinking that could massively improve their business? Who really loses when this happens?
In the lonely job of the entrepreneur, why would we choose to not work with others creating win-win scenarios and making a difference bigger than ourselves?
In a recent conversation I was having with a fairly successful business owner, we started talking about some of the goals he had for himself and his business when he first started and how they compared to his goals today.
As we discussed how his thinking had evolved in the 10 years he had been in business, we realized that as he had achieved one measure of success, time had also taught him to compromise on his bigger goals and ambitions. He felt comfortable where he was in his business and was loathe to overextend himself or his business to drive further growth. How many of us reach that plateau in life and in business?
We convince ourselves that what we have is good enough and there really is no point in trying to relive our dreams. Those dreams were of a forgotten youth when we didn’t understand how the world worked. The passion, energy and drive that first got us started in business and saw us claim success after success seem to be a thing of the past and long forgotten. What happens when you face the truth about what your business could really achieve if you started rebuilding it with the same passion, energy and drive that you first had. Only this time you also add to it the years of experience and best practice you have accumulated and the strategies that have worked for thousands of other businesses across the world?
In The Matrix, Neo (Keanu Reeves) is introduced to a mysterious man named Morpheus. Morpheus talks about the Matrix and the truth that Neo is just a small part of the Matrix and one of the Matrix’s “slaves”.
Morpheus then presents Neo with 2 pills, a blue pill and a red pill, and explains a choice to Neo: “This is your last chance. After this, there is no turning back. You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember, all I’m offering is the truth – nothing more.”
So the question for the business owner/ entrepreneur is whether reality, truth, is worth pursuing. The blue pill will leave us as we are, in a life consisting of habit, of things we believe we know. We are comfortable, we do not need truth to live. The red pill symbolises passion and drive along with risk and questioning the status quo. It forces us to ask ‘What if?’ and ‘Why?’ Asking these questions ultimately leads us to a choice. Do you continue to ask and investigate, or do you stop and never ask again? Neo chooses the red pill. Which one would you choose? Click on the red pill to get in touch with us for a complimentary strategic review of your business.