Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps on How to Make a Decision

“When you cannot make up your mind which of two evenly balanced courses of action you should take – choose the bolder.” William Joseph Slim

Over the course of this last week I have talked about the decision making process. This process can help us in making difficult decisions. The process forces us to take action and to move from one step to the next in a continuous flow. Standing still has to be avoided at all times. From a business perspective, not being able to make critical decisions or to keep delaying them, will eventually lose you any competitive advantage you may have had. The world unfortunately does not wait for us to find the right time or right opportunity to make a decision. Listed below is a methodology I use for decision making:

1. Objective Clarification: The first step when making a decision is to look at the larger picture. Decision making is not an isolated process of just meeting specific needs, it is one in which broader goals and aims have to be taken into consideration for the future. It is only after clarifying what we hope to gain or learn from the decision we take, do we move to the next step. To learn more on how to clarify objectives behind a decision please click here.

2. Data Collection: The second step involves getting all the facts and figures required to make a decision. This could include, research, surveys, feedbacks or any other form of data collection which would provide us with information to help make a decision. The truth is, it is not possible to have all the facts and figures specially in a time bound situation. Life is about making optimal choices based on, often incomplete information. One must not let lack of data hinder us from making decisions. To learn more about data collection please click here.

3. Listing Options: Once we have adequate data about decisions we have to make, the next step in the process is to develop a list of alternatives. The purpose of this list is to put down on paper different options available.There will always be several possible alternatives available when one has to make a decision.Making an endless list of possible alternatives is not wise, and frankly, will waste a lot of time. Be specific in what you want and develop your alternative list accordingly. To learn more about developing an option list please click here.

4. Evaluating Options: I use a simple model which helps rank options according to our objectives and weight-ages given to specific factors. This enables us to rank each option in an unbiased manner and helps to gauge how they compare against each other on a holistic level. This model is developed on the basis of the prior 3 steps discussed. To learn more about the model and how to use it for your decision making process please click here.

5. Making a Decision: After successfully completing the four steps outlined above, we reach a point where we should have enough information to make a decision. Most of the time, we will not have all the information required, life is all about making optimal choices based on incomplete information. We should not let this affect our decision making process. Once a decision has been made, one needs to take responsibility for it and ensure follow through. To learn more about the final step in the decision making process please click here.

If one were to look back at life, there are bound to be decisions which, in retrospect were not the correct one. The important thing to remember is not the fact that one made a wrong choice, but whether we learned from the mistake or not. We should not let past failures inhibit us from making similar decisions in the future. If one were to take such an approach,  very little progress forward would be made. As mentioned earlier, life is short, we need to have the courage of our decisions, confidence to trust our gut instincts, and keep moving forward. I wish you all the very best on all your life decisions in the future.

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Can you make a decision?

“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” Theodore Roosevelt

After weighing all possible alternatives, a decision making point is reached. This stage in the decision making process is where many individuals face problems. Some of the reasons I come across quite regularly for this are; there is inadequate information, I have received mixed reviews from feedback which has further confused me, I want to put this decision off for a while to think about it more, I cannot make this decision alone and, what if I make the wrong decision? These are all valid reasons to put off making a decision. However, if this becomes a recurring pattern in life, then, very little progress would be made when a difficult problem arose. 

Once our homework is done, and we believe we have adequate information about the decision at hand, we have to take a leap of faith. Waiting for the perfect situation, the perfect business opportunity or the perfect partner will invariably hold you back. We have to be proactive and want to move forward, this not only increases confidence, it provides invaluable experience and feedback. It is in moments of decision that we find out who we really are, and what we are made of. Use these opportunities to showcase your skills and abilities rather than shying away from taking responsibility. 

Once a decision is made, the next most important aspect of this entire process is, follow through. We have to be a 100% committed to the decision we make, and take full responsibility for it. This is not a time for excuses or getting cold feet. We must prove to ourselves, as to those affected by the decision that we have what it takes to execute the decision. If one makes a habit of changing one’s minds after taking a decision, this reflects poorly on character and value systems. In business, such a person would be deemed unreliable, and lacking the confidence required to take responsibility. Hence, next time you are put in a position to make a decision, do your homework well ,and when ready, make the decision and follow through. As an added benefit, the feeling one experiences after making a correct decision is amazing, and should be the end goal every time!

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Ranking your Options

“Choice of aim is clearly a matter of clarification of values, especially on the choice between possible options.” W. Edwards Deming

 Once we have developed a list of alternatives, the next step in the decision making process is to rank them. The ranking process requires basic elements to keep it simple, yet effective. The first element required is developing a criterion list to assess all your possible alternatives against. Listed below, you see an example alternatives list I have created for the laptop example I mentioned yesterday. For this example I singled out what I felt were the most important factors. The same example can be adjusted for just about any decision. Whether you are assessing a new car, business idea, partner, employee or a potential investment opportunity. Develop a list of criterions against which you can assess all the available alternatives. It is important to rank all the alternatives against chosen criterions. 

The next element that is required is, assigning weight ages according to your preferences. I used a 10 point scale for this example, however, there are other ranking scales, and I have personally used a 100 point scale as well. This depends entirely on the complexity of the decision, and the number of criterions being used to assess each alternative. The next aspect is to assign specific scores to each option, based on the criterion. I have used a 5 point scale for the assessment in the example below, 5 meaning, very satisfied and vice versa. After you grade each criterion, multiply the scale score with the assigned weight-ages. Finally, add each options total score, and you have a decision based on resulting total scores for each alternative.

Laptop Rankings

A further complexity to the model above,  particularly when making business decisions, is to add a risk component. I left this component out of the above example to make it easier to understand. Adding a risk component can help you weigh the risk-reward ratio of each alternative. This has been very helpful to me when assessing different business opportunities. The model described above, brings together all the factors we have spoken about in the last couple of days. It is important to understand the logic behind each of the components, and the manner we arrived at this stage. Once we have a total score, we are ready to move to the last stage of the decision making process.

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Developing Alternatives

“The absence of alternatives clears the mind marvelously.” Henry Kissinger

Once we have adequate data about decisions we have to make, the next step in the process is to develop a list of alternatives. The purpose of this list is to put down on paper, the different options available. The purpose of this exercise is to write down all the options floating in one’s head and translate them into a tangible option. This helps put perspective on the decision at hand by giving an overview of the options available. Many individuals like to write down as many possible alternatives as possible at this time. I think this complicates the decision unnecessarily.

The point of adding structure to your decision making process is to streamline it and make it more efficient. When we don’t do this, decisions take longer because of the incessant processing going on in your head. This ends up not only confusing an individual, but also significantly prolongs the time it takes to reach a decision. Therefore, when you develop a list of possible alternatives, only jot down those you are seriously considering and which fit the larger objective behind the decision process. For example lets say you want to buy a new laptop. You have been to the stores, got all the brochures and now sit down to make a list. If your list contains 20 possible laptops you are interested in, the decision will take forever to make. I had to make this decision a couple of months ago. I needed a laptop which was aesthetically pleasing and highly portable. I took a look at a couple of alternatives, the choice came down to a Sony or an Apple, I then made  a decision and settled on the Apple.

I think many of us make the decision making process a lot more complicated than it actually needs to be. There will always be many possible alternatives available when one has to make a decision, like choosing a college, a car, a computer or a mobile phone. Making an endless list of possible alternatives is not wise, and frankly, will waste a lot of time. Be specific in what you want and develop your alternative list accordingly. If for some reason one cannot find enough alternatives or an alternative that fits your criteria, it is possible to delay making the decision. However one should not use this as an excuse to be complacent or avoid making a decision. Once we have our list of alternatives ready, we can move to the next step of the process. 

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Getting your facts right

“Trust your hunches…Hunches are usually based on facts filed away just below the conscious level.” Dr. Joyce Brothers

Carl Jung did the foundational research behind the very popular MBTi personality type test. One of the capabilities of the test is to assess the manner in which we process information and reach decisions. On one extreme of the scale, you find individuals who require all the facts and figures to help them make a logically correct choice. On the other hand of the scale, you have individuals who trust their intuition, and tend to make what may be perceived as more emotional decisions. I happen to be one who trusts intuition a lot more than depending on facts and figures. There have been times this decision making process has got me into trouble, however, the times that things have worked out in my favor outweigh them. What it comes down to is personality type, and our values and belief system. One needs to be comfortable with whichever path one chooses to take.

The truth is, it is not possible to have all the facts and figures specially in a time bound situation. Life is about making optimal choices based on the often incomplete information. One must not let lack of data hinder us from making decisions. If one finds oneself delaying making difficult decisions or finding ways to avoid making such decisions, we need to ask ourselves the cause of such behavior. Confronting this head on will help enable us to progress in life. Life is too short to run away from making decisions which need to be made. We need to have the courage and confidence to trust our instincts and if we make a mistake, to learn from it. A conscious decision needs to be made about actually living life rather than just spectating it from the sidelines.

When in doubt or with little information to base a decision, consult others who may help guide you. This helps get a different perspective on the matter and may make it easier to make a decision. I have spoken about mentors in great detail, and how they have consistently helped me in decision making relating to both my life and business. Sometimes it just takes that little bit of re-affirmation, and at others, it may require a radical point of view. Either way, if we do not ask others for feedback and advice, we are not allowing ourselves to grow as individuals. Once you have your facts, figures and gut feeling, it is time to move to the next step of the decision making process.

Related Articles:

– How do you process information?

– How do you make a decision?

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5 Steps to Write a Customer Value Proposition

“The toughest thing about the power of trust is that it’s very difficult to build and very easy to destroy. The essence of trust building is to emphasize the similarities between you and the customer.” Thomas J Watson

A customer value proposition (CVP) is a direct reflection of how your organization brings value to your target segment. It helps them answer the fundamental question “Why should I buy from you instead of your competitor?” A well developed CVP has the ability to transfer your target segment’s attention to the distinctive advantages of your product/service, and the reason they should select it. If the CVP is generic and abstract, with fancy words which do not translate into tangible value for the customer, it is of no consequence. Listed below are five steps to help you develop a winning CVP.

1. Customer Identification: Who is your target customer? Instead of answering this question with generic answers such as multinational companies, teenagers or women, be more specific in your approach. An analysis outlining the customer’s needs and their current pain points is the need of the hour. If your product/service does not fulfill a need, it will be difficult for your organization to generate substantial traction. Therefore, the first step requires understanding your target customer and ensuring that the essence of your CVP reflects an unfulfilled need. To read more about customer identification please click here.

2. Distinct Advantages: What makes your product/service special? If your product/service is homogenous in comparison to the rest, chances of getting lost in the crowd are, high. Your product/service must provide customers with a simple and clear reason to choose your organization over the competition. This being a vital component of your customer value proposition, it is essential that substantial time and effort is put into identification and development of these edges. To read more about discovering your organization’s distinct advantages please click here.

3. Measuring Value: If your product/service does not bring tangible benefit to your target customer, chances of recurring business is diminished. During customer research, you will discover pain points for your customers. These need to be addressed by adding metrics to monitor positive changes through your product/service. Once the customer understands the value you bring to their organization, they are able to select you with greater ease and provide recurring business. To read more about measuring the value brought by your product/service please click here.

4. Sustainability: With the claims made in a CVP, an organization is making a promise to its target segment. This could be in the form of creating efficiency, increasing productivity, stimulating sales or even making life easier. When the customer selects your service, they expect to receive the benefit promised to them. It is critical that organizations understand what it takes to keep those promises, and to continually make good on them. Making big claims is the easy part, delivering on those claims is what sets the winners apart. To read more about sustainability of your CVP please click here.

5. Competitor Comparison: Every company has their strengths and weaknesses. However most companies are so engrossed internally, they forget to pay attention to their competition. For a CVP to be most effective, it must clearly provide the prospect with a reason to be selected over another competing product. It must bolster its strengths and play against their competitors most exposed weaknesses. With the constant changes taking place in our world today, do not lose sight of the competition, always remain vigilant about all potential and major changes. To read more about competitor comparison and your CVP please click here.

Developing a good CVP takes time and effort. It is not something which can be done in a single day. It requires a thorough analysis of your industry, competitors and yourself. A comprehensive understanding of market dynamics and the industry’s pain points will help construct a CVP which addresses market concerns and bridges it with solutions. A well developed CVP can be a great source of inspiration and motivation for the entire organization. Make sure you allocate adequate time and resources for its construction.

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Competitor Comparison

“Concentrate your strengths against your competitor’s relative weaknesses.” Paul Gauguin

Your customer value proposition (CVP) needs to be benchmarked against your competitors. Prospects will always ask the question “Why should we choose you over them?”. As mentioned in earlier posts, ensure a distinctive advantage, tangible metrics and a proposition which is sustainable over a period of time. When formulating a CVP the competition must always be kept in mind. Irrespective of whether you have experienced success relatively quickly or whether it has taken a longer period of time, the tendency to become complacent  is always there. It is at these moments that we are at our weakest, and our vulnerabilities exposed.

When initially constructing your CVP, it is vital to do a sweep of all the local competition. This will enable you to:

1. Position yourself: It is important to position yourself correctly in relation to your strengths and the competition’s weakness. We are always looking to operate in that sweet spot where our competitors are at a disadvantage, and target customers are able to make a clear and easy choice about whom to choose and why.

2. Focus: There are areas, where our competitors have clearly developed strong competencies, which make it difficult for new entrants to penetrate. After a thorough analysis, the aim should be to collect all the vulnerabilities in the competition’s defense and amplify them. This is best done by focusing marketing and research efforts to ensure development in areas where the competition is at its weakest.

3. Understand trends: By continuously monitoring the competition, a keen insight into future trends in your industry is developed. This enables developing core expertise in those areas before the competition and can put you in a strong position to potentially disrupt the market. 

Once the analysis is complete, the wordings in your CVP should reflect the strengths of your organization in comparison to those of your competitors. With the constant changes taking place in our world today, do not lose sight of the competition, always remain vigilant about all potential and major changes. 

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Keeping Promises

“Never promise more than you can perform.” Publilius Syrus

Imagine if FedEx did not get your package to its target destination overnight! Would you use or recommend the service to anyone again? Probably not. As customers of products/services, we expect them to deliver on their promise. Inability to match expectations, results in unhappy customers, and more importantly, negative word of mouth publicity. Such publicity is viral in nature, can spread like wildfire, and could well mean the end of the road for your organization. Deciding to play it safe and not putting anything on the line, chances are you will never really stand out in a crowd. A fine balance has to be maintained to ensure customer satisfaction, while ensuring your organization is able to stand out in a crowd.

Look at renown brands in the market place today, notice the promises each is making. Volvo promises safety, Energizer batteries promise to last longer, Domino’s promises to get you your pizza in less than 30 minutes and Disney promises entertainment for the entire family. Each one of these companies makes a commitment, then ensures they deliver on the promise. Anyone of them, failing to consistently deliver on their promise, would not find their name on the list above. Many companies however, make big promises these days, come through initially, but are not able to make that commitment a sustainable one. 

When developing your customer value proposition (CVP) and committing to increase efficiency, boost productivity or bring a smile to your customers, it is critical to lay a solid foundation to continually provide those experiences. Making big claims is the easy part, delivering on those claims is what sets the winners apart. Carefully think through promises to your clients, ensure the ability or develop the capability to deliver on those promises on an ongoing basis. Remember, all it takes is one major fall to bring down everything you have worked hard to build. 

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Measuring Value

“The trouble with measurement is its seeming simplicity.” Anonymous

If you have ever pitched a product or service to a prospect, there is no doubt you have heard the question “How is this product/service going to help my organization?”. If the reply to this question is abstract, vague and includes words such as speed, efficiency or productivity, without any tangible figures or results, closing the deal will be a challenging proposition. When I say tangible results, it does not mean they have to be precise, they should however provide the prospect with something to create a frame of reference. For example, Domino’s Pizza gets your pizza to you in less than 30 minutes, FedEx gets your packages to its target destination overnight and M&M say, their milk chocolate will melt in your mouth and not your hands. Three world renown companies, each with a differing degree of measurement attached to their product/services. 

The bottom line is, if your product/service does not have the ability to bring tangible benefit to your target market, chances of success are slim. The question coming to mind now, should be, “What sort of tangible benefit can my product/service provide my target market?” Entire books, courses and seminars have been created around this one critical question. If a company is able to answer this question with a tangible benefit of great value to its target market, success is not far. However, answering this question is not as straightforward as it appears.

These are a couple of pointers to help start discussions around this particular question with your team:

1. Identification of pain points: An organization’s product/service is developed in order to address a certain pain point that the target market may have. Initially national post offices promised prospects that they would get their packages to their destination. The process was slow but efficient and there was no alternative. FedEx comes along, and addresses this pain point by promising to get your package to it’s target destination, over night. This example shows,  to get faster traction your product/service has to address correct pain points.

2. Establishing metrics: Once you have addressed a particular pain point, measure how it is superior to the  alternatives. FedEx aims to get your package to its target destination overnight. The stress is on the speed  of package delivery. Identify key metrics to ensure, that prospects will be able to clearly measure the benefits of using your product/service. There are many examples in the market place, mutual funds offer specific returns, sports cars tell you how fast they can go and some software promises specific increases in productivity. 

3. Case Studies: Actions and results speak larger than words. If you are a new company and have a product/service which has not been commercially tested, I strongly suggest you find your first pilot customer as soon as possible. Most established companies look at start-ups with suspicion, at the back of their minds, they wonder if you can actually deliver. I believe it is a justified stance and one which we need to learn to live with. To counter it, find a customer, do a commercial implementation and track just about everything you can. Afterwards, analyze which metrics have value and focus on those.

This is by far one of the most challenging steps one has to take in the development of a good customer value proposition (CVP). Much time needs to be spent in identification of correct metrics and related data collection. However it is well worth the effort. The next time you pitch your product/service to a prospect remember to tell them exactly how you will be benefiting their organization. It will clearly increase the probability of closing the deal, the incremental increase however will depend on how well you have mapped out your CVP. 

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Distinctive Advantages

“Strategy used to be about protecting existing competitive advantage, but not any more. Today it is about finding the next advantage.” Vijay Govindarajan, Chris Trimble

A customer value proposition without a distinctive competitive edge is an incomplete one. If your organization can sell books online just like any other seller why should customers buy from your store? When you create a distinctive competitive advantage, it sets you apart from your competitors and gives your organization an edge. For example Amazon has this brilliant one click ordering system, huge variety, and an intelligent reviewing system. Put it all together, and that is a most compelling reason to buy books from Amazon as compared to other online book stores. 

When FedEx started out they promised getting your package to its target destination overnight. Suddenly all other courier companies were scrambling to put together the resources required to offer the same. However, only very few have been able to come close, and today FedExing a document or package has become the norm. FedEx was able to leverage on this distinctive advantage and used it to create a high entry barrier. This clearly demonstrates how an organization can strengthen its position in the market place with a distinctive competitive advantage. 

Identification and development of your organization’s distinctive advantage entails:

1. Internal review: Do a thorough scan of your organization’s strengths and capabilities. Do a function by function analysis which includes looking at your, management, production, sales, customer support, finance, operations, marketing and Information technology functions. Analyze which ones are helping you most in promoting and expanding your business. 

2. Developing: Once you have identified a function or process which sets your organization apart from the rest, you need to develop it further. This is done by strengthening the advantage with a greater allocation of resources as well as developing complementary assets around your competitive edge. This will not only widen your edge it will make it much harder for the competition to replicate it quickly. 

3. Reviewing: To remain competitive in today’s dynamic market place requires your organization to be extremely vigilant about changes taking place. Many organizations become too comfortable and in their complacency allow competitors to catch up. Constantly innovating and reviewing your edge is an expensive exercise which does not show immediate results. However to ensure that your organization keeps its position in the market place, it is a must. 

Distinctive advantages do not necessarily have to be unique. They must however provide customers with a simple and clear reason why they should choose your organization over the competition. Being a vital component of your customer value proposition, it is essential that substantial time and effort is put into the identification and development of these edges. Without them, the probability of long term success is greatly reduced. 

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