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Effective Financial Management | Blind Spots Part Five

Financial Management

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

Blind Spot #5 – Managing the Financial Aspects of Your Company

This article focuses on the fifth of five blind spots many business owners have when trying to grow from 5 to 50 employees. In our previous article, we discussed the first blind spot: not seeing the value around consistent company planning. The second blind spot focussed on how to maintain employee accountability, while the third highlighted seeing the importance of high-quality weekly management meetings. Last week, we highlighted the importance of efficient company performance monitoring, which brings us to the final blog of our series.

The fifth blind spot involves not managing the financial aspect of the company. Too often business owners begin their business on a shoestring and adapt to monitoring cashflow by how much money they have in their bank account. Although this is never advised it can work initially when the financial numbers and expenses are small. This quickly changes however, and when revenues and costs go up it becomes impossible to manage cashflow based on your balance. 

Financial Management Pitfalls

The most classic miscalculations come in the form of tax bills and annual costs that are not amortised over the whole time period. These ‘lumpy’ sporadic bills often drain the business accounts unexpectedly. If too many of these surprises sneak up on you, the business rapidly develops significant issues.

Too often, the first strategy used by entrepreneurs is to forgo paying their taxes. The tax department then transitions to becoming a lending institution, with excessive rates of interest that only slip you further down the slope. This dynamic often continues indefinitely. When the company does well enough on the sales side of the ledger, it can work its way out of debt, but too often the weight and stress of the tax bill become too much for the company and owner. This self-perpetuating dynamic continues, and eventually becomes too much for the company to endure.

Outsourcing Financial Management

It doesn’t have to be that way. We find that eliciting the help of an outside entity like a virtual CFO can dramatically improve both the dynamics and likelihood of business and financial success. A CFO-like advisor can act as an objective third party by removing the financial management blind spots and quickly implementing objective checks to monitor how the company is financially performing. This gives you greater accountability and streamlines the process of managing your outgoing financials.

A more specific financial management blindspot that virtual CFOs can help with is with cashflow forecasting. Even the most basic types of financial disciplines involve monitoring financial results in the form of monthly and quarterly financial reporting. Looking into the future is as important as looking in the rearview mirror at how a company has performed.  Effective forecasting offers insights into how the company will perform, providing all-important feedback on what adjustments need to be made now to assure future financial success.

Financial Management: Conclusion

Both strategies help a business owner and their team be more realistic in terms of how the company is performing.

In conclusion, it is important to recognise one’s desire to guess how their company is performing. This avoidance of objective and predictive information exposes an owner and their business to a great deal of unnecessary risk. Virtual CFOs are wildly cost-effective. Thus it is fitting to say, ‘an ounce of prevention is worth a pound of cure’!  Remove the financial management blind spot today and start better monitoring both what the company’s needs are now as well as how it will likely be performing over the next 30-60 days.

Until next time, enjoy the process!

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Performance Monitoring for Your Company | Blind Spots Part Four

Performance Monitoring

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #4 – Lack of Consistent Company Performance Monitoring

This article focuses on the fourth of five blind spots many business owners have when trying to grow from 5 to 50 employees. In our previous article, we discussed the first blind spot: not seeing the value around consistent company planning. The second blind spot focussed on how to maintain employee accountability, while the third highlighted seeing the importance of high-quality weekly management meetings.

The fourth blind spot lies in not realising the importance of consistent overall company performance monitoring. This exists for two main reasons:

Business leaders think they mentally maintain their company performance monitoring & don’t need ‘reports’ to tell them how things are going.

This may be true to some extent but this belief comes unravelled when things become more complex or detailed. Mentally maintaining a general idea of the sales volume is more manageable than tracking the gross profit on a specific type of work. Additionally, we tend to forget how numbers are trending even when they are important to us. Utilising efficient, documented performance monitoring, such as with a company scorecard, retains performance information objectively so it removes our tendencies to remember things the way we’d like versus what actually occurred.  

Business leaders mistake financial reports for company performance monitoring.

I agree with most business owners that there is minimal value (though certainly some) in reviewing numbers that occurred in the previous month or quarter. It is like thinking you could affect the outcome of a game by watching the replay highlights. Effective company performance monitoring is about reviewing numbers where the results indicate how the game is going to end if things continue on the current path. This gives the business the all-important opportunity to take preemptive actions that can affect outcomes. This is the difference between a KPI (key performance indicator) and KPR (key performance result). An Indicator attempts to predict the future while a Result is something that cannot be changed or affected.

Even when business leaders realise they can’t effectively monitor their business without first monitoring KPIs, it still requires work to obtain an effective scorecard for a company.  

The goal is to keep your performance monitoring scorecard to between 7 and 10 statistics, though when beginning that number is often more like 15-20. Over time and consistent performance monitoring, companies settle into a scorecard that has around 10 numbers that include mostly KPIs but a few KPRs. The management team develops a level of trust and comfort that when the numbers are good the company is actually doing well, and when numbers fall off, they are highlighting issues that need to be resolved in order to keep the company’s financial results on track.  

When business leaders invest the time and energy required to generate effective company performance monitoring it allows them to better predict what’s coming and to be able to navigate the inevitable issues that arise in business from time to time.   

Scorecards should add fun and objectivity to a business and its management team. Start visually tracking more of your critical performance numbers consistently and see what happens to your ability to identify problems sooner and begin resolving them faster. After all, problems usually get bigger the longer they are left unattended, so the sooner you spot them, the easier it will be to resolve them.

Until next time, enjoy the process!

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Weekly Management Meetings | Blind Spots Part Three

Weekly Management Meetings

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #3 – Not Seeing the Value In Weekly Management Meetings

This article focuses on the third of five blind spots many business owners have when trying to grow from 5 to 50 employees. In a previous article, we discussed the first blind spot which was around not seeing the value of consistent company planning and the second blind spot focusing on how to maintain employee accountability.

The third blind spot lies in not realising the value and importance of a weekly management meeting. Many jokes are made about meetings because good meetings are hard to come by, but when done well, an efficient, well-executed weekly management meeting is an absolute game-changer.   

Do you struggle to see the value in weekly management meetings? If so, it is typically because you don’t feel you and your team have time to meet, when staying ‘productive’ seems to be a more practical use of your time. Another common issue is the feeling that meetings aren’t very productive. Last but not least, a leader can feel it is difficult, possibly even painful, trying to facilitate a meeting week over week when it seems to be a repetition of the previous week’s topics.

Truth be told, all those things can be legitimate challenges of past meetings, but it doesn’t have to be that way, and when weekly meetings are run well they will raise both the economic and productivity aspects of your business.  

What’s required to create effective weekly management meetings?  

Defining the format of your weekly management meeting is essential. Whether it is the staff included or the structure and schedule of the meeting itself, clearly planning each aspect is vital, and surprisingly simple. The following four steps will ensure that you not only hold an efficient meeting, you will also find exceptional value in it and recognise it as a fundamental and productive part of every single week.

Weekly Management Meetings

Step 1: Decide on who should be in the weekly management meetings

If you have less than 10 employees it is likely everyone should be in the meeting. When the company grows, it can be reduced to the managers of the various departments. This is the team that needs to understand and fortify where you want the company to go.  Without this clarity, it is nearly impossible for them to make the best day-to-day decisions on how to achieve the results you want from them. Many accountability issues stem from a lack of understanding rather than a low level of commitment.

Step 2 – Prepare for your weekly management meetings

You should have two key company documents and strategies in place: 

1. Your quarterly and yearly goals. You will need to know where you want the company to go before you can begin having effective weekly meetings.  These plans should include two key elements:

2.  The core financial numbers that often include revenue, gross profit and sometimes a more net profit type of number like EBIT (Earnings Before Interest and Tax).  Ideally, some KPIs (key performance indicators) can also be included but we don’t need to get too fancy out of the gate.  

3.  The critical projects the company needs to complete by the end of the quarter (or any 90-day cycle) to be able to hit the desired financial and strategic targets. Often in management books, these ‘projects’ are referred to as “Rocks” and we do the same in our management consulting practice. Rock identification and completion is a topic unto itself but for the purpose of this article, we will keep the concept to the identification of how the company can most practically improve over the next 90 days to best move it towards its desired outcomes (vision, mission, BHAG, 1-3 year goals, etc.).  

Step 3 – Have a practical company scorecard

Ultimately, you want to have a scorecard that monitors all relevant aspects of company performance but that often takes some time and effort to get right. Start with some basic numbers that offer an overarching projection of your company’s health. For example, your company revenue may seem like a valid number to track on your scorecard, but it is a ‘lagging indicator’. It doesn’t shed much light on how the company is performing this week because it requires invoice and/or money collection and demonstrates how the sales team was performing last month and your marketing the month before that. When you try to pick a few initial scorecard numbers to track it is often more effective to use more ‘leading indicators’ such as the number of proposals submitted or the number of new qualified opportunities for a projected period.  

Regardless of which numbers you pick, begin measuring and documenting something consistently. There is a very good reason great business people consistently say, “what gets measured gets managed.” When you don’t measure with practical numbers you have no objective measuring stick for providing performance feedback.  

Step 4 – Use a proven meeting formula

There is no reason to reinvent the wheel. Great weekly management meetings have the same attributes:

    1. They happen the same time every week.
    2. They start on time and end on time.
    3. They stay on topic and are not allowed to devolve into unfocused dialogue.
    4. They have a consistent agenda that includes:
      1. Starting on a note of gratitude or positivity.
      2. Review the week’s performance scorecard – regardless of how simple initially
      3. Share employee / team and customer headlines for the week
      4. Review the status of this quarter’s “Rocks” or projects.
      5. Review the To Do’s that were identified in the previous meeting(s) to ensure completion and accountability.
      6. Discuss the key issues, opportunities and topics that have come up over the previous week
      7. Rate the meeting on a scale of 1-5 on whether it provided value for the individuals attending and rating the meeting.
    5. At the end of each 90-day period, a day-long planning meeting is utilised to update the Goals and Rocks and have a longer session to unpack bigger opportunities and challenges facing the company.

In conclusion, weekly management meetings are often not seen as critical to a company’s success but this is due to a blind spot created by a history of negative meeting experiences. 

By following the four steps outlined above, any existing blindspot will quickly and permanently be removed creating a new opportunity for greater employee accountability and buy-in along with significantly higher company performance.  

Until next time, enjoy the process!

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Collaborative Accountability | Blind Spots Part Two

Collaborative Accountability

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #2 – Create Collaborative Accountability

This article focuses on the second of five blind spots many business owners have when trying to grow from five to 50 employees.  In our previous article, we discussed the first blind spot which was around not seeing the value of consistent company planning.

The second Blind Spot involves not seeing how to hold employees accountable in a collaborative way. The issue is often that the business owner doesn’t realise that employees are not performing to standard because they are not clear enough on what is expected of them, rather than simply not caring. Let’s look at how collaborative accountability can resolve this issue.

There are two areas employees are typically less than clear on. The first is the big picture of company vision and direction. Most employees are only provided feedback from a vantage point of their specific position and not at a company level. This makes it harder for the team member to understand the macro goals and objectives and it ends up being more difficult for them to adopt collaborative accountability and make decisions based upon the company’s greater good.

The second issue is that the team member’s seat, or position, isn’t clearly defined, making it challenging for the employee to fully understand what they are accountable for. This is often because the manager(s) have not taken the time or had the skills to clarify the employee’s seat in a clear and concise way. Rather, they have an organisational chart and a Position Description (PD) and expect the employee to infer the true meanings of how they need to perform beyond what is written down. This causes the manager to hold the team member accountable for tasks they weren’t even aware of.

It is the company’s obligation to share with all employees the company direction and do so consistently so that the strategies and ideas can sink in over time. They say you need to tell someone seven times before they get it; employees are no different, especially when talking about the goals and ambitions of someone else’s company.

Once you are clear with your employee about where the company is going and what their seat is accountable for, then you are ready to begin monitoring their progress. This is where the 1:1 review strategy and collaborative accountability become important. Although there are a number of different elements to a 1:1 review with a team member, the most important aspect is providing them with clear and consistent feedback on how they are performing as it relates to the company’s expectations. Most notably, how they are performing in relation to the company’s core values and the key deliverables for their particular seat. When these two components (core values and key deliverables) have been clearly defined and discussed in advance, providing high-quality 1:1 reviews will be straightforward.  

In conclusion, if you want to hold develop collaborative accountability in a productive way to ensure they are clear on where the company is going, what is expected of their performance and to provide clear ongoing feedback on how they are progressing. This clarity takes the emotion out of the process and is easy for all types of people to get behind. Collaborative accountability isn’t simply telling your staff members what is expected of them, it is actively collaborating with them to define the role as you both see it and are able to sustain.

If you are looking at how to become more clear with your employees on what you expect from them please review our posts on the accountability chart and the importance of company planning.  And as always, feel free to contact us with any questions we may be able to provide insights on directly.

Until next time, enjoy the process!

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Company Planning & Execution | Blind Spots Part One

Company Planning

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time.

Blind Spot #1 – Disregarding the importance of Company Planning

To be clear, “Company Planning” for our purpose means defining what you want your company to accomplish and how you will know when you achieve it. A company plan includes several consistent components that we won’t go into here but you can review in a previous blog post here. For now, it is sufficient to understand that good company planning will include meaningful definitions for the following items: 

    • Core Values
    • Vision/Mission/Purpose
    • Unique Selling Proposition or “3 Uniques”
    • The Target Market or Customer Personae
    • The BHAG (Big Hairy Audacious Goal)
    • Three-Year Goals
    • One-Year Goals
    • Current-Quarter Goals
    • Current Primary Company Issues

Like most written descriptions, they get better over time through the process of discussion and revision. This is one primary reason why many business leaders fail to see the value in company planning; they try it a few times but don’t return to the information consistently enough for it to become highly meaningful for everyone involved. They then disregard the Company Planning strategy and discipline thinking it isn’t that helpful when in reality they failed to implement and execute it effectively from the outset.

A second reason many business leaders overlook the importance of Company Planning is that we are not typically very good at it initially. One of my favourite sayings comes to mind when writing this: “anything worth doing well is initially worth doing poorly.” This is often the case with Company Planning. It takes time to get the required sense of when to push a team for clarity and when to let a concept rest for the time being. Additionally, it can take some trial and error to discover which questions to ask to identify true value for a team rather than simply receiving specific facts or statistics.

A final reason why many business leaders fail at company planning is that they lack consistency. Company Plans should be reviewed in detail every 90 days for them to become ingrained enough to begin affecting people’s behaviours and decisions. We use a full-day planning session every quarter with our clients to maintain clarity over the next 90 days and reinforce long-term targets. This repetition of reviewing, discussing and adjusting is what breathes energy and clarity into the company’s overall direction. And consistent performance reviews provide the necessary feedback on whether the company’s efforts are matching the company’s ambitions.

Company Planning should be a business leader’s superpower rather than a blind spot.  We hope this article compels you to see the value in company planning and reflect on whether it was more about the quality of execution than the strategy itself that led to past failures. Like many things in business, the more you do it the better you will become!  

In our next blog post, we will be covering Blind Spot #2: How To Hold Employees Accountable in a Collaborative Way. 

Until next time, enjoy the process!

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Blog Financial Control Strategy and Planning

Generate Compelling Business Strategies Through Storytelling

Today we focus on the final of the five strategies great problem-solvers use to break through their challenges. As a quick reminder from the previous articles on this topic, here are the five mutually reinforcing problem-solving business strategies that seem to underly great problem solvers’ success: 

  1. Don’t accept the first description of a problem as the actual core issue
  2. Be curious about every dynamic of an issue
  3. Maintain an empathetic view of the world, to see through multiple lenses
  4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
  5. Use storytelling to generate a compelling call to action.

Strategy #5:

The Use of Storytelling for Business Strategies

Psychologists and communication experts have told us for years that our brains process information best in the form of stories. Likely this is due to evolution and how we have evolved as a species over millions of years. Be this as it may, I have little authority on storytelling and even less direct skills at performing this valuable combination of art and science.

We all have weaknesses in our arsenal of business strategies and this is my Achilles heel, as much as I would love to have developed it over the years. My lack is prowess in this area is not due to a lack of knowledge or for want of trying. That is why, even though I am not an effective storyteller, I am comfortable commenting on the strategy and providing some guidance on where to go next if you are curious about the topic.  

One of my favourite focuses on the use of storytelling is when a company utlises it to tell its own story to its marketplace. One author I find particularly helpful on this front is Donald Miller with his book Building a Story Brand.  He succinctly describes both why and how a company should present itself through the structure of a story as part of its overarching business strategies.  

Although the entire book is worth reading and implementing into your own unique business strategies, the key insight is that your company is not the main actor in your company’s story – the customer or client is. Using this lens changes how a company approaches promoting itself in a profound way. I hope you enjoy the journey this book and insight set you on. You can find the book here and at numerous other locations.

As for your own storytelling skills, there are countless books and courses on how to become a better storyteller. However, the real challenge is putting in the time and energy to actually become a better storyteller in the realm of your own business strategies. Although I have failed to date to find the discipline to do so, I hope you will because everyone will benefit from your development.

This completes the five business strategies for effective problem-solving. I hope you have identified some opportunities for you to further develop your problem-solving skills.  We always appreciate your feedback on business strategies that you find helpful.  We hope to hear from you sometime soon. Until then, best of luck on your journey.

Need more advice on creating effective business strategies? Feel free to contact me today with any questions you may have.

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Blog Financial Control Strategy and Planning

Analysing Your Problem Solving Strategies

Today we focus on the fourth of five strategies great problem-solvers use to break through their challenges. As a quick reminder from the previous articles on this topic, here are the five mutually reinforcing problem-solving strategies common in successful problem-solving strategies: 

  1. Don’t accept the first description of a problem as the actual core issue
  2. Be curious about every dynamic of an issue
  3. Maintain an empathetic view of the world, to see through multiple lenses
  4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
  5. Use storytelling to generate a compelling call to action.

First Agree on the Actual Problem Before Discussing Problem Solving Strategies

Having facilitated hundreds of annual, quarterly and ad hoc company planning sessions, the most consistent dynamic I need to referee is discussions on solving key problems. The typical dynamic is to immediately seek solutions when a problem is raised. The team then quickly forms a range of objective opinions on how best to resolve the issue. Many minutes, hours or even the entire meeting can be wasted upon investigating the first idea that presents itself without discussing alternatives. The saying “Ready, fire, aim” seems fitting here.

Great problem solvers don’t limit themselves to focussing upon a singular problem or the first solution that seems to be viable. Rather they call upon a rarely utilised strategy of first clarifying ‘What’ the actual underlying problem is before allowing a deeper discussion to take place that will then provide the most practical, most educated problem-solving strategies possible.

Rarely a day goes by where an example of this problem-solving strategy doesn’t rear its head. In a weekly Executive Management meeting I was facilitating today, an issue was raised about an underperforming business unit. In many meetings, a great deal of time could have been spent on all the problems being observed about this particular issue.  Fortunately, the CEO asked the question, “but why do we feel the business unit is struggling?” This provoked a discussion around how the Business Unit Leader (not in the meeting) was struggling with either doing what they said they would or, when they couldn’t, proactively telling those affected that she wasn’t going to achieve the objective. 

After some discussion, I asked the question, “but why is the staff member struggling with their objective?” The response from the CEO was that he was letting her off the hook and not addressing the problems as they arose. He self-diagnosed that he was the underlying problem and that he would improve his communications and engagement with her to address the issue more directly and rapidly. This led to a different solution strategy and one that the Executive Team had more control over. Not using this problem-solving strategy would have likely resulted in a very different strategy and outcome.

If this strategy seems interesting, give it a try in the next discussion you have with your team about a problem.  See if you can ask a question about the cause of the problem.  Continue investigating the fundamental cause of the problem until you have a general consensus from the group on what the actual issue is. Then discuss and identify a practical solution that is then tracked until completion.

Fun Fact: the same strategy can work at home! Enjoy the process and let us know your experiences.

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Adopting Empathy to Gain Business Insights

Adopting Empathy

In today’s blog, we will focus on the third of five strategies great problem-solvers use to break through their challenges: adopting empathy. As a quick reminder from the first article on this topic, here are the five mutually-reinforcing problem-solving strategies that seem to underly the success of the world’s leading problem solvers: 

  1. Don’t accept the first description of a problem as the actual core issue
  2. Be curious about every dynamic of an issue
  3. Maintain an empathetic view of the world, to see through multiple lenses
  4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
  5. Use storytelling to generate a compelling call to action.

Strategy #3: Adopting Empathy to Gain Valuable Insights

As a concept, empathy is somewhat of a cliché. Like most overused words there is real value at its core; the problem is that most people aren’t willing to put in the work to actually put the concept into practice. 

The opportunity for anyone willing to adopt a more expansive perspective is significant. Most notable is the ability to present similar information to different individuals to obtain more pervasive understanding and agreement. This improved agreement ratio leads to greater productivity and less conflict.

Another benefit empathy can provide is an increased understanding of the complexities involved in a challenge. Often we value certain challenges higher when we better understand the details. The same goes for another person or party seeing a different dynamic in a problem with greater clarity. Just because our background and experiences help us see one part of a problem more clearly than another person doesn’t mean it is more valuable. An empathetic discussion can help you gain greater clarity on topics you were less clear on.

A third opportunity in using empathy to solve your business problems is the ability to define the actual item of disagreement and compartmentalise it. Often we disagree at macro levels when in reality we agree on nearly everything but a few specific details. By carving these out, teams often have the ability to solve important problems and not involve the conflicting items. However, it is difficult to navigate the unpacking of these issues without adopting an empathetic approach to maintain open, productive dialogue. 

Despite the risk of empathy becoming a cliché, it is frequently being identified as the super-skill for humans as we move into an ever more digitally-interactive world. 

Quick Empathy Hack

When you want to create a good dose of empathy, practice asking yourself the following questions:

  1. “What would be required for a well-intentioned person to be taking the point of view they are?” 
  2. “What beliefs do they have that could be different from mine?” 
  3. “What is the actual concept/idea we disagree on?”
  4. “What are all the things we do agree on?”

Any of these questions can help you avoid judgement of the other person. This will give you additional space to identify viable and effective solution strategies that can work for both parties.

Enjoy the positive emotions and insights that come from pushing the use of empathy over snap judgements!

Need more advice on adopting empathy? Feel free to ask any questions by contacting me today.

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Blog Financial Control Strategy and Planning

Functional Curiosity For Success

Functional Curiosity

Today we focus on the second of five strategies great problem-solvers use to break through their challenges: functional curiosity. As a quick reminder from the first article on this topic, here are the five mutually reinforcing problem-solving strategies that seem to underly their success: 

  1. Don’t accept the first description of a problem as the actual core issue
  2. Be curious about every dynamic of an issue
  3. Maintain an empathetic view of the world, to see through multiple lenses
  4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
  5. Use storytelling to generate a compelling call to action.

In this blog series, we are going to break down each of the five problem-solving disciplines into actionable concepts with the hope that we all become better problem-solving leaders as a result.  This article will focus on the first strategy.

Strategy #2:  Be Curious About Every Dynamic of an Issue

Gary Vaynerchuk wrote in his most recent book, Twelve and a Half, “the word curiosity is underrated in our society. It feels fluffy, academic, and childish, but I believe it’s one of the most important characteristics for success in business.”  We can’t agree more.  

Being in the business coaching industry and helping leaders improve their strategies and decision-making, it is common to see people getting stuck in old or simply incorrect beliefs.  When people lack functional curiosity, they dismiss new opportunities instead of taking the time to explore them.

Curiosity is defined as a strong desire to know or learn something. It is the energy that generates the patience to identify something new, something not recognised before. It is in this space that new insights and strategies for more effectively solving problems are born.  

When this curious energy is missing, we tend to keep repeating our past. Whenever there is an inflated ego involved, curiosity gets suppressed. Moreover, we find a strong correlation between suppressed curiosity and financial management challenges.

We have found one exercise particularly good at stimulating more functional curiosity in times where you may be overlooking the opportunity or not feeling the desire to do so.

Functional Curiosity Stimulator Exercise:

One effective question to ask yourself when trying to muster a higher level of curiosity is, “what is the belief that you need to have in order to see the problem the way you are currently observing it?”  

Let’s say you are currently facing a problem where your staff are not feeling accountable enough for the standard of work they are performing. In asking the above question you identify that the belief you have is, ‘Employees never care as much about the quality of their work as the owner does’.  

Functional Curiosity can get you to then ask, “how may my current belief not be 100 percent accurate and what other dynamics could be at play with the employees’ work quality challenges?”

This question can open your thoughts up to potential opportunities for improvement like:

  1. They may not fully understand the implications to the current substandard work. 
  2. The team is simply not clear on the standards you are wanting.
  3. There may be a skill set issue at play

Often, new problem-solving strategies can come from seeing new dynamics to a problem through this line of questioning and functional curiosity. Let us know your experience when trying this strategy on some of your long-standing challenges.

Next time you are faced with a problem try to observe functional curiosity and see what new insights may be gleaned from even the oldest and most troublesome challenges.

Be sure to check out next week’s article where we discuss the third of the five strategies great problem solvers use.

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Problem Solving Strategies Every Manager Should Apply

Problem Solving

Great problem solvers are made, not born. We have found after decades of problem-solving with leaders across business and non-profit sectors these leaders tend to have a common mindset and set of strategies; they learn to adopt a particularly open and curious mindset and adhere to a systematic process for resolving even the most challenging problems. And when conditions of chaos and uncertainty exist, they are at their best.

Five mutually reinforcing problem-solving strategies seem to underly their success: 

  1. Don’t accept the first description of a problem as the actual core issue
  2. Be curious about every dynamic of an issue
  3. Maintain an empathetic view of the world, to see through multiple lenses
  4. Ensure an agreed-upon definition of the issue is reached before any discussions on potential solution strategies
  5. Use storytelling to generate a compelling call to action.

In this blog series, we are going to break down each of the five problem-solving disciplines into actionable concepts with the hope that we all become better problem-solving leaders as a result.  This article will focus on the first strategy.

Strategy #1: Don’t Begin Problem Solving Until You have Discovered Actual Problem

This is a practical and effective strategy for nearly all problem-solving discussions.  “Our monthly sales are too low,” is a simple example of this dynamic that plays out in many management meetings. Countless hours and emotion can go into discussing how to improve the sales team’s skills, change pricing, simplify the sales process, hire a new lead generation company, replace the current CRM and the list goes on and on. Great problem solvers look for clues and continue to unpackage the component parts of an issue until they identify what the core issue is on the topic. Continuing this example, the root cause was a change in the Google algorithm initiating a 30-day drop in leads until an updated strategy could be identified and implemented. Understanding this greatly benefited the solutions the company put in place to mitigate the specific issue going forward.

Developing the discipline to use this strategy of peeling back the layers on the perceived issue is something great problem solvers consistently do – but it is not easy. There is a desire to speed up meetings, get to solutions, and be action-oriented. “Ready, Fire, Aim” is a good adage to help one remember to first identify what the real problem is before moving on to discussing it in any great detail – especially potential solutions.

The ‘5 Whys’ is a popular problem-solving strategy that uses this concept effectively. It is an iterative, interrogative technique used to explore perceived problems. The primary goal of the technique is to determine the root cause of an issue by repeating the question “Why?”. Each answer forms the basis of the next question. Five is for the optimal number of iterations needed to resolve the problem. This method provides no hard and fast rules on how long to continue the search for a root cause but we will address this in an upcoming article regarding the strategy of getting to a finalised problem definition. Click here to see an example of the 5 Whys in action.

Problem Solving

Whether it is a specific strategy like the ‘5 Whys’ or the discipline of taking the initially stated problem and testing whether it is the actual problem or merely a symptom, the big idea is to put in the work upfront to ensure you and your team are spending time and energy on the actual problem because this will optimise your efforts and find more effective solutions in the long run.  

Be sure to check out next week’s article where we discuss the 2nd of the 5 strategies great problem solvers use.

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