As businesses grow, there’s one thing at the back of every business owner’s mind: “Can we handle the extra work?” And that’s the catch 22 – do you get more work and solve the issues then, or do you spend time improving the processes now so that when the work comes, it’s easily manageable? We’ve all worked in different places, for different owners and managers, and I’m sure we’ve experienced both sides of this. I know I have.
I’ve always been interested in businesses solving problems, and continuing to develop and solve the next problem, and then the next… Now that I actually am one of the business owners and the day to day functioning relies on us, it can be hard to find the time to look at something objectively because it works and gets the job done. But that doesn’t improve us. That just creates more of the same. The same outcomes, the same obstacles, the same bottlenecks.
So what do we do?
It’s the same for your own financial life as well. However you run your personal finances, you are comfortable with it which makes it easy, and you might not think there’s any benefit from speaking to someone. But an outside, independent opinion is always worth looking for.
Example 1: The McDonald’s Milkshake
There’s a fairly famous product development story about the McDonald’s Milkshake. Without reinventing the wheel, you can read the whole story here, but the story is that you need an outsider to reframe the problem.
McDonalds’ staff noticed that the Milkshake was a customer favourite, so they started introducing new flavours or adding more flavour to what they had, but it didn’t improve sales further.
So McDonalds brought in a man called Clayton Christensen. He watched and built the typical customer persona of who buys the McDonalds Milkshakes. He looked at why they bought the Milkshake, and it was nothing to do with the taste.
Most Milkshake Customers purchased in the morning when they were alone in the car, with a long boring commute ahead of them and only one spare hand. This made eating a bagel difficult with only one hand, a donut didn’t last long enough and fruit or anything else didn’t fill them.
So they chose the McDonalds Milkshake because it is easy to suck up with one hand, it was tidy so they didn’t have to worry about spilling it on their work clothes, it’s thick so takes a long time to consume and it takes longer to digest so it kept them feeling fuller for longer.
Christensen suggested the milkshake was made even thicker, with some chunks of fruit to make it take longer to consume
The results – sales increased by 7 times!
Example 2: Houston Airport Baggage Collection
Houston Airport kept receiving passenger complaints about the length of time they had to wait to receive their luggage.
Airport managers worked on streamlining this, improving processes and reduced the wait time to just 7 minutes. Still, the complaints continued. So they brought in outside consultants to look at the issue with fresh eyes and perspective, to see if they could answer it. They concluded that to improve the wait time any further would detract from the customer experience. They could throw the bags from one place to the next instead of carrying them, but then things might get broken.
The outside consultant reframed the problem.
It wasn’t the length of time it took to get the bags out which was the problem. The problem was that passengers had to stand about and wait for 7 minutes with nothing to do.
And so the solution was to park the planes further away, meaning passengers either had to walk further or get a shuttle bus to the terminal. Waiting times therefore reduced because passengers were occupied by the walking and not standing around. And the complaints stopped.
We can question the ethics of this move but it solved the problem. It was about addressing the passengers occupied versus unoccupied time to improve their customer experience.
We see this all the time with the wait time for webpages to load. If it’s blank, it annoys us. If there’s picture and text blocks which load or animations, we are less annoyed.
It was never about the baggage handling process. The passengers just hated waiting about with nothing to do.
Reframe the Problem and Bring a Fresh Perspective
“To reach intelligent answers, you often need to ask really dumb questions.” – Rory Sutherland
Whether you are looking to develop your business or improve your personal finances, when you are busy working in it, it’s hard to step back and take a fresh, big picture view.
Rory Sutherland wrote in his book, Alchemy, about how big companies made their processes too smooth, that everything seemed so simple that customers didn’t value the product or service. The solution was to make things slightly more difficult, so that the client valued paying for their help.
Henry Ford, the man behind the Ford Car Company, has a very famous quote that if at the time he asked customers what they wanted, they “would have asked for faster horses.” Cars weren’t even a thing back then.
We experience this all the time when running the business. But we also experience this when we are helping clients.
Addressing your financial needs
How many times do we meet clients who are complaining about the tax they pay. The simple solution is a pension contribution but they don’t want to lock money away. Or earn less, but they can’t afford to do that to live their current lifestyle.
Another more complex problem which consumes people is a potential Inheritance Tax issue. We can go and treat the symptoms, set up trusts, do fancy planning and buy protection policies. But the simple solution is to go and spend your money. Those flights you take every year – go business class. If you use trains – go first class.
It’s hard to take this view when you are running around fire-fighting and you’re busy.
Bring in the outsider’s view. The objective, independent view who can see the bigger picture because they aren’t emotionally attached to the problem.
They bring reason, they reframe the problem, and they often offer the simplest fix which you were to involved to ever see.
Make the milkshake thicker. Make the walk longer. Pay the pension contribution. Go and spend the money!
Get in touch with John or myself if you want a fresh, independent outsider’s view on your personal finances.