What is the real problem?

source: pcmag

I am the new owner of a Fitbit One. For those of you who don’t have experience with Fitbit, Jawbone UP, or Nike Fuel Band, these devices track your activity. They measure how many steps you’ve taken, calories burned and even how well you sleep.

Peter Drucker tells us that “what gets measured gets managed.”

The makers of activity tracking devices have a hypothesis. If you are continually measuring your activity against set goals, over time you have a better chance of living a healthier. more active live then those that don’t us the device.

What would this look like in the context of your life? What would it be like if every activity your performed was tracked? Would it give you a better shot at achieving your goals?

More importantly, does technology solve all our problems? I will admit, I am terrible at tracking my activity. I even made the book below to try and stay on top of what I was doing at work.

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But is technology really the root cause to this problem? Many individuals in the last several hundred years have managed to log their activity.

Will technology make activity tracking easier? Of course it will. But keep asking “what is really the problem?”

In The Toyota Way to Lean Leadership, Jeffrey Liker tells a story about a problem that was occurring in the body shop at a Toyota plant. The workers on the line where over tightening the bolts and it was causing small dents in the body.

A new Toyota executive, Gary, had the perfect solution to the problem – buy wrenches that shut off at the proper torque. i.e. upgrade the technology. GM, Ford and others all had these wrenches. Why didn’t Toyota? This answer did not suffice for Toyota management – they sent Gary back into the plant to observe some more and come up with another answer.

Through root cause analysis (see The 5 Whys), Gary was able to determine that the real problems were tool maintenance and training. He instituted a new program that helped to keep the shop tools well maintained. Rather than spending millions of dollars on new drills, his solution was cheap and solved the real problem.

Without question, root cause analysis is hard. Your boss will want “the story” quickly and many companies have short term goals, so quick fixes are preferred to solving the real problem. Think of the patience and wisdom Toyota had by sending Gary back to the plant for another week to try again. How many managers would have been delighted that his or her employee had come up with a solution?

Next time you discover a problem and think you have a solution, think about root causes. You may be solving the wrong problem.

Playing to Win

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I am starting a series of posts on A.G Lafley and Roger Martin’s Playing to Win. It’s a delightful book on strategy AND it’s not what you might typically think about when the words “business strategy” are mentioned.

For many of you, the words “business strategy” will produce one of two responses.

One: you will want to fall asleep, close this tab in your browser, block my facebook updates.

Two: you think about businessmen and women in a room figuring out how they can make more money, often at the expense of you, the customer.

So what is different about Lafley and Martin’s approach? The winning is strongly linked to delivering superior value to your customers…i.e. you win when your customer wins.

Peter Drucker said, “the purpose of a business is to create a customer.” Contrast this with what is taught in every Economics 101 class, “the purpose of a business is to maximize profit.”

What Lafley and Martin show us (in this book and Martin’s articles) is that the way to maximize profit (the Econ 101 definition) is to maximize customer satisfaction. The ideas are related, but those that put the profit maximization ahead of making the customers happy will not win in the long run.

I think Johnson and Johnson’s credo is a great example of this idea. I’ve include the entire credo below. (highlight is mine). LINK TO PDF

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Notice the order in the credo:

  1. Customers
  2. Suppliers and Distributors
  3. Employees
  4. Communities
  5. Shareholders

The shareholders are listed LAST! Does J&J care about their shareholders? Absolutely, but they ensure that the shareholders win by taking care of 1-4 on the list above. “When we operate according to these principles, the stockholders should realize a fair return.”

I’l end this with a few questions, what do you think would motivate your employee base (or yourself)? A: Solving an important problem for your customer, somehow making their lives better, etc. or B: Improving returns for shareholders?

For me (and for 99.999% of the world) it’s A. I get excited about discovering and meeting our customers needs. I want to help ensure that they are delighted.

What should we be teaching students in economics? The purpose of the firm is to maximize profits? or should it be that the purpose of the firm is to maximize customer value? Which one would attract the best and the brightest into business? Again, I believe we could dramatically change the experience of most business school students by focusing on improving the lives of customers.

For the next few blog posts, I’ll dive further into some of the ideas discussed in Playing to Win. Now that you see that strategy can have a higher purpose, please come along for the ride.

Roger was kind enough to spend a few minutes with me and sign my copy of his book.

Roger was kind enough to spend a few minutes with me and sign my copy of his book.