Successful, fast-growth, very high profit businesses appear, at first glance, to have little in common with one another. Some are retailers; some are manufacturers. Others are wholesalers; still others provide services. One may have no employees; another has several dozen. Some are flashy and high profile; others are so low-key that they're almost invisible. What they all have in common is an ability to quickly solve problems and to learn from their mistakes. They know how to troubleshoot. If you want to improve your business, you'd better learn to be a good troubleshooter, too.
This guide to problem solving was originally developed by Rohm & Haas Co. field tech service expert, J. Franklin Moore, in the early 1960s for use in troubleshooting the processing of plastics in injection-molding machinery. By modifying some of the terminology, I've found that this six-step program can be used to fix all kinds of problems.
This powerful program has already been used to troubleshoot vacuum forming equipment, diagnose and repair automobile engines, tune pianos, fix troubled marriages, landscape homes and treat illnesses. This simple and effective program has also been used by countless small companies to solve their business problems.
Here are the six steps to solving any problem:
1. Define The Problem. You can't solve a problem unless you know what it is. Define your problem as specifically as possible. Don't say, "The car doesn't run." Say, "The engine runs but when I put the car in gear, it won't move." Define the problem further by saying what the problem isn't - "I've released the parking brake and taken my foot off the brake, so it's not the brakes. I know the wheels aren't blocked because I've walked around the car and checked them."
Once I had two unhappy business partners in my management consulting practice. They said they weren't getting along. After 40 minutes of questioning, I learned that the real cause of their unhappiness was that their business wasn't making any money and they were going broke. Once we made the company profitable again, the partners got along just fine.
2. Have A Plan. To solve a problem, you must establish a plan of attack which leads to a specific goal. Consider this: in 1953, the graduating class of Yale University was interviewed. Only 3% had specific goals and a plan to attain those goals. 20 years later, all surviving members of the class were recontacted and interviewed.
Conclusion: the 3% with goals and a plan of attack had a combined financial net worth which exceeded the combined worth of the other 97%. Never underestimate the power of a plan.
3. Change One Thing At A Time. If you raise your prices, change all your advertising, replace your sales staff, redecorate your showroom, revamp your website and discontinue your toll-free number all in the same month and your sales drop by 25%, you'll never know what caused it.
Change one thing at a time and measure the effects of each change.
4. Allow Time For Changes To Work. If you run a newspaper ad or online offer with a time-dated coupon, you'll know almost immediately whether it works or not. On the other hand, if you're measuring the effectiveness of a bigger Yellow Page ad, it may take a full year after you place the ad before you have reliable data. (Ads must be placed 3 to 5 months before the new book comes out and not everyone starts using their new phone books right away. This is why almost all advertising has gravitated from the Yellow Pages to the web. Who has time to wait a year for ad results?!)
If you hire a new outside salesperson for a new territory or new product line, it may take six months to evaluate his or her effectiveness. A changes to a website may not be 'recognized' by search engines for a month or more.
5. Keep A Record. Write down and analyze everything:
• What are your daily peak sales times? (Maybe you shouldn't close for lunch.)
• What are your hot and cold days for sales? (Should you be open on Saturday and closed on Monday?)
• Where is your new business coming from? (If 90% of your new business comes from customer referrals, do you really need that big, four-color magazine ad?)
• How long does it take to make a product in March? In July? On Monday? On Thursday? (If your times are varying by more than 5%, something's probably wrong with your manufacturing process.)
• Record your quote-to-sales ratios. What percentage of jobs quoted are you getting? (Why are you losing the rest?)
• How many phone calls and/or sales letters/e-mails does it take to get an appointment? How many appointments does it take to get a sale? How do your figures compare with other businesses like yours? (Often, you can get such data from your trade association. Or a web analytics firm.)
• How many web page visits does it take to get an online sale? How does that compare with other firms in your business segment? (Hire a web analytics firm to access and analyze your server log data.)
Lots of businesses owners experiment and tinker with their operations and try new ideas, but only the top 4% of all owners ruthlessly record results of their experiments and make decisions based on factual data. These successful entrepreneurs know that keeping good records can lead to a more profitable business.
6. Share Your Successes. If it works, spread the word. If you solved a problem on the day shift, tell the night shift crew what you did. Don't keep secrets. Tell your staff what the problem was, what you tried and what finally worked. If you have field sales people, tell all of them how a problem was resolved at a troublesome account and ask if they know of other customers with a similar situation.
Can the same solution be applied to other businesses too? If so, write an article for your local newspaper, or provide a tech tip for your favorite trade magazine, or do a podcast with an online business guru - the resultant publicity may get you some new customers. (posted 5/5/16)