Small Business Development Center
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Monthly Archives: January 2010

Continue Asking Why Until You Get to the Root of the Problem

By Chemeketa SBDC

little-marciaMarcia Bagnall, SBDC Director

Have you ever had a recurring business problem that you just couldn’t solve?
A problem that came up over and over and wouldn’t go away? Here’s a strategy that may help you discover the root of the problem so that you can stop addressing symptoms (which will always come back) and solve the underlying problem once and for all.

It’s called the “5 Whys” and it’s a question-asking method developed in the 1970s at Toyota. The strategy involves looking at any problem and asking: “Why?” over and over again until you trace the chain of causality down to a root cause that still has some connection to the original problem. Using this technique will help you determine not only the nature of the problem, but the solution as well.

Very often, the answer to the first “why” will prompt another “why” and the answer to the second “why” will prompt another and so on; hence the name the 5 Whys strategy. There’s nothing magical about 5, that’s just the ballpark number of “whys” it takes on average to get to the bottom of something. Often what you’ll find is that the cause of the problem isn’t obvious at first glance, and that’s why you’ve been missing it all this time. Only when you dig and dig will you uncover it.
Here’s an example. Let’s say you have a very unhappy client. So you ask:

1.    “Why is my client unhappy?” and the answer might be because you did not deliver your services when you said you would.
2.    So why were you unable to meet the agreed-upon timeline or schedule for delivery? Well, the job took much longer than you thought it would.
3.    But why did it take so much longer? Turns out you underestimated the complexity of the job and didn’t factor in enough time to complete it.
4.    Wow, why did you underestimate the complexity of the job? Because you made a quick estimate of the time needed to complete it, and did not carefully list the individual stages and resources needed to complete the project.
5.    Why didn’t you spend more time and effort on the estimate? Because you don’t really have a protocol for estimates, you just do them on the fly.

Aha! You clearly need to review how you handle estimates, and you need to create some clear protocols to handle this in the future. What you’re doing now simply isn’t working, and it causes this same unhappy client problem to recur.

But unless you asked “why?” a few times you probably wouldn’t have connected the unhappy client with the lack of a workable estimates system, and that’s what ultimately turned out to be the root cause. The easy answer would have been to say that you couldn’t deliver on time because you were backed up, or had employees out sick, or any number of other probable causes.

Don’t stop with easy answers! Keep asking “why” until you get to the heart of the problem. Then you’ll be able to formulate a solution.

Sharing political views a branding issue

By Chemeketa SBDC

jhofmannJennifer Hofmann, SBDC Advisor

If you have a heartbeat, you probably have opinions about a wide variety of topics. When you feel passionately about political issues, it can be tempting to turn your customers to broadcast your enthusiasm. No matter which side of the fence you’re on, it’s important to take a wider look at the implications of sharing political views in a small business.

How far should you go in sharing your political views in your business?

First, consider the people who are on the receiving end of your message: your customers. Whether you share with them formally or conversationally, remember that they do business with you because they want your help and need what your business offers. They may not welcome topics outside of the norm because it goes beyond the expected transaction.

Secondly, recognize that your business has a brand. A brand is partly made up of images and messages  that convey what your business is about. Branding speaks to your target market and helps them feel comfortable doing business with you. However, branding is also about how your business is perceived by customers and potential customers. If politics aren’t historically part of your brand, you may get a certain amount of resistance from reluctant listeners.

So, before you hang posters or become a Facebook fan of a political issue, here are some questions that help clarify whether your business should take a stand:

• Who are your clients? Think about who your customers are from two angles: demographics (household income, gender, etc.) and psychographics (what beliefs they have and what they value). Do your political views align with the lifestyle and values of your target clients?

• What needs and problems do they have? If you reflect on past conversations with clients, you may find that they have similar problems that cause them to hire you. They may look to you to solve their challenges. What problems do they have?

• Does sharing your political views help your clients with the problems they’re having? If sharing your viewpoint would directly assist the client, they might appreciate hearing about it. However, if the issue is not related to their problem, you might risk alienating valued customers.

If you’re still not sure, put yourself in your customers’ shoes. Consider the reaction you’d have if your favorite store sent a letter endorsing a belief that contradicts your own. Is that a reaction you’d want your customers to have about your business?

In essence, political views are a personal issue. They’re part of your individual value system and you have a right to communicate them. However, as a business owner, you must weigh your desire to share your views against the importance of serving your customer.

Your Customers Shouldn’t Feel Your Pain

By Chemeketa SBDC

marcia-bagnallMarcia Bagnall, SBDC Director

In tough times of reduced revenues and reluctant customers, it’s necessary to make cuts just to keep the doors open. There are many cuts you could make of course, but how do you decide? There are better and worse cuts, so choose carefully. Here are a few guidelines.

First, always always keep your customer in the front of your mind. Be thinking constantly about what your customer hears, sees, and feels with each interaction they have with your company. Remember, you’re in the customer loyalty business. Anything that you do needs to boost customer loyalty, not erode it.

Your customer has many small interactions with you in the course of one visit, or one phone call or online transaction. And all those little impressions (especially the initial ones) add up to one big impression about how your customer feels about doing business with you.

This means you should think about cuts in terms of what your customer won’t see, hear or feel. When you make cuts of any kind, do so in the ways that are the least visible to your customer, and help ensure that the fundamental customer experience is unchanged to the greatest extent possible.

Say you have a retail business, and your customers know that when they walk in they will enjoy your wildly creative window displays. Those displays are part of the experience your customers get by coming to you and not going to a competitor. This should be the last thing you cut, as it’s one of the first customer impressions (and an important one). It may not be a revenue center in and of itself, but it’s a draw that keeps customers coming in.

The person who answers your phone may be a similar draw to customers. While it’s cheaper to have an answering machine instead, the cheerful voice and knowledgeable answers from your employee may be the single factor that keeps customers sticking with you and not shopping your competitors. Remember the rule about all those small impressions adding up to one big one. 

You need to maintain high levels of customer service at all times. So instead of cutting services when you’re open, consider cutting hours or days instead. Essentially this is a quality vs. quantity decision. Another thing you may be able to cut is management. Management seldom cuts itself because no one thinks they’re redundant. But since management is invisible to the customer it’s fair game for reduction.

Determine what the small but crucial experiences that matter most to your customers are, and keep those at all cost. Then figure out how to reduce other costs that don’t adversely affect these small but psychologically important customer interactions. Remember, your customers are the most important asset to your business.