Counter-intuitive thinking, a way of thinking that’s contrary to what our human nature suggests.
Program Titles
- 7 Steps to Becoming INVALUABLE: As people become aware of your ability they seek your counsel
- Improve your bottom line while making your life easier
- Contrarian Mindset, to show how industry specialization can work to your advantage
- More effective ways of doing business
- Changing Face of Competition
- Making the exceptional normal without reengineering
- How can you develop the skill of counter-intuitive thinking?
Dale C. Furtwengler, Preventing ‘Too Big To Fail’ Isn’t Easy, the president of the Federal Reserve Bank, had repeatedly warned regulators of allowing banks to get too large. He also quoted Former Fed Chairman, Alan Greenspan, who said “Knowing when the crisis will happen is not possible for human beings.”
While I agree that we may not be able to predict the exact time that a crisis will occur, we can certainly get early warning signals that we’re creating one.
The key is that the earlier we can identify that an effort is going to fail, the smaller the crisis we’ll face when it does occur. How can we avoid the “too big to fail” mistake in the future? There are two questions that I find particularly helpful in discerning whether or not a merger or acquisition will fail.
An economist who asks “Are they investing cash?” Managements make more prudent investments when they’re using their company’s cash than when they’re borrowing the money from others. We need only recall our youth to validate her statement. Who among us wasn’t more frivolous in our spending when our parents were footing the bill than when we had to cough up the money ourselves?
The second question is one that has served me well both in my personal investments and my client work. The question is “What’s in it for the customer?” An industry leader acquiring a relative newcomer to the industry can significantly increase customer value if: the newcomer has offerings that the industry leader does not those offerings are valued by the industry leader’s customers it would take years for the industry leader to develop comparable offerings it would take the newcomer years to build the name recognition and gain the level of customer confidence the industry leader possesses there are markets in which the industry leader has a presence that the newcomer doesn’t serve
Had these questions had been asked prior to the Bank of America / Merrill Lynch and Wachovia / A.G. Edwards mergers would the regulators have approved them? We’ll never know for sure, but three things that are obvious is that all four companies had: stellar reputations with strong brand recognition wide distribution channels which made them readily accessible to customers and prospects a wide array of offerings designed to satisfy virtually any customer need.
From that vantage point, was there really any reason for those mergers to occur?
It’s counter-intuitive, but these two simple questions:
Are they investing cash?
What’s in it for the customer?
Can provide regulators with the insights they need prevent a recurrence of the “too big too fail” fiasco we’re currently suffering.
The 7 Steps to Becoming INVALUABLE program I offer is designed to help you see more effective ways of doing business – ways that dramatically improve your bottom line while making your life easier. In today’s blog I used
Step 1, Contributory Negligence, to demonstrate how simple, inexpensive and easy to implement solutions can be when we break problems down and begin to look at them from the standpoint of what we did to contribute to them.
I also used Step 5, Contrarian Mindset, to look beneath the level of complexity most people see to the lowest common denominator(s) that drive the challenges we face. In this instance, two fairly simple questions serve as powerful indicators of how to avoid “Too Big To Fail.”
Not by focusing on the skills associated with the sport, but by educating them on how to use the time between shots, plays and events. Why? Because it’s the downtime that allows these athletes to recover from the strain of competition and intensify their focus for the next shot, play or event.
Are you building pauses into your schedule? Are you using pauses to help you:
• Savor your success?
• Reflect on a skill you acquired and how it can be applied or enhanced?
• Recover from the strain of competing in one of the most challenging environments ever created – the world of business?
• Intensify your focus for dealing with the next growth opportunity or misstep on your way to greater success?
I’ve begun building into my day, a 10 to 15 minute break for every 90 minutes I work. What has it done for me? Exactly what you’d expect. I accomplish more in less time than I did previously without feeling exhausted.
Give yourself the gift of frequent pauses. The more that you think “I don’t have time for a break”, the more essential it is for you take one. You’ll find that you’re enjoying greater success, less fatigue and greater joy in living your life.
The 7 Steps to Becoming INVALUABLE program I offer is designed to help you see more effective ways of doing business – ways that dramatically improve your bottom line while making your life easier. In today’s blog I used Step 5, Contrarian Mindset, to show you how to pauses are as essential as the activities in which we engage. I’ve also employed Steps 4, and Step 6, Eclectic Education, by using the disciplines of music and sports to demonstrate how universal these concepts are.
Market Specialization
An often overlooked advantage of specialization…
…staffing
On the surface, the company that serves multiple industries might seem attractive because it offers more variety in your job. But once you’re on the job you realize that this “variety” also adds a great deal of complexity to your job.
How?
Each industry/profession has its on idiosyncrasies, its own language and its own preferred practices. This not only makes your initial orientation more difficult, it makes keeping current on changes within each industry/profession more difficult. This complexity typically slows collections at the same time that you’re being evaluated on your ability to collect quickly. Is it any wonder that the better collectors migrate to firms that specialize?
While many business owners may view this kind of specialization limiting, the reality is exactly the opposite. It’s counter-intuitive, but specializing allows your firm to:
gain a greater understanding of the customers you serve
monitor the ever-changing environment in which they work
provide higher levels of service to those customers
charge premium prices commensurate with the higher service levels
recruit, retain and reward staff more effectively
Contributory Negligence, Step 1, was used to show how we often inadvertently complicate our lives and add to the cost of doing business by trying to serve multiple markets.
Memory – A Function of History?
If not…
…how reliable is history?
Our pastor made the comment that memory is a function of history?
Is it?
Scientific studies of memory that show that, contrary to popular opinion, our memories aren’t full-length features stored in exacting detail.
Instead they are more like holograms where what’s stored are the key elements of the story. The details get filled in as we recall the episode.
“The least likely experience” is often the “most likely memory.” Why is that? Because the least likely experiences trigger emotional reactions. Indeed, it’s the emotional reactions that we have to the situations we face that determine what memories we retain.
If you doubt that think of your last trip to the grocery store. Was it memorable? If not, there were no surprises; nothing that triggered an emotional reaction. Conversely, if it was memorable, it’s likely that someone allowed you to go ahead of him in the checkout line, shared a kind word with you or raced to get ahead of you in line. Each of these actions triggers an emotional response that forms a memory.
Why is this important? Because, this natural tendency can “wreak havoc with our ability to predict future experiences.” If our primary recall is of unusual experiences, how accurate is our historical perspective? How well can we predict future outcomes if we’re focused on the least likely results?
It’s counter-intuitive, but memory is not an accurate historical perspective. That’s why, when predicting an outcome, it’s wise to recall:
The last relevant experience you had
What emotions were triggered during that experience
Whether this was an isolated instance among many other similar, yet less memorable, experiences
Then ask yourself, “Is this memory an accurate predictor of what I can expect?” This simple approach will help you avoid creating unrealistic expectations and improve the historical accuracy of your memory.
Step 3, Suspend Judgment, to show you that emotions trigger memories and influence our expectations for the future. Then I used Step 1, Contributory Negligence, to demonstrate how we contribute to the outcomes we get – favorable or unfavorable – by our penchant for using “least likely experiences” to predict the future. Finally I used Step 5, Contrarian Mindset, to show you how to overcome this natural tendency.
Leadership, Marketing, Pricing, Productivity, Selling, Strategy
Books by Dale C. Furtwengler
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