Chapter 3: Select Opportunities that Help Performance in Many Areas

Chapter 3

Select Opportunities that Help Performance in Many Areas

The material in this chapter expands upon pages 200-205 in The Irresistible Growth Enterprise.

In The Irresistible Growth Enterprise, we describe a strategic thinking method that can help you address where focus will do you the most good compared to competitors and in absolute success. In that book, we talk about nth degree thinking. That process requires you to take one element of your business environment and expand it to extremes … both much larger and much smaller than you can possibly imagine could occur. That stretching out makes it easier to see where making an adjustment relative to irresistible forces can make a useful difference, regardless of what happens with irresistible forces.

In picking 2,000 percent solution opportunities, you also apply nth degree thinking. To do so you stretch the benefits that stakeholders could gain or lose to their limits, rather than stretching the irresistible forces.

Here’s an example. Linear Technology specializes in providing semiconductors that allow portable electronic devices to operate longer on battery power. If we look at that battery-life-extending quality, stretching the benefit to the nth degree means having portable devices that never lose power while you are using them. Under such circumstances, we could expect that every device that is now used in a plugged-in, stationery environment would be more often supplemented by a portable version … assuming weight and other forms of inconvenience did not prohibit that use. For a comparison, Linear Technology could also look at the effect of vastly lowering the costs to provide its semiconductors and how much that would change benefits to customers and ultimate consumers. Since these chips are a small part of the portable devices and Linear Technology has a high market share, this cost benefit is probably smaller than by making battery life unlimited. In that is the case, Linear Technology should focus on its battery-life-extending qualities rather than cost reductions.

In looking at the technical limits of its semiconductors to extend battery life, Linear Technology needs to then apply the nth degree thinking to the various technical choices to accomplish unlimited battery life. These choices might include using less power to perform the same task, draining batteries less for the same power usage and gaining more stored energy through the device’s use. If any of these qualities could be extended to the nth degree, that quality would enable unlimited device use.

The nth degree test next needs to be applied to the theoretical limits of each technology choice. For instance, if a device were operated with only the minimum power required by current technology, how much could power usage be reduced? If batteries were drained in the optimal way, how much longer would they last? If more energy could be stored through the device’s use through solar panels and heat exchanges, how much would that extend battery life? Without going into the physics of the problem, let’s assume for our purposes that storing more energy is the maximum improvement that is theoretically available. After all, devices are usually located in warm environments with lots of light around, held by people in even warmer hands, moved and poked at with fingers, and taken into different physical environments. Which technical solutions would work best at the lowest cost? Those potential solutions should become the focus of finding one change that will create the most benefits.

If you do not work in a high technology environment, you may be wondering what your choices might look like. Let’s consider a book publisher. Assume that our book publisher examines the following areas using the nth degree test for competitive and profit impact: cost of development; cost of production; duration of development; distribution availability in bookstores; amount of publicity; amount of positive word-of-mouth comments; pleasure that readers get from the book; what percentage of readers like the book; and pricing. Notice that taking the number of positive word-of-mouth comments to the maximum would tend to overwhelm the other areas. Most publishers, however, don’t put much attention in that area. A publisher that did could probably expect to create an overwhelming 2,000 percent solution for its books and its publishing performance.

Questions to help your organization identify the area where performance improvement will create the greatest benefits.

In thinking about finding the greatest benefits, it’s good to keep two time frames in mind. The first is for the effects in one year of less. The second is for the effects in five years or more. The reason for keeping these two time periods in mind is because customer preferences are always shifting from one direction into another. The benefit you choose to emphasize should be one that will have immediate, substantial benefits while providing even larger, more important benefits over the longer term.

1. What benefits could your products or services provide to customers and ultimate users?

It’s important to think about both what benefits you could provide today and those potential benefits that you could deliver later. At this stage, the longer your list is the better your eventual results will probably be. Don’t rule anything out for now. Later steps in the workbook will help you sort out areas that aren’t promising for all possible reasons. So for now, open your mind as wide as you can. This process will work best if you apply this thinking to one customer, product or service at a time.

2. If the positive side of each benefit was expanded as large as possible, which benefit would be most valuable in stimulating purchases from your organization?

Although many people will want to apply maximum rigor in answering a question like this, it usually turns out that common sense can provide an equally valid answer with much less time and effort. If you find that several benefits seem to share the lead in providing maximum value, simply continue to focus on all of those benefits in the remainder of this chapter’s questions.

3. How might you take that most potentially valuable benefit to the maximum?

A good brainstorming session is called for here. Gather around people from a variety of backgrounds (including a number that are unrelated to what you do). Describe the benefit that you want to take to the nth degree, and ask each person to describe as many ways as possible that the nth degree might be reached. As before, place no limits on ideas.

4. In looking at potential solutions to take the potentially most valuable benefit to the maximum that you defined in 3 above, which solution alternatives would also drive other highly valuable benefits forward?

Here, you are trying to find overlap where a potential solution provides enhanced effectiveness that helps more than one highly valuable benefit when provided to the nth degree.

5. Which of the potential solutions that advances many benefits towards the nth degree would be the easiest for your organization to implement?

In considering your choices, be sure to include your ability to access the talents of other organizations through partnering, outsourcing and other potential relationships.

Copyright 2005 Donald W. Mitchell