It’s not Luck


bullSolve CORE problems
As small business owners, we are surrounded by problems. Immersed in problems. We create a small business, and in return, our small business creates an endless stream of problems for US to solve.

But after reading this book, I’m going to claim that almost all of the problems we face daily in our businesses — big or small — are side effects.

The real cause of all these problems must be something deep and hidden. Because if it were easy to identify, we’d all be billionaires… and we’re not.

In other words, we spend our business lives treading water when what we really need is a boat.

So the action item related to this first insight is simple. Write this on your wall with a Sharpie marker: “I am either solving core problems, or I am wasting time.”

So how do you find the true core problem in YOUR business? That’s our second insight.

bullDon’t Think… DIAGRAM
In other words… if you want to think out of the box, first, draw a box.

One of the major themes in this book is to create a diagram of cause and effect relationships. This slows down your thinking process, which in turn improves the quality of your thinking.

It’s one of those things that might seem silly — but after reading the book, I get it.

Diagramming does two things:

First, it slows down your thinking process, and
Second, it helps you build on each insight.

And those two things have one marvelous effect — they make it easy to think out-of-the-box.

If you skip the diagram process, you’re essentially relying on ONE insight to solve your whole problem… a problem you probably don’t even fully understand. A problem that is probably a side effect.

You want to identify the ROOT problem? The CORE problem?

Then there’s no short-cut. This book has convinced me.

If you want to identify the ROOT of a problem, you need to build what Mr. Goldratt calls a cause & effect diagram.

Here’s how you do it:

First, brainstorm 10 or so big problems you face in your business and write them each on a Post-It note.

Second, grab some more Post-It notes and draw arrows on them. For fun, trim your arrows so that they look different from the problems.

Third, find a few of the problems that have cause-effect relationships, and put them together using the arrows to connect them.

Fourth, keep going until every original Post-It note is connected and makes sense. You’ll probably need to add additional Post-It notes explaining various connections.

Fifth, focus on areas that bother you… things that aren’t quite right. Expand those areas by adding even more Post-It notes explaining the cause & effect relationships. Look for loops, and call them out… feedback loops (positive or negative) are powerful and must be respected.

At some point the core problem — the root cause — will emerge — and then the solution will follow soon after.

This is both art and science. The science is the process — the discipline of actually doing the diagram. The art is the intuition you need to diagram it right.

Intuition alone is a gamble. You’re almost guaranteed to miss things. And you’re almost guaranteed to focus on a side effect instead of the cause.

If you combine the art and the science together, you have a chance.

A word of caution: diagramming is more than a brainstorm discussion. Brainstorming discussions are randomizing and create tons of possible solutions.

The diagramming process Goldratt suggests is more like a puzzle, and there’s only one solution. Each Post-It note you add gets you closer to reality. So the diagramming process is about understanding reality.

And the solution you end up with has a better chance of being a breakthrough instead of a compromise. Breakthroughs double your income. Compromises increase your workload.

So here are some action items for you:

  • Buy a few copies of the book It’s Not Luck so that you and the people you brainstorm with are all starting with the same understanding.
  • Then schedule a meeting and go for it. Use the diagramming process. Trust the process…and see what happens.
  • If this process doesn’t work for you alone, let it rest, then come back to it. After all, your goal is a breakthrough…not a compromise.
bullDon’t compromise… SOLVE
How do you tell the difference between a compromise and a breakthrough?

Compromises double your stress…breakthroughs double your income.

To achieve a breakthrough, all you need to do is solve a core-problem… something that causes lots of other problems.

So go for the breakthrough.

The action item is to set your bar high. Either use these techniques to achieve your own breakthrough, or hire someone who can analyze your business for real, and do it for you.

Either way, set your bar high.

Oh – and don’t be surprised if the ‘breakthrough’ is common sense.

Usually, the best solutions are hit yourself in the forehead, common sense solutions.

One note on this: Any breakthrough solution will still have negative side effects… but those side effects are worthy of addressing because they unlock the breakthrough.

Make sense? If you spend your time solving side effects without understanding the core problem, addressing side effects is a waste. But if implementing a breakthrough creates side effects, there is no better use of your time than addressing those side effects.

It’s all about the breakthrough.

The action item here is to set your bar high when it comes to solutions. And that leads to the fourth insight.

bullGood Thinking is the Enemy of Great Thinking
There’s no shortage of ideas…
There’s a shortage of UNDERSTANDING.

There’s no shortage of compromises…
There’s a shortage of BREAKTHROUGHS.

In other words:

There’s no shortage of good thinking…
There’s a shortage of GREAT THINKING.

So the easy habit of ‘responding quickly’ is our greatest enemy in small business.

In other words, the nimbleness of small business — the trait that allows small business to survive bad decisions — is also a crutch that allows us to get away with average thinking.

We think through things poorly because we can get away with it. And that’s a bad habit.

Action item: Review last week’s Brevity Brief and apply the good-to-great concept to our thinking process as well.

bullOptimize your life, not just your business.
Goldratt talks over and over about the trap of ‘local optima’ — the trap of optimizing each piece of a large business separately, and by doing so, missing the chance to optimize the system as a whole.

That makes sense…

But that’s big business…

As a small business owner, your business is just a piece of your life. If you apply these insights only to your business, you are falling into the trap of Local Optima.

So use these principles to integrate your whole life. Come to understand how all aspects of your life fit together — your health, your character, your family life, your friendships, your purpose, and your business.

So the final action item is to think of your business as part of your life, and optimize your life.

The 7 Habits of Highly Effective People


Put Private Victory Before Public Victory

Private victories are internal. These represent success in our struggles to change who we are inside. Our internal fights must be won first, before we seek to do battle with the outside world.

7 Habits outlines three ways to accomplish private victory –

Becoming Proactive

This doesn’t just mean planning triumphing over reaction, it involves establishing what part of your personal world is truly under your individual control and managing that most effectively. The heart of the insight is recognizing that while we are subject to the whims of an uncaring world, we have the ability to see and respond quite differently to the same outside stimulus. The world doesn’t make us act in a particular way, we choose how to act.

Consider the tragedy of a dying parent. Some may be crippled by grief and the impending loss; others in the same situation may use it as an opportunity to reconnect with their siblings or religious faith. If this sounds like positive thinking, it is – but not the bargain basement positive thinking advocated by a host of self-help books, Covey’s book predates that drivel.

He shows how having a personal vision and drive, tempered with a willingness to learn and change, allows actual personal growth, not the quick fix version. As he says, “Principles are the territory. Values are the map.” Values have to spring from your own deeply held principles, and they cannot simply be adopted like putting on a new coat. His message is to embrace your life and not turn from it; gain from your experiences – painful, joyous and others.

Begin with the End in Mind

Simple, right? Then why are we so apt to get tunnel vision? A shift from focusing on the here and now to a future goal is the difference between getting mired in the day-to-day and having a perspective that puts crisis in context and allows easier decision making. Principles and values give you insight on what the end should be, and keeping the end in mind gives you insight on what has to be done right now.

Put First Things First

This habit seems obvious until you delve into what this really means. Problems arise when there are multiple, competing ‘first things’. Ranking priorities becomes a matter of evaluating rival tasks to find not just the most pressing, but the real ‘first thing’.

By keeping the end in mind, priorities shift – the most stressful and demanding sometimes becomes the least important. Effective people are not necessarily busy people. They have learned the secret of developing production capacity and not just raw production. For instance, if you spend the time to learn how to use a piece of software, really learn it, and it saves you time down the road, you are focusing on increasing production by increasing production capacity.

Putting first things first means paying attention to production capacity — striving not to just do more, but to develop infrastructure so that more becomes possible.

Integrity Leads to Win/Win

The Public Victory section extends personal characteristics out into the world of interrelationships. Integrity is foremost because it cannot be faked and without it, trust suffers.

Integrity encapsulates a host of excellent character traits: Honesty, Steadfastness, Loyalty, Selflessness, Genuineness.

The reason integrity leads to a win/win is because the authentic person seeks out mutual benefit and situations where there is profit for everyone concerned. Respect and trust are the hallmarks of these interactions. My concerns are in parallel with yours. My gain is your gain.

You may recognize the lack of integrity as the reason we need contract law. But there was a time when a man’s word was his bond in both small and large things. Effective people still use this standard. And they expect it from others. The amazing thing is that we all want to operate in an environment of trust and mutual respect. We all want a win/win. We just don’t feel comfortable trusting ‘the other guy’.

Covey describes the win/win as the Third Alternative – not your way or my way, but a higher way. Operating with integrity allows others to respond in kind. By moving toward the higher way we encourage others to do the same.

The primary difficulty facing leaders seeking a win/win is finding out exactly what represents a win in another’s view. Communication becomes a key skill…

First Understand, Then Be Understood

The technical term is empathic communication. The idea is just the opposite of what we usually mean by effectively communicating. Usually, we strive to be understood and think success revolves around how well we get our points across. While this is important, Covey demonstrates that the first step is not to make yourself understood, but to understand the person you wish to reach.

The most difficult part of listening is shutting down our innate filters. We tend to edit what we hear based on our own biases and experiences, turning what was said into something that better fits our own viewpoint. This filtering mechanism means that almost all of what we hear or read is abandoned.

The common statistic is that we only really retain about 20% of what we hear. There’s another percentage less well known – we learn about 80% of what we experience. Rapport through empathetic communication means you first understand the person you wish to interact with, and only then do you attempt to be understood using their experience base and worldview. This is the connection that moves communication from the 20% to the 80% level.

Viewing communication this way is just one area we can develop cooperation as a skill. A conversation that uses the ‘understand first’ paradigm is one that embodies cooperation – two parties who wish to accomplish the same goal.

Cooperation is an important element in other areas of interaction also…

Creative Cooperation Is the Key to Synergy

“The strength of the wolf is the pack and the strength of the pack is the wolf.” – Kipling

We are simultaneously individuals and part of a more powerful group effort. A lack of cooperation ruins many an enterprise. Organizations fight for ‘team coherency’, ‘joint effort’ and many other catch phrases. It all comes down to the same thing: How can you get people to cooperate?

Building on the other habits of effective people – the internal character building and integrity, the win/win, and real communication – all lead to better cooperation, but there is actually more to be done.

Creative cooperation springs from responsibility. The corporate catch phrase has become ‘owning’ a task. While we pay lip service to this ideal, usually it is completely one-sided. You own your job until you screw up. You own your job but someone else is secretly checking up on you.

Covey shows us that real cooperation is bound up with consequences – just as real responsibility comes with payoffs as well as penalties.

Creativity comes in when a project is reshaped so that real ownership is possible. Usually this is avoided because businesses have a low tolerance for failure. But actual responsibility means that failure is a possibility. Our employees are not fooled when we call them ‘associates’ or tell them they are in charge of X when they are then treated as automatons – mere cogs in the vast machine.

The advantage of having actual, instead of phony, cooperation is that multiplication of effort results. Synergy has become another buzz word because of this. When Covey writes in 1990 though, this is a fresh idea. The meaning hasn’t yet been lost by overuse (and under-application).

The book broke new ground and reshaped how we think of business as not something that happens in a building somewhere, but something fundamentally human, consisting of the full spectrum of human activities, emotions, triumphs and failures. The ideas are many and important. They require practice and upkeep. And upkeep is the final habit Covey addresses.

The Upward Spiral of Continuous Improvement

Rome wasn’t built in a day. Or a year. In truth, Rome wasn’t built at all – it evolved. This is the essence of the seventh habit, a willingness to rediscover and renew the principles embodied in the first six.

A first read of The 7 Habits of Highly Effective People gives one a sense of what’s possible. A second reading and application of the insights allows the ideas to take hold by demonstrating their effectiveness in practice. But this is life altering material. It takes a willingness to keep at it, to evolve.

The habits each represent a dimension of our overall selves. Some of us will be better in one area than another. Perhaps you are a natural communicator, or perhaps you find the win/win with little effort. Each area feeds into the next so that improvement in a habit where you are weaker pays off in other areas too.

In practice, we work on those habits where we are less able and this pulls up the whole structure. The cycle overall is increased improvement. The spiral leads through a series of three repeated steps: commit, learn, do. We commit to an improvement, learn the skill and then practice it until it becomes the habit we desire, and we do not stop the process.Commit, learn, do.

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