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Monday, April 27, 2015

Agile entrepreneurs know anything is possible


YES YOU CAN!


It is easy to develop a negative attitude or receive advice from negative people.  This is especially true when tackling difficult situations.  In my first turnaround, I was repeatedly told to walk away from the company because of major failings in the financial market place.  The company was a text book case of a boiler-room style investment bank overselling the company’s stock in an IPO.  Adding to the complexity, the company’s technology was not advanced enough to keep sophisticated investors excited.  The over promotion caused the stock to move from the $5 offering price to a $20 per share price on the first day.  Due to failings of the underwriter and lack of advanced technology, the price fell to around $1 per share in less than a month.  The underwriter (also major investor post IPO) had similar results with 5 other companies.  Their loss of cash, coupled with other events, resulted in their declaring bankruptcy.  The clearing house each of the six companies’ failed and they declared bankruptcy as well. All of the companies the underwriter had taken public were mentioned in nasty news articles about the underwriter.   This resulted in guilt by association for the company I was attempting to turnaround!

It would have been easy to not attempt to turn the company around, but it is important to keep an open mind.  Learning to approach problems in an organized manner and not assuming failure is inevitable is an important part of building a business.  Problems may be wide and varied and solutions are not in books.  People often have biases and may be correct by responding with their gut reaction to problems.  Many times gut reactions are not correct and they limit an individual’s ability to see alternatives or novel solutions.  One of the greatest challenges occurs once you state something is not possible.  The reason this can limit your solutions is a bit like anchoring, i.e. “a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered.”  Stating something is not possible tends to prevent you from looking for solutions thus limiting your creativity.  So, even in the face of adversity and negativism from so many, I had to stay focused and believe anything could be done.  The key was finding a solution that might work and trying it.

It is different when one works extensively to resolve a problem and is not able to find an appropriate solution.  The learning process in attempting to solve the issue may involve many discussions and readings of articles.  The increased knowledge may allow that creative solution to occur spontaneously in your quiet moments.  The lack of an extensive attempt, diligent learning, and negative anchoring to a negative outcome limits options and ability for creativity to take over.  Adopting a negative attitude dooms the process or at least lowers the success rate.   It also decreases chances for a more creative output.

There are steps one can take to solve what may seem unsolvable.  They may or may not fit with your personality, but if the problem is significant, trying them may be worth the effort.

Improve attitude:  Assume all problems have a solution rather than your problem is not solvable.  By taking the positive step, you eliminate the anchoring and now must seek alternatives.

Learn as much as possible:  You have identified a problem.  Now learn everything possible about the problem, and surrounding issues.   The more you learn the better chance your creative side can contribute.

Talk with people having different skills:  One of the ways some companies increase creativity is forcing staff with differing skills to be in close contact resulting in increased interaction.  The reason is that different skilled people discussing a problem may lead to solutions because of cross-fertilization.  The same can be true for your problem solving.

Identify alternatives:  While all problems have solutions, some solutions may create more problems.  Having alternatives allows for hybrid solutions or a work-around that may be better for your situation.  Being too rigid on the type of solution can be just as limiting.  Keep an open mind.  The goal is to make your company a success not make all your ideas work the way you thought they should.

Do not give up too easily:  There may come a time when you must abandon an approach or problem because time or costs may become limiting.  Having alternatives can help in such cases, but giving up too easily may cause you to miss that one great idea that can turn a failure to a huge success.
At this point, you may be wondering what happened in the turnaround situation.  Maybe I was just lucky, but the company grew from a $3M valuation to $300M in 5 years!  I guess all the people that thought it could not be done, were just wrong!
 



  Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon