7 Thinking Tools to Win at Business and Life
How my MBA class gave me a lifetime of wisdom.
Will you remember what it was like?
When you walk through an Amazon acquired movie theatre, the one where you receive 1 movie a month free with your Prime subscription.
Excited, you walk to the snacks counter only to find all Whole Foods products. The ads that greet you before the Amazon-produced movies are of exclusively Amazon-owned businesses.
You find it extremely difficult to find a theatre that screens stand-alone productions, so you give up and walk to the same Amazon theatre every month.
Will you remember what it was like?
Times like these are called an inflection point in an industry, a step so profound that it transforms the way entire businesses are positioned, causing incumbents to react or die.
Call it evil or genius, but some business corporations have the power to make the right moves repeatedly to achieve scale and thus, dominance.
It is the right way to think through things that can make success a habit, in business and in life.
While prosperity depends on many factors beyond one’s control, the ability to think systematically and evaluate opportunities accurately can be learned.
And here I discuss the 7 thinking tools learned from my MBA class that have also immensely helped me in making life decisions.
Organizational Debt
Organizational debt is the accumulation of decisions that should have been made but weren’t.
Most people love the status quo, a comforting environment with no hard question to tackle. It is this comfort of ‘que sera sera’ that slowly rusts the cogwheels and makes turnarounds harder.
To tackle this debt, Scott Belsky (CPO Adobe) uses elephant lists: a running list of the elephants in the room that everyone sees but no one wants to address.
Be it that employee you are putting off letting go, or the decision to throw away stuff you don’t need, it is important to address the elephants before they become a liability.
Jobs to be Done Model
Introduced by Clayton Christensen, the jobs to be done model states that a customer buys a product when she thinks “I have a job I need to get done, and this is going to help me do it”.
For example, a person buys a toothbrush to appoint it to have clean teeth. The goal of a business is to make its product the best solution fulfill an important job in the customers’ life. That is the way to make your product undefeatable.
In personal life, act as the rational consumer. Any indulgence you wish to add into your life, ask yourself if there is a job so important for this product that you have to buy it.
Personally, I have gone to the extent of writing how I will use an iPad and evaluating if those jobs cannot be performed by existing gadgets before buying one, this process has helped me declutter my life and surroundings.
Right to Left Thinking
Right to left thinking consists of defining your goal at the outset, followed by a series of steps and systems to achieve the underlying goal.
In business, this is often done in the case of consumer good companies. The management knows the price point which the consumer will be willing to pay for their product, say $2 for a bar of soap.
The job of the business units is to use raw materials and processes so efficient that the consumer can get the desired quality soap at the price point they are willing to accept.
In personal life too, building systems to achieve the endpoint is a great practice. For example, if your goal is to lose 10 pounds, you start with the diet, type of exercise, and time frame for your to achieve the result.
Concept and Model
In business, a concept is a benefit that a firm offers to its customers. On the other hand, the business model is how the firm generates income/profits. The model is the underlying essence to creating a concept.
For example, a low-cost airline might offer cheap or even free flights as a business concept, but its aim might be to generate margins through the sale of onboard merchandise or secondary benefits, such as checked-in baggage or priority seating. Similarly, a bank might offer deposit or loan services as a concept but might generate its profits through fees and penalties.
Similarly, in personal life too, you may need to project benefits to others with the aim of bringing benefit (profits) to yourself. For example, helping someone in selling their apartment in order to make contacts while buying your own house, and gain the trust and respect of the individual you helped.
Theory of Constraints
An important concept in operations management, the theory of constraints implies identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal, and then systematically improving on that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.
Be it a business constraint such as lack of timely delivery of raw materials which is slowing down the manufacturing, or a personal constraint such as lack of a personal vehicle to commute for work which is eating away your time, you should identify what is slowing you down and work to resolve it.
Key Failure Indicators
Articulated by Brandon Chu (VP, Product — Shopify), key failure indicator is an antithesis of the famous key performance indicators or the numeric goals one achieves to be said to have done a good job.
While there is great emphasis on doing the right thing, there is little that is said about not doing the wrong thing. Key failure indicators take care of that, providing a set of activities to never do if you wish to achieve that goal.
In business, it could mean to grow adoption of feature A of the product without taking away adoption of feature B. In life, you may know texting that ex will rob you of the progress you’ve made post-breakup.
Core Competencies
Core competencies are the combination of resources and capabilities that are instrumental in delivering products that beat the competition by providing more value to customers over an extended period of time.
In business and personal life, recognizing your differential power and honing it to your advantage helps create a ‘competitive advantage’ that ensures your offering is perceived by the target market as significant and superior to those of competition.
You may not be great at painting, but you could be the only one who can paint doodles and think of fun corporate life scenarios to create comics out of them. Think of what YOU can do the best, and become a master of it.
The above 7 thinking tools have helped me structure my life, and make effective decisions for my clients. I wish this article pushes you to greater productivity, clarity, and self-awareness.
