Sorry, the headline’s a week late for Hallowe’en…
Many of you will have read Freakonomics, the hugely successful ‘rogue economist’ look at everything by Stephen Dubner and Steven Levitt. Now they’ve a new book out – Think Like a Freak – and I was reading it on holiday.
This book tends much more towards self-help than it does towards economics, and there were a couple of points in it that really struck a chord with me.
‘Don’t be too proud to quit’ was the first one. At first glance this flies right in the face of the traditional business view that nothing can replace persistence and too many people quit when they’re just around the corner from succeeding.
But there are times when quitting makes sense: when you’ve tried an idea and it simply hasn’t worked. When your startlingly brilliant insight about what the market really, really wants has – astonishingly – proved to be somewhat wide of the mark. There’s no shame in saying, ‘Fine, that didn’t work. Let’s try something new.’ And in the days of the internet and ready-fire-aim start-ups, abandoning an idea is no longer as expensive as it once was.
One of the hallmarks of the most successful entrepreneurs is the number of failures they’ve had – which they then saw as a learning experience.
But the story that’s really stayed with me from Think Like a Freak is the one about the Chinese children and their eyesight problems…
The book makes a simple point: ‘tackle small problems, not vast ones.’ Again, that seems to be directly at odds with most business advice: surely you can’t ‘keep the main thing the main thing’ if you’re off fighting small fires?
…And you can’t get a much bigger problem to tackle than the Chinese education system. Children in the poor, rural province of Gansu were underperforming at school. The cause was eventually pinpointed: their diets were deficient in iron, which was affecting their eyesight. They were performing badly at school because they simply couldn’t see the blackboard.
Two Western economists launched a programme to give the children free glasses – and their performance in school improved dramatically.
The point is very similar to one I made a few weeks ago in Small Gains, Big Profits, where I looked at the lessons business could take from the success of GB Cycling. Some problems – improving the Chinese education system; achieving Olympic success – are so huge that the only way you can tackle them is through a series of small initiatives.
I’m always pleased at TAB meetings when a member comes in and says, “We’ve saved 5% on our heating costs” or “On average we’re getting paid six days quicker than we were this time last year.” It’s pleasing for two reasons: first of all I know that if they’re making small gains in one area they’ll be making small gains in several others – and the sum of those small gains is significant. Secondly I know that someone who’s paying that much attention to detail is going to succeed.
Business is becoming ever more competitive and knowing exactly what’s going on in your company is vital – as is knowing it at the right time. TAB members will be aware of the absolute importance I attach to KPIs (Key Performance Indicators if you’re new to the blog) – but once you’ve identified your key numbers, you have to stay on top of them. It’s no use finding out in January why you missed your targets in October.
That takes me back to the beginning of this post: deciding that something isn’t working and abandoning it is nothing to be ashamed of: realising that you didn’t know the numbers and you’ve been on the wrong path for a year emphatically is.
Next week I’ll be in a more relaxed mood. I’ll be considering one of the most crucial business questions: should you treat yourself to a couple of days in a five star hotel?