| by Danielle Vincent

Helpful Thoughts: Is it a systemic problem or is this a one-off thing?

I read a lot of business books. The one I'm currently reading, The Effective Executive, by Peter Drucker, is so insightful that I wanted to share some reflections on the methods.

I hope you find these reflections helpful.

The Elements of the Decision Process

  1. The clear realization that the problem was generic and could only be solved through a decision which established a rule, a principle
  2. The definition of the specifications which the answer to the problem had to satisfy, that is, of the "boundary conditions"
  3. The thinking through what is "right," that is, the solution which will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable
  4. The building into the decision of the action to carry it out
  5. The "feedback" which tests the validity and effectiveness of the decision against the actual course of events

(this list was taken directly from the book, word for word)

It's my observation that most of us go from crisis to crisis, playing what could be described as "emergency whack-a-mole," without stopping to reflect on the systemic causes of these crises.

For example, you may have noticed that we're often out of stock of certain products, and rarely out of stock of others.

We've been doing this complex inventory tango for several years and have never quite gotten a handle on how we can have the right products in stock at the right times. It might seem like a regular forecasting problem, but so many variables toss our inventory around like a ship on stormy water... just when we get our sails tied down on one side of the boat, the winds and water changes and we have to cut the ties and let the sails go free.

(Side note: I am not a boat person, and about 1/3 of the way through that analogy I knew I was in deep trouble. I hope my vague concepts of sailing are accurate enough for you to get the point)

Because every wind and water change requires a different approach (OMG THE BLAZING SADDLES IS SELLING OUT! WAIT, NOW IT'S FIRE IN THE HOLE! OH SHOOT, NOW LUST IN THE DUST IS SUPER POPULAR), and we're not really able to control the wind and water, we've treated most of these inventory shortages like emergency moles to be whacked.

(Another side note: Wait... whacking moles? Not only is that not how you get rid of moles, that's not very nice. No one is winning in this game. What kind of senseless monster invented Whack-a-Mole, anyways?)

Peter Drucker to the rescue 💡

"By far the most common mistake is to treat a generic situation as if it were a series of unique events; that is, to be pragmatic when one lacks the generic understanding and principle. This inevitably leads to frustration and futility."

"Frustration and futility." That is a good description of how we feel when we can't seem to get our inventory in hand. When Russ is making soap every day of the week, and we can't seem to satisfy everyone's hopes and expectations, he does feel frustration and futility.

Let's look at the issue:

  1. Is this a real problem? Yes, customers get angry and frustrated.
  2. Is this recurring? If yes, it's got to be a system problem
  3. Can we predict it? Unsure. I think we'll have to try out some systems and see if they work.

My friend Kevin Cleary (formerly the CEO of Clif Bar) said it best: "YOU HAVE TO LOOK AT REALITY." He could see by my face that I wasn't a huge fan of looking at reality. But reality is what we are working with.

Tomorrow, we'll look at step #2: How we define the success criteria around this situation that we're trying to solve.

I hope you find this little exercise interesting and helpful. I love this stuff.

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