We live in a world that tries to ignore the relationships of cause and effect. Ignore, because while we know that eating the wrong diet can damage our hearts, many do it anyway. Ignore, because while it’s only common sense that buying a house you can’t afford will lead to financial distress, many did it anyway. Ignore, because though it seems fairly obvious that failing to invest in education will ultimately damage our country, so many are willing to do it anyway.
We ignore connections, even when they are obvious.
But sometimes we don’t understand the connections in the first place. For instance, until recently the average medical doctor only received the equivalent of two hours of instruction in nutrition during his entire medical training, even though our bodies are chemical factories that are completely at the mercy of the chemicals (food) we put in them. Without deep knowledge of the basic chemistry and mechanics of food production and nutrition, most doctors do not understand the connections to health and prevention. Does this make them stupid? Of course not. Uninformed, leading to reduced ability to problem-solve, yes. But stupid? No.
This failure to make connections is not isolated to the medical community. Business owners regularly fail to make the connections necessary to ensure the health of their businesses. The problem is that most business education does a pretty decent job of teaching each of the elements – disciplines – of business, but does not do such a good job of teaching the connections.
Inputs and Outputs
But it’s quite simple really. And once you start thinking about business in the way I’m about to describe, you won’t be able to stop. How easy? Well, consider this.
We all know that the desired output of a lamp is light. If I asked you which element provided the actual light, you would say it was the light bulb. And then you could elaborate and say that the electronics inside the lamp provide energy to the light bulb, that the power cord is what delivers energy to the electronics, and that the power cord must be plugged into the power grid of the house through a power outlet.
The only output in that analogy is the light from the light bulb. Every other element is an input. Business is the same.
Outputs are the things your customers experience as a direct result of their awareness of, or relationship with, your company: The products and services you offer, the environments within which the products and services are delivered, the messages the company conveys, the discussions consumers have about the company either face-to-face or through social media, and the reactions they get – both good and bad – to the products and services they have purchased from you.
Inputs are all the things you do to deliver those products, services, messages, and post-sales support and to influence or respond to consumer-driven communication about your products and services.
Have you ever wondered which elements of your business you should prioritize for investment and development? I just gave you the answer. Well OK, maybe there’s a little more to it than that.
Imagine that you own a business that designs shoes. No, that’s too broad. Imagine that you have a business that designs orthotic shoes. Your desired output is a shoe that a podiatrist can recommend, and that a consumer is willing to wear, both because it performs as expected and because it looks like an attractive shoe and not a medical device. Your target consumer is a woman who works full time on her feet in an indoor, non-industrial profession – like a nurse, medical technician, or retail sales professional. Everything else you do must enhance and protect these outputs.
So what are your inputs? To figure that out, work backward from the ‘light bulbs’.
In this diagram, the outputs are the products, marketing, sales, service, and public discussion as perceived by the customer. Everything below the red line is an input. Each input necessary to achieve a desired output represents an important investment. You make your decisions from the top down.
- If you decide that your customer is female, that dictates which type of shoe designers you will hire.
- If you decide that your sales method will be through orthopedic and podiatric offices, that determines which type of sales people you will hire.
- If you decide that your sales effort will be using the internet, that dictates which types of technology you will invest in.
Failure to invest in your critical inputs will guarantee failure of your outputs.
So here’s where we return to the concept of cause and effect. Because if your business strategy is built on weak inputs, it’s just a house of cards, and the lowest layers must be built and strengthened before the upper layers can produce economic value.
Simple, right? Now if I could just get that stupid song out of my head.
The shin bone’s connected to the . . . knee bone. The knee bone’s connected to the . . .
© 2010. Andrea M. Hill