Developing New Revenue Streams using Option Solving

 

Let’s think of any well established business that’s trying to build new revenue streams. It brings to mind a successful company that already has two well established and profitable legs to its business and believes it should have a third one. One of its senior executives is assigned to initiate the issue, so he pulls out his copy of “Smart Decisions” (see Order Book) and gets to work.

His first task is to pull together an appropriate group of people from across the company and then put the issue of finding a third revenue stream before them. It took them a good 40 minutes to hash out the appropriate question (see Latest Example): the book also has some useful tips on how to approach establishing the right question.

With this in place the group of eight participants brainstormed about appropriate “bookends” to tease their intuitive minds into becoming as creative as possible. Because, with bookends like: “Just stick with existing core business” and at the other end “Commit to very aggressive expansion” (see Latest Example): there was no way either would fly with their CEO.

Now they had a good framework to come up with the most compelling alternatives from which they could independently and confidentially make their choice (see Latest Example). You will see they came up with six alternatives, although we won’t see them all so you won’t be tempted to second guess their choices. (NOTE: They are in the best position to understand their particular circumstances and their specific alternatives. We just need a flavor of their thinking, so that any of us can take a fresh perspective with our own situation.)

Once they had come up with their own Option Solving scenario, they were then in a position to share it with their CEO and their other colleagues. It certainly created a lot of debate in the company and eventually an approach was decided upon. The whole technique got most people’s attention and a good degree of input. This company is now ready to move ahead and pursue its next distinctive revenue stream.(Next posting in 2 weeks: Revisiting Giving Advice through Option Solving…Please also make COMMENTS for connecting with the author.)

                                        © 2009-2010 Leadership Solutions Inc® (MALRC). All rights reserved

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Repositioning Financial Controller: using Option Solving

A CFO for a fast growing entrepreneurial network engineering company was being challenged by her President to relieve herself of most of the day-to-day tasks of running her financial group. He wanted her to step up and become more strategic and future oriented, assisting with acquisitions and better financial packaging of the technology products that were used in client solutions. To step up she also had to get her people to step up, particularly her controller. Her controller had to take on more of the day-to-day financial activities, in conjunction with being more responsible for the development of her small financial team.

The CFO’s challenge was how to achieve this, especially as her controller was home grown, like herself, and was immersed in the daily detail and routines without looking much at the bigger picture. If you go to the Latest Example, you will see the relatively simple question the CFO posed with an objective sounding board. This brought about the two “bookends” – “Leave controller acting as she is” and at the other end “Consider outsourcing the financial function.” Neither was obviously appropriate but they were another important step to framing the issue that needed to be solved.

Once these were on paper and in the open, the CFO’s mind started racing, drawing upon her considerable intuitive intelligence accumulated over the years. Even though she may never have been posed this exact same issue before, her intuitive mind could find many parallels and similar situations which would help her come up with the most realistic options. As can be seen again in the Latest Example (as well as in the book “Smart Decisions”), the CFO came up with six alternatives before exhausting her options. Then she set them aside for a while, as she worked on some other related matters, to emotionally distance herself from the possibilities. Other activities allowed her intuitive mind to process the information and possibilities in a more subconscious way.

An hour or two later, she returned to her sheet, see Latest Example, and made her intuitive choice. It’s interesting to see a few months further on how both people have made some significant strides. The CFO is getting much more involved in acquisition moves, as well as positioning the company better with its major suppliers. The controller is stepping up to handle more of the daily financial issues, including finding a way to present monthly financials earlier in the month.   (Next week’s posting: Looking at the best option for developing a New Financial Stream…Please also make COMMENTS for connecting with the author)

                                        © 2009-2010 Leadership Solutions Inc® (MALRC). All rights reserved

Enhancing IT: using Option Solving

 IT groups are under scrutiny like never before within the current difficult market conditions. They are expected to produce a whole lot more with less capital invested. So the IT executive I have in mind works for a sizeable financial house with an IT Group of around 75 people.  His CEO is challenging him mightily hard to reduce costs significantly, still meet the business demands of producing new and upgraded projects on time, and still retain good internal relations with his senior peers.

He now gets his “Smart Decisions” book out and begins to frame the right question as discussed in Chapter 3 (see what he comes up with in the Latest Example). If he poses the right question, it will really make him start thinking outside the box. He didn’t choose to involve his team at this point because clearly more than one option would likely include a certain amount of downsizing (with one option on his mind as much as 30%) and he didn’t want to make people nervous until he had his ducks more lined up. So he chose to work with an outsider as a sounding board to start with.

Once his question was in place, he picked two bookends; one was “Remain as we are.” The other was equally a stretch – see Latest Example. However, these really started to tease his mind to come up with reasonable alternatives. With further thought he and his “speaking partner” came up with six, of which three are in the Example given. Because of the emotional challenges in making the right choice (he may have to let some people go), he chose to sleep on it –“emotional distancing” – see Chapter 7.

With his mind made up the following morning, he now had to sell it to his CEO and his peers. He walked them through his Option Solving framework, so they understood the question, bookends and alternatives. At this point he had to be open-minded and flexible to other options and in fact they came up with one he hadn’t considered before. He replaced his B alternative with this one. He then took a straw poll of his colleagues, while they were available, to draw on their “collective wisdom.” Fortunately their choice agreed with his choice and he told them so.

Now he went to meet with his own key team for their consideration and buy-in. This was naturally a much more emotional session owing to the possibility of cutbacks. Even so, he walked them through his question, bookends and options to allow them to add to everything. Once completed, he asked them to remain silent overnight and come back in the morning with there best intuitive option. This they did with a split in opinion, once the confidential straw poll was taken. One faction backed his choice another faction came up with another choice. It was close.

After a quick break, he invited participants (there were 8) to state their intuitive thoughts about one or the other. Allowing time for a fair amount of discussion he asked if people were ready to independently poll again. (He recused himself from contributing to the discussion, since he didn’t want to unduly influence anyone.) A majority wanted more time to think it through, so he invited them to take another night to sleep on it.

Back again the second morning, he took another straw poll and this time the majority went in his direction (at which point he informed them of his own choice). By and large the minority went along with the majority because their voices had been heard. And so now it came time to talk about implementation. (Next week’s posting: How a CFO had to reposition her financial manager/controller…Please also make COMMENTS for connecting with the author)

                                        © 2009-2010 Leadership Solutions Inc® (MALRC). All rights reserved

Significant Non-Profit Financial Crunch: using Option Solving

Non-profits are facing enormous funding challenges right now unless, of course, they are directly connected with the Haitian earthquake disaster. This is combined with their particular challenge in recent years, where the donor trend has been toward making specific spending requests for their donations. Such reasonable requests have severely reduced the amount non-profits can spend on general administrative and running expenses. Added to this, for most not-for-profits, have been their income reductions during 2009 and now with the Haitian disaster most giving is going in that direction.

By mid-year 2009 an important international arts festival in a large north east US city was facing an impending squeeze on its state and local funding. It was fretting over how it was going to be able to sustain its incredible success over the years. Its executive director found herself pondering, with a couple of objective outsiders, how the festival could position itself, going into its summer festival, to avoid major cuts in its fall budget negotiations.

There was considerable discussion about the key question to be asked (see book “Smart Decisions”) and Latest Example. Once this was decided it was easier to determine the two bookends: again see Latest Example. Both were clearly unacceptable.

With these in place (see Latest Example), the executive director was able to see her immediate options. In this case, the proximity of the discussion to the actual event inhibited her ability to apply the best alternative. But the discussion helped her to see how valuable this exercise could be, so she requested a separate option solving session with her board members (post-the-event), where a new “one-mind” consensus could be hashed out on the best way forward. (Next week’s posting: How an IT executive solved his latest upgrade and downsize issues…Please also make COMMENTS for connecting with the author)

                                        © 2009-2010 Leadership Solutions Inc® (MALRC). All rights reserved