Lesson 10: The Symptom is not the Problem

In both life and business, we often experience pains for which we want a quick solution. Stagnating revenues? Add a new product. Profits decreasing? Cut costs (read: jobs). Higher employee churn? Casual Fridays! You’ve definitely come across some of these solutions. Some have become so heavily associated with the problems they intend to solve that they are used in business schools as examples of what NOT to do.

To be clear: none of these are poor decisions in their own right. But in certain scenarios, they are used to solve a problem without knowing what the problem is to begin with. We know it’s there, somewhere. We feel the pain it causes. Yet those are just the symptoms, not the problem itself. Lesson 10: the symptom is not the problem.

The 3 Cs of Marketing

Company, competitors, customers: “the 3 Cs of Marketing”. It is a great framework for auditing the state of your business (hot tip for any graduates reading this: it’s also a really handy way to structure your analysis in most case interviews). I personally like using it because it provides both an external perspective, looking at factors affecting your customers and competition, and an internal perspective, looking at factors from within your company. Importantly, it provides a guide when digging deeper into what could be causing the symptoms, so you can find the underlying problem.

Company: Symptoms are loud and obvious; you need to look deeper

When it comes to your own business, it’s virtually impossible to miss the “symptoms” of a problem. Revenues stagnate or fall, employee churn increases, development speeds decrease, and so on. You will hear the grumbling and see the numbers turn red. The urge is to act fast and stop the snowball before it rolls out of control. However, being reactive in this situation can be dangerous. You might be plugging up a hole without noticing that the entire hull is rusting away. Resist the urge and instead take a structured approach to diagnosing the problem:

1.?????? Ask employees, not leaders: Your employees are likely much more in tune with the daily operations of your company and have invaluable insights into potential problem areas. Start by setting up office hours or running town halls. In all likelihood, you will uncover aspects of your business that are otherwise invisible to executives.

2.?????? Crunch the numbers: Look at your products’ performance in detail over a longer period. It doesn’t have to be 5-years necessarily, but at least a year would be relevant. Check how sales have trended. Look at your costs around R&D, staffing, bonus structures, and investments. Have they aligned with your company’s vision for this period? Or are you paying for things that do not help you achieve your goals?

3.?????? Establish regular monitoring: Downturns are cyclical, therefore solving a problem today does not guarantee it won’t come up again. The trick here is to go from being reactive to being proactive. Set up regular monitoring and reporting practices to stay a step ahead. For large companies, this can come in the form of a business intelligence department, in charge of setting up and tracking KPIs across your company’s value chain and reporting quarterly on their findings to an executive steering committee. Smaller companies can achieve similar results, albeit on a smaller scale, by leveraging PowerBi dashboards monitored by a small team reporting to your COO.

Competition: Sometimes it isn’t just you; look at your market broadly

Companies do not exist in a vacuum. And while you may think your business is a unique gift to humanity, likely it has a lot in common with other companies in your industry. Therefore, look broader and check if maybe your problems are actually the result of troubles in the industry.

1.?????? Do your research: Executives and experts are valuable resources. They keep up to date on market trends and can speak to any particularities being experienced across companies. Check industry and research papers, too. Most are paid resources, but the insights they provide are largely worth the price. If you’re bootstrapping, though, online forums, papers, and industry charter organizations are your best bet for the information you seek.

2.?????? Synthesize and communicate: All your research won’t help much without it being easily shared across your organization. While your purpose is to diagnose the problem, you also want to ensure the symptoms aren’t running rampant in your company in the meantime. Synthesize your findings and communicate them as necessary to relevant people across your organization to support any efforts running in parallel to reduce the symptoms.

3.?????? Look for changes of the guard: Are any established companies leaving the market? Are new entrants coming in? Are these newcomers doing things differently? These are signs of larger trends and eye-openers as to where your company may also be doing well and… not so well.

Customers: Your customers might be feeling it too; check in on them

Finally, the root of all our troubles and the source of all our joy: the customer. People are… well, they are people. Fickle beings, ever-changing, curious, and difficult to understand. Also, your customers are the first to react to any changes in the market or to your product. If something’s wrong, they will be your best source of finding out what that is.

1.?????? Get to know them (regularly): Conduct your own research across different customer segments: genders, incomes, demographics, and product preferences. Your target audience is bound to change as time passes, so make sure to keep up. If you find discrepancies between who they are now and who you thought they were, then it’s time to make some changes.

2.?????? Ask about their problems: We are diagnosing, so sometimes it makes sense to simply ask where it hurts. Your customers have their own pains, needs, and desires. So far, your products have aimed to solve at least some of these. But, as we have established, this may change over time. Check in with your customers to gather valuable insights into how their needs have evolved. Then adapt accordingly.

3.?????? Ask for advice: Speaking of adapting, the best way to direct your efforts may very well be to (surprise) ask your customers. But beware: are not always able to distinguish between “what they want” and “what they want to pay for”. Yes, a car would make me happy. But what I desire (a Ferrari) and what I want to also pay for (my Mini) are two very different products. Try to avoid this issue by asking not just your customers, but those of your competitors as well. See why they prefer other products, which features they appreciate, what they consider most valuable about them, and most worth the price tag. Contrast and compare with your offering to see where you need to adapt, if at all.

Acting is about reacting; business is not

The bottom line to using the 3Cs in your diagnosis is to understand the need to shift to a more proactive mindset across your company. The key is to do such research regularly, so you can always catch the snowball before it starts rolling downhill. Uncertainty is fine when looking to the future, but the present demands certainty. The better armed you are with the right information, the more prepared you are to proactively take the necessary steps to solve problems before even the first symptoms are felt.