Here is a short introductory video about The Right Questions.

“Successful people ask better questions, and as a result, they get better answers.” Tony Robbins

Ask the right questions, get the right answers and become more effective at decision making, strategic planning and achieving goals.

“A prudent question is one half of wisdom.” Francis Bacon

To make a good decision, whether, in a personal or business context, the first step is to correctly frame the challenge. Asking questions does this. ‘The Right Questions’ is a simple and memorable method to make good decisions and to create effective plans.

Philosophers identified the most important questions over two thousand years ago. But this first-principles approach has been somewhat lost in formal education today, partly due to the level of detail that is pursued in an increasingly complex world.

The information available via the Internet is seemingly endless but this has a downside. It is easy to become overloaded with data or miss out on important factors when making a decision. And there is a problem with some decision-making processes too; a lot of systems rely on jargon that is not memorable or straightforward to apply.

Interrogative Open Questions

Therefore we need an easy to access tool to deal with complex and evolving situations. The good news is that the core questions are actually embedded in language.  The seven basic interrogative questions of what, where, why, when, who, how and which are the triggers needed to unlock any problem. It is then just a case of understanding their application.

The Right Questions methodology uses the seven core interrogatives and applies them to strategic planning, implement projects and achieving goals. It is a creative process, described as “deeply motivational”.

The Right Questions approach is used in coaching and consultancy as well as being a decision-making tool. Simon Ash developed the framework from his experience as a Bomb Disposal Officer.

“Ask the right questions, get the right answers, and be more effective.”

The Quest

Understand your values, unlock your purpose, set your priorities, achieve success. Click here to sign up and get the 1st stage for free!

So, having established in previous posts the background to The Right Questions and an idea of their importance, we can now get an overview of The Right Questions and how they are applied to strategic planning and achieving goals, both in a personal or business context. The questions come in an order of sorts but the process of asking The Right Questions is also iterative and cyclical. In other words, the answer to one question is likely to inform an answer to another, and even after we have worked through all the questions we will generally go back and revisit the others to refine our answers.

It is beneficial to explore the questions in two broad groups. The first is comprised of the where, what and why, and these encompass the strategic framing of a situation. The second group is made up of the questions how, when, and who and these help us develop a specific plan within the aforementioned strategic frame.

The two groups are joined by ‘which’ as this question deals with the concepts of options and risk. After looking at the overall strategic picture we use ‘which’ to explore courses of action from which we can choose an option to develop into a more detailed plan. We then return to this same question to weigh the risks as the plan progresses. Looking at these options and risks are the key decision points and can lead us to return through the strategic framing or planning loops again.

Taken all together these seven questions create a template for strategic planning and also become a decision-making process that follows a figure of eight cycle, as demonstrated in the diagram below.

“I keep six honest serving-men, (They taught me all I knew); Their names are What and Why and When, And How and Where and Who.” Rudyard Kipling

STRATEGIC FRAMING

Why? (Values and Priorities)

The ‘Why?’ represents our values. Our values are our identity; the things at our centre that define why we have the vision in the first place, why we do the things we do, why we attract certain people. They are our beliefs and worldview. These are often things we hold in common with others at one level but the particular combination and application of the values make them unique to us. Knowing our principles shows us what we value most and therefore it also helps us to prioritise and make good decisions.

Where? (Situation and Vision)

‘Where?’ is the present location and the future destination, the situation and the vision. We look at whence we have come from and whither are we going as our journey is bracketed by these ideas of ‘where’. When you get out a map the first thing you do is identify where you are and get your bearings; only once you have done this do you plan to move. And when you move, you don’t want to wander aimlessly (movement in itself is not progress), there needs to be a destination, something we are aiming for. This destination is the dream, the thing that stokes our passion and gives us our drive.

What? (Mission)

‘What?’ represents the mission, the reality of what we are going to do. The mission is the bottom line, the tangible measured difference that we are to make. To work out the mission we need to define success so that we know our finish line. We can then sum this up in a pithy and memorable way to get our mission statement.

REFLECTION INTERSECTION

Which? (Options, Risk and Reflection)

Options

We have to choose which way to go and therefore ‘Which?’ deals with the idea of selection. First, we have to generate a range of courses of options we can choose from. This is a creative process, requiring divergent thinking, and taking time to step out of the purely logical process in order to examine unorthodox ways of problem-solving. Generating these options is something we can do before looking at the how, when and who questions. We are generally faced with various strategy options and we have to select a route by assessing relevant factors.

Risk

One of the major factors affecting a decision is risk. If a venture is deemed too risky it is the surest thing that will stop us from acting, no matter how attractive the option first seemed. To make good decisions we need to identify, assess, mitigate risk and then manage the risk accordingly. Capacity for risk varies between people and situations so it is important to remember that this is an ongoing process of management. At the same time we don’t want to become defensive, timid or risk averse; achieving bold visions means taking risks. We just need to make sure we have counted the cost before we commit ourselves.

Reflection

The option does not have to be perfect. What we are looking for is the minimal viable product (MVP) approach to problem-solving. When an idea good enough to add some planning to it, but then we need to test it. This is where the ‘which’ question becomes the reflection point in the interlinking loops between strategic framing and planning. We test our ideas, reflect and learn from them, then adjust our plans and go again.

PLANNING

How? (Strategy, Goals, Planning and Resources)

‘How?’ is the method or plan by which we achieve the mission. Goals and activities support the overall strategy and propel us towards our dream. Breaking down the route into manageable steps gives us the basis of an action plan and makes the dream an achievable reality. Once we have worked out the detail of each task it is much easier to assess the correct resources we need for each step and therefore, by adding up these resources, we can get a better estimate of the total resources we need to achieve the whole mission.

When? (Timing and Programming)

It is no surprise that ‘When?’ refers to time. Timing is critical. Choosing the right time makes the difference between success and failure and it takes an equal measure of planning and wisdom to know when to implement strategies, to go for goals and ultimately achieve missions. Time is key to planning and is the one truly limited resource. As we overlay our plan with time we create a programme with milestones that help us to measure our progress towards our goal.

Who? (Roles, Team, Structure and Network)

The ‘Who?’ is primarily about the roles different people fulfil, the makeup of our team, the structure of our organisation and the people we connect within our personal network. Sometimes we have a mission and then we go out and put together a team and therefore we need to know what we are looking for. At other times we may need an existing team to adopt a new strategy. In this case, we need to know how best to place people as we re-structure the existing team. Even if we are operating alone, not having a specific team or organisation, we always have a unique network of contacts to draw upon. People are always involved one way or another on our journey and they are the most important resource that we can draw upon.

Now that we have looked at an overview of The Right Questions we will look at each one in greater detail in future posts.

If you want to know more about the background and evidence for the approach I recommend you read:

Beyond the 5Ws: Ask questions like a philosopher, answer as a visionary

If you want to start going through the process I recommend you ‘start with why’ (like Simon Sinek) and read the following:

What are your personal values?

The SWOT analysis is one of the easiest and best-known decision-making tools. Leaders and managers employ this method frequently, but it can be used by anyone. Here is an explanation of what a SWOT analysis is, when to use one and how to write a good SWOT analysis. I have also included a worked example.

What is a SWOT Analysis?

SWOT is an acronym that stands for: Strengths, Weaknesses, Opportunities and Threats.

The SWOT analysis was developed by researchers at Stanford University, following a study in the 1960s. The study looked at various Fortune 500 companies and found that there was a difference between an organisation’s set strategic priorities and what was actually done. The study also revealed that the problem was not poor employees, but rather a lack of clear objectives. Therefore, SWOT was developed to give staff a clear understanding of a business or project.

Why is SWOT analysis effective?

The SWOT analysis is one of the most important and popular tools for decision making and strategy development. This is because of its:

• Simplicity – it is simple to learn and quick to use
• Clarity – it focusses on the key issues and aids clear communication
• Flexibility – it is applicable to individuals and organisations.

Having a coherent strategy is vital to any organisation, and equally, self-awareness is critical to personal effectiveness. But you need to be able to understand and communicate these things clearly. This is why SWOT analysis is such an important tool.

When should you use SWOT analysis?

The SWOT analysis is best used to:

• Improve situational awareness
• Develop strategy
• Identify and refine actions and goals
• Improve self-awareness (for an individual or team)
• Reflect upon a completed project or activity

The SWOT analysis was designed for organisations but it can equally be used by individuals. The SWOT process identifies crucial internal and external influences within a given situation. Therefore it gives us a snapshot of where we are and is excellent for situational analysis.

SWOT Template

The most common way to present and consider the SWOT approach is as a matrix. Here is an example template:

How do you do a SWOT analysis?

Do you want to know how to do a SWOT analysis? Don’t worry; it’s easy! Just follow these steps.

Step 1: Create a SWOT table:

The SWOT matrix is set out thus:

• Strengths and weaknesses are usually listed in the first row of the matrix; S and then W. These relate to internal factors.
• Opportunities and threats are external issues or circumstances. These create the second row; O and then T.
• In this layout, the first column, strengths and opportunities, signify the positive or helpful factors
• The second column, weaknesses and threats, are the potentially negative or harmful issues

SWOT Analysis Template Layout

Step 2: Brainstorm

Next, brainstorm as many different considerations as you can under each heading.

Here are some questions to help you:

Strengths (internal/personal):

• What are your/your team/organisation’s key skills, areas of experience or expertise?
• Can you define your USP (unique selling point/proposition)?
• What are your core values? What do you love, enjoy or prioritise?

Weaknesses (internal/personal):

• What do you not enjoy doing?
• Where have you failed or fallen behind the competition?
• What skill gaps do you have?

 Threats (external/circumstantial):

• What circumstances are most troubling you?
• Who is your major competition?
• Which challenge is the most important right now?
• What is the worst thing that could happen to you/your organisation?

Opportunities (external/circumstantial):

• How can you leverage your present situation?
• Who/what could most help you right now?
• How is change providing new openings?

Step 3: Prioritise

Now prioritise the lists; work out which are the top three to five things in each quadrant.

Whether you are using it as an individual or as part of a team, keep it simple and high-level; that is the systems greatest strength.

Step 4: Analyse

Look at each item in turn and consider the actions you could take. Here are some questions to help:

• How can you play to or maximise your strengths?
• What personal development goals, people and processes can help address your weaknesses?
• How can you exploit, expand or multiply the opportunities?
• What control measures do you need to put in place to limit the threats?

Now look for further relationships that you can identify across the columns, rows and diagonals.

Remember that weaknesses are often a reflection of strengths. For example, if you have a strength in that you are very good at coming up with lots of ideas, or you are a business with lots of products, a weakness might be that you find it hard to focus on just one of them.

Similarly, look at the flip side of external factors; you may find that threats can also provide opportunities. For example, a competitor could actually be a potential partner.

A failed project is always an opportunity for learning. From your analysis, how could you use that learning and pivot the idea, or re-purpose the team?

SWOT Analysis Example

Here is a short example using personal strengths and weaknesses:

SWOT Analysis Example

First looking at the strengths I recognise that I am quite task-focused. This means I am a good planner and show determination when seeing a project through. Moving across to the right quadrant I have noted a related weakness. Because I am task-focused that means I am quite future-orientated. The downside of this is that sometimes I can forget to be content in the moment or to celebrate the success of achieving something before moving on to the next goal.

Then looking at threats I have noted down that there is increased competition in my industry, with more people entering the market all the time. This threat does lead to an opportunity in the bottom left quadrant. I have the chance to refine my USP (unique selling proposition) in order to stand out from the crowd.

Example analysis

It is more likely that I would list more items under each heading before continuing, but for the sake of simplicity let’s do a little analysis on what we already have.

How do I maximise my strengths and minimise the impact of my weaknesses? There are a few options I could consider under the ‘3 Ps’:

• Personal development: I could attend some training to improve my mindfulness and being ‘present’
• Person: find or employ someone else with a complementary skill set whose strengths/weaknesses are the opposite of my own
• Process: put some time in the diary to be more reflective on a daily basis and plan ahead to celebrate after achieving a goal

When considering the threats, I cannot control new people entering the market but I can work out how to best serve, and therefore retain, my existing clients. The opportunity of refining my USP becomes a strategic task, something that is going to require more work delving into why I do what I do, how that makes me different, who I can best serve and what extra benefit I can bring. The other items that I list in the strengths quadrant will help to develop that USP.

Making a plan from your SWOT Analysis

The ‘Right Questions’ format is an excellent way to examine this issue and so if this is something you want to pursue further then I recommend that you read my post on What are the Right Questions for Decision Making and Strategic Planning?

If you would like to explore more decision making tools then I recommend ‘The Decision Book’:

Once you have developed your strategic framework it is much easier to make a successful project plan. So let us recap on how we bring together the strategic planning: at the beginning we identified ‘where’; the beginning and the end of the journey.  We defined success in the ‘what’ so that we definitely know when we have arrived, and we have also established ‘why’ we are setting off in the first place.  The where, what and why provides us with the strategic framing for our project plan.  Now we need to choose a route and also work out what we are going to take with us; what resources we will need.  This is where we come on to the ‘how’, the method by which we achieve the mission; the goals and activities that measure our progress towards our desired outcome.  Combined with answering the ‘when’, ‘who’ and ‘which’ we can come up with the plan we need to employ in order to achieve the overall vision and mission.

Let us put this all together with the aid of a story.

Planning to achieve a life goal

I mentioned previously the expedition to Greenland that I undertook with my wife to make some first ascents of a group of mountains on the east coast.  For the planning of the expedition we used all we information we had at our disposal, although the maps and aerial photos showed very little in the way of real detail.  But these coupled with some knowledge gleaned from an expert on the area meant that we were able to identify a way to approach the hills, find a likely spot to make a base camp and select some peaks that we could attempt while we were out there.  These peaks each became a goal in their own right and we now had the outline of a plan.

Once out in Greenland we were able to confirm physically the scalable peaks in the area and work out a more detailed climbing programme that suited our available time, our ability, and the weather.  This itinerary was designed to build towards going up the largest of the hills in the area.  I had spotted the peak on the photo back in the UK; but now that I could see the mountain in three-dimensions I was able to identify some potential routes to get to the top. I knew these could be explored yet further when we got close enough to ‘rub our noses up against it’.

From plan to reality

From what I had observed I could see that the climb would break down into several natural stages: the approach to the mountain, a traverse of a plateau, the main climb and achieving the summit, and then recovering back to our camp.  Each stage had a planned duration and had milestones we set and measured our progress against. This all helped to keep us on schedule.

By the time we were in striking distance of the summit we were tired, the going was hard and the temperature had dropped significantly.  At this point the measure of progress reduced from milestones to ‘I will take ten more steps and then rest’.

“How do you eat an Elephant? In lots of very small pieces.”  Anon

This was how we achieved our aim and how I fulfilled my dream: one little step at a time.  I am happy to say we got there and back again safely and during our two weeks in that region of Greenland we ‘bagged’ six first ascents.  It was a truly successful expedition.

The key to planning success

This story holds the key to planning any great venture.  A dream powered by passion turns into a mission.  We then start to plan ‘how’ we are going to achieve that mission and break it down into goals.  Each of these goals is further broken down into smaller stages; milestones are set and the nearest steps are planned in the greatest detail.

This is an important point: the detail of the project plan or strategy depends on our proximity to the goal. If we start with too much detail – for events too far in the future – we will find the situation will inevitably have changed. By the time we get there, the detail is unlikely to work out.  Therefore it is better to remain flexible and adapt. As new information comes to light, and as we get closer, we can then plan in ever greater detail.

Breaking the plan down

It is like breaking down a landscape into the near, middle and far distance.  When we look out from our starting point we can naturally see the near ground with more clarity. We may even be able to identify the exact path we want to take.  As we strain our eyes towards the horizon we cannot hope to have the same level of detail. So we have to keep our long term plans broader in scope.

The near, middle and far could be measures of proximity, as they were for me in Greenland. But they could also be time-horizons such as 6 months, 2 years and 5 years for a business plan.  We will look at this a little more under ‘when’ and timing.

Planning to several stated horizons, with varying levels of detail, helps us to strategize comprehensively. It helps to maintain plans that are both simple and flexible.  With our goal in mind, there maybe two or three routes that we could use to get there.  We choose the best course and then we plan for this strategy to the required level of detail.

The most important question in a project plan

The amount of detail we need is dependent upon the task. But, what is essential, is that we have broken down our goal to the extent we know exactly what to do next.  We need to be able to answer the question: “what is the one most effective thing that I can do right now to effectively take me towards my goal?”.

In this way, we can make the next few steps very clear and achievable; even if the overall goal seems daunting.  If we fail to break things down properly then our more audacious goals will evade us. We know exactly what we need to do next. That is where the detail lies.

“Prior Planning and Preparation Prevents Poor Performance.”  Military saying

If you want the best chance of successfully achieving your goals and dreams then you are going to need some sort of plan. Here are some tips, steps and templates to help you plan and achieve any goal.

“If you can dream it, you can do it.”

Walt Disney

What is a goal?

A goal is something you want to achieve. It could be a personal ambition or a group objective. It is an idea that you envision and then plan and commit to fulfilling.

The Importance of goal setting

The process of setting goals helps us psychologically to encapsulate an idea and commit us to action. Working towards a goal gives us the feeling of positive forward movement.

It also helps practically as setting goals allows us to quantify our end-state and qualify our success. Having a set goal allows us to measure our progress and reflect and learn as we work towards it.

Setting goals allows us to know when we have succeeded in something and provides the opportunity to celebrate when we achieve the goal.

“We aim above the mark to hit the mark.”

Ralph Waldo Emerson

The Importance of Plans

Whether you are an individual thinking about a career change or personal development, a team undertaking an innovative project, or a large organisation rolling out a new strategy you will need a plan of some sort.

Action plans do not need to be overly complicated. For example, at the simplest level, to-do lists and shopping lists can be crude but effective action plans.

If you are an individual aiming to achieve a simple goal such as going on holiday the details of the plan will, of course, be very different to a large multinational corporation making an action plan for launching their next product. But despite this, the initial questions that you need to ask are very similar.

The steps to making a plan and achieving your goals

To achieve the goals you just need to follow these simple steps and create your plan:

1. Ask yourself why do you want to do the thing you are thinking about?

Asking why helps to work out what you value and what motivates you.

To find out more about discovering your principles, passions and priorities go to the post ‘What are your personal values?’

2. Work out where you are and where you want to go

You need a start point and an endpoint. First think about your present situation, where you are now. This situational analysis helps to set the context for starting out with your goal.

Next, think about where you want to be when you have succeeded in your goal. This is the vision or dream you want to achieve.

If you want more help in developing your vision statement read ‘What is a vision statement and why are they important?’

3. Define what your overall mission is and what success looks like.

Now that you worked out where you want to get to you can define what the endpoint actually is.

Describe exactly what success looks like; the criteria that show exactly when you have achieved your goal. This is your goal or mission statement.

For more detail on this process have a look at ‘What is a mission statement and why do you need one?’

4. Think about which ways you could achieve success and consider the advantages and disadvantages of each option.

There are different routes you can take to achieve the goal. Which one seems the best? Think about what the risks might be and what advantages and disadvantages there are to each option. Then you can work out what you believe to be the best option to choose.

For more help with this section have a look at ‘Which is your best course of action?’

5. Pick your preferred goal and work out how you are going to achieve the goal.

Now that you have considered the options and picked your favourite you can start to plan how you are going to achieve it. Think about: What are the steps you need to take? What resources might you need?

For more detail look at ‘How do you set goals, tasks and milestones for a plan’ and also ‘Setting goals and tasks the SMART way.’

6. Break the goal down into steps, noting who can help you.

You don’t have to do everything on your own, even if this is a personal plan rather than a group one. As you break down the goal into steps think about who might be able to assist you or give you advice.

If you would like to find out more about this step read ‘Networking and the power of relationships in building a team.’

7. Schedule the individual steps into your diary to define when you will achieve them.

Now that you have a list of steps you can put them into your diary. I tend to keep my list of goals and steps on my phone then prioritise them and put the most important next steps straight into my diary. A step should be easily achievable, something you can do in minutes or at most hours. The one most important thing you need to do should be the next thing in your diary, even if that’s a simple 5-minute task such as making a phone call.

Picking the right time is also important. For more on this have a look at ‘The secret of perfect timing.’

“When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps.”

Confucius

Asking The Right Questions to achieve goals

This process reflects The Right Questions decision-making process and can be applied quickly – as a rapid problem-solving method – or in a more lengthy in-depth study to formulate a detailed plan or strategy.

The Right Questions planning process employs the seven basic interrogatives in the English language (why, where, what, which, how, who, when) to provide an easy to remember and holistic approach to problem-solving.

You can find out more about The Right Questions and how to apply them via the following link:

What are The Right Questions for Decision Making and Strategic Planning?

Goal setting and personal plan templates

Whether you are doing a quick appreciation of a situation or looking at a problem in greater detail it is useful to create a simple summary of your conclusions. Practically it is useful to have this summary on a single piece of paper that is quick and easy to refer to and easily communicated or shared.

A personal action plan template can help you achieve this headline view of the challenge you are facing and remind you of the critical factors you need to address. If you post the action plan in a prominent place – be it your noticeboard, fridge or computer screen – it will also help to keep you accountable to the next steps you need to take in your plan.

Here is a simple pdf template (pictured below) to capture your personal plan for achieving goals. You can download the template for your use below:

Quite often we limit ourselves and our plan to our present resources.  After all, it is reasonable to ask ‘Which holiday can I afford?’ before going and booking one.  Budgeting is good stewardship and I would certainly not recommend getting into debt on a whim.

But we will never be able to dream big or make macro leaps forward if we limit our goals to what we can achieve with the resources we have now.  It is better to first ask what we are passionate about doing, working out the resources required, and then thinking creatively of ways to get what we need.  That is why this question comes some way down the planning process.

The importance of logistics

An army needs logistics. A large portion of every military is concerned with delivering the right resources to the right people in the right places.  In fact, there are many more logisticians than infantry soldiers in the average army.  But the army does not exist for logistics. It has a mission to achieve. That aim is very rarely just to do with just moving men and equipment from one place to another.  Logistics is a large and essential part of achieving your aim. But it is there to support the mission, not to drive it.  History testifies to the fact that an army will beg, borrow and steal if necessary to get the job done if (or rather when) logistics fail.  You can still achieve your aim when resources are difficult to come by if you remain focussed; as the United States Marine Corps would say: you just need to ‘improvise, adapt and overcome!’

The right motivation is key

This is because there are very few times when finances and resources are fixed.  A compelling vision inspires us to innovate and save. It motivates us to earn and raise the funding that we need and find the tools to get the job done.

Why is it that many people who win the lottery often struggle. Why do they end up having spent their money within a few years?  The gambling industry sells winning as the dream; it does not provide a vision for what comes beyond that.  Many people who win do not have a clear idea of what they want to do with the money. They might take a nice holiday and pay off the mortgage but that is not a grand vision. Anyway, these things can be done without playing the lottery or the roulette wheel.

People who make (and keep) large amounts of money use it productively. Resources that continue to grow are usually driven by a vision beyond that of just making cash.  Bill Gates, the richest man in the world for most of the last decade, was not motivated primarily by money.  When he started Microsoft with Paul Allen they had a vision of a computer in every home. This dream, of how computing could transform the world, drove Microsoft. It became the most successful software business in the world and made Bill Gates a multi-billionaire.

Money, Manpower and Materiel

So we start with the dream and then work out what we need to make it a reality.  When we need to make something happen it generally comes down to the three ‘M’s:

• Money
• Manning
• Materiel

Cash, workers and equipment are all important but it is usually the first element, the money, which drives others; so this is the primary consideration here (we will look at the people issue more under the ‘Who’ question).

Estimating the cost

When we have our dream or our goal, we can start to put a cost against it.  If it is hard to assess the cost for a whole goal we can break it down, as we have done previously, and cost each constituent task or step.

Remember to put a cost against the time you invest in achieving the goal.  When doing something yourself you can feel you are getting it done for free but that is not actually true.  Our time is worth something, even if it is just the opportunity-cost of not being able to do something else while we are engaged with a task we have decided upon.

Often it will turn out cheaper to pay someone else to do a task that can be delegated as this leaves you just the things that no-one else can do and you will achieve your goal all the sooner.  We will look at delegation some more under the ‘Who’, but having broken down tasks and now putting costs to them will help you make decisions on the team you might need.

Alternative funding

Once you have estimated a cost for each individual task you will get an idea of the budget for the whole project.  Once this has been done you can start to think creatively about how to reduce the costs. Or you can seek further resources in more inventive ways (and no I am not talking about stealing here!).

For example, instead of paying for a qualified professional, could you get someone to do the work voluntarily? Perhaps you could offer them experience as an intern? If someone is still in training or education they may value the experience more than pay.  Alternatively, think about what service or product you might be able to offer someone in return. Bartering is as old as trade itself but sometimes people forget it. I have used this sort of transaction in building my business. For example I have coached people in return for help with my website.

I used this method when I employed someone to develop my website. They worked on the website in return provided some coaching to help them further their career. It was an easy win for both of us, and no cash changed hands.

Fuel the dream

Considering the resources we need and how we are going to get them is an important aspect of how we make our dreams real.  An idea becomes a lot more tangible as we think about and assess the tools and materials we need for the job. It can take some time, and may not be as liberating as some of the big picture thinking, but it is important so stick with it!

“First, have a definite, clear practical ideal; a goal, an objective. Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods. Third, adjust all your means to that end.” Aristotle

“Happiness is a positive cash flow.” Fred Adler – Venture capitalist

I may not be a millionaire but in many senses, I am rich.  This is because for much of my life I have had the pleasure of not having to worry month by month about the balance in my current account.  When billions of people are worrying about whether they will have a decent meal today or if they will have a roof over their head tonight then it is good to be thankful for such mercies.

But I did not start out flush with cash and there have been times since where things have been a real struggle. At times every business pitch seems to fall flat, work is short and reserves are needed to keep afloat.  At such times I have become very keenly interested in profit, loss and cash flow and therefore they should be things we have a handle on before we hit a challenge.

The day to day challenge of cash flow

In a previous post, we looked at cost and resourcing in the context of a given task or project.  When thinking in project terms, the finances are focused on a finite amount that we are wanting to raise and control.  When thinking about a business there may well be projects that we want to achieve, but the day-to-day of the business is defined by profit and loss and – perhaps even more importantly – by cash flow. So I just want to highlight some crucial things to remember before we move on.

Cash flow is important as it determines the rate of return and affects liquidity. As Dragon’s Den star Peter Jones points out:

“There’s nothing more important than cash – cash flow issues are one of the biggest causes of company failures.”[1]

Liquidity is especially important to the SME (small and medium-sized enterprise). This is because you may well have invoices on the way but if they don’t arrive in time (to pay off your own debts) then your company can go under. Then it does not matter how profitable you are on paper. This is why all companies need a reserve of some sort, to manage these cash-flow challenges.

Cash flow and personal finance

The same goes for personal finances; after all a household is effectively a small-sized business.  You have certain a certain income and outgoings.  Each month you need to make sure more comes in than goes out.  If you achieve this then the amount left over is profit. This is the bit you get to choose how to use; to save or invest, could be considered profit.  If you spend more than you earn then quickly you will get into debt.  As debts compound it can become impossible to pay them off and then your household or business goes bust.  It is very simple.

As an individual, this could mean being declared bankrupt or as an organisation going into administration or liquidation. Either way, it will be a huge hurdle in you fulfilling what you set out to achieve. So, it is best to reduce the risk of this happening. Do this by planning as carefully as possible and keeping on top of your accounts.

Keeping your accounts and balancing the books

At the most simple level, you may just need a ledger or spreadsheet with three columns: one for money in, one for money out, and one to work out what’s leftover. This gives you a snapshot of your finances at any one time. If you then produce a table predicting this information over a period of weeks or months, then you have the making of a cash flow forecast.

The issues of profit, loss and cash flow are perhaps most important when starting out in a new business.  It can often take several years for a company to really become profitable and for finances to stabilise.  It is therefore those first few years where the business is most vulnerable.

The Business Case and forecasting

Part of the business case and business plan at the beginning will be forecasting the finances over this critical time.  If you want to attract finance or get a business loan then any investor will want to examine these figures.  It is part of their risk management; they want to get their money back, with interest.  You need to be profitable for them to be profitable.

It can be tempting to be overly optimistic about your finances in the beginning stages of a business.  Therefore I recommend you produce several models for your cash flow: a best case, most likely case and worst-case scenario. Work out the most stripped-down version of what you need to operate and the investment required, as well as your preferred initial equity.

Final thoughts

I am not going to go into more detail on book-keeping here as it is outside the remit of this post. There are plenty of good resources on accounting that you can look at. Software packages such as Microsoft Excel and Apple’s Numbers provide spreadsheet templates. These can be used for household and business budgets as well as cash flow forecasts. I have also suggested some useful links below where you can get more information.

The most important thing is to have a method that works for you where you can track you’re finances. And remember, cashflow is at least as important as profit, especially if you are a small enterprise!

Useful links:

http://www.businesslink.gov.uk

http://www.hmrc.gov.uk

We do not always think in terms of risk but there is risk in every decision we make. The risk is always balanced against the opportunity to some degree or another. Risk assessment, risk management and risk strategies are processes we can add to our decision-making process. We need some way to consider and manage risk. This is because our decisions and planning are continually influenced by our attitude to risk.

“Great deeds are usually wrought at great risks.”  Herodotus

High anxiety

One summer I was mountaineering in the French Alps with a group of friends.  We had just spent a few days bagging some routes when someone had the idea of tackling a nearby climb. It was not one we originally planned to do as it was a higher grade than we were generally comfortable with.

That season there had been very little snow and the ridges were more exposed and icy than usual. So, as this route was following a ridge, I argued that it would be in bad condition. It was likely to be even harder than the guidebook suggested.  The weather was also set to change for the worse, so as far as I could see, the risks outweighed the opportunity.

I thought my logic was sound but the person who had proposed the climb was very persuasive. He managed to get the other two members of the group to agree with him. They wanted to give the climb a go.  It was three against one, and I knew they needed four people to attempt the route. Therefore the pressure was on for me to accept the majority decision. But I genuinely believed it was not a safe option. It was a tough conversation. I then made myself very unpopular when I refused to do the climb. It was a stand-off. They needed a fourth climber and therefore all we could do as a group was head back down the valley.

A good call

Fortunately for them, the other three found another willing climber. I meanwhile, by now feeling somewhat sheepish, decided to go trekking for a couple of days. As I was on my own I decided to stay below the snow line and try and avoid the bad weather.

I spent most of the next few days feeling guilty about being stubborn but when I returned I found that my decision had been justified.  The weather had deteriorated and the route proved to be in poor condition, as I had predicted.  After a few hours of struggling in dangerous conditions, my old climbing partners were forced to make an emergency descent. The deteriorating weather meant they also had to make a hasty retreat back down the valley.

It turned out that they were the lucky ones; that weekend ten people lost their lives in the Mont Blanc area as high winds whipped people off icy ridges.

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Risk affects our decision making

Life is full of decisions and intuitively we are assessing risks all the time, even if they are not as obvious as the ones in the previous example.  As we pursue our dreams we will be frequently faced with various options of ways to achieve our aims.  In order to navigate our course, we have to assess the factors, consider the risks, and make decisions as to the best way to go.  Sometimes to help answer the question ‘which way should I go?’ it is prudent to consider ‘which way shouldn’t I go?’ and this particular question is all about risk.

If a venture is suddenly deemed too risky, it is the surest thing that will stop us from acting; no matter how attractive the option first seemed. Therefore, risks need to be identified, assessed, mitigated and managed, so that we are in the best possible place to make our decisions.

Capacity for risk varies between people and situations so it is important to remember that this is an ongoing process of identification and management.  At the same time, we don’t want to become defensive, timid or risk-averse. Achieving bold visions means taking risks; we just need to make sure we have counted the cost before we commit ourselves.

When to consider risk

In The Right Questions Framework, we consider risk when we look at options. This comes under the Which question.

You don’t want to start a venture by looking at risk. If you do, the problems could easily become paralysed before you even start.  But, if you plan without considering the risk, you could quickly become disillusioned or make a serious mistake that could be hard to recover from.  Therefore it is at the point when one has a clear idea of what we need to achieve, and are considering different options to achieve that goal, that we look at risks.

“Take calculated risks.  That is quite different from being rash.”  General George S Patton

How to manage risk

Unnecessary risks can be avoided by careful planning and this process is part of your risk management process.  Your approach to risk – which risks you tolerate and those you treat – becomes your risk management strategy.

This exercise is a helpful aid to decision-making, but remember, that one should never make a decision out of fear.  Some risks will be big – you just need to know whether that danger is acceptable to achieve your aim.  Effective risk management helps us to achieve our mission, but with the risks considered and reduced as much as possible, not at the exclusion of risk entirely.  Remember, it is more important to do the right thing than the safe thing.

As you go into the process of identifying and evaluating the risks I recommend, that if you are part of a larger team, that you go through the following exercise first as an individual and then as a collective. This avoids group-think and other related biases.

Once you all have some ideas you are likely to find that as a team you will have a healthy (frequently robust) discussion about how to categorise risks. This is due to people’s different viewpoints; do not worry, this is a productive process. Diversity of thought will help you all evaluate risks more effectively and help you learn more about how the team thinks and operates. This inclusive process will also allow people to express any fears, find solutions and commit to the final plan.

Risk Management Process

Here is a simple risk process. If you follow this exercise you will be able to identify the key risks you face and create a basic risk management strategy:

• Play devil’s advocate for a moment: give yourself 5 minutes to try and think of as many things as you can that could put a stop to your venture and list all these threats.
• On a scale of 1 to 5 give each risk a score of how probable it is to occur (5 being the most likely).
• Now do something similar, scoring 1 to 5 for the severity of the impact of each of the risks.  In this case, a ‘1’ might be a minor inconvenience whereas a ‘5’ would be a show-stopper.
• For each risk multiply the probability score and the impact score so you get a score of 1-25 for each risk.  You can now rank all the risks in a table.
• Start at the top with the biggest risks and think about how you can avoid, prevent, limit the damage or otherwise manage the risk.  This is called mitigation.  Write down the plan for each risk and after the mitigation measures have been applied score the risk again for likelihood and impact to see how it has improved and whether it is acceptable to you (and/or your team).
• Now consider whether the opportunities outweigh the risks for the course of action you have chosen. If you are unsure, you can go back and look at the risks in more detail for another course of action that you generated previously.
• Once you have identified the most important risks make someone responsible for the management of each risk. They do not carry all the risk (or blame if it goes wrong) but they do have responsibility for tracking the risk on behalf of the team.

Record and review your risks

There are lots of ways you can record the information you get from this process. Most businesses have spreadsheets to capture the key operational or project risks. Find what works for you but my advice is to keep it simple. If the document is too big and complicated people won’t read it.

The other thing is to keep it up to date. Make sure you review the risks on a regular basis. The situation changes; new risks emerge, other risks fade. Make sure you are tracking them.

But don’t get obsessed or paralysed by risk. After all, who dares wins!

Why every leader should know David Patreaus’ 4 stages of creating and Implementing Effective Strategy

Who can you think of who has genuinely created and implemented an effective strategy?

Plenty of people profess to have done this but few have accomplished this feat on the international stage or at the Grand Strategic level.

As we will see, from someone who actually has some credibility (no, I don’t mean me!), an effective strategy can be implemented in 4 steps.

But before we get onto this, what does strategy really mean anyway?

It is an overused term, and this can cause confusion. You might hear someone say, “My strategic approach is to…” and then list a series of goals. That is not a strategy. Neither is it the same as a mission or vision statement.

Strategy made simple

Strategy comes from the Greek word Strategos, which means military general. The General was the commander who gave the overarching directive to an army; the conceptual framework of how to defeat the enemy.

We might not be facing a real-life enemy, but we are sure to face challenges, which is why modern interpretations of strategy substitute these terms. For example, Richard Rumelt, author of Good Strategy, Bad Strategy defines strategy as

“A strategy coordinates action to address a specific challenge.”

In other words, it is the ends, ways and means of success, which itself is another good definition of strategy, still used by militaries today.

“Strategy equals ends (objectives toward which one strives) plus ways (courses of action) plus means (instruments by which some end can be achieved).”
Colonel Arthur F. Lykke Jr

Somewhat unsurprisingly, in terms of practical application, examples and theoretical principles, the military is still a primary source for the understanding of strategy. David Petraeus (retired US Army General) is a classic example of someone who has created and seen through an effective strategy at a genuinely strategic level.

Who is General David Petraeus anyway?

For those unaware, David Petraeus is a retired General, who commanded at the highest levels, and is also a former Director of the CIA. Suffice to say, having wielded that degree of power, he knows a thing or two about strategy.

Most importantly he knows how to implement one.

This is perhaps best illustrated by his time as overall commander of coalition forces in Iraq in 2007. The situation he inherited was certainly a strategic problem.

At the start of 2007, the US military was sustaining around 100 fatalities per month and around 700 wounded, while civilian casualties were around 1500 a month. Baghdad was effectively lawless and local militias as well as insurgents, of various ideologies, rampaged around the country causing mayhem.

Yes, I hear some of you say, this was a problem partly of the coalition’s making, and yes, there you have a point. In fact, the lack of a coherent long-term political strategy (beyond the military one) in Iraq was a large cause of this situation. But the challenge in 2007 remained, and General Petraeus was chosen to tackle the immediate issue of the horrific death rate.

The Surge Strategy in Iraq

After going through proper problem analysis, Petraeus developed the ‘Surge’ strategy. On the face of things, this could have been seen as just an increase in troop numbers, but it was a lot more than that. The plan recognised that previously the military had been using many wrong ways and means. It needed new ideas. Therefore, the surge was not just an increase of 30 000 troops but also encompassed new counterinsurgency (COIN) doctrine, changing the ways and means that would be used to stabilise the country (the ends).

The success of The Surge can be seen in numbers. Civilian casualties quickly reduced in 2007 and fatalities from mid-2008 to mid-2011 fell to around 200 a month. US fatalities dropped to fewer than 11 per month in the same period. Overall, the surge strategy resulted in nearly a ten-fold reduction of fatalities from 2006 figures.

Defence Secretary Robert Gates described Patreus’ ‘Surge’ campaign in Iraq in 2007 as the

“Translation of a great strategy into a great success in very difficult circumstances.”

Patraeus after the Surge

Petraeus did implement a successful strategy in Iraq but that does not make him perfect. He, like any senior leader, did not always succeed (he was not quite able to replicate the success of Iraq in Afghanistan due to the vastly different circumstances) and he messed up badly too (Petraeus had to step down as director of the CIA after it was revealed he was having an affair with his biographer).

As well as recognising that these failings just make Petraeus human, he is easier to respect in the aftermath as he has been willing to admit and address his faults (a virtue not seen in some very senior figures).

Petraeus, though nominally retired, is still very active. He is a visiting professor to prestigious universities across the world, and, due to his strategic wisdom, serves as an advisor and board member to multiple diverse organisations. So, even with his faults, his strategic mind is still highly valued.

Therefore, when he says something about strategy, I take note. Recently, he shared his four steps to developing an effective strategy at the Royal United Services Institute (the defence and security think-tank) and so I thought I would share these and some reflections upon his framework.

The 4 Steps of Developing a Highly Effective Strategy

Patreus describes the following four steps as his “intellectual construct for strategic leadership.” In other words, this is not just about creating a strategy, or having the leadership to implement one, it is both combined.

Task 1: Brainstorming

The first step is to get the big ideas right, and that is dependent upon understanding the problem. The problem is made up of various factors too, such as mission analysis (assessing what you must do) and situational analysis (getting a deep understanding of the circumstances).

You have a better chance of analysing the problem and coming up with novel solutions if you have real cognitive diversity. Petraeus sought out scholars and deep thinkers to help him with this problem analysis. This included people who would challenge ideas. This is vital as a leader surrounded by sycophants will eventually come undone from hearing what they want to hear rather than what they need to hear.

Once problem analysis is complete then the brainstorming can enter a phase of creating options or courses of action. Options are then evaluated, and the leader (commander) makes their decision of which course of action they want to pursue.

So, the key question for a leader at this stage is:

How can you create the best team to understand the problem and come up with creative solutions?

Task 2: Communicating

Once the leader has decided upon the preferred course of action, that big idea can then be communicated. Now the challenge is working out who you need to communicate to and how.

There may be many stakeholders inside and outside the organisation that need to hear the message. In the case of Petraeus, during The Surge it was not just the soldiers who needed to know the strategy; it was everyone from the Pentagon in the US and coalition partners, right through to the local population and insurgents.

And each stakeholder group has different information needs and so an engagement strategy becomes a sub-set of the overall strategy. This includes stakeholder mapping and thinking about how each group needs to be informed and what influence you want.

For example, Petraeus wanted to communicate with the local population and the end result was that he wanted trust and support – rather than hostility – so he needed to achieve a shift in mentality. Even for the coalition forces there needed to be a shift in mentality as they were going to have to change how they were going about their operations up to that point.

So, communication needs to be clear, as concise as possible and targeted to get people engaged and, where possible, empowered to support the strategy. When you are thinking of how to deliver the message a good starting point is The Rule of 3, which provides an easy structure to follow.

Therefore, the key question for the leader at this stage is:

Whom do I need to inform, how do I best communicate and what is the impact I want to have?

Task 3: Implementing

Once communicated, the next stage is implementation. This requires breaking down the big idea into an action plan. In military terms, this is the campaign plan where different lines of effort work together to achieve the desired end state.

But a good plan is not enough on its own. Effective implementation requires good leadership. The strategic leader knows how to adapt their style to best influence each team member or stakeholder. For example, influencing sceptics might require a more transactional approach as they might not buy into the vision of transformational leadership. So, the principal needs to be able to apply situational leadership whilst remaining authentic.

As with the brainstorming stage, the strategic leader needs a great team around them for the best chance of success. Being a strategic leader means selecting and supporting the right champions to lead each element of the plan.

Therefore, for implementation, the leader needs to ask:

How do I turn this strategic idea into an actionable plan and who can best realise each element?

Task 4: Assessing

Never assume a plan is set in stone. As Field Marshall Helmuth von Moltke stated:

“No plan survives contact with the enemy.”

In other words, it does not matter how good your idea is, when that plan interacts with the real world (and the many factors you could never foresee) the strategy will need to evolve.

We live in a rapidly changing world. Good leaders expect to refine their strategy is this VUCA (volatile, uncertain, complex, and ambiguous) environment. What’s more, the ability to assess how effective a strategy is, and then adapt plans to improve them, is the mark of a high-performing team as well as a great leader.

A high-performing team retains a growth mindset, learns from failure and drives their continual improvement by constantly assessing what to start, stop or continue within the given plan.

Therefore, for the leader at this stage, the critical question becomes:

How do we improve the plan and reinforce success; what do we need to start, stop, or continue doing?

The Strategic Cycle: How to Create and Implement an Effective Strategy

David Petraeus’s strategic framework is very simple on the surface. The four stages of brainstorming,communicating, implementing, and assessing, create an easy-to-remember cycle.

And strategy is cyclical. One situation and set of effects lead to another. This was particularly true for Petraeus who went from overseeing The Surge in Iraq to being the commander in Afghanistan. This was a very different set of circumstances but one impacted by his own strategy in Iraq (namely the draw of resources from one area to another).

You may not be playing on the world stage but whatever level of leadership you aspire to, this strategic cycle can help you. Even if you are just working on your own and facing some big problem, the stages still hold true.

So, think, what is the biggest challenge you are facing right now? What can you do to brainstorm new ways of addressing the issue? What do you need to communicate? How will you best implement the plan to resolve the issue and how can you keep assessing your progress?