The 5 Most Important Questions Business Leaders Should Ask

Note from Bob:  These are great questions – not just to ask yourself – but to ask your team and staff!

It’s customary to evaluate a business in terms of its strengths, weaknesses, opportunities and threats, SWOT. Anyone who has taken the most remedial business course will have encountered it.

And it’s a good place to start.

You need to know what you’re best at, where you could improve, where you could expand, and where problems lie. Tony Robbins, bestselling author of Awaken the Giant Within says that if you want to get better answers, then you have to ask better questions.

SWOT does that for you. It forces you to ask questions about your business.

It’s a good starting point, but it’s not enough. The real benefit of SWOT is that, if done correctly, it creates more questions than it answers. If all you do results in one-line answers, then you’ve missed a golden opportunity to improve.

Wrong answers

What might the wrong answers look like?

Strengths – great customer service.

Weaknesses – so busy that we can’t always meet customer demands on time

Opportunities – more business

Threats – none

Those are real answers from a real company in the UK. Do they sound familiar?

Better questions

If your answers look a bit like the ones just mentioned, then you need to ask better questions. Here are five of them. If you don’t think about the answers honestly and objectively, then you’re beyond help.

So with that in mind, let’s look at them one at a time.

Question 1 – What would the company that could put you (us) out of business look like, and how do you (we) become that company?

Do you (we) think that you’re invincible? That there is no one out there who could take your (our) market by storm?

Think again.

There are entrepreneurs out there with a lot of money who also happen to have a wide range of interests. Whoever thought that someone who started as an online bookseller would supply furniture, clothing, computers, and even groceries?

Whoever thought that someone who wanted to create a new car company would eventually get contracts from the US Government to put satellites into space and set his sights on populating Mars?

Whoever thought that someone who had a construction company would create enough wealth to make a successful bid for President of the United States?

In case you hadn’t noticed, we’re living in a different world.

All bets are off. Nothing is as it was. Not only will what got you here not get you there, it won’t keep you there either. Doesn’t matter if you like it or not.

These are the facts.

According to Forbes, there are more than 2,000 billionaires in the world today, more than at any time in history. And that’s not due to inflation. Instead, it has come from innovation. No industry is immune from the changes that are to come. Even if you can’t see it yourself, your business is under threat.

And so you have to play the Devil’s advocate and think about what a business would look like that could put you out of business.

This won’t be a fun exercise, but it will certainly be a lot more enjoyable when you figure it out and fix it, than if you don’t see it until it happens.

Question 2 – What fundamentals could disrupt your (our) industry?

This question is different from the first one. To get an idea of what disruption looks like, let’s mention of a few examples.

AirBnB – What industry did it disrupt?

In effect, it put almost everyone in the world with a spare bedroom into the hotel business.

Uber / Lyft – What industry did it disrupt?

The former, more than the latter, has so seriously threatened the taxi cartel that the courts have gotten involved.

That’s because those who drive recognized taxis are subject to different rules than the recent upstart.

Who do you think will win in the end? It will be the upstarts. You can’t legislate for every eventuality. Somewhere, somehow, the entrepreneurs will figure out a way to make their idea work.

They always do.

Virgin – What industry did it disrupt?

This may have been one of the first to disrupt an entire industry. After spending time with Freddie Laker, learning about the industry and how the big boys defeated him, Richard Branson started a new airline with one leased aircraft.

Today, Virgin Airlines regularly leads the field, and holds rail contracts in the UK as well.

How did they start?

When he was 17, Branson started a student magazine and a student advisory centre – a helpline that enables people to get the help they need anonymously. Soon thereafter, he began to produce records for much less than the mainstream companies.

The name of the company is very telling, too. It was so-called because Branson and those with him recognized that they were virgins in business.

Your greatest threat will not come from those you know; those who play by the rules. Instead it will come from those who don’t know what they are or don’t care about them. It will come from those who ask themselves how the industry could be improved if there were no rules.

Question 3 – What is there about me (us) that makes me (us) difficult to work for, and what needs to change?

You (We) may think that there’s no one nicer on the face of the earth than you (our company).

You’re (We’re) easy-going, fair, honest – even drop-dead gorgeous, or somewhat handsome. And those are nice traits. All of us, however, have things about us which aren’t nice. A little introspection will reveal them. You (We) know what they are. You (We) just avoid thinking about them.

Out of sight; out of mind.

If you (we) don’t think about them, then they must not exist.

Wrong.

The thing is that those little annoying habits of others – the ones that drive you nuts – are probably the same ones that drive others nuts about you (us). George Carlin once said that “anybody driving slower than you is an idiot, and anyone going faster than you is a maniac”.

You can substitute the American nouns for British ones.

If this is how we feel about others on the roads, just imagine what it must be like at work. Think about this: Who is the most annoying person that you work with? Start with a peer.

Now ask yourself the same question about your supervisor. What one thing, if you had the power to change, would you fix without even batting an eyelid?

And those you supervise. Which one gives you the most trouble? Which one do you have to counsel the most or clean up after?

The things that you find the most annoying in others are probably true of you to a greater or lesser extent.

Start with those things and fix them. Do the opposite of what people expect. Their reaction may surprise you. They may actually relax, smile, and do better work as a result.

Question 4 – Which 20% of our customers give us the most grief? And which 20% of our customers also cost us the most to maintain?

This is Pareto’s Law, or the 80/20 Principle, at work.

It’s the principle that you can apply to fire customers.

Approximately 20% – could be 15% or 25% or 5%, or some other figure, but there will be a noticeable group – of your customers who cost you more in time and other resources than they’re worth. And that cost will be substantial. It’s likely to be as high as the opposite number.

So for example, if 20% of your customers cause you the most problems, then it’s likely to be 80% of your problems! If the number of trouble-makers is only 5%, then they will probably cause you 95% of your headaches. It behooves you to figure out who they are so you can fire them.

This may sound crazy, so let’s look at an example of something that’s a little different, but which illustrates the point.

OPEC – The Organisation of Petroleum Exporting Countries – sets production quotas. Their goal isn’t to pump as much oil out of the ground as they can. Instead, it’s to earn as much money as possible.

To do that means pumping less; not more. And that’s because of that well-known economic principle of supply and demand. When the demand is greater than the supply, the prices go up; and so it’s possible to sell less and earn more. The fact that the US is now starting to export oil will change that. That is, America will disrupt the oil industry.

What do the oil production levels and price have to do with firing those customers that give you the most grief?

In both case, less is more.

In the case of oil, less is sold, but for a higher price, and so the overall revenue is more.

In the case of your customers, you’ll spend the majority of your time and other resources dealing with the issues surrounding a disproportionately small number of them.

If you want to increase revenue for your company, then figure out who is delivering the least amount of value to you, and then get rid of them.

When you have fewer problems to contend with, then you can then concentrate on getting more customers who are easier to deal with.

Do this every year.

Question 5 – How can our sales teams serve our customers and future customers better?

This question is subtle. It’s counter-intuitive. Most people would ask how their sales teams could sell more, either to existing customers or new ones.

That’s not the right question.

If you ask the wrong one, then there’s little chance that you’ll get a good answer, That’s because it’s based on incorrect assumptions.

Why is Question 5 the right one?

It’s because it makes the sales teams part of the value you deliver. You’ve probably heard that “time is money”. Maybe you even believe it. It isn’t.

The length of time it takes you to deliver value is unrelated to its value.

Think about it.

The most incompetent take the longest to do a job well. Should their compensation be higher than that of someone who does a good job in a fraction of the time?

The only thing that matters is value. Value is what you sell, and it’s also what you deliver. A good job delivered slowly is not valuable. So what you need to do is to think about how your sales teams can help your customers to deliver more value to their customers.

The goal isn’t just to sell value; it’s also to enable others to deliver more.

Conclusion

Five essential questions that business leaders (and their teams) must ponder. Five questions that you (your team) probably don’t want to think about, or you (your team) don’t think apply to you (your team). Five questions which, left unanswered, could put an end to your business ambitions.

What got you here, won’t get you there, and it won’t keep you where you want to be, either. Spend time thinking about these questions. Raise them at your team meetings and board meetings.

Schedule a one or more away-days for yourself and your team so that you can discuss these things.

Your future depends on it.