I had the good fortune of getting to know Barrett Ersek this week. Barrett is a self-described "lawn boy." He started, built and sold two lawn care companies in the Philadelphia-area.
What makes Barrett unique is his ability to innovate. The ability to determine an "X factor." An X factor is any creative innovation which leads to a 7x to 10x competitive advantage in your industry. In Barrett's case, he was able to make a quantum improvement in how his company acquires new business. By following a seven step process, he was able to identify the cost and time of customer acquisition as a bottleneck in his industry and then remove it. Specifically, Barrett was able to reduce his cost of customer acquisition from $275 to $50, and simultaneously reduce his sales cycle from three weeks to three minutes. Clearly, such an innovation gave Barrett a huge leg up on his competition.
The seven step process is as follows:
1. Identify the essential question. What is the bottleneck in your industry, which, if removed, will give you a tremendous competitive advantage. Barrett says to "dream without limits." Have a clean slate where anything is possible. List all of your bottlenecks and then start to work on the one you rank highest. Choke points can be found within your P&L or business operations such as margins, expenses, etc. (industry pains), and your customers (real or psychological customer pains). Remember, we are not talking about an issue unique to your business such as a sales person who is not converting well. Of course, you need to execute well. Rather, we are referring to a problem or road block which is in place industry-wide.
2. Once you have identified your essential question, ask yourself the "why" five times. Drill down so that the true issue is what you are addressing.
3. Formulate the essential question.
4. Ask yourself the essential question repeatedly, which brings the issue constantly to a conscious level. Even write it down and carry it around with you.
5. Ask the essential question to anyone who will listen. You never know who will give you even a little idea to help you toward solving the problem. In Barrett's case, he aggregated feedback from a few people to come up with his solution.
6. Once you have the answer, take massive and immediate action.
7. Start all over again. X factors over time become table stakes. So you continually need to innovate.
So what was Barrett's X factor? Previously, to obtain a lawn care client, Barrett would acquire a lead from word of mouth or marketing efforts, make an appointment, then send someone to measure the prospect's lawn. His company would then send an estimate, follow up, and hopefully close the lead. This would take about three weeks and cost about $275. By engaging in the above innovation process, Barrett was able to save remove this bottleneck.
His solution avoided the need to send a worker to measure a prospect's lawn, saving time and money. Instead, he was able to come up with a formula of measuring lawns using, among other things, aerial photography and tax maps. While this may sound like a natural solution to the problem, hindsight is 20-20. Indeed, even today, many of Barrett's competitors don't use this process, and instead, measure lawns the "old-fashioned way."
As you prepare for 2010, identify your essential question and figure out how to solve it. If you do, you will crush your competition.
Matthew Weiss is an admitted business learning junkie. He reads only business books and magazines (well almost only) and attends dozens of business workshops, keynotes and panel discussions each year. In this blog, he provides quality, take-home value from "all of the above" and shares his personal thoughts and experiences. Weiss is a New York traffic lawyer and sole owner of Weiss & Associates, PC, a boutique law firm specializing in vehicle and traffic matters throughout New York State. He is also the former Global Learning Chair for the Entrepreneurs' Organization. He can be reached at email@example.com.
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