Every Business Has Hidden Problems (and That’s a Good Thing)

As I mentioned in my last post, the best way to become an important person is to solve important problems. But as a new hire, you most likely don’t know what the biggest problems facing your organization are yet, much less how to be part of the solution. To the untrained eye, it might even seem like the organization is doing great and isn’t really in problem-solving mode. The company’s website, marketing, and people all convey confidence in the business. Don’t be fooled: every company, no matter how successful, is always dealing with some major new challenge or other. Even runaway success brings with it new complications. Your task is to separate the marketing language from reality so that you can focus your efforts on addressing challenges that will benefit the business most.

The challenges you’ll find in any organization come in two flavors:

Type 1 Challenges often sound like restatements of the organization’s overall mission, and employees will openly acknowledge them often. For example, a software company trying to build a better web browser may cite technology barriers as a major challenge. These are obvious, and you may be working on some of these challenges as part of your core responsibilities. Don’t stop digging here.

Type 2 Challenges are the real deal, and you won’t hear about them during the interview process. A Type 2 Challenge for the software company above might be, “We have zero brand recognition and don’t know how to market our products.” That’s a much scarier problem for the future of the business than some technological hurdle. These are the kinds of things you’re looking for.

Given how significant Type 2 Challenges are, they are surprisingly hard to find. Just like you don’t reveal embarrassing things about your family to strangers, employees don’t talk about Type 2 Challenges with people they don’t know. For that reason, it’s safe to assume that you haven’t heard about the biggest challenges yet.  The list below is by no means all-encompassing, but it should give you some ideas for where to look in your own organization.

Without further ado:

Product-market fit –Particularly at startups and young companies, product-market fit is constantly being iterated upon. Simply put, do you have the right offering for your target customers? Are salespeople struggling to win business? Is the customer base really diverse without a good understanding of whom your product best serves?

Product maturity – How wide is the gap between the actual state of your product or service and the way the company presents it to the market? Is your product or service really the first, the best, the fastest, or the only, as you claim? If not (and it probably isn’t), how far are you from getting there? It’s not a problem that there is a gap between the marketing and the current state. But is that gap closing or widening?

Market disruption – Are there radically new ways available for your customers to meet the need you satisfy for them? Do they want to consume your service in new ways that you can’t accommodate (e.g. Netflix vs. Cable TV)? Do they expect to pay for your product in a different way than they always have? Sometimes, what your customers want simply changes. Look at McDonald’s and how it has tried to redefine its image in a much more health-conscious 21st Century.

Strategic instability – Companies can go through bouts of relative strategic calm, but they can also experience periods where it seems like they revamp their core strategy every year. When the troops don’t know which way to march, it creates internal friction that shows up all over the place: muddled advertising, confused customers, frustrated employees. Be on the lookout for this when your company has had a lot of recent executive turnover.

Competition – Sometimes, you’re just not winning. It happens for all sorts of reasons: inferior product, changing customer needs, or lackluster sales and marketing, to name just a few. Do your customers see you differently than they used to? Is there a new player on the block who’s just eating your lunch? There will always be competition, but if you’re really getting beaten up, you absolutely must understand why.

Customer satisfaction – This is an area in which I find the gap between your marketing language and reality can be painfully apparent. No matter where you work, there will be some people who hate your product. After all of the internal rah-rahs, it is shocking the first time you experience real hostility from customers. Mark my words, there are people out there who have somehow had a bad experience with your company (fair or not) and will happily tell you to your face that your product or service “fucking sucks”. Remember that one or a few data points don’t make a trend, but it’s helpful to understand your customers’ emotions and what they like and dislike about your company. I promise this: you will be amazed at how many industry-leading companies have spawned huge communities of people who despise them. Right now, you’re probably thinking, “Sure, but not company x.” Yep. Them too.

Customer mix imbalance – Sometimes the customers you want aren’t the ones you’ve got. Depending on the kind of business you’re in, that can impact the viability of the company overall as well as its ability to attract both future customers and employees.

Market awareness – The company may be struggling to make itself known to customers. Internally, the talk might be about success stories and the customers you’ve acquired, but how many of the potential customers you want know about your company? Again, this is common at startups and young companies.

Scalability – The company may seem like it’s humming along, but will the operation break down when you want to expand? The signs of strain may already be present. Perhaps it’s overworked people holding together the customer support process or something similar through herculean effort. If a process is painful today, it will usually be more painful when the business gets larger. The business model needs to be able to scale up with the business, or you’ll be in real trouble when those stressed-out, overworked people holding things together start quitting.

Partner issues – Your company may have a supply chain that involves many different businesses to make your product. Or you may partner with other companies to bring your product or service to market. Partnerships create opportunities, but they also create vulnerabilities for companies when certain partners for whatever reason can no longer be relied upon.

Hiring & retention – Is the organization losing lots of experience or having trouble filling key roles, particularly at executive levels? Are the most talented people leaving? When you look around, do you see more “A” players joining or leaving?

Brand strength – Is your company’s brand as strong as the company generally thinks it is, or perhaps as strong as it used to be? Are sales people well-equipped to close new business, and do they have the tools they need to succeed? Is the company is better at making products than it is at marketing them? If you have a sizable advertising presence, is the company image solidly in place, or are you cycling through different identities, disorienting employees and customers alike?

People/Morale – People issues come in many forms, but start by looking around and asking yourself if people are excited to come to work. Are they engaged in what they’re doing and enthusiastic about the mission, or is it just a job? Do you and your colleagues have compelling career paths? Is the organization good at building leaders from within, and do managers show commitment to furthering their direct reports’ career development? I’ve thankfully never had to deal with this situation, but I’ve known plenty of people whose mangers clearly didn’t care whether the people reporting to them succeeded and grew or not. When management shows little or no commitment or loyalty to its people, they usually get the same in return.

Whatever you uncover, the key is to constantly ask yourself how whatever work you’re doing ties to these challenges. You’ll be amazed at how quickly you’ll see ways to have a greater impact on the business simply by being aware of these challenges. And when you demonstrate clear understanding of what matters most to the business, managers will start to trust your judgment. Remember, earning trust isn’t just about being smart or even necessarily making the right decision. It comes down to showing someone that nine times out of ten, you’ll make the same decision they would. Opportunities, mentorship, and other good things follow when people in charge trust your judgment.

Now that we’re thinking along the right lines, in my next post we’ll explore some tips and best practices for actually finding these hidden gems in your organization.