What else can I achieve with this? - a beautiful question to bust your frame
July 9, 2014
I wrote recently about how William Smithberg caused Quaker to lose $1.5billion in 3 years due to his decision to acquire Snapple. We read that the thrill of the hunt and the hindsight bias (he made a killing with his Gatorade acquisition) blinded him to the fact that $1.8billion is a lot of money to be spending in one fell swoop. Let's set aside for a moment the hidden agenda which might well have been fuelling his decision because, frankly, even if he wanted to carry so much debt, he could have spread it out and not put everything in one basket. So, how could Smithberg have avoided the fiasco? Let me share one easy trick to bust all resource-based decision frames (purchasing, investing, hiring, loaning etc)
Ask "What else can I achieve with this?"
Isn't this a beautiful question? When you ask yourself this question, you look at your opportunity cost and you force yourself to think of the other things you could achieve with this resource. You may come to realise that you can achieve a whole lot more than your initial idea. Let's uncover why this is such a great question...
1. It does not argue against your initial idea
When you use this question, you are not saying that your initial decision question is bad; you are just looking to see what else you could do with your resources and if there wasn't anything else that you could achieve with it. It opens your mind to further possibilities. And it also protects you from disagreements.
2. It overcomes confirmation bias
Let's face it. People are in love with their own ideas. They will find ways to defend their solutions, to justify their conclusions. Take a look at this picture...
I love it because it shows how we can conjure up evidences to the contrary when we are looking to justify our decision. This question shifts the spotlight away from your current frame and onto another one - which might be even more exciting!
3. It focuses on results
By asking what else you could achieve, it makes you look beyond simply using the resource to deriving benefit. It therefore makes you relook your intent and its success factors, and the options you can take to achieve them. And this is extremely important when you have limited resources to play with in the first place!
A recent example
Applying this is very easy and it does not take a rocket scientist to figure out how it works. I have a perfect example. My daughter recently asked for money to buy a car. Never mind that she doesn't have a license yet. She is in the process of getting one. But she wants a car just the same. She is running her own business and so would like to have one for ease of transport. I get that. But the problem is, cars in Singapore are exhorbitant. Even for an 8-year old one! Even though the sticker price was relatively low - $13,000 - she failed to take into account all the attending costs for the remaining 2 years it had left. So, using a quick, back-of-the-napking calculation, we figured that it would cost a total of $31,000 to run the car for the next two years. She was unfazed by the number, saying that it will be expensed out. (I suppose she learnt her accounting well?)
Then I released the bombshell. "What else can you achieve for your business with $31,000?" The discussion ended then and there. Not because I shut her up, but because she realised that the opportunity cost of buying the car was way too high! She could well build more revenue with that $31,000 carefully spent, than on a car that depreciates every time she steps on the accelerator. Case dismissed!
So the next time you are faced with a decision that requires the use of resources, stop and ask yourself, "What else can I achieve with this?" You'll be surprised that not many of us actually do that.