The Value of "In the Box" Strategy

"Common sense in an uncommon degree is what the world calls wisdom."
Samuel Taylor Coleridge
Author

People are frequently encouraged to "think outside the box" when faced with a challenging business problem. In theory, this enables novel solutions by relaxing assumptions, looking at problems from a different perspective, and thinking creatively. Such an approach can lead to breakthrough strategies and solutions. Unfortunately, when basic principles of business are violated, it can also lead to significant value destruction.

The trick of "thinking outside the box" is making sure you think outside of the correct box. Relax self-imposed assumptions and constraints to your hearts content, but beware of violating time-tested business fundamentals.

To help keep me grounded, I like to periodically skim the book Thinking Inside the Box: The 12 Timeless Rules for Managing a Successful Business by Kirk Cheyfitz. Is the book groundbreaking? No. However, it is a valuable reminder of the fundamental principles of good business.

Cheyfitz's book provides numerous mini-case studies categorized into 12 business planks:

1. Some things never change: know the difference between what will change and what won't, and pay attention to the former
2. Profits: the first business of business is making money
3. Cash is everything: if you don't manage your cash, you won't be managing anything for long
4. Know what can be controlled and what can't: it is far better to manage expenses than pray for sales
5. Customers are the boss: give customers what they want, not what you want to give them
6. Unify the whole business: you should be selling all the time
7. If you can buy it, don't start it up: follow the example of virtually every big company in history and buy your way to bigness (at a reasonable cost)
8. Hire smart or manage hard: when it comes to people, you can either hire smart and get out of the way, or you can run yourself ragged micromanaging
9. Secure the real assets: find your business's real assets (the ones that generate your profits) and leverage them for all they're worth
10. Results are more important than the process: the end result is what really matters, so don't get bogged down in methodologies
    
11. Nothing lasts forever: always be ready to renew your business
12. Always have an exit strategy: make a plan to get your money out, and keep the plan updated and handy

The book is a quick read and provides a wealth of sound business fundamentals. Each chapter ends with an excellent summary that can make the book a ten minute read if required.

Monday Morning Actions

• Encourage unrestricted thinking / ideas when brainstorming "out of the box." You never know where creativity will lead you!
  
• In directed brainstorming, focus on relaxing self-imposed assumptions and constraints
• When evaluating ideas, apply fundamental business principles to help screen viable paths
• Before executing a plan, document and reassess core assumptions. If the plan stretches basic business principles, an objective 3rd-party assessment may be valuable