In this episode of Sequence Over Strategy, Michelle Warner guides you through the ‘Five Whys’ exercise to uncover the root of your business challenges.
Are you feeling overwhelmed by the idea of expanding your business and adding new customer segments and products? In this episode of Sequence Over Strategy, Michelle Warner guides you through the ‘Five Whys’ exercise to uncover the root of your business challenges. By focusing on the impact of marketing efforts on your new ventures, you'll gain clarity on whether your current marketing strategy aligns with your growth plans. Discover the key to avoiding the chaos of running multiple businesses and embrace the power of asking the right questions with the Sequence Over Strategy mindset. Let's simplify your marketing efforts and set your business up for success!
Check out the full episode at TheMichelleWarner.com
Hi, I'm Michelle Warner, and I'm a business designer and strategist. For over 15 years now, and working with more than 1,000 clients, I've helped small businesses grow. And during all that time, I've noticed the same trend everywhere.
When business owners are confused, or they're not growing the way they want, they're actually all facing the same problem and trying to solve it in the same incorrect way, and they don't even realize what they're doing. So what are they doing? They're throwing out a bunch of popular tactics at their problems.
Maybe they're posting on social media a ton trying to grow followers, or releasing new products, hiring a bunch of new team members. Maybe they're raising prices, or lowering prices, or researching how to price things correctly. Maybe they're launching a podcast, a YouTube channel, or a podcast that's also a YouTube channel. I literally had one client tell me that a former coach said if she didn't post 15 times a day to LinkedIn, she would never get any clients.
Now listen, none of these things are inherently bad or wrong, except maybe the 15 posts per day thing. But all of these things ignore one foundational problem. A problem that if we just stopped to solve it, would help us build in a stable, steady way without all the noise or waste or frustration that we come all too familiar with as entrepreneurs.
Think about it.
Imagine building efficiently with less drama and more confidence. But as entrepreneurs, we've set ourselves up to fail at that most basic goal, no matter how good it sounds. And that's because we spend so much time throwing so many things at the wall, just waiting for something to stick, that it's hard to know why something sticks when it does, which makes it hard to repeat the wins. It also makes it hard to understand any losses. So unfortunately, in all that chaos of the day-to-day, it's way too easy to get lost trying to do all of the things. And when you do that, you're never going to build something sustainable and growing. You're never going to build a sturdy business.
And look, I get it. It's very tempting to look for the trends, the popular tactics, or the perfect playbook that can make it feel like you're in control and you have an instant winner. It's also very easy to throw that spaghetti at the wall. We've all done it. We've all been there. But the real skill we need to master is different. The real skill we need to master is taking a breath before making the throw to make sure we're asking the right questions first. If we did that, we'd realize an important thing. We'd realize that it's more important to figure out the right order for our actions than it is to take any action at all.
Yes, you heard me right. Rather than throw that spaghetti at the wall, rather than just taking a bunch of action, or rather than looking for a perfectly polished playbook, what we need the most is to understand sequence over strategy. That's the idea that it's more important to do things in the correct order than to do things correctly. I'm going to say that again.
It's more important to do things in the correct order than it is to do things correctly.
The perfect strategy for your pricing won't matter if you don't sell something people want. The perfect strategy for this podcast doesn't matter if I hadn't proven my ideas elsewhere or built a small audience of passionate supporters already. What you do next is the most important decision you can make right now.
Welcome to Sequence Over Strategy, a show about small business entrepreneurship. My goal on this show is to help you find and trust your own sequence of actions rather than someone else's theoretical strategy. And I'm going to do it all so you can build a sustainable business that serves you for all the things that matter the most, your time, your energy, and your profit. In every episode, I'm going to answer a question from a real entrepreneur struggling with a real challenge in their business.
Today’s Listener Question
Here's today's question from Kristen Tate, who runs The Blue Garrett, working with authors who are ready to find their readers.
“I've hit a ceiling in my service business, and I don't want to go past it by adding more hours or building a team. What I'd love to do is build a content business around it, selling books and courses to two different audiences, freelance editors and authors. I love creating the content, and I'm learning to like marketing, but is this whole plan doomed from the start? Am I essentially going to be running three businesses, services for authors, content for authors, content for editors, and run myself ragged in the process?”
Thank you for the question, Kristen. I know so many people can relate. When you're running a business, you have so many different opportunities to grow it in so many different angles, often several really good opportunities. So it's hard to figure out which ones to pursue. But what I like most about your question and what I want to congratulate you on is that you recognize that making this decision can result in you feeling like you're running multiple businesses. Most people don't recognize that danger and they end up getting stuck doing exactly that. So well done.
When you are a solo or really small business, sometimes doing something as simple as adding a customer segment, as adding additional products can actually make it feel like you're running multiple businesses. And this actually reminds me of some trouble I got myself into during the pandemic with houseplants. I started collecting them. I mean, who didn't during that time? And I've been paying the price over the last few years. Here's what happened.
The Houseplant Dilemma
I started collecting plants with a lot of different needs. Some like lots of sun, some like lots of water, others didn't need any water at all. Some were very low maintenance, some high maintenance. There were spreadsheets on how to care for all of them. But it was the pandemic, I had time to pay attention to all those various needs and my house could accommodate them. Life was also really simple. I had room to make that complication. But now as life has gotten fuller over the past few years, as the world has opened back up, I'm paying the price because I cannot keep track of all of these different rotating needs that all of these different houseplants need. I'm not proud of this, but slowly but surely my plants are being pared down to one category so that they're all in the same set of rules. There are still just as many plants and there are many varieties of plants, but everything that I have now falls under one care plan that I can keep track of.
That is the heart of my response to you. The question here isn't whether or not there's some arbitrary rule that you need to follow about how many segments you're allowed to have, or how many product types, or even how many different things you do in your business. The question instead is whether or not those things play well together, whether or not they have commonalities you can take advantage of, or whether they leave you scrambling trying to chase all of them down.
I mean, back to my plants. I didn't simplify by buying 20 versions of the same plant. I simplified by only buying plants that fall under one care category. And if we follow the same rules there, we look for those commonalities, we can start to find a way to answer the type of question that you're asking here in terms of, hey, if I make these decisions, am I setting myself up for failure by setting myself up to run the equivalent of several businesses?
So let's break this down. Because when I talk about sequence over strategy and the importance of doing the right things in the right order, one of the most important things that I'm talking about in there, one of the most important, first things we need to do is to ask your questions in the right order. And it's very easy to ask the top level strategy question first, similar to the way that you're asking. That's very normal. Should I do this? I have this idea. Should I do it? But I can't answer that question, or I can't answer it well, because I don't have enough information. So to be able to answer that question correctly, to be able to give useful advice, to be able to help you understand how to think this through, we usually have to dig deeper and ask some foundational questions first.
The 5 Whys
One of my favorite ways to do this is to use something that's called the 5 Whys tool. And the 5 Whys is a simple tool designed to get to the root of a problem. It is as simple as the name implies. Instead of immediately trying to answer a question like the one that you have in front of you, Kristen, instead you go and you ask why five different times and see what kind of answer you arrive at then because when you ask why, or really any of the question words - how, what, when, where, why - you start to get to the root of your question and the answer will solve something more interesting, more permanent, it will lead you to a more permanent solution.
To illustrate this, I like to think about an assembly line. So let's think about somebody named Bob who's working in an auto assembly line. And Bob gets in trouble one day because Bob was not at his station to pull a cord and maybe stop an assembly line during the middle of a process. And so if we were to ask and answer a very top-level question, why did Bob not do his job? Well, the answer might be, Bob wasn't there, and so Bob was slacking, and we need to fire Bob. That's probably not the right answer.
Instead, we want to start asking why five different times. Why did Bob not do his job? And an interesting answer might be, well, because Bob was doing another job he had been asked to do in a different location at the same time. And so therefore, immediately in our second why, we discover that this wasn't Bob's fault. Bob was being asked to do two different things at the same time. So then we have to ask, why was Bob required to be somewhere else on the floor when we needed him over here to pull this cord? And then we'll get another answer.
And you can tell if we keep asking why in that situation, we are gonna get to some operational misalignment that has required Bob to be in a couple of places at the same time. And so if we were to just fire Bob for not being there to pull the cord, the same problems can exist in whoever you insert into his job tomorrow. But instead, if we ask why five times and we figure out why Bob wasn't there, then we can solve that problem, set him up for success, and not have this issue going forward.
And that's why we want to use this Five Whys framework because it gets you to the more permanent solution. You can answer a lot of questions at what I call a first level why, that very first why. You can answer those questions all day long and never get to anything that's sustainable. You'll just set yourself up to having a very similar question the next day or the day after or a week later. So instead we wanna go deeper and first find out what is the real question that we need to ask.
And our question this week is a really great example of how these five whys can help. Because Kristen asks if she's dooming her business by trying to offer services for authors, content for authors, and content for editors all at once. She wants to know if she's going to be run ragged by that plan and create essentially three businesses if she decides to go this route.
So what do you notice about that question now that we've just talked about the five whys? Well, it's a first level why question. If we were to answer this without any other context, we would get an answer that very likely would lead to the same problem the next day, the next week, the next month. So instead, let's use the five whys to find the right question to ask in order to get Kristen her answer.
So we're going to start with the most obvious first question. Kristen, why might you feel like you're running three businesses? And the answer there is probably because you would anticipate that you're feeling overwhelmed or scattered and trying to get everything done. Why might you be feeling that way? Well, because by adding these additional things to your business, you have a lot more on your plate. Why do you have a lot more on your plate? Because this new plan requires you to do a lot more work.
And now I'm about to take a leap and I'm about to ruin a surprise because the next question I'm going to ask is why is there so much more work? And from my experience, I can tell you that the answer is because I'm doing a lot more marketing. And like I said, I just took a little bit of a leap there. But I will tell you that when you're talking about expanding the business as a solo business owner, there are typically three components of your business that are heavily impacted by branching out in the way Kristen's talking about branching out. And she references all of them in her question.
Number one, there are your customer segments, right? Obviously, if you're thinking about branching out and adding segments, your customer segments are going to be impacted. The product mix is also impacted. And Kristen talks about that directly as well. If she is going to go from services to adding content-based products, that is an addition her product mix is going to be impacted. And by default, her marketing efforts are going to be impacted because she's going to have more things to sell to more people. And it might feel like all three of those have the potential to cause chaos when you're serving multiple customer segments.
But surprisingly, in my experience, that is not true at all. And when you look at it, it makes sense why not. And why it makes sense is as a business grows, the product mix is likely to expand. So whether you're serving one segment or 20, you're most likely going to be dealing with an increasingly complex product mix as your business grows.
So when we look at this question of should I add customer segments, should I add products, it's not really the right question to ask whether the addition of products are going to mess you up and have you feeling like you're running three businesses. Because as you grow, even if you stick to one customer segment, you're likely to be adding products in some way, shape or form. So we don't have to worry about the product mix as it relates to this question, because again, it's something you're going to be dealing with, whether you stick to one segment or many segments.
And interestingly, the customer segment also doesn't really matter in this discussion, because other than an initial definition of those different segments, there's not actually any actual work related to an expansion of one customer segment to three customer segments that is directly related to those segments. Once you've written the ideal customer profile for those segments, it's kind of one and done. And this goes back to the 5 Whys.
Obviously there is additional work related to adding segments, but that work is not directly associated with just the fact that you have added a customer segment. Because what is the actual work impact of adding a customer segment? The work impact of adding those customer segments shows up in what you have to do to market to those segments.
So this is where we come back to the fact that marketing is going to be your potential problem child in this question. The product mix doesn't matter because you're going to be adding products anyway. Customer segments don't matter as it directly relates to that because that's a kind of one and done definition. What does matter is what the resulting impact is going to be on what you need to do to market.
And here we arrive at that final why and the right question that Kristen needs to ask herself. How much is your marketing going to change when you add these segments? When you go from marketing services to authors only and expand that to offering content to both authors and editors, what in your marketing is going to have to change?
If the answer is a lot, then yes, by growing in this direction, you are absolutely in danger of creating multiple businesses for yourself because you are going to be juggling multiple separate marketing efforts. And in the solo business world, the number of separate marketing efforts you're running is the equivalent of how many businesses you're running. I know that's not a literal definition, but I can tell you that in over 10 years of working with small business owners, the amount of marketing funnels you are running is the equivalent of how many businesses you feel like you're running.
So, If the answer is, yeah, my marketing's going to change a lot and I'm going to need to run multiple marketing funnels, then that is a danger signal. But if the answer is that your marketing isn't going to change that much, then it's fine and you're not likely to feel the sting of taking on the equivalent of a couple of new businesses.
Let's go back to that house plan example. When I started looking at why I was struggling to keep up with all the various house plans I'd collected, It became obvious that the problem wasn't about how many varieties of plants I had, i.e., the problem was not how many customer segments or how many products I was offering. The problem was in the different ways I had to care for those different things, i.e. the marketing mix.
So I simplified, and now I have a rule where I can only buy varieties of plants that fit into the care cycle I have established. So if we think of the care cycle as my marketing efforts, I can add any type of customer segment, any type of product mix, i.e. any type of plant variety that fits within that care cycle. But if it doesn't fit within the care cycle, it's not an option because it adds too much to my plate.
So again, a reminder, what we've done here is identify the right question to ask. And that question isn't about how many segments or products you can offer, but what those things share or don't share with the main driver of what I call model bloat, which is marketing, right? In your business model, what is going to be the main driver of causing those initial symptoms that you're worried about? You're worried about overwhelm. You're worried about being run ragged. What is going to cause that? Marketing - extra marketing effort.
Advice for Kristen
So Kristen, if you are going to have to run different marketing efforts, say a relationship marketing funnel for services and a traffic funnel for those content products, then you may find this isn't a good option. But if all of your segments and offers fall under one type of marketing funnel, you're likely in the clear. And my friend, this is a good news, bad news situation. The good news is we have found the right question to ask.
But Kristen, I'm not sure you're going to love the answer because I'm guessing you are going to find that it is the former, meaning that you may find that this is not a great option. Because what do we know about marketing and how it lines up with different product types? We know that higher touch services like the ones you're offering now are going to fall under relationship marketing because you are looking for just a few great quality leads.
The marketing goal for anything higher ticket is high conversion, and what we need to find high conversion is just the right number of quality leads. We are looking at running a quality over quantity funnel. But when we start talking about content-based products, those tend to fit better with the more classic low conversion mass marketing traffic model that requires a lot of leads. And as we talked about in the last episode, the marketing efforts required to fill both of those funnels are very, very different.
And so Kristen, my advice is to tread carefully here because what we have found is that your proposed way to grow is likely to put you into a position where you are running both relationship marketing and traffic marketing efforts. And that is likely to be where the trouble starts to creep in and where you do start to feel like you're running multiple businesses.
If we had a proposed addition of client segments and product mix that were in alignment with your current marketing, i.e., they were in alignment with relationship marketing, then I wouldn't be as worried for you. But what you're proposing here is that you're going to add a product category and therefore a customer segment that lines up with traffic marketing. And so you are going to be running two very different marketing efforts in order to sell to this expanded customer base and expanded product mix.
And that's where it's potentially a problem. I don't have a problem with additional customer segments. I don't have a problem with an expanded product mix as long as it stays in alignment with that marketing mix, right? Back to the house plants: as long as those things fit within the current care plan, expand all you want. But when you start branching out and you start adding complexity to the care plan, i.e., adding complexity to the marketing, that's when we run into issues.
So, Kristen, I hate to say this. I don't like to be the bearer of bad news, but I would tread really carefully in this situation. Take a look at what the different marketing requirements are going to be to make this make sense. And let's go from there.
Take a Deep Breath
We've just talked about a lot of things, so let's review. It is often the case that you are asking the wrong question when you are asking big strategic questions about your business. And to clarify, there's nothing wrong with asking big strategic questions about your business. Of course you should do that. But to arrive at the answer, it is likely that you're going to want to drill down and find some more foundational questions to answer so that you can build up to answering the big question that you're asking yourself.
The question is just too big. It sets you up to answer in a way that's not grounded in any core reasons of why you're asking the question. So instead, you want to go back and go through a 5 Whys exercise to identify what the root question is, and then answer that, and then answer the question that comes after that. So this is a very simple exercise and I demonstrated it for you. You're just asking why five different times and trying to figure out, you know, what are some of the knock-on effects that are going to happen when you start implementing whatever you're thinking about implementing is that big strategic thing.
And you saw when we did that here, we discovered that the right question wasn't, should I add some segments? Should I add some products? The right question is discovering that the root danger in adding those things isn't actually in adding those things. It's that the root danger is in the marketing requirements that are going to be added in order to support those things that you're thinking about adding.
So therefore, the correct question to ask is, will the customer segments or new products I'm thinking about adding to my business be served by my current marketing efforts? If so, you're in a low danger situation. When we're talking about risk reward, this is a low risk situation. But if the answer is no, and the answer is I'm going to need to build up a different marketing machine to sell these new products to this new segment, then you are in the danger zone. You're in a high risk category and you want to tread carefully before making that decision.
Thank you so much for being here. I love answering all of your questions on the Sequence Over Strategy podcast, and I'm going to be back every other week with a new episode. So make sure you subscribe so you don't miss one. And if you'd like me to answer your question on the podcast, head over to themichellewarner.com/SOS. Send me your SOS signal, tell me what you're wrestling with, and you just might hear my answer in a future episode.