What to do when it’s not working

When you’re building a company, things are bound to go wrong. At some point, you’ll miss your revenue numbers or your customers won’t be engaged as you were hoping they’d be. Whatever the case, when something goes wrong, you’re going to need to figure out why.

To figure out what’s wrong, you’ll need to go to the source of the problem. There is no cheat code for fixing these things. You have to get in the weeds. (Just like the way to build something customers want is to be really close to your customers.)

When something isn’t working, there are broadly two possible reasons. Either the strategy is wrong (in which case you need to throw it away and start over), or the strategy is fine but the execution is off (in which case you need to debug and fix it).

One of my advisors likes to illustrate this point with a story about the time his company opened a London office, with a goal of expanding into the European market. Unfortunately, early revenue numbers were disappointing. The team’s consensus was “Wrong strategy. Europe just isn’t ready for our product yet.”

 “Maybe,” replied my advisor. Then he got on a plane to London to take a look himself.

The next morning, he showed up early at the London office to find out that... no one was there. Around 10 am, the sales team started to trickle in, make some espresso, and chitchat. At that moment, he realized that the problem wasn’t the strategy, it was the execution. It wasn’t that Europe wasn’t ready for his product—it was that they hadn’t hired the right initial sales team. They had hired a sales team that wanted to coast and maintain the status quo, not ones who were driven to break into a new market. So he replaced the team with new, hungrier salespeople, and, lo and behold, European sales took off.

If you want to understand why it’s not working, you can’t figure it out just by looking at a dashboard.

One of the core principles of the Toyota Production System is genchi genbutsu, the idea that you need to go to where the work is being done if you want to understand and fix a problem. If you’re experiencing a problem in your manufacturing process, you can’t debug it from your desk. You have to go to the factory floor, because you won’t understand the problem without visiting the actual worksite. And if you don’t understand the problem, you certainly can’t fix it.

The same applies here. If you’re trying to figure out why customers aren’t buying your product, you can’t just read the third-hand summary explanation. You need to watch the product demo, listen to sales calls, and visit the actual sales floor—and only then will you be able to determine what’s wrong.

From afar, “It’s a strategy problem” is indistinguishable from “It’s an execution problem.” But if you go to where the work is done, roll up your sleeves and start digging, eventually the answer will become clear.