Solving Problems Thinking Outside the Box

Thinking outside the box isn’t as unique as you might assume. All sorts of people do things all the time, that are outside the normal limits they are supposed to follow. That’s a shame, but what’s worse is they don’t apply their ability to think outside the box to solve problems. That’s the rare version of outside the box thinking.

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I can recall two specific times thinking outside the box enabled me to achieve results beyond anyone’s expectations. The first occurred in 1981 when one of the software authors I worked with at Digital Marketing, invented a box that would run business software on an Atari game computer. A group of us wanted to manufacture the box and sell it to Atari owners and broaden our distribution of business software by roughly 20,000 users. Everyone loved the idea including Dave Gangola who had constructed the gizmo in his garage.

Thinking outside the box, I suggested we contact Don Kingsborough who was, at the time, responsible for Atari’s marketing.  Kingsborough also introduced a talking teddy bear named Teddy Ruxpin and built a giant marketing firm around it. Everyone liked the idea and we proceeded to contact Atari to setup10170-Atari-800 a meeting to discuss our proposal. In this process, we found out that Atari was attempting to construct the very same device Dave had invented all by himself and the project was code-named “Sweet Pea.”

In exchange for $250,000, and with the help of Peter Moss, who had come to us from Charles Schwab, Bob Baker and I met with Atari several times and negotiated a contract to provide the schematic design, manufacturing rights for 20,000 units, and 5 prototypes in time for the Comdex trade show in Chicago that year. I met Nolan Bushnell and Alan Alda, who was Atari’s official spokesman.

We were higher than a kite that winter but ran into a bit of reality when the low-end of the computer market fell apart. We spun off two companies, Add-On Computers and Add-On Software with the proceeds from Atari but our trip on cloud 9 was short-lived. Nonetheless, outside the box thinking produced a giant leap from thinking we would manufacture these boxes ourselves and try to sell them one at a time.

The second outside the box thinking, had to do with saving lots of money in inventory when I worked for Al Pease at Independent Business Systems in Livermore, California. IBS was a manufacturer of multi-user computer systems, which came in two basic flavors. One ran a proprietary  operating system based on UCSD Pascal, and the other on a niche operating system called Turbo-DOS. Both flavors came in a variety of configurations based on the size of the hard drive(s) requiring the stocking of multiple hard drives for all the supported configurations. One day, it occurred to me that by using a variety of hard disk controllers, we could use fewer hard drives and supply the same configurations in our price list. Al told me, “You earned your paycheck this month,” when I shared my bright idea. The reduction in inventory was significant and gave us the feeling we were fleet of foot, when it came to computer manufacturing.

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How Much Should You Budget for Advertising?

This is a common concern of all businesses who are trying to generate and increase sales. I have seen so many people who throw money at this problem without having a clue what the outcome would be.

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When I was in business school, we had a guest lecturer who was the retiring CEO of the Bank of America and I asked him the same question. He said 2% of gross sales and that’s what I might expect a conservative businessman to say.

For starters, I always say, “It depends.” The situation varies from business to business and from market to market and depends on the competition as well as several other factors. I’ve watched too many small businesses go under because they had no budget at all. They spent advertising money based on their gut feelings. If you would like to avoid that outcome, I recommend the article at the end of this story by Roy H. Williams, for a great example of exactly what you can afford. And that’s the message here, you should not spend more than you can afford. Just like your budget at home, you must take more in than you send out.

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Having a plan and stated goals will make it easier to create your budget. Budgets for advertising and promotion usually are broken into different segments and are based on the kind of business and the greatest influencers of customers in your target market. If you absolutely have to come up with a number immediately, stick to the 2%. You will see, after reading the article at the end of this, that if you stick to 2%, chances are, you will not be spending too much.

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2% of a small number, isn’t very much, so that will certainly limit what you can spend it on. The better your system of capturing what caused your customers to buy, the less risk you will be taking. If you like to gamble, all bets are off.

Calculating you ad budget Ad Budget Calculation by Roy H. Williams

Failing to Plan is Planning to Fail

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I enjoy planning and I’ve had lots of experience doing it. Planning with me started before I graduated from high school when I needed a plan for navigating the probability of being drafted to serve in a war in Viet Nam. Since I was not accepted by any of the colleges to which I applied, I had to contend with the draft board who, at that time, took every able-bodied male over the age of 18 and sent them into the U.S. Army. Sorting things out I found that volunteering for the service allowed me to choose either what my job or MOS would be, or where I would be stationed. I lived in Germany for 5 years and that was a tempting choice, but I decided to take the longest school I could find in a subject I thought would be interesting and that turned out to be 20 weeks studying meteorology, the weather.

This exercise taught me something important about planning which would stay with me throughout my work career. You will never account for every variable in a plan, and you will, however, discover some things you wouldn’t have if you did not plan. Planning for contingencies is just as important as planning itself. That’s how you avoid major errors and unacceptable outcomes.

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Fortune smiled on me when I met Bob Baker and he hired me in 1981 at Digital Marketing, a software publishing firm. Our premier product was Milestone, a PC project management software program. Milestone was also sold as VisaSchedule for the Apple computer. This program introduced me to the formal elements of a project plan and the charts and symbols used in professional project planning, the key ingredients of which are people or manpower, time, and money. These elements are balanced to save as much of each as possible and allow project managers to determine how long it will take, how many people in the effort and what it’s going to cost. Projects are broken down into tasks that have associated time and cost elements. They are presented together in a Gantt chart which indicates the milestones to achieving each section of the plan.

Later in my career when I worked at Computer Aided Management, I became familiar with ViewPoint another PC project management software package but this one was much more robust and expensive. Where Milestone had been a couple of hundred dollars, ViewPoint was $3,000 and came with a week of training ensuring customer’s success using it. This version of the project management planning tool focused a great deal on tracking the progress of the plan and was utilized by very large corporations like Pacific Bell, AT&T, and Hewlett-Packard to plan their projects. Our sales department spent many hours demonstrating ViewPoint’s capabilities and it was selected Editor’s Choice by PC Magazine twice.

A few years later, I found myself consulting with Digital Tools, who sold a software project management package called Autoplan which ran on minicomputers as well as PCs. And I had another client, Kidasa Software who published a software program called Milestones Etc. that produces Gantt charts quickly and easily. I participated in the production of PG&E’s internal manual on project management and have worked with several dedicated project management consulting firms.