060: Triangle of Tradeoffs

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Hello. Hello my friends. Today we are talking about the project management triangle or trade offs. Maybe you've heard of it. Fun fact. My parents are both architects. My dad is an architect, my mom's a landscape architect. They met in grad school on the east coast and then got together when they bumped into each other randomly in San Francisco one day after that. I like to tell them that I take after them insofar as I'm an idea architect, as my friend Laura pointed out. She also called it a freedom architect, which I think is so fun that I don't necessarily design plans. I don't really have a visual sensibility in that way.

But I love creating structure and creating order out of chaos.

Why am I telling you what my parents do for a living? Because for a stretch of time. So my dad has run his own business for many, many years, a good chunk of his career. And he always used to tell me growing, especially when he was working on residential remodels, he said every client thinks they can have it all. They want the highest quality at the.

Lowest prices in the fastest speed.

And I always have to tell them pick two. That is the project management triangle. We have speed, quality and cost.

And it's true that it's very difficult.

Not only to receive all three if you're the client, but to deliver all three if you're the business owner. You have to make choices. It is almost inevitable that there's going to be a trade off of some kind. For example, if a client wants something done quickly and the highest quality, it's going to cost more and it should cost them more because you're bumping them up in your process and you're Speeding it up and bumping them up the line and delivering the best that you can do.

The highest quality.

If they want something super high quality and super low cost, maybe you're bartering with a friend. Well, maybe it's not going to get done as quickly because you have to focus on the higher revenue generating activity. And then the third part of the trade offs, if they want something done super fast and very low cost, it might not be that good, it might not be the highest quality. So let's talk about McDonald's. There you're getting a burger, it's done very quickly and it's very low cost.

But is it the best burger of your life?

Most likely not. On the other hand, we all know you go to a Michelin star restaurant and they give you a burger that's like 6 inches tall and who can even eat this thing? And there's patties and Asiago cheese and grilled onions and it's just done to perfection.

Okay, well that's super high quality, but.

It'S also going to cost you. I was reading a book called the Road Less Stupid.

This is recommended to me by my brother and it's really good. The author, Keith Cunningham, he puts all.

These chapters and they're kind of like tough love. Tell it to you straight.

He's all of our honorary chairman of the board and he's telling it to you like a board member looking into your business. And also from the quote, stupid mistakes that he has made throughout his career. Every chapter also has these fantastic thinking time prompts. I need to go back. There's over a hundred in the book.

And they're so juicy. Like any one of them would be super insightful.

Particularly he also talks about this project management triangle. He calls it something like a death triangle, which that's just too violent for me. But he says that essentially as business owners there are three primary success, operational excellence. He gives these examples of Home depot, Walmart and McDonald's where the internal focus is on cost, speed or quantity of selection. The second one is customer intimacy. His examples are IBM, Nordstrom, maybe a.

Neighborhood bodega or drugstore.

And there the internal focus is on.

The quality of the relationship with the.

Customer and exceptional customer service.

The third category is product leadership.

Think Intel, Apple, Tesla. The internal focus is on innovation, functionality, features and the overall design and performance of the product. He says that the mistake small business owners make is attempting to be all things to all people.

A truly bad idea. What I like about this is the reality check.

If you had to pick two that you're going to make your name on the brand of your business or which two do you want to pick? Which ones are most aligned with the values and goals that you have for your business? He even says you would think for a long time to come up with the name of a successful business that has created a great brand by optimizing for all three with equal emphasis. Spectacularly successful companies attempt to excel at only one of these success propositions, maintain parity at a second, and usually ignore the third. In other words, it's rare, if not impossible to find a business that delivers.

The highest quality in the shortest period.

Of time at the lowest price, and.

Has a world class customer experience process.

The reason is that's not a formula for scaling a business or for being profitable. That is a formula for trying to please everyone and as a result going broke.

The last thing I'll read you, he says.

Here it is on a bumper sticker.

You can't be important everywhere, so be important where it counts.

Ah, this is just so good. It's such good food for thought.

Especially the prompt that can you think of a company that you love and admire that excels at all three? Probably not. I mean, maybe there are some small examples, but it's true that the companies that really make a name for themselves prioritize one and then that's their value that they bring. I have a thing for luxury hotels. Like, I just love them. I don't know why I love them so much, but I can tell you right now I'm not looking for the lowest cost hotel anymore. Same thing when I fly. I fly Delta and I always book at least Comfort Plus. I have not yet reached a stage.

In my life where career where I'm booking first class all the time, usually only if I finagle some great deal.

But Comfort plus, yes. I am not looking for the very cheapest seat on the plane that doesn't recline. And it's right near the bathroom and it's at the very back of the plane. No thank you. I will pay a little more, especially if I'm traveling for business. And I will sit by the window and I will sit in a seat.

That reclines where I can put my.

Bag under the seat in front of me that's not near a bathroom.

We'll be right back just after this.

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There's a line I heard on a podcast in a conversation and now I'm kicking myself is a well known Silicon Valley entrepreneur. Possibly Mark Andreessen could have been Reid Hoffman, but I don't think so. And he said of all the entrepreneurs and the startups that he spoke to, the number one thing almost everybody needed.

To do was raise their prices.

There was almost never a case where he was telling a team you need.

To lower your prices.

And so many companies are on the freemium model. He was saying double. You have to stay in business.

Think about this for your business of.

This project management triangle, quality, speed and cost. What do you want to be known for? What is most important to you and what are you willing to sacrifice? Maybe you're making a different but related set of trade offs in your business. For example, when I was coaching one on one I would create a shared Google Doc between me and the client and I would always encourage them to fill in updates and I said I would, I will always review them before we talk. But I knew that I am not good at email and doing long essays where I'm coaching over email. I learned that the hard way because I would have some clients very early on in my business who it's so understandable but would write me these long missives and I would spend spend all this time writing back and then I.

Realized I felt so bad if I.

Got overwhelmed or I didn't respond in time. And so one of the trade offs that I made was I will show up and be fully present on our calls and I will review everything in the Google Doc before we talk and I will have you on my mind and I will send resources and people and introductions and connections as I think of them. But what I can't commit to is in depth coaching via email in between our calls. So I was making a trade off a little bit.

I don't know of the project management.

Triangle where this falls, but a certain trade off in terms of my 247.

Availability in order to deliver the very.

Best that I had during the time we had together. Another way you could frame that is. So if that's the time piece of it, well then what would the investment need to be in order for you to be on call and give that.

Uber red carpet service?

For me, there's not really a price. The whole mantra of free time is working less and fewer hours and having those hours be really contained to your best energy. I don't know that there is an amount. I mean, okay, who are we kidding?

If someone paid me like on retainer, 20, 30, 40, 50 grand a month to be on retainer and answer their.

Text messages anytime, would I do it? Maybe. Probably not forever though. There's really no amount of money that could get me to be like a responding monkey to my phone at all.

Times for a really demanding client. I asked this question in the introduction of the book. I call it the million dollar client question.

But you could think about this for yourself.

Is there an amount of money that would make it joyful to deliver your services at a certain threshold of time? Money and quality? And then which of those trade offs are you willing to make? Which of those areas do you want to become known for and which of those areas do you have the best chance of being known for? One thing I love about Apple products about the Peloton Bike that I Pandemic purchased is that they're gorgeous and functional and I use them every day. So I don't mind paying more for them because the investment per use amortizes out over time to be very low considering the value I get in return. So that's an example where price is not at all the driving factor. Yes, it will sting a little bit.

And I certainly did order the peloton bike with 0% APR for three years.

Why not? And just make monthly payments?

But the price isn't really what got.

In the way, it's how is this going to serve me in my life. So let's think about that. As business owners, you don't always have to price things the lowest. If you offer something of value that also is tremendously high quality and wreaks a true impact in people's lives, then go ahead and increase your prices guilt free.

To wrap up this solo episode, you.

Hereby have permission to prioritize one corner of that project management triangle above the others. I'm so curious to know which one you're going to pick.

Thank you so much for being here.

Listening everybody.

Have a beautiful rest of your day.

If you've listened this far, you get a gold star.

Thank you.

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