I’ve said it before and I will say it again that the best part about writing something and sending it out into the world is that other people read it and write back. The reason that’s the best part is because I don’t have a monopoly on good ideas, frameworks, and heuristics and often when people write back they share with me something that tops the original. So it went when I heard from Steven after I wrote about trying to get good outcomes that matter.

The gist of that piece is that as you face an increasing number of challenges in businesses (or life, let’s cast a wide net), you need to pick and choose which ones to focus on. That means you need to weigh two items in tandem: the merit and the context. The merit is the idea that a good outcome is achievable. The context is the idea that achieving the outcome will result in measurable good. 

At Permanent Equity we’ve boiled that down to two questions. First, can we solve the challenge? And second, is the challenge worth solving. Because if you are going to spend time doing something, you both want to be able to do it and to know that doing it is worthwhile.

Well, Steven said that he liked our two questions, but that he had a mentor that ran “every single significant strategic decision through three questions.”

1. Is it real?

2. Is it worth it?

3. Can we win it?

He further said that he finds these questions so effective at getting to the heart of a matter that he structures key communications to others around them.

I like it!

The added element of “Is it real?” is interesting here, and I received Steven’s note on the same day that I talked to a small business that needed to raise capital. It was down year-over-year and starting to burn cash, but holding out hope that a big box retail chain that it had been flirting with off and on through the years would pick up its product line and place a large order that would serve as a springboard to sustainable growth. 

Now, winning that business is obviously worth it and the company had a credible plan to win it, but was the opportunity real? Big companies are fickle beasts and my experience is that it’s not fun to be a small company beholden to one. That’s because being in that position leaves so many things out of your hands and if something is out of your hands, it’s hard to know if it’s real. And if something's not real, it probably doesn’t matter that winning it would be worth it.

– Tim

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