Everyone knows the value of planning ahead of time, but very few of us think about how effective working backwards in business can be. With so many new technologies at our disposal, beginning with the outcome we desire, then reverse engineering the milestones needed to achieve that outcome, has become easier than ever before.
Take something as common as securing a business or real estate loan for example. Not long ago borrowers had no idea whether they would be approved for a loan once they applied. They may have thought their credit history and assets were sufficient, but until the lender gave them that final nod of approval no one knew exactly on what basis the lender would decide. What’s more, borrowers whose loans were turned down might never learn the real reason why. Never mind whether there was recourse to correct that reason. As a result, many borrowers found themselves going from lender to lender, turned down for the same correctable reason.
But that was then. Today hundreds of online sites assist borrowers in determining whether they are qualified in advance of filling out an application. Moreover, should a borrower discover they don’t (or barely) meet a lender’s criteria; clear steps on what they can do to better their qualifications are spelled out. For instance, if the culprit turns out to be a low credit score, online tools show how many points a borrower can raise their score by simply a) lowering their overall debt, b)reducing the number of credit cards they own, c) making on-time payments, and so on. By using this information, prospective borrowers can act beforehand to make certain their credit score is never an obstacle to securing a loan.
But that’s just one example of working backwards to pave the way to success. Today, many college students choose their majors based on the foreseeable job market. With many graduates unable to find good paying jobs and forced to move home, it makes sense to choose a course of study that leads to employment. So by looking at industries where the greatest job growth is expected, students can work backwards to make certain they’re prepared for those opportunities.
Politicians are also famous for working backwards to win elections. They shape their platforms to appeal to issues that are of interest to the greatest number of voters. Then once in office, work backwards to sculpt legislation to garner the support they need to pass new laws and programs.
Similarly, successful marketing is an exercise in working backwards. Prior to introducing a new product or service, focus groups and surveys are deployed to identify what the consumer wants. Once this information has been collected and analyzed, it’s all a matter of reverse engineering. When the process is carried out correctly, rapid consumer adoption is almost assuredly guaranteed.
But working backwards isn’t limited to effective political and marketing campaigns. It’s a practice which can be applied to achieving all short and long term goals.
Not long ago a handful of young engineers reached out to me to discuss a start-up they had in mind. Having spent my career working with early stage companies which quickly grew into industry game changers (Apple, Abbott Labs, Xerox, Oracle, etc.) they wanted to see if I had any advice to offer them.
After studying their forward-facing business plan – complete with five year financial projections, product line extensions, competitive analysis, distribution and manufacturing analysis, etc. – and listening to their detailed presentation – I asked whether any of them had considered working backwards.
“Yes. For example, let’s start with what you need to get your company going. . .”
“We already have the ideas and the patents, so the answer is capital. We need capital.”
“So what do you need to get the capital?”
There was silence. Then one of them piped up, “We don’t know what we need to get capital. We thought it was the patents and business plan. . .”
From here we began working backwards. First, we identified the individual investors and venture capital firms most likely to invest in their technology category. Then from here, how to best get access to the those likely investors. From here, we identified the start-ups these investors had recently seeded. And then crafted a plan to reach out to the founders of the successfully seeded companies to get to the bottom of precisely what they did to get funding from the investor. Then we began reverse engineering the business plan and presentation to look and sound like pitches which had previously been successful. And we continued to backtrack like this until we reached a point where we could work backwards no more.
Fortunately, most engineers and scientists are familiar with the value of reverse-engineering. This is how many problems are diagnosed and corrected. So the young founders of this start-up quickly grasped the idea and dove head first into the process. The result? The first venture capital firm they presented to claimed they were a “strong match” for the kind of investment they looked for and seeded the company.
While successes like this might appear – at first glance – to be a matter of “luck,” in truth there is nothing random about success. In this case, the engineers went in with a presentation which meticulously conformed to presentations which had already been successful with that firm. There was no reason to believe that what worked previously would not produce the same outcome.
As predictive analytic technologies gain in efficacy and popularity, our ability to reverse engineer the steps needed to guarantee successful outcomes grows by leaps and bounds. But only if we learn to use the information and tools to work backwards.