Learning goal
After this lesson you can tell a symptom from a cause, formulate a measurable goal and write down a bottleneck hypothesis so that a test could disprove it. That sounds modest. It is the step most companies skip – and the reason initiatives so often start in the wrong place.
Symptom or cause?
“We have too little revenue” is a symptom. “Our quotes don’t get decided” is a more precise symptom. “We send quotes without scheduling a meeting to discuss them” is a possible cause. The difference: a symptom describes what you see. A cause describes what you could change.
A simple test: Can you derive an action from the sentence that starts tomorrow? With “too little revenue,” no. With “quotes without a discussion appointment,” yes. As long as you only have symptoms, you're not yet at a hypothesis.
Bottleneck means: the one spot where an improvement changes the result of the whole. Improvements elsewhere change the metric there, but not the result. Anyone who doesn't know the bottleneck optimizes side issues, often very diligently.
An example
A consulting firm with eight employees finds that revenue has stagnated for three quarters. First reaction: more marketing. Before budget flows, management counts out one cohort: Of 40 inquiries in a quarter, 22 were qualified, 18 got a quote, 4 were won. The quote-to-close rate is thus about 22%. Something else stands out: The quotes sat open for a median of 34 days before a decision was made, and in 11 of 14 lost cases there was not a single conversation after sending.
The symptom “too little revenue” becomes a hypothesis: “We lose quotes because we send them instead of discussing them.” The measurable goal: “Median decision time under 20 days, close rate of the next cohort above 30%.” The test: “Every quote is sent only with an agreed discussion appointment, for one cohort.” If the rate doesn't move, the hypothesis was wrong. That's not failure; it's insight for the price of one cohort.
Exercise
- 01Write down the symptom that concerns you most right now – in one sentence.
- 02Rephrase it three times more precisely until an action can be derived.
- 03Set a measurable goal with a metric, target value and period.
- 04Write the hypothesis as a “We … because …” sentence.
- 05Describe a test that could refute the hypothesis: What do you change, for how long, and how will you recognize the result?
Reflection aid
- Does your hypothesis contain a “because”? If not, it's still a symptom.
- Could the test disprove the hypothesis? If every result can be read as confirmation, it isn’t a test.
- Did you name a number you can already measure today? If not, your first task is to make it measurable.
- Does the hypothesis concern a spot whose change alters the overall result, or just a sub-metric?
The next lesson is about which tasks to tackle first when several bottlenecks compete for attention at once: proximity to the money.
