Insight 10: How to solve complex problems upside down to get ahead.

Berkshire Hathaway is a US based investment powerhouse that is most famously associated with Warren Buffett. Buffett has been one of Americas richest men for over 25 years.

But what isn’t known is that Buffett attributes much of his success to his business partner, Charlie Munger. Charlie died in December last year aged 99 but he left behind a considerable legacy – and that is how he solved problems.

Why is this important? Because for over 2 years, in an effort to get inflation out of the economy, they Reserve Bank has worked away at creating a recession. And its now clear that many New Zealand businesses are faced with the problem of recessionary forces affecting their business and their livelihood.

So, what was Charlie’s approach to problem solving?

Charlie believed that when faced with a large problem that you should always invert. What does this mean? He said, to get real progress, look at the problem upside down. For instance, “don’t think about what you want, invert it, and think about what you want to avoid. “

Like anything new, it’s a little hard to understand at first, so let’s put the concept in context;

So, the question you are now solving is: How do I make sure that I don’t have financial stress?

And the answer is, I need a successful business. So, if we invert that, what we don’t want is; I don’t want a mediocre business.

And the problem you are now solving is: What are the things that I need to do to ensure that my business is not mediocre?

And on it goes and you move back and forth from negative to positive.

Make no mistake, Charlie Munger was a tough guy, and this is a tough process. But there are some powerful forces at play that affect us as business owners – so it takes a powerful tool to ward them off, or even better turn them into opportunities. This might not be your cup of tea, but for some, it might provide a break through moment to move to the next level.