When is a Camel a Horse Designed by a Committee?

Too many cooks spoil the broth. A child, looked after by seven nannies, is a child with one eye… Phrase it however you want, but when many manage one thing, some things are missed or turn out wrong. The camel analogy specifically criticizes committees and group decision making, implying that incompetence results when too many people are involved on a project. Therefore, the camel’s humps reflect bad planning and inept design when the original concept was a horse. 

These proverbs speak to a number of current issues regarding decision making, innovation, and performance. It’s worth asking: How disciplined, organized, programmed, and/or fact-based should decisions be? Or are we heading in the direction of unstructured, flexible, creative, and innovative planning?

Unfortunately, we tend to rely on preset parameters or stick to old habits rather than pursuing the most effective process. So, let’s explore some topics that can help you decide what the best plan of action might be for any given scenario:

Camel (Committee) Versus (Horse) Individualism

The simple answer is it depends. If you have a thriving company with ample market and internal capabilities, diversifying can be an exciting option. In particular, vertical and horizontal integrations can assist in achieving better use of your resources. Similarly, if you have operations or marketing capabilities, cooperation can be highly productive in better utilizing those resources.

In contrast, the less resources, knowledge, or experience you have with cooperation, the less you should do it. Diversification does not work effectively in business cultures that have no synergy. Similarly, cooperation frequently fails when it is done to solve or cover up weaknesses. The K-Mart and Sears merger is one of the best examples of failed diversification which was executed with poor management and a prayer that two losers would make a winner.

Innovation Versus Discipline

I believe innovation and discipline can coexist.  You simply need to focus on improving autonomy at all levels as you simultaneously increase discipline. For example, Google, among other big corporations, are developing artificial intelligence (AI) programs to write and develop artistic works like music and art. They argue that this technology will greatly enhance an artist’s ability to create. Others disagree, saying that it will just replace artists. My own experience in the knitting industry showed me that automation greatly enhances an artist’s potential and reduces mundane tasks. I believe that similar improvements are evident in areas like digital photography and animation.

George Bernard Shaw said, “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” Similarly, Steve Jobs quipped that if he asked customers what they wanted; it would be obsolete before he got it on the shelves. So, it remains that innovation is a necessity, but if it’s unmonitored, you may end up with that pesky camel…

Focus Versus Diversification

Some businesses try to randomly pursue diverse options by simply throwing s**t at the wall and seeing what sticks. Others complete so much research and planning that, in the process, aspects like goals, probabilities, and outcomes are overshadowed or forgotten. Business owners need to identify priorities and focus. From there, test and adopt or change as opportunities or issues arise. It’s important to remember that many plans are based on wrong assumptions or are poorly executed and, therefore, do not succeed or are unable to adjust to change.

For example, I was working with a client who was trying to execute over 15 different educational programs and was stressed out, over budget, and not managing effectively. We simply cut out the least effective programs which saved money and, as a result, were able to allot additional attention and resources to the more effective ones. Focusing your strategy can be accomplished with a few simple efforts:          

  • Measure, Estimate, Prioritize, and Adapt.
  • Follow the 80-20 rule.
  • Make mistakes and learn from them.
  • Be open to change and feedback.

Experience and Expertise

In his book “Outliers,” Malcolm Gladwell became famous for stating that, “10,000 hours of practice are required to become a world-class expert.” I am not sure it is 10,000 hours, but my experience indicates that experience and expertise are probably the most important factors in achieving success. That doesn’t mean you need expertise in everything, but it does mean you need at least a hook in the field you are pursuing. And if you know you are lacking expertise in a critical area, I suggest hiring someone to help.

For example, right-brain creatives typically don’t like financial analysis so it’s usually a good idea for them to hire an accountant. In the last couple of weeks, I have had clients with seemingly great ideas and passion who overestimated their gross margins by 10-20%. They simply didn’t do the detailed financial work and didn’t understand that those numbers could make a huge difference between profit and loss.

This argument is in no way intended to ignore the importance of passion, commitment, innovation, testing, and even mistake making. I’m just saying that both individuals and organizations need to realistically assess the risk of failure and the reward of success. Expertise and experience are critical for accurately evaluating opportunities and new innovations.

Risk Evaluation

Are all of the features of a decision understood? Do you know the probability of reward, the amount of the reward, and the value of the reward? For example, what are the goals of your efforts? My clients are usually small businesses who need to make a profit and earn a living. Thus, they frequently pursue less risk. 

In contrast, venture capital firms are frequently pursuing growth and worry whether the enterprise will be large enough to generate large returns. Therefore, they expect a certain amount of loss as well as some lost investments in order to generate large growth and profits in other areas.

Analytics Versus Intuition

The increased use of analytics over intuition has been significant in improving the understanding and results of decision-making. This shift was greatly influenced by the growth and confidence in behavioral economics fostered by authors like Daniel Hahnemann, Richard Thaler, and Michael Lewis. While there are no quick and simple resolutions, there are a few simple rules to improve the decision process using both analytics and intuition. 

Analytics is simply the increased use of research, models, probability, risk, numbers, and analysis to improve decision-making. In some cases, it has proved to be a valuable tool to understand and improve decisions or simply validate prior intuition—particularly where there is plenty of stability and historical data. For example, I have helped several of my clients improve their businesses by focus on the 20 percent of customers or products, which we know, statistically, accounts for 80 percent of their sales.

Here are some simple guidelines to help manage decision making dilemmas:

  • Understand goals, tasks, and complexity. For example, the more uncertainty and unclear information, the more you need to rely on intuition.
  • Integrate the proper role of expertise. If you have complex tasks that require diverse resources, incorporate collaboration. If you have standout experts with extensive experience rely on their abilities. For example, I am always fascinated how surgeons and lawyers delegate tasks to paralegals and surgical nurses.  
  • Test, measure, and adapt. Gather information, confirm ideas, adapt and improve winning ideas.
  • Incorporate risk to evaluate the potential and results of success.
  • Don’t be afraid to follow your passion, commitment, and instincts.
  • Take a break. We are frequently too consumed and stressed with our tasks. We don’t take time to incorporate efforts like training, casual lunches, social events, new ideas, reading, and informal meetings into our routines. 

The goal is really to find a balance between group decision making and individual efforts so you don’t wind up with a camel when you wanted a horse. Recognize when analytics, facts, and research can improve your decisions. And don’t be afraid to follow your intuition when traditional answers don’t seem correct. Taking probabilities, risk, and values into consideration, you should be able to find some harmony between the two ends of the spectrum.

Dr. Bert Shlensky, president of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies.  His books for the business entrepreneur: Marketing Plan for Startups and Small Business and Passion and Reality for Small Business Success, are available at www.startupconnection.net.

Success Starts with Culture

Imagine waking up and being excited about going to work. What would it take for that to happen? Perhaps a boss who understood your needs? Coworkers who were easy to collaborate with? Clear communication between departments? A challenging, but manageable workload? Good pay, benefits, and some fun office perks like free lunches? In short, most of us require a work environment that supports our needs while encouraging productivity in order to be happy and successful in our jobs. Employee satisfaction relies heavily on company culture.

Establishing a successful culture is crucial for the overall progress of any company and maintaining a positive atmosphere with clear expectations is essential to facilitating employee performance. A great strategy that lacks a supportive culture is sure to fail, while an environment where people feel they are being given the recourses to excel will result in a much higher success rate.

So, how do you create a successful culture?

Encourage Communication

Surprise! When everyone is on the same page, things run more smoothly! Set goals and develop strategies to achieve them. And then share those with your teams. Inclusive environments foster a stronger sense of belonging, which can increase performance.

Accept Failure

It’s inevitable. Acknowledging that fact from the beginning enables everyone to get over their “fear” of it happening. If employees know they will be supported when it happens, they’ll be more likely to take (appropriate) risks, which can lead to innovation. When people are afraid, they can’t perform to their full potential, as fear is one of the leading factors that holds us back and prevents us from trying new things.

Look for the Positive

We’ve all felt what it’s like to work with/around negative people—their energy sucks everyone else down to their level. We feed off of those around us. Create an atmosphere where everyone lifts one another up. Finger pointing and attempting to place blame is never productive. When a problem arises, work to find a solution. When mistakes happen, look for the lesson to be learned and grow. Everyone will be better for it. A culture that focuses on learning from mistakes will always be more equipped to deal with them when they arise.

Provide Assistance

Make sure employees have the resources they need to succeed. That may mean providing additional training, one-on-one feedback, updated equipment/software, or extending deadlines. Understand your employees’ needs and let them know they can rely on you to back them up.  

Ensure Employees Have a Voice

This can be as simple as a suggestion box where employees can anonymously provide feedback. The key here, however, is that all suggestions must be thoroughly considered. Just allowing people voice their thoughts/opinions/concerns isn’t enough. Their suggestions must be appropriately addressed as well.

Treat People Equally and Individually

This might sound contradictory, but it simply means that, while everyone should be treated fairly and equally, their individual needs also need to be taken into consideration.  Some might need more supervision or verbal encouragement while others thrive being left with complete autonomy on a project.

Bring Back Basics

We all want to be respected, appreciated, and acknowledged. Be kind and remember that a simple, “Thank you,” goes a long way. And don’t forget to have some fun. Sure, it’s work, but we all like to have fun while doing it. Have a company picnic, organize a holiday party, or join an intramural sport with coworkers. The more you bond outside of work, the stronger the team will be at work.

Obviously, each environment is unique and the type of culture you cultivate will be specific to the needs of your individual organization. While a majority of these examples are universal, it’s up to you to decide what culture will work best for the success of your company.

Poll:

Which aspect of work culture is most important to you?

(Please let us know in the comments!)

  • Work/life balance
  • Benefits package (health care, PTO)
  • Flexible hours
  • Positive/likable coworkers
  • Feeling challenged

Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.net ) is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business as well as the President & CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, his focus is on working with select startups and small businesses.

Call Bert at 914-632-6977 or  BShlensky@startupconnection.net

Business Planning is a Process (Not a Formula)

Creating a business plan is a lot like forecasting the weather… those who are in charge of predicting a storm get blamed if they are not 100% accurate. The same logic applies to business planning in terms of timing, expediency, and execution. This can lead many business owners to abandon ship, rather than seeing it as an opportunity to change course.  Always remember, business planning is a process.

Carl Schram, former head of the Kauffman Foundation for Entrepreneurship, recently wrote Burn the Business Plan, which echoes a similar strategy for a streamlining the planning process. Reis and Schram are mostly right to criticize excessively lengthy business plans. At Startup Connection, we argue that business plans are necessary, but that they need to flexible and dynamic (and meant primarily for yourself, not others.) As the saying goes, “If you don’t know where you are going, any road will get you there.” Making plans for others (especially venture capital firms) and following specific rules almost guarantees the process will not be useful to you. In addition, venture capital firms account for a very small segment of business financing, especially in the beginning. A business plan is not just a document to be stored on a shelf; it should establish parameters and be developed, tested, and be continuously revised. Even with a “perfect” business plan, there will be failures along the way. In particular, failing and learning from failure are critical components of the ongoing planning process.  Business planning is a process.

Some Planning Suggestions

There is no cookie-cutter approach to writing a business plan. Get your ideas on paper before stressing about the organization of information. Don’t stifle yourself. Write it in your own words, as simply and concisely as possible.

Focus on your passion. A successful business plan should express why you think your business is a good idea and why you will succeed. If you need to dress it up in a suit and tie to show to investors, do that later. A business plan should be YOUR vision.

Common Parts of a Business Plan

Every business plan is different because every business is different. However, there are some common elements to consider, such as:

  • Mission statement
  • Goals
  • A description of products and services
  • Ideal customer
  • Analysis of the industry and your competitors
  • Marketing and sales tactics
  • Operational plans
  • Manufacturing and delivery logistics
  • Resources necessary (this includes labor, equipment, and facilities)
  • Financial budget

Also, focus on the components that are most important and challenging, rather than worrying about making every section perfect.

Some Further Tips

  • Don’t be too verbose: A formal business plan must focus on the needs of the audience and the entrepreneur. Business plans must be on point and clear. Typically, plans should be 15-30 pages. If additional details are required, put them in a short appendix.
  • Think it through: You might have a great idea, but have you carefully mapped out the steps you’ll need to make the business a reality? It’s worth investing your time in the planning phase to ensure you might make money in the long run.
  • Do your research: Investigate everything you can about your proposed business. Google and Amazon are great and easy tools to understand the market and your competition.
  • Be realistic about your competition: Is your product or service something people really want or need, or is it just “cool?” Why do you think people will buy your product or service?
  • Get feedback: Obtain as much feedback as you can from trusted friends, colleagues, nonprofit organizations, and potential investors or lenders. You’ll know when you’re done when you’ve heard the same questions and criticisms again and again. The goal is to have a good answer to almost everything that can be thrown at you.

Completing the business planning process can be challenging, but it should also be interesting, productive, and satisfying. The hardest part is developing a clear picture of the business that makes sense, is appealing to others, and provides a reasonable road map for the future. Another challenging aspect is integrating your products, services, customers, marketing, operations, management, and financial projections seamlessly together. However, these pieces should not dilute your enthusiasm to succeed.

Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.net ) has an MBA and PhD from the Sloan School of Management at MIT.  He served as the president of West Point Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start-up companies and small businesses. Call today for a free consultation, so we can use our business plan templates to take your business to the next level.

If Business Risk Makes It Comfortable, You’re Denying What’s Possible

Anyone needs to read the The Path of Least Resistance as a way to drive them toward creative growth, authored by Robert Fritz and the master of one of the best quotes ever outlining true business risk and what it does to many a company: “If you limit your choices only to what seems possible or reasonable, you disconnect yourself from what you truly want, and all that is left is compromise.”

Robert Fritz Said That, and to This Day, It’s the Mantra of Any Entrepreneur Looking to Take on Business Risk

In a nutshell, never limit yourself to what you’re comfortable with — or you’ll deny yourself the possibilities. Risk can do that, and here’s the clincher: sometimes that’s a good thing! But don’t fall into the trap of believing that you should just stick with what ‘works’.

Yes, it sounds smart. Go with what works. If it ain’t broke, don’t fix it. Common adages that make plenty of sense, especially in business. We’re not knocking that at all! But what we are saying is that while these sayings are true, they’re only true in the right situations.

After all…it doesn’t say “go only with what works.” So go with what works in your business according to the risks you commonly take, but don’t be afraid to go above and beyond that on occasion. Test the waters. Research the trends. Grow.

Now if it “ain’t broke, don’t fix it” makes perfect sense, but only if you’re planning on having something operate on its own and works just fine as it is without adding anything to it. What if you want to build something else along with it? Something that’ll make that perfect machine run even better?

In that case, you’re not fixing anything. You’re simply improving. Advancing. And there’s nothing wrong with that.

The Challenge Is Looking at Business Risk as NOT a Realist Factor, But an Opportunity to Have Ideas

So don’t be afraid of taking it. Risk is there for a reason. But it’s not to stymie you. It’s to enrich you. That being said, you can’t be enriched if you don’t have that creativity to reach beyond that business box and find out what’s outside of the cardboard.

In summary, you want to tackle business risk? Don’t be safe. Be creative!

Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.

The Holy Trinity of Brand Development: Features, Benefits, and Advantages

Say what you want about trademarks and logos. They have their place. But if you’re really looking for brand development, making sure it’s successful in the market you’re targeting, there are three aspects you have to focus on the most:

You Simply Ask Yourself These Three Questions About Brand Development: What Are the FEATURES, What Are the BENEFITS, and What Are the ADVANTAGES?

Real quick, if you don’t know the answers to those questions, simply start researching. Get them. Withoutbrand development-1 them, your brand isn’t a brand. But just a name. And there are a lot of names out there!

The thing is when you’re building your brand, educating your consumer base about the “holy trinity” does a few things — it lets your customers know what the product/service is, why it’s great, and why it’s better than the rest of the competition. We’re talking about a 1-2-3 combo, and if you were a boxer, that’s a knockdown on the 3rd round for the championship belt without breaking a sweat! You’re, of course, asking just why these three together make so much of a difference in your brand development.

  • Features — The “features” of your product and service happen to be exactly what it is. The specs. What your product/service does and provides. This is the nuts and bolts. The basic understanding. After all, customers may know what a fork does, but they had to have that explained to them when the fork was first introduced into the consumer market, right? These days, though, features don’t come across as that simple, hence why aspects like warranties, ease of use and distribution return privileges (the added “features”) make a difference as well.
  • Benefits — Here’s where we get a little tricky. The benefits are like the “features” except now we’re going above and beyond what the product/service does. Why does it do what it does? That’s the question. We now know what a fork does. But why do we need one? To effectively eat our chicken Caesar salad, of course, without any of the lettuce falling off! Now that’s a benefit. But it’s only a benefit if the customer believes he/she needs it and sees it as valuable.
  • Advantages — And, of course, lastly, it’s pretty obvious why a fork would be better than, say, a SPOON when eating chicken Caesar salad. This is where you have to explain what the advantages are. Target your competition. Set yourself apart. Sure, the spoon’s great for cereal, but when was the last time you successfully ate a salad with a ladle? These days selling the advantages of a product or service has been getting much more cutthroat and vicious with the shorter attention spans and seamless Internet communication capability.

Hence why more now than ever we focus on these three even heavier than before as part of branding. Packaging your product/service in this way along with that name and logo gets you started on the right foot. Plain and simple.

Now Get Started With Your Brand, Ring the Bell, and Make It Happen

Of course, I can help you with everything you need in propelling your small business, all the nuts and bolts. But you need the vehicle first. Here are the parts. Start building. And I’ll see you soon.

Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.

Going Against the Grain: Why Listening to the Business Outlier Might Be the Push You Need

These days business just isn’t about playing it safe or going with the status quo. Chances need to be taken. Such is the case for what is commonly called the business outlier, or in other words a professional who doesn’t follow the standard model of business in any given industry or market. Some might even call them trendsetters, whistle blowers, or even “contrarians.” I, of course, call them the hidden gems. The ones who might have an idea that’s never been tried before — and you never know, you just might be the first person to score a new niche, tap into a new market, or penetrate a brand-new revenue source no one ever thought existed.

So Here’s Some Strong Advice for You: Listen to That Business Outlier. And Take Some Chances.

The challenge, though, is the fact that oftentimes the outlier or contrarian might push a few buttons or ruffle a few feathers, because let’s face it: going against the grain can cause issues. And sometimes going against the grain means you’ve got that loud voice that yells out into the crowd that the old way of working just doesn’t work anymore, and you’re all stupid, when that’s also not true.

So exercise caution — and listen to that enthusiastic business outlier. You might pull some really clever golden nuggets out of that business networking conversation.

Think of the landscape we’re currently in. Changes are aplenty. Think of the fact that we have so many ways of borrowing money at 2% to 5% or even no interest on 6-month credit cards, but even now companies are going with 12-20% requirement for returns while passing on other opportunities.

I implore you: don’t. Never assume, especially on outdated stuff. Try something new. You never know if it’ll work if you’re not testing it in your business model.

So Are You, In Fact, Testing Out Any New Business Ideas and Challenges?

If so, fantastic. If not, please reconsider. Chances are pretty darn good that even if it doesn’t work, you just knocked another low card in the deck, which gets you to that ace in there. After all, good business is like a deck of cards. A numbers game. Keep going through all of them until you land the full house.

Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.