When I started this article a few weeks ago, I thought things were getting less stressful with COVID starting to reduce and the economy booming. Since then, the Ukraine situation has escalated, inflation has increased, and stress seems to be rising again. All of this is a reminder that continual change seems more permanent, and we don’t necessarily know what it is or what it will be. Our strategy should focus on being flexible and preparing for whatever might happen.
For example, my and others stock portfolios dramatically increased between 2019 and 2021 by investing in high profile tech stocks like Amazon. In 2022, those and many other tech stocks are dramatically down. Thus, I am learning to diversify.
Similarly, things like COVID, mask mandates, going to back to work, entertainment, and restaurant businesses are experiencing continued uncertainty rather than a straight return to normality. In contrast, kids seem to be going back to school normally.
The most significant aspect of all of this continual change is increased stress and depression. While many of us experience the roller coaster effects of uncertainty every day, an increase in mental illness, drinking, suicides, and crime point to more long-term and serious implications.
So, what do we do? I recommend understanding some certainties, watching change, and developing more flexible strategies.
Some certainties:
There are new structural trends that are becoming embedded in our culture. While myself and others often discuss them, they need to be given more consideration in our strategies and programs. These include:
Income inequality continues to increase.
Technology continues to boom.
Bureaucracies continue to be less effective.
Some changes to watch:
The economy keeps growing.
Labor will continue to be tight.
These changes are producing inflation, which has not been significant for over a decade.
Ways to implement flexibility:
Review and measure your programs on a more regular basis. In particular, evaluate the potential of alternative strategies, such as Internet versus retail.
Allocate some of your time and financial resources to developing and evaluating new programs.
Understand and implement programs to better manage changes like work from home, revived entertainment and networking, school, and diversity.
While change and its uncertainty are increasing, we need to give even more attention to proven best practices. These include:
Utilize technology. It’s not going away. And, it can streamline many of your processes.
Diversify everything: portfolios, employees, your skill-set, etc. We can’t continue living in our own little bubbles. Diversifying also exposes you to more opportunities for return.
Be prepared to adapt quickly. Change is a constant and it’s happening rapidly these days. Don’t get left behind because you’re unprepared, or even worse, unwilling to change.
Prioritize the 80-20 rule. It has been proven time and again that 80% of business revenues are generated by just 20% of our customers. Yet, we all continue to waste time, money, and inventory dollars on customers that bring in a lower return. This tendency frequently adds unnecessary confusion and complexity.
Focus on service, image, andculture. These are frequently the biggest (and often least expensive) ways for small companies to develop a brand and differentiate themselves. Something to consider: In the current social climate, people are more inclined to connect with a brand or buy from a company that is aligned with a good cause and/or participates in charitable giving.
Consider structural changes. Open systems in particular have a number of benefits including more effective problem solving, leadership, communication, and planning. It might be time to reevaluate how your company functions on a structural level and whether or not it’s producing the results you want.
It always seems that as soon as we think things are “settling down” and we’re falling into a groove, that’s when we’re thrown a curve ball. This is because we’re utilizing a mindset that craves the comfort of consistency and reliability. We need to shift our mindset to one that expects change because, while none of us can predict the future, we can, with certainty, rely on change. This might make you feel uneasy, but know that we are all in the same boat. Try to remember that staying flexible will make adapting easier. And, implementing sound, proven strategies will not only set you up for success, but put you in a position to effectively and efficiently change with change.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward.
We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
With the Internet as a daily staple in our lives, it may seem like we talk about everything and no topic considered off limits. However, when we take a closer look, most of our discussions are about nothing. Or, at least, not about anything substantial. Most people are more interested in popular topics than anything serious—just scroll through social media to witness countless examples of this. As a result, what important discussions are being ignored or avoided?
The most Googled searches over the last few months were eBook, YouTube, Amazon, weather, Walmart, Gmail, Home Depot, Target, and food near me. So, clearly Google isn’t being used as often to develop facts, evaluate different positions, or examine alternatives.
In general, we have built barriers and social taboos that limit discussion on critical topics, such as:
Sex may be a great conservational topic, but there are few discussions of practices especially after one has experienced puberty. The New York Times had an interesting article about sex among older people. One recounted story was about an aid entering a client’s room in a retirement home and finding two people romantically engaged. Being highly embarrassed and assuming something was improper, he asked his supervisor what should he do and was told to leave quietly and leave the door shut behind him. It reminds me of the saying, “It’s only awkward if you make it awkward.” And we’ve certainly made the topic of sex awkward with our own social constructs.
Politics receives a lot of attention, but there is very little constructive debate. In fact, many encounters start with rules about being polite and avoiding conflict. It is clear some of our leaders are even struggling to say nice things about some recent politicians who have passed away. This isn’t to say people need to get into fights, but there doesn’t seem to be any effort (or ability) to have constructive conversations anymore.
Intelligence has even become controversial. We have even elevated emotional IQ to avoid discussing if someone is actually smart. Evidently, it is acceptable to discuss if someone is a jerk, but not to discuss if they are halfway intelligent. Universities are reducing reliance on SAT scores for college admission. However, there are few discussions of what will replace it or the impact of the changes. Similarly, no one is talking about changing any of the other factors that bias the admission process.
Religion is consistently a controversial topic. Personally, I don’t understand how people can pray for God to help their baseball team or how God decides which team to root for. Similarly, using religion as means to avoid vaccination doesn’t seem like a valid excuse.
Finances are also typically avoided. The only probability is that people who are making money will talk about it and others won’t or are trying to figure out how much others are making. Notice how financial conversations have changed in 2022 seeing that the market has not done as well as previous years.
Even when we understand events, we are reluctant to discuss cause and effect. Facts are frequently more independent that we think. Too often, bias distorts positions and facts. We sometimes assume that the relationship among factors is a straight line. However, most relationships involve a variety of factors.
Entrepreneurs are often superb at describing how they perceive their company as different. Typically, the best sections of business plans are the description of the product or service and the expertise the members behind the business bring to the overall team. On the other hand, the weakest parts of the same business plans are, consistently, the competitive analysis, the market research, the marketing plans, and the distribution plans. See the chart below:
When we don’t take the time to talk through important issues, a lot goes unaccounted for. Committing to participating in open discussions can often shed light on critical aspects that may otherwise have been overlooked and, thus, save you from unnecessary frustration and extra work in the end.
One area where discussion is rampant and welcomed is sports. People love and accept criticism of their favorite teams. New York fans even support me in rooting for my Chicago teams. What makes this topic fair game for discussion? There is just as much passion, emotional attachment, and loyalty to sports teams as political parties. Yet, unlike politics, we don’t tiptoe around criticism and debate when it comes to sports.
Crime is another topic that is discussed often, but with very little substance. A few months ago, the big rant was about defunding the police. After recent violence, it is back to law and order, but little attention has been given to causes, analysis, or solutions. Similarly, there is no real effort to enact gun control or criminal justice legislation.
All of this is to say, we need more open discussion and should not avoid uncomfortable issues. Recently, a colleague of mine passed away. I will always remember our open discussions. We frequently had heated debates about difficult issues and, as a result, we developed some great solutions that were mutually beneficial. A heated discussion can still be respectful, productive, and produce positive results. Consider what topics you avoid and why. Engaging in these conversations could unlock new areas of growth and success—both professionally and personally.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward.
We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
The last couple years have been stressful, unpredictable, and rocky, to say the least. Getting back on track and accomplishing more in 2022 is going to take dedication and focus. This may feel like a major feat after so much uncertainty, but, rather than looking at the big picture, which can often seem daunting, let’s focus in on some key areas that will jump start a successful year.
How exactly do we reduce feelings of overwhelm and hone in on specific goals? Here are some key focus areas for success in 2022.
Focus on: Simplifying
We need to take it one step at a time. Focus on individual issues and their consequences rather than the overall uncertainty and stress in the economy and within ourselves.
A corollary of focus is “keep it simple stupid.” Simple also relates to the characteristics of your forecasts. Focus on factors that really affect your business so you can understand them and estimate factors that are not as significant. For example, look at aggregate costs and administrative expenses rather than trying to forecast small items like telephone, utility, and insurance costs on a monthly basis.
Simplify, wherever possible, so you do not lose sight of the forest for the trees.
Focus on: Change
While change continues to dominate and disrupt our society, we need to focus on solutions and improvements. The most recent examples are the resurgence of COVID cases, the uncertainty of “build back better,” and inflation, which will have an unknown impact on our economy and political environment.
The post-pandemic changes we’re seeing should be viewed as a critical opportunity to improve sales, profit, and competitive positioning. While there are some technical aspects to this, it is the thinking and integration of the components that can lead to success. Read more on this topic here.
Bottom line: Forecasts are often wrong. Change is inevitable. Be prepared to be flexible.
Focus on: Technology
Despite the fluctuations, there are several tools for executing solutions and gains in 2022. These are based on the strong growth and development we’ve seen, especially in technology, over the last few years.
Technology is accelerating and will have long-term effects on our economy as well as our lifestyles. Tech companies like Facebook, Microsoft, Google, and Amazon are dominating. Tech stocks still represent about 50% of growth in the S&P and tech is the focus of many startup ups.
Focus on: Prioritizing
We have too many choices, but aren’t informed about our options. Cheese, beer, bread, and turkey breast are among the most over-assorted products in our lives, but stores spend little time educating customers on varieties, taste, and price of different products. Making it a priority to educate consumers about their options would improve customer satisfaction.
Additionally, prioritize providing what consumers actually want and how they want to get it. Amazon had about 22-24% of all web traffic this holiday season and, yet, we’re still talking about less successful alternatives like retail and Internet outlets.
Consider Focused versus Comprehensive solutions: There is a big difference between ensuring that you focus on key issues and trying to cover every possible variable. We frequently make decisions and develop strategies based on general goals and assumptions rather than focusing on specifics.
Prioritizing can dramatically improve results. Focus on what you are good at and pay less attention to your weaknesses. Much of analytics in sports is based on getting players to focus on the efforts with the greatest probability of success.
Focus on: Removing bias from data
Comparing forecasts to 2021, 2020, and 2019 requires some special consideration to understand the differences. The biggest problem with forecasting is bias. And, whether we admit it or not, we all have them. Analysts love to discuss mathematical formulas and measurement in affecting bias, but most bias, especially in small businesses, is simply human. Your assumptions, analysis, and data can all unknowingly affect results.
A key element of balancing expectations and probability is to develop, test, measure, and adapt.
Focus on: Risk
We are frequently afraid of risk when dealing with the rapid changes in our society and environment. The Internet, digital technology, mobile phones, Google, and Amazon are examples of technology that is transforming our lives. Relying on old methods and a “we’ve always done it that way” mentality can actually be riskier than adapting and making change.
Focus on: Process
Many planning programs put financial objectives at the end of the process. Developing financial parameters at the beginning and then revising as programs develop has many benefits. It particular, it can help you avoid pursuing poor paths and highlight opportunities.
Additionally, work to create a more open and honest culture, which encourages open communication and collaboration. Empower your staff and management, and trust your employees. This may require reassessing your current workflow and hiring process to ensure you are hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times.
As we head into a year new, what are some specific areas you’d like to improve? Focus on those. Try to channel your energy into clear goals rather than on general ideas. And remember that success takes time and consistency. It may not happen overnight, but if you keep putting in the work, you will see progress.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward. We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at (914) 632-6977.
Have you ever asked a question only to receive the dreaded, “Because I said so,” response? This is often a phrase repeated to children, but even adults are prone to hear things like, “Because this is the way we’ve always done it.” If you’ve been on the receiving end of these statements, you know that they are never satisfactory explanations to questions. They’re a cop out—a way to evade the underlying issues and, perhaps, an unintentional admission of one’s fear of change or refusal to embrace innovation. And, that is exactly how we get stuck in patterns that don’t work within systems that are unwilling to adopt new structural paradigms—even when it’s the obvious answer.
Many people, myself included, have been writing on this topic for 5-10 years—reiterating time and again that our economy is dramatically changing and many analysts are ignoring the consequences. What is even more perplexing is that we continue to ignore some proven models of success.Several years ago, Walter Isaacson wrote in The Innovators about the impact of technology, the digital computer, and Internet revolution. These trends have only accelerated in recent years. One of the most interesting themes is the commitment, diversity, collaboration, and even friction, among diverse participants in almost every phase of the revolution, such as Jobs and Wozniak or Gates and Allen.
The results of this technological shift are evident in a comparison of stock performance of traditional companies versus newer tech companies. The stocks of P&G, I.B.M., G.E., Coca Cola, Dupont, and AT&T have DECLINED an average of 8% annually over the last 5 years. In contrast, the price growth of companies like Google, Facebook, Apple, and Amazon has increased at a rate of 24% annually. This trend is also evidenced by G.E. and other huge companies’ recent decision to dissolve their outdated structure.
To put that in perspective: investing $100,000 in the traditional companies 5 years ago, would be worth about $66,000 today. Investing $100,000 in the tech companies 5 years ago would be worth about $300,000 today.
Financial advisors also seem to be reluctant to embrace this shift. For example, much of their discussions focus on bonds versus stocks rather than tech stocks versus industrial or value stocks.
It’s really no surprise that so many businesses are failing considering both society and business refuse to recognize that old paradigms and structures are already obsolete or are well on their way. For example:
Large corporate structures (like print publications and brick and mortar retailers) are all gradual losers, or worse.
Companies as well as society continue to do what they have done in the past, often with poor results. Despite massive economic and political efforts, issues like income inequality, healthcare, and infrastructure investment will continue to hold back our economy.
With little real attention to these changing trends, the poor performance of many organizations is virtually a given.
Even more distressing is that it’s the structural paradigms of these organizations producing much of the deficient results, rather than the typical financial discussions. For instance, the long-held propositions that business advantages, like economies of scale and utilizing expertise and marketing synergies, are simply false in many cases. Rather, these and other former industry leaders are failing because of the following limitations:
Many large companies have tunnel vision, organizational constraints, etc., and ignore emerging technologies and opportunities.
They lack the flexibility to respond to the needs of the market and use outdated solutions to new problems.
They fail to allow the vision, entrepreneurship, and risk necessary to succeed, while heaping huge income growth on unproductive leaders.
In contrast, new structural paradigms are providing numerous opportunities for successful change:
The success of smaller, more innovative companies shows that many organizations should get smaller (or act smaller) in order to effectively deal with today’s environment.
Reducing layers and creating professional cultures are a start. Boards and management need to split up organizations like G.E., create spinoffs, or implement more independent groups. That may be what’s really necessary to maximize the potential of both individuals and organizations.
Large organizations say they want excellence, entrepreneurship, innovation, risk-takers, etc., but, really, they tend to encourage mediocrity. For example, short-term goals and reviews for both organizations and individuals actually inhibit the development of more positive cultural characteristics, rather than spur them on.
Testing and failure, which are critical parts of innovation, are punished more than rewarded. Even sound risk-taking is reduced because of the fear of repercussions within the organization. In short, organizations frequently ignore the advice, “you can’t score if you don’t take a shot.”
Organizations need to be open to measurement and feedback. Looking, understanding, and sharing financials, operations reports, and sales reports are the first step towards embracing new structural paradigms. Simple research studies, social media, and other devices are additional tools.
Open systems and collaboration are like winning the trifecta at the horse track. Open systems have been around for a long time but are becoming the norm for success. They reject bureaucracy, authority, hierarchy, and closed decision-making processes. They encourage participation, diversity, new rules, and to some extent, chaos.
These new structural paradigms, cooperation, smaller can be better, and open collaborative systems, offer great hope for organizations. While they rely on innovative approaches to problems, the solutions are readily available. Therefore, once we acknowledge that different strategies are needed, we can implement new tactics, provide opportunity and education, and allow our organizations to be effective.
I strenuously argue that if we do not learn to accept and accommodate innovation and deviant behavior both inside and outside of organizations, we cannot change or achieve excellence.
We’ve seen a multitude of change since the start of the Pandemic and it’s continuing to come full speed. Although change is inevitable, we must work to remain equipped to handle the drastic and rapid post-pandemic change we’re experiencing. To do this, there are some areas that deserve our concentrated attention.
Here are some current realities that continue to change and will require us to pay attention, keep up, and take action:
The pandemic is over 18 months old and is not yet over. It will undoubtedly have dramatic long-term effects on our society in ways such as continued stress, virtual work and school from home, vaccines, and new social norms and public regulations. Schools are already planning to cancel snow days and utilize e-Learning when weather is bad. A multitude of businesses are requiring proof of vaccination to enter—this includes restaurants, bars, sporting events, concerts, etc. We need a better understanding of issues and responses to post-pandemic change.
Technology is accelerating and will have long-term effects on our economy as well as our lifestyles. Tech companies like Facebook, Microsoft, Google, and Amazon are dominating. I just got the holiday wish list from my grandkids, which includes a new iPad and phone. Apparel, trips, and personal gifts are lagging while tech leads in sales.
Climate change, slower population growth, and more diversity are significant features of our society. Except for Africa, much of the world is getting older and experiencing slower growth than in previous decades.
Equitable policies and opportunities. The general response to ignore these and other critical issues is unacceptable. Political, social, and economic change are dramatically slow. For example, the time it has taken to adequately address discrimination against minorities and women is embarrassing. Sexual harassment policies and enforcement are decades behind where they should be. 18% of the population is Hispanic and they are virtually ignored.
Stress levels are heightened as evidenced by increased crime, suicides, shootings, drinking, and divorce.
Wealth inequality around the world is increasing and no one is doing anything to stop it. The number of billionaires increased from 1,000 to over 2,000 between 2010 and 2020. Their wealth grew from $3.7 trillion to over $8 trillion. The top 10% represent 80% of the wealth in our country making wealth and income very different things.
The most perplexing part about all of this is that there are solutions to most, if not all, of these problems. We simply refuse to adapt or we adapt too slowly. How have we done a good job in reducing things like car fatalities, drunk driving, diseases like Polio, etc. when we seem completely unable to reduce bullying, illiteracy, poverty, discrimination, gun violence, and climate change?
Not only do we need to possess the willingness to embrace change, we also need to be equipped with the tools that will enable us to react to change and create an action plan to keep up. Here are some suggestions to improve the speed and effectiveness of change and adaptation:
Consider structural changes. For example, there are numerous articles and books on how elite universities recruit and educate the top 1% with little progress in growing or expanding diversity. They also have billions of dollars in endowment and have been growing their endowment funds at rates of 20-40% per year recently and, yet, they are doing nothing to enact change.
In contrast, Mackenzie Scott (Jeff Bezos’ ex-wife who has $60 billion) is changing the structure of charitable giving. She is a disrupter in that she focuses on equality, gives only unrestricted gifts (no building or school names), and donates significant funds to lesser-known institutions, like black colleges, to help transform their entire organization.
Focus on reducing stress. The pandemic has caused significant stress and unhappiness and we need to take action to reverse some of that damage. My neighborhood has made an effort to increase socialization, warmth, and fun. They sponsor holiday parties, social event, networking meet ups, etc.
In general, friendliness, courtesy, and decency could significantly improve things. Greeting someone hello, saying please/thank you, giving hugs, checking in on neighbors, and offering to lend a hand really goes a long way.
Prioritize the 80-20 rule. In the modern business realm, it has been proven time and again that 80% of business revenues are generated by just 20% of our customers. Yet, we all continue to waste time, money, and inventory dollars on customers that bring in a lower return. This tendency frequently adds unnecessary confusion and complexity.
By focusing on the products that you know your customers want, you’re making them feel much more confident—especially when you’re selling online. Instead of finding new ways to market products that simply aren’t selling, you may be better off pivoting and concentrating solely on what is selling. If you give people what they’re searching for, they’ll buy. If you don’t, they won’t. It’s that simple.
Remember technology is king. Amazon, Google, Facebook, and Apple will survive and grow as they become even more innovative and efficient. Traditional retailers with large real estate platforms and margin requirements are at great risk. Consumers are proving to prefer the perks of working at home, fast delivery, and other convenient Internet processes. Virtual offerings will continue to expand and be utilized and, therefore, they must be integrated into our structures.
Assess your digital branding and Internet presence. If you research anything about business today, it’s obvious that Apple, Google, and Amazon are three of the most important sales and communication vehicles. Nearly everyone uses their phone and/or laptop to research as well as buy products and services. I argue that digital activities and marketing need a special place in organizations and should be a major part of programs.
Don’t forget that service, image, andculture are frequently the biggest (and often least expensive) ways for small companies to develop a brand and differentiate themselves. Some suggestions: Focus on your target market and segment your ideal customer. Be polite, listen, and then act based on what you have learned. Become a trusted resource to your prospects by providing useful information that will help them make a good choice. Build an email list and send informative mailings on a regular basis. Keep in touch with potential and existing customers.
Creating and maintaining a positive company culture is a critical component in achieving excellence and establishing a great brand. A great strategy without a supportive culture will undoubtedly fail—I’ve seen it happen too many times.
Open systems are also becoming a critical aspect of great cultures as they often reject bureaucracy, authority, and hierarchy. Open systems encourage participation, diversity, new rules, and to some extent, chaos.
The post-pandemic change we’re seeing should be viewed as a critical opportunity to improve sales, profit, and competitive positioning. While there are some technical aspects to this, it is the thinking and integration of the components that can lead to success. This should not, however, become an excuse for ignoring basic good practices. Too many small business owners are getting burned by executing untested marketing strategies—and while it can be easy to get enamored with the latest technology or fad, don’t forget the importance of factors like analysis, expertise, and experience.
The current state of the world and the rapid advancement of technology are stimulating perpetual change that cannot be ignored. But, with the right mentality and a willingness to incorporate tools that will help you successfully adapt, you can thrive in this new normal.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward. We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
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