“Money makes the world go round,” as the saying goes… And, undoubtedly, we’ve all spent time worrying about our personal finances. Yet, how much time do we actually spend trying to learn ways to improve our financial situations? Too often, we fret about things, but fail to fully understand the bigger picture or take action to better the circumstances. So, let’s discuss some ways to jumpstart financial success.
First, look at your personal finances and consider options. This can be overwhelming for some because the expansion and complexity of financial issues has made understanding them more uncertain. Additionally, many financial advisors focus on helping people do specific things (i.e. reduce risk, provide income, plan for retirement, save money, etc.). They frequently focus less on growth, reasonable risk, and family issues. Therefore, they fail to understand your entire situation.
Consider this example: low inflation and interest rates have caused bond returns to be (2-4%) dramatically less than stocks (10-20%). Similarly, small businesses are getting more access to business loans at lower rates. Yet, many advisors continue to recommended high rates of investment in bonds, which basically dilutes an investor’s potential over time. If you have 10-20% returns in stocks for a few years, you are still better off in a declining period than earning almost nothing by investing in bonds or a savings account.
Also noteworthy: having a safety net might encourage people (especially young people) to spend rather than save. This is especially true if parents can provide a backup (either monetarily or in the form of housing) when they’re getting started.
One of the first steps in financial management is to understand the parameters especially as options and opportunities become more complex. For example, research the risk of investments and understand options like buying on margin, bitcoin, shorting stocks, Game Stop stock, etc. before making any decisions.
I am always reminded of a strategy meeting held several years ago. We were discussing using a venture capital firm and the presentation included several references to EBITA. One of our design staff spoke up and asked, “What is EBITA? It sounds like an animal.” After receiving an explanation, she suggested that outsourcing and importing could lower expenses and increase EBITA. The lesson is to always ensure we understand and explore all the elements of personal finance.
So, what now?
Gather all of your information and write it down. I recommend simple rather than elaborate analysis and be sure that you are involved in the process. Elaborate analysis can have wrong assumptions, can be too complicated to understand, and is often abandoned because it is too complicated and may utilize tools that aren’t appropriate.
There are a few basic elements of your information that should be reviewed, at least, annually:
A balance sheet that includes all of your assets and liabilities. This would include securities, personal assets, debt, and long-term liabilities like mortgages. In short, how much are you worth including an estimate of things like pension and social security benefits? Keep it simple and, if needed, analyze select issues in more detail.
An income statement and plan. How much are you earning and how much of that will you keep? This mostly includes the basic information from your tax return. Where does that income go in terms of expenses, debt payments, savings, etc.?
How much debt do you have and what are the costs? Is it short or long-term and how is it changing?
Asset based loans (mortgage, car, line of credit) are much less expensive than credit card loans, payment terms, or other loans with 10-20% interest rates. For example, if you have several thousand dollars in stocks, a line of credit can be particularly attractive.
While assessing your situation, consider the values of assets like house ownership, life insurance, retirement benefits, and family assets. Consider gifts, inheritance, end of life expenses, and in-kind contributions like family vacations as part of your financial assessment. Generally, we are living longer and might want to consider giving gifts to young people before they are too old to really use it.
Identify and compare alternatives. Investing, saving, spending, types of investment, and time periods are all things that should be considered. Additionally, while evaluating your options, you need to consider the environment, personal preferences, and financial situation. I believe in, at least, reviewing alternatives even if you end up deciding against them. But, economic reforms and the decline of the pandemic should generate a strong economy in 2021.
Consider new alternatives rather than outdated standard tools. Tech platforms, Fin-tech, direct sales, the Internet etc. are driving the economy—not traditional manufacturing companies. Growth is more likely than recession and strategies like traditional companies and cash investments may be overrated.
Assess your personal situation in terms of job, monetary requirements, future expenses/needs etc. In particular, what are your passions, strengths, and constraints? I always come back to Sheryl Sandberg’s recommendation to consider, “What would you do if you weren’t afraid?”
The most important advice regarding personal finances is to just pay a little bit of attention. Consider opportunities and alternatives as well as challenges and constraints. That mindset should be supplemented by a continuous process of analyzing, measuring, and adapting to ever-changing parameters, programs, markets, and risks. Anytime we deal with money, there is potential for stress. But, we shouldn’t view personal finances as a daunting subject. Instead, look at it as an opportunity to learn, grow, improve your circumstances, and set yourself up for greater success.
Please visit our website www.startupconection.net to book a Free Session in which we can help you develop an action plan that will evaluate potential and risk. We always discuss process, expected outcomes, and cost before you make any commitment.
Dr. Bert Shlensky, president of Startup Connection\, prides himself on his ability to define what is unique about each and every business. He works closely with individuals to develop a personalized approach that targets specific areas of concern and offers solutions based on his 40+ years of experience. His expert team will address your particular needs while working to save you time and money.
Let’s face it: Bureaucracy has lost much of its effectiveness. The entire system needs a dramatic overhaul. Many aspects of bureaucracy actually cause reduced organizational effectiveness. Hierarchy, which implies power based on position, limits the impact of new research and expertise in decision-making. Even Max Weber, one of the original advocates of bureaucracy, understood that it could be threatened when focusing on “the rules” overshadows the actual goals. This happens constantly, which means the system is broken. When things aren’t getting accomplished because we’re stuck following ineffective procedures, it’s time to change the process. We’ve all experienced this. How many times have you found yourself unable to complete (what should be) a simple task because of a flawed system? Ever find yourself passed around from person to person and no one seems to have an answer for you?
We find this model works better for us!
Bureaucracy also lacks the vision and flexibility to deal with innovation and the increased pace of change in our environments. In short, bureaucracy, rather than performance, becomes the goal. My worst nightmare regarding bureaucracy is the phrase, “We’ve always done it that way.” It’s a refusal to consider alternatives and, thus, a recipe for failure.
Even more perplexing is the fact that we continue to ignore some proven models of success. Open systems and collaboration, in my opinion, are like winning the trifecta at the horse track. They have been around for a long time, but are just now 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.
It should come as no surprise that open systems are superior and continuing to do things “the way we’ve always done it” is a dead-end. But, society as well as businesses fail to recognize that old paradigms and structures are failing:
Large corporate structures (print publications, big banks, and brick and mortar retailers) are all gradual losers, or even worse. Even Jamie Dimon of Chase recognizes that banks have allowed Fin-Tech startups to threaten their future growth.
Companies and 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 our economy back.
How do you move away from bureaucracy and toward open communication?
Innovation and Discipline
Innovation and discipline can coexist. It requires 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. (At one time, mechanics had to spend hours making chain links to design a new sweater.) I believe that similar improvements are evident in areas like digital photography and inventory management.
Focus and 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 not 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 and Evaluation
Are all of the aspects 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. Where does your business stand? And how much can you afford to risk?
Analytics and Intuition
The increased use of analytics over intuition has been significant in improving the understanding and results of decision-making. While there are no quick and simple resolutions, there are a few simple rules to improve the decision process using both analytics and intuition.
‘Outcomes…normally we just measure the height of the files.’
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 focusing on the 20 percent of customers or products, which we know, statistically, accounts for 80 percent of their sales.
Forget Fear.
Few sports teams, sales calls, or competitions achieve more than a 50 percent success rate. Rather than dwell on and sulk over losses, analyze your mistakes and research how to improve. Additionally, cultivate a business culture that values feedback, encourages communication, and supports collaboration. Open and honest communication on all levels is the only way to move past mistakes in a productive manner.
Empower Employees.
Giving your staff and management teams the freedom to make decisions and take (reasonable) risks can result in improved productivity. When you hire and train talented and trustworthy people, you can rest assured that they will do their jobs to the best of their ability and, ideally, add value to your business. When employees feel trusted and are given the autonomy to take chances, they’re more likely to think outside the box and offer alternative solutions. This authority in decision-making also means that employees will make mistakes at times and it’s important to remember, once again, that without failure, there is no success.
Look Beyond Your Circle.
It’s imperative to have external resources for obtaining information and receiving feedback. You need people who will tell you the truth without sugarcoating it. Make sure you have a reliable network that understands your business needs.
In general, I recommend more consideration of the process of decision-making. How good is our information, what are the consequences of mistakes and how much risk can we afford? I believe with the exception of issues like safety we can afford more risk and openness. We generally are overly concerned with the consequences of mistakes rather than the potential of risk.
And finally, let go of bureaucracy. Yes, it can be scary to transition to something new, but familiarity doesn’t equal success. In fact, sticking with something just because it’s comfortable usually isn’t beneficial. And, shockingly enough, sticking with something that doesn’t work (i.e. bureaucracy) also doesn’t work. It’s broken and it’s not worth fixing. It’s time to replace it.
Dr. Bert Shlensky is the president of www.startupconnection.net. He and his team of experts focus on helping businesses develop integrated customer-focused marketing programs that are key to business startup success. Dr. Shlensky’s most recent book is entitled, “Passion and Reality and Small Business Success.” You can reach Dr. Shlensky at: 914-632-6977 or email him at: bshlensky@startupconnection.net
The word “uncertain” doesn’t usually give us much hope. It implies instability, insecurity, and vulnerability—all things most of us try to avoid. But, perhaps, we can find a way to embrace uncertainty and find a way to make it work in our favor.
As we forge ahead into 2021, there will certainly be a significant amount uncertainty. Generally, we try to predict future trends based on recent past events. However, 2020 had such immense disruption that it is almost useless to use it as a base. Many argue that this uncertainty causes pessimism and lowers expectations. However, I argue we need to embrace uncertainty, as it creates opportunities and should incite positive expectations.
Why? Well, let’s take a look at the following paragraph describing American economic trends: “Despite this prosperity, major shifts were occurring in American business and the workforce. Preexisting corporations were merging and becoming larger, more powerful conglomerates. Consumers increasingly were doing their shopping at discount chain stores and their dining at inexpensive fast-food restaurants, leading to a decrease in the number of single-proprietor businesses. Meanwhile, manufacturers were relocating from the Northeast and Midwest to nonunion Southern states, taking jobs with them and robbing industrial cities of their vitality. Manufacturers also were opening factories in foreign countries to take further advantage of cheap labor. These shifts led to a decline in the power of unions.” (The 1960s Business and the Economy: Overview | Encyclopedia.com)
While this could describe much of today’s economy, it’s actually a description of the 1960s. It shows progress after disruption and it’s arguable that the 1960s had even more disruption than we have currently (consider the assassinations, civil rights, wars, and general social change). After major turmoil, we still achieved more growth, technological improvements, and social change than we’ve seen today. I believe that the stress we’re currently experiencing as a country could produce the same excitement that we saw in the 60s. On the other hand, it may be difficult to replicate Kennedy, the Beatles, a moon launch, the computer explosion, Martin Luther King Jr., and some of the other revolutionary changes that took place during that decade. But, history repeats itself…
And, historically, change usually occurs after disruption (and we have most definitely experienced a lot of that). In my own experience with corporate turnarounds, it’s much easier to motivate, innovate, and develop collaboration in troubled or changing organizations than within those whose culture is based on the closed-minded rule of “we’ve always done it this way.” It’s amazing how many individuals and organizations have incorporated new efforts like E-commerce, work-from-home, Zoom, etc. in order to adapt to the times and, as a result, have actually improved their results.
While we tend to focus on the negatives, there are many circumstances that should create a more positive environment if we learn to embrace uncertainty. The most significant may be the coronavirus. I suggest we focus our planning on the potential of the vaccine by spring or summer more than the tragic experiences of today. In other words, rather than just worrying about the possibility of shutting down in the near future, we should be adopting a mindset of: How do we keep a business viable today in order to thrive in the fall? How do we learn to embrace uncertainty?
I recommend focusing on these three areas that create significant opportunities for positive thinking: technology, expectations, and analytics.
While we seem to constantly advocate for technology, I think we underestimate it. For example, financial advisors continue to advocate balanced portfolios with traditional companies and bonds, but here’s the reality:
In 2016, if you had invested $10,000 in each of P&G, G.E., G.M, and Exxon (all among the leading companies of the day), it would be worth $35,000 or a loss of about $5000. If you had invested the same amount in Amazon, Google, Facebook and Microsoft, it would be worth $169,000 or a gain of about $139,000. If you had invested the $40,000 in 3% bonds, it would be worth about $46,000 or a gain of about $6,000. Yet, advisors tout Exxon as a great opportunity for 2021 despite the growth in electric cars, energy saving efforts, and reduced energy consumption.
Pay attention to areas like E-commerce, A.I., infrastructure, medical research, etc. These will produce dramatic opportunities for growth and investment.
Positive Expectations are a critical cause of growth and success. Venture capital, increased risk, and positive thinking can produce dramatic results. Low interest rates and inflation have had a huge impact on reducing actual risk. My favorite musical has always been My Fair Lady because of the Pygmalion effect, which infers that having positive expectations leads to enhanced performance, which results in a higher probability of success. The implication is that confidence and energy will increase if we believe in ourselves. On the other hand, a negative self-perception results in a significantly lower chance of succeeding. What we think we’re capable of, therefore, basically becomes a self-fulfilling prophecy.
Technology and expectations can be enhanced with improved measurement and analysis. Some simple ways to implement analytics: review goals, probability, risk, and measurement. Basically, ask yourself how you’re doing and where you can improve.
More advanced analysis, testing, and measurement may include creating more dynamic and interactive efforts, which can boost the development of strategies. Allowing for failure and considering alternatives can also be useful. Incorporating operations, customer service, branding, and pricing in decision making can create new, successful approaches. Accept this fact now: Mistakes will occur. So what? Learn from them and move on. Mistakes are only bad if you keep making the same ones.
So, you see, positive expectations can have a dramatic impact on success. Yes, there is uncertainty ahead, but when has there ever been zero uncertainty? A feeling of security at any given moment doesn’t actually equate to certainty. We can’t predict the future and we don’t know what tomorrow holds. There will always be uncertainty, so embrace uncertainty and trust that the “unknown” is where possibility lives. Facing unexpected change is the fastest way to determine if you’re a pessimist or an optimist. What will you be? A defeatist or an opportunist? Why not try expecting greatness? Expect it from yourself, from others, and from the universe. Because when you expect it, it’s easier to find.
Please visit our website www.startupconection.net to book a Free Session in which we can help you develop an action plan that will evaluate potential and risk. We always discuss process, expected outcomes, and cost before you make any commitment.
Dr. Bert Shlensky, president of Startup Connection, prides himself on his ability to define what is unique about each and every business. He works closely with individuals to develop a personalized approach that targets specific areas of concern and offers solutions based on his 40+ years of experience. His expert team will address your particular needs while working to save you time and money.
“The 1960s Business And The Economy: Overview.” Encyclopedia.com, www.encyclopedia.com/social-sciences/culture-magazines/1960s-business-and-economy-overview.
“Business proposals and applications? Yay!” is probably something you’ve never thought. They’re time consuming, tedious, and, very often, frustrating. Whether you’re writing and sending or receiving and reading, there is a better process to write better proposals that we can all implement to make everyone’s life easier.
On one hand technology has made it easier to write, submit, and receive multiple proposals. However, this also increases the number of unqualified proposals and puts more demand on readers. For example, if I post about a job opening (even with specific qualifications), I get hundreds of replies. While some are excellent, I can tell the majority just copy and pasted a formatted response. I mean, why not? It only takes a few seconds to respond that way and MAYBE you have a shot…
I argue, however, that our current process of writing and receiving proposals and applications has simply not kept up with the technology of generating them. The most difficult issue is unqualified applicants. In many cases, job descriptions fail to include basic requirements like location, full or part-time, skills needed, and education/experience requirements. When they do provide specifics, many applicants ignore them or simply don’t read thoroughly. Because it’s easy to click and send, we end up wasting each other’s time.
The process to write better proposals is made even more complicated due to mistakes and carelessness. Here are some examples and ways to avoid these issues:
I have received proposals that I can tell are copied and pasted because they have other client’s names on them. Huge red flag there. If you’re the person sending this: Read things before you send them. It looks highly unprofessional. If you’re the person receiving this, it’s probably a waste of time to consider it. Has this person really read the description of what you need if they can’t even take a minute to look over their response?
Fees are often confusing and/or misleading in the same letter. In particular, refund information is frequently contradictory. These are usually settled, but why not avoid the confusion to begin with by taking the time to proofread?
Applications that show little awareness that they have read requirements or the nature of the request are annoying. Make sure to address the specifics. Details are important and stand out to someone who is choosing between various applications.
Too many details can be overwhelming. For instance, pages of legal or unnecessary information often clutter up a proposal. While things like payment conditions and adhering to laws are appropriate, much of the rest is simply irrelevant. Packets are often sent out that include a broad range of information that isn’t applicable to everyone. For example, if a job is remote, don’t send pages about in-house rules/expectations. Be relevant.
Additionally, proposals need to meet clients’ needs and goals. Things you should consider and/or address in your proposal: Are you truly qualified to provide what is needed? What are the technical versus creative aspects of a request and how will you approach each? What kind of budget is available? When is the deadline? Is it part-time or full-time? Is it a one-time project or ongoing relationship? How much of the request is analysis and understanding versus established solutions? Why are you right for this job? What skills or experience makes you stand out from other applicants?
While going through proposals, the first thing I do to reduce the number of applicants is to eliminate all that lack the experience and skills I requested. I also get rid of the ones with low fees—you get what you pay for and you don’t want a plumber when you need an electrician.
The process of writing and receiving proposals can be time consuming, inefficient, and produce mediocre results. If we make concentrated efforts to improve the process in order to write better proposals, the finished product will be more successful. Before submitting a proposal, ask yourself: Do I understand the goals and requirements? Do I have the experience and qualifications requested? Have I expressed all of this clearly in the proposal? If you can answer yes to all of these, submit away! And remember: make it personal—to them and their needs as well as to yourself. After all, they are hiring YOU. So, highlight what makes you special and how your unique talents are the best fit to execute their needs.
Bert Shlensky, president of Startup Connection is a graduate of Sloan School of Management at M.I.T. He served as president of WestPoint Pepperell’s apparel fabrics business as well as President & CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startups and small businesses.
Innovation. What does it mean to you? Is it something you embrace? Or is it an idea you find daunting and shy away from? If you find yourself in the latter category, it’s time to reassess your relationship with innovation because it’s imperative if you want your business to stay relevant in an ever-changing world.
As we continue to navigate through a global pandemic, specific recommendations on how organizations and individuals can be more innovative have surfaced from various sources. I argue, however, that we need a more flexible approach to innovation.
Now, in order to enhance innovation, we must first understand it and consider what our goals are in trying to do it. For example: There is a big difference between writing a new song and developing a vaccine for the Coronavirus.
Some questions to consider:
Are you tweaking a problem, examining alternatives, or creating an entirely new solution?
Does the problem involve diverse expertise, extensive analysis, and extensive outside resources?
What resources, constraints, risk, and requirements will affect innovation?
Let’s expand on a few of these issues:
Are you solving problems or developing new concepts?
Much of corporate innovation revolves around finding better or new solutions to existing problems. For instance, for many years, car companies focused on developing better combustible engines, retailers focused on developing better shopping experiences, and IBM focused on building bigger and better computers. In contrast, other companies focused on developing entirely new solutions, which gave us the electric car, E-commerce, and the cloud.
Decisions regarding these issues involve a number of considerations. Do you give research groups complete freedom or do you require specific goals and financial objectives? How much risk and error do you encourage and allow? In general, venture capital firms allow more risk and pursue a home run while corporations tend to stick with more planned efforts.
While new markets and technologies are exciting, minor innovations can also be very productive. Logistics involving areas like inventory management, customer service, and sourcing can have dramatic impacts on cost, sales, and profits. In particular, Amazon has become extremely good at what they do: Prime, their own truck fleet, and automated safe warehouses have dramatically stimulated their performance.
Simple measurement and focus can dramatically improve results. Reviewing sales by product, P&L, and the 80-20 rule can inspire effective new practices. I have a client who switched 70% of her business from retail to E-commerce and has grown 40%. The process also requires new strategies on pricing, inventory management, and marketing. One huge advantage was that she was able to introduce new products on the Internet almost immediately rather than waiting 6-12 months for the retailers to make and execute decisions. In this instance, a problem was solved using existing concepts, but it was innovative for her specific company.
How are your decisions affected by analytics and intuition?
Decision-making used to be a simple choice between things like experience and intuition. However, Artificial Intelligence and other tools have added a new dimension to reduce the uncertainty of decisions. There are even major breakthroughs in medicine regarding the diagnoses and treatment of disease using improved statistics and analysis. The development of the Coronavirus vaccine has also been greatly accelerated by new technologies and processes.
Tools and presentations are also dramatically changing. For example, a colleague of mine objected to my website because it was too dependent on PowerPoint and Excel. While these are great tools and are the most used for analytical and presentation methodologies, they do have many limitations. The information can be old, longitudinal analytics is frequently lacking, they are not interactive, and they may not be visual enough. The lesson being: we must continue to challenge our ways of doing things…
Analytics as a new dimension requires consideration of new parameters. The most important is replacing hierarchal structures with collaboration, analysis, and facts. Many organizational structures are based on hierarchy and this simply needs to be replaced by a search for excellence and consideration of alternatives. Additionally, as we deal with more complex goals and analysis, we must remember that intuition is still important. In particular, the more creativity and uncertainty there is in a situation, the more intuition is required.
Some of this dilemma is created by the differences between “left-brain” and “right-brain” thinkers. Left-brained people are said to be more analytical, logical, detail and fact orientated, numerical, and more likely to think in words. Right-brained people are said to be more creative, free-thinking, intuitive, able to see the big picture, and can visualize more. So, whichever you are, perhaps try asking someone who thinks differently than you how they would handle something you’re working on—you might realize they have an entirely different approach that may or may not be better than your own.
The most important aspect of this discussion is to understand the use of analytics versus intuition in your decision-making process. We love to hang on to our hunches, beliefs, experience, and hierarchy. We even twist facts and ignore reality to provide continuing support for an argument. But, we need to invest time and money to analyze, filter, and review ideas. New analytical tools can enhance our flexibility, testing, ability to adapt, and the evaluation of alternatives.
Are you focusing on excellence and collaboration?
Innovation requires collaboration. It thrives with participation, diversity, new rules, and (to some extent) chaos. It also rejects bureaucracy, authority, hierarchy, and closed decision-making processes.
A major component of collaboration is excellence. Large organizations say they want excellence, entrepreneurship, innovation, risk takers, etc. However, they often fail to revise practices that encourage mediocrity (i.e. hierarchal structures and non-diverse cultures). Testing and failure (both 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.”
It’s also important to note that exceptional people are often eccentric and can be challenging to manage. You may find that these employees like to work odd hours, need specific environmental stimuli for inspiration, and, generally, refuse to do things in a traditional way, which can often be disruptive to an organization’s flow. The upside, of course, is that they’re producing remarkable work.
Does your company culture encourage innovation?
While we tend to focus on innovative methods and technologies, we sometimes forget that culture can dramatically affect innovation. For example: California has about 15,000 patent applications a year compared to less than 200 in eleven other states. There are simply more resources and a more comfortable culture in California, which spurs innovation. Some organizations encourage testing, failure, and research while others believe in the “we have always done it this way” approach (which never stands up to the test of time). You need a forward-looking company environment for innovation. For example, market research should be a tool rather than an absolute. As Steve Jobs said:
Are we having fun yet?
In order to balance innovation, you must enjoy what you’re doing. You started your business because you had passion—Don’t lose that! If you’re truly happy doing what you’re doing, your customers will want to buy into that. They will feed off of your excitement!
You have to be willing to change with the times. And you have to give emerging business trends more than just a passing thought or you may miss out on big opportunities. Consider multiple and dynamic alternatives, goals, and methods. Innovation is the key to growth, profit, and sustainability. And the great thing is: there’s no one way to do it. Be innovative about innovation—the possiblities are endless!
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, he now focuses on working with select startups and small businesses.
When you want to stand out, reach out to Bert for the tools that will build your “sticky” brand. My focus is on understanding and analyzing your dilemmas and challenges, so your company becomes profitable faster.
Call (914) 632-6977 or email me at bshlensky@startupconnection.net. Don’t leave without signing up for our useful free eBook!
Feeling stumped or overwhelmed? Contact Bert at (914) 632-6977 or Email to start the process. Thanks!
![[while reading "Economic News" at a news stand]
"I'm not as interested in the strength of the economy as in whether it's on my side."](https://i0.wp.com/startupconnection.net/wp-content/uploads/Im-not-as-interested-in-the-strength-of-the-economy.jpg?resize=725%2C236&ssl=1)
