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.
Now, before anyone gets up on a soapbox with an opinion
about whether or not stereotyping is “politically correct,” let’s just take a
step back. Of course there are bad stereotypes—ones that cultivate hate,
encourage inequality, and perpetuate racism. This article is not about those. That type of stereotyping is
ignorant, misinformed, and detrimental to society as a whole, in addition to
being harmful to your business.
The stereotyping
we’re dissecting today relates to trends and analytics. The bottom line is: negative
and harmful stereotyping stems from ignorance, assumptions, fear, and
misunderstanding, while a healthy stereotype comes from research data and an
analytical point of view.
A large part of marketing revolves around segmenting and focusing on selected consumer groups. The “stereotype” that older people are less likely to utilize technology is a helpful bit of information (supported by research) that may influence your marketing strategy, especially if your target audience is over the age of sixty (of course, there are always exceptions to the rule, but you can see where I’m going with this…) This demographic is also more interested in things like adult diapers, medical services, and reverse mortgages. They may not even understand things like streaming services, apps, or YouTube. These may sound like generalizations, but these particular stereotypes, when supported by data, are useful to your marketing strategy.
When You Stereotype
Others
Stereotypes, traditionally, have been used to divide people.
They create an “us and them” mindset. However, I argue that stereotypes can be
used for good if they come from an attempt to unite people and find
commonality. For example, a
recent study showed that teachers were more effective with students who shared common
demographics like sex and race. Educators can use that information to find the
best academic fit when they are seeking employment.
Another
positive way to utilize stereotypes is to find ways to relate to others. In
business particularly, creating rapport with investors, customers, co-workers,
or vendors is an important element to success. Finding common ground—whether that’s
background, hometown, religion, etc.—may help you connect with others. We infer
things based off of what we know about others. So, you might ask a person from
Chicago if they’re a White Sox or Cubs fan. The assumption that he or she is,
perhaps, a fan of a particular sports team based off their hometown isn’t
offensive in any way and it may spark a conversation about rival teams.
A
common stereotype, that I find beneficial, is considering the implications of
whether someone is “right brained” or “left brained.” In particular is someone
more creative or intuitive (right brain) or rational and analytical (left
brain). Factors like fact, logic, emotion, and passion can vary depending on
the audience and situation. These two types generally excel at very different tasks
and have specific ways in which they work best.
When Others Stereotype You
You can
argue all you want, but looks matter. Studies have shown that it takes just 30
seconds for someone to form an opinion about another person upon first meeting
them. We’ve all heard it before, but how we choose to present ourselves makes a
difference. And like it or not, people will make assumptions and stereotype you
based off what you wear and how you look. It may work for or against you, but
the key is knowing that it will happen and working to present yourself in the
way you’d like to be perceived.
When it comes to business, I suggest knowing your goals,
understanding your consumer’s needs, and keeping your audience’s perceptions in
mind. Perceptions are imperative.
This includes perceptions of you, your product/service, your brand, your
marketing, etc. Whether you’re selling a product, developing a relationship, or
impressing an audience, you need to consider how your and your message come
across, what assumptions people will make, and the impression you want them to
walk away with. You can’t control what people think, but you have the power to
influence their inferences.
Have you ever been a victim or beneficiary of
stereotyping? What stereotypes have been applied to you? Were they offensive?
Have you ever judged a book by its cover and been wrong?
I’d especially love to hear how stereotypes have helped you develop more effective messaging. Contact me today, and let me know your thoughts.
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. Though technological, social, and online integration, he can help launch your business to the next level.
Henry David Thoreau said it best: “Simplicity, simplicity, simplicity!” Despite the universal acknowledgement that his words are both wise and sound, we continue to flip him the bird with our actions. Keep It Simple, Stupid.
It genuinely applies to all areas of life:
Don’t overcomplicate things! Especially when it comes to proposals and sales
pitches, we frequently forget the tried-and-true advice: “Features Tell,
Benefits Sell.” Repeatedly, this adage has been proven over the centuries. So
by now, you would think it’s so obvious that everyone practices
it. However, this is NOT the case at all.
Why do so many of us still try to sell based
on the features of our products and services rather than their benefits???
Sales techniques require careful thought and
analysis. It seems trivial and self-evident to state that selling is a process
that involves a buyer, a seller, and a transaction. So, why do many of
us frequently forget that simple formula? There are countless books,
articles, tapes, and training efforts on sales techniques, but it boils down to
meeting the needs of the client.
I recently experienced two vastly different
proposal approaches that perfectly demonstrate my point.
One: I needed a new estate lawyer. The first
person I considered hiring started our meeting by explaining that he did not
charge for the initial meeting because he wanted to clearly understand my needs
and explain how and at what price he could meet them. He then listened and gave
a great presentation on how he would handle my needs. I hired him without
seeking alternatives because he understood what I wanted and showed me how he
would deliver that. Many professionals including accountants, investment
advisors, and even real estate brokers have similar approaches.
Two: I was seeking a marketing consultant. I
placed an ad on Craig’s List and received many responses from people who were
seemingly qualified. However, many showed traits that excluded them from
further consideration:
They wanted to sell
packaged services without any understanding of client needs and goals.
Frequently, they didn’t even read the introductory material that was sent to
them.
They provided little
information on why or how their efforts would be successful or
beneficial to me. One actually wrote that there was no long-term pay off for
their services.
They highlighted their
product’s presumed strengths rather than focusing on how it would meet my
needs.
The juxtaposition of these experiences shed
light on some simple strategies that may help you improve your own
approach:
Listen. Take the time to understand what the client needs and wants. Do you both understand the difference between the two and how to balance them? For example, is the budget only big enough to execute the programs necessary for success? Or are there excess funds that will allow for add-ons? (Also, avoid pitches that ask for a budget and then offer low bids just to secure business. Saving money doesn’t help if goals aren’t met.)
Know your strengths. What skills and
programs do you have to answer client needs? Creative, technical, and
programming needs/skills are quite different. What do you bring to the table and
how will those unique qualities ensure the client’s success?
Set trackable goals. How will you measure
results and progress? You need an end goal so that you can show results. What
is the startup period? Are you trying to improve sales, communication, or branding?
Tangible progress is key.
Be direct, honest and polite. Transparency and manners
go a long way. Additionally, make sure to provide clients with your email
address and phone number on every document. You may think this is trivial or
obvious, but I can’t tell you how many resumes I’ve been sent that lack this
basic information.
Provide proof for your
claims.
Cite examples of relevant success. It both builds your image and gives clients confidence
in hiring you. I automatically reject suppliers who cannot provide references
or quantitative expectations for their program.
Find connection. Consider what may seem
like external variables: Demographics, gender, culture, economy, and geography
may be more important than you think. I am from Chicago and Yankee fans
frequently build an instant rapport with me by trashing my White Sox.
The bottom line: Keep
it simple, short, and to-the-point. Avoid the fluff. No one wants to walk away
feeling confused about what is being offered. Clients want to know what you do,
how you can help them specifically, and at what price. “Simplicity, simplicity,
simplicity!”
So, you run a business, huh? You probably provide some sort of product or service, right? Okay. So what? Who cares? There are a lot of products and services out there to choose from; why should I give a damn about what’s your brand?
Branding and marketing have
dramatically changed, but marketers are still ill-equipped and reluctant to
incorporate the changes. While creativity, branding differentiation, and
advertising used to rule the field, the rapid growth of companies like Amazon
have made value, service, quality, and culture more important. Now, more than
ever, it’s obvious that details, the execution of logistics, and operations are
integral marketing opportunities.
Consider these new key
perspectives:
Branding is not what you tell
them. Branding is what they think of you.
Your customers determine the
value of your products—not you!
We all know the adage:
Features tell, benefits sell. So, if this is true, why do so many
entrepreneurs still focus on the features of their product or service rather
than the benefits? Your prospective customers don’t care what your product or
service does; they only care about
what it does for them!
No one cares about a cool logo or a fun design. No one cares about creative
packaging. Consumers care about being satisfied. No one cares about your brand
unless they have a good experience.
Therefore, “branding” is actually more operational. So, how do we
shift our mindset from the old “traditional” way of branding and refocus on execution?
Make A Good First Impression
That first experience leaves a lasting impact. Is your store clean? Were the employees friendly? Did you have what the customer needed in stock? Is your website easy to navigate? Details matter. That’s why people hire designers to build websites and decorators to create ambiance. If a consumer’s experience wasn’t memorable in a positive way, you may have lost them. If their experience was bad, you’ve definitely lost them. What’s your brand is how they walk away feeling because that’s what they will remember.
Have a Strong Digital
Presence
Nowadays, everything is digital. It doesn’t matter if your
business is virtual or brick and mortar, you need to have an online presence.
I’ve seen people intentionally avoid a particular store or restaurant because
their website looked out of date or they had bad reviews on Yelp.
Things to consider: Is your website easy to navigate? Is
your store easy to find on Google Maps? Does it even come up in a Google
search? If a potential customer can’t find your store on the first try, chances
are they’re giving up and going to whichever store they could find easily in
their Google search.
Digital Branding needs to be comprehensive. You should have
a website, social media accounts (Instagram, Facebook, Twitter), and positive
reviews on sites like Yelp.
Do Not Neglect Operations and Execution
Adequate staffing, prioritizing services, and having enough supplies
to meet customer needs without incurring excess expense is critical. Pizza
parlors need to plan ahead for Super Bowl half-time deliveries, right? This
might not be your particular problem, but every business has its own version of
the “half-time rush.” If a first-time customer tries to utilize your service
and is disappointed, you’ve probably lost them.
Provide Service with
Integrity
Obviously, the goal is to always provide quality service the
first time, but we all make mistakes. If you do mess up, own up to it and try
to make it right. Many cafes offer free drink coupons when an order isn’t made
correctly. Acknowledging the error and attempting to make it right can
sometimes prevent a lost customer.
Brand Does Not Determine Price
Traditional pricing models no longer apply in today’s world
of business. Entrepreneurs who recognize this will be better able to price
their goods and services appropriately. In the past, it was thought that a
well-known, desirable brand meant you could charge whatever you wanted and
people would pay. Now, search engines make it incredibly easy to compare prices
and analytics are showing that, in reality, a low price is more important than
a brand name. In fact, there are tons of people who may want the prestige of a
designer bag, but are just as happy buying a knockoff.
Effective pricing strategies vary widely depending upon a
number of factors. Consider alternative pricing tactics as well as the entire
pricing package. It’s also imperative to remember that pricing is dynamic. Just
look at Amazon and airline companies: you can search the same product or flight
two days in a row and the price may shift. Demand determines price. Some
companies even brand themselves based solely on things like “the lowest price
option.”
Offer Convenience
In this day and age, if you’re not providing some sort of
ease of use or accessibility, you’re dead in the water. Try to offer some sort
of convenience, such as easy payment plan options, delivery, or 24-hour
customer service. Making your consumer’s experience efficient and convenient makes
your brand “user-friendly.” And who doesn’t want to be thought of in that way?
Company Culture
This is one of the most
important components of branding. Creating and maintaining a positive company
culture is a critical component in achieving excellence and establishing a
great brand. People remember experiences. They may not remember what they were
buying, but they’ll remember the employee who was rude to them. Please and
thank you always go a long way.
Your Brand is an Experience
Know your strengths. What makes you interesting and
different from your competitors? This doesn’t necessarily mean “better.” Two
different soaps can clean equally well and cost the same amount of money, but
if one comes in fun animal shapes… that stands out. It’s different. It’s
memorable.
There are people who shop at Saks Fifth Avenue, but also frequent
Costco. These consumers aren’t worried about price; they’re looking for an
experience—and they will receive a very different one at each location, but
both will be satisfactory and in alignment with their desires. People enjoy
shopping on Amazon because they like the experience of purchasing items from
home, in their sweats. Successful brands have clear, distinct experiences.
So, what makes your brand
unique? What experience are you providing? And why should anyone give a sh**
about what you’re offering? We’d love to hear your feedback in the comments
below!
A customized approach that caters to each of his clients’ specific needs is what sets Dr. Bert Shlensky apart. With a PhD from the Sloan School of Management at M.I.T., he focuses on implementing individualized strategies that have helped countless businesses increase sales and profit. He knows what works and has the experience and expertise to help you take the steps necessary to achieve your business goals.
Is risk taking scary? If you’re only thinking about the possible negative outcomes, yes. But, it can be exciting if you take more risks if you focus on the potential positives results.
Many risk takers
enjoy gambling because the the idea of
winning something is more exciting than losing… For others, the idea of
losing money is more unpleasant than the potential of gaining—and that makes
the experience unenjoyable for them.
Nonetheless, in business, it’s important (and frequently imperative) to take risks in order to expand, grow, and adapt. So, how do we take more risks responsibly?
Evaluate
The Risk
What and how much
is really at stake? If a lottery ticket costs $20 and the two potential
outcomes are to lose $20 or win $2 million, is that risk worth it? For some,
yes. But, not every risk is right for everyone.
What exactly is on
the line and how much can you afford to lose? Weigh the pros and cons. For
example, buying lottery tickets, gambling, and staying at a cheap hotel are all
things that have a low probability of “winning.” However, they are affordable and
the rewards are often high.
In
contrast, using all of your funds on risky investments, not buying insurance,
or driving somewhere without directions are all risks that have the potential
for significant loss and marginal benefits. This leads us to the next point…
Understand
The Odds
Do
you really, truly, and completely understand all the aspects of the risk? The probability
of reward, the amount of the reward, and the value of the reward? Do you know
what you’re going up against and what it would take to recover the potential
loss?
Assess The Worth
If we consider skydiving a
risk… the cost is fairly low and the probability of surviving is very high.
However, the fact that (despite good odds) there is even the slightest chance
of death makes it too much of a risk for many people. Truly understanding all the
aspects of any risk is key to deciding whether it’s worth it to you.
Know
Your Goal and Set Limits
For
me, playing cards is problematic because, if the stakes are low, I play more
daringly and end up losing quickly. If the stakes are high, I worry too much
about losing and don’t bet.
If
my goal is to have fun, I’ve learned that the best strategy is to set a
monetary limit so I can enjoy myself without worrying about excessive loss.
Different approaches will work for different goals. For example, in craps there
are some back bets that are at even odds. If my goal is to stay at the table as
long as possible to watch the action, I won’t take those bets because I’ll lose
my money faster and reach my limit sooner. For someone who is solely concerned
with winning quickly, they might take those bets.
Consider
Normal Distribution
Normal
distributions have many convenient properties, such as the concentrated curve in
the center, which decreases equally on either side. The highest probabilities
are around the mean (center or average) and the lowest at the edges of any
distribution.
Some
examples of its application are:
The
probability of heads or tails in a coin toss is 50% over the long run, but can
be very skewed one way or the other when considering just a few flips.
The
probability of rolling a 7 with two dice is about 16%. That is the same as
rolling a total of 2, 3, 11, or 12.
The
biggest issue here is that we sometimes assume a normal distribution when the
data doesn’t match. Changes in technology and/or deviant data points frequently
challenge our assumptions and estimates.
I
argue that normal distributions frequently underestimate outliers (i.e. exceptional
people like Steve Jobs, the impact of political events, technology, or just unusual
results). It’s counterproductive to always assume normal distribution is at
play when there are other important factors to consider, such as innovation,
unexpected data, and emotion. That 1% at the end of the distribution chart with
an extremely high value is what frequently accounts for exceptional behavior—
it’s where we find the individuals who ignore the odds and take a big risk.
Tips
to minimize loss:
Have a backup
plan.
Research
everything: cost, odds, competition, value, risk, and alternative strategies.
Know your
strengths and play to them.
Test and analyze
results so you can adjust accordingly.
Adapt and be flexible. Most efforts won’t succeed on the first
try, but practice integrating the positive components from each trial with some
different approaches.
Incorporate rather than ignore change, history, trends, and special
events. For example, the impact of E-commerce, analytics, and cell phones are
just starting to be understood and the potential may be much greater than
estimated.
If risk still
seems daunting to you, try to look at it this way: When playing a game like
Black Jack (or while running a business), there’s a strategy and you constantly
have to assess the cards you’ve been dealt in order to get the most out of the
money you’ve invested. Owning a business in and of itself is a risk. It’s just
a matter of deciding how much and what kinds of additional risks you want to
take to propel your business to the next level.
Sure, you can argue that riding the middle lane is safe and risk-free, but it’s naïve to think anything is “secure.” Life is more like Roulette: just when you think you see a pattern, chaos breaks loose. You could never intentionally take more risks and still suffer loss in the form of an unexpected economic slump, a natural disaster, or theft. At least with a planned risk, there are controlled aspects that take the unknown odds into consideration: a combination that weighs risk/reward and encourages growth.
Are
you a risk taker? Does risk excite or scare you? How has risk helped or
hindered your business? Share your stories in the comments!
Dr. Bert Shlensky, president of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies for businesses of all kinds. This combination has been the key to client success. His book, “Passion and Reality for Small Business Success,” is available at www.startupconnection.net.
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!
