by Bert Shlensky | Aug 9, 2018 | Operations
There are two seemingly conflicting trends in organizations regarding technology and innovation. The first is a trend towards autonomy, which focuses on organizational goals, as well as cooperation and empowerment. The second is a trend towards automation, which simplifies work requirements and can result in fewer workers. I argue you can have both autonomy and automation… You simply need to focus on improving the autonomy at all levels as you increase the automation.
The autonomy approach is described by Fred Kofman, who promotes cooperation and voluntary exchange for mutual gain. According to this theory, motivation, culture and collaboration produce better solutions than pure self-interest. In short, organizations should focus on winning for the organization, and not just the individual silos of participants.
Organizations in Silicon Valley often devote their attention to things like automation and AI. However, they are held accountable for the trend that some jobs are being replaced by robots. This includes jobs like taxi drivers (replaced by self-driving cars), hedge fund managers (replaced by algorithms), or financial journalists (replaced by chatbots).
This idea was brought home to me a few weeks ago, during a visit to an 1850’s restoration community Sturbridge Village. They had little cottages doing various tasks to make clothing (like cleaning wool, spinning, weaving and sewing). The work that went into production of a few yards or one shirt was incredible. In contrast, my experience in the apparel industry was that we could weave millions of yards in short periods, thanks to automation.
Similarly, Google and others are developing AI programs to write and develop artistic works. They argue that this technology will greatly enhance an artist’s ability to create, while others argue that it will just replace artists. My own experience in the apparel industry is that automation greatly enhances the artist’s potential by reducing mundane tasks. Instead of it regretting the displacement caused by automation, we need to focus more on realizing its potential for individuals. For example:
- Don’t let automation or analytics give you one simple answer. Programs and situations are diverse, and require a variety of solutions. A great example is the success of the Golden State Warriors and LeBron James in basketball. The Warriors win by an integrated team that gets the ball to the open man, and passes more than any team in history. LeBron’s teams have won by making LeBron the focal point, and supporting with complimentary plays and personnel.
- Similarly, organizations need to consider their goals and processes. Do you need more expertise and experience, or more creativity? Are you maximizing the potential of your stars and developing collaborative solutions? Do you need diverse expertise on a problem?
- Most people I see working care about their jobs and try to do them well, regardless of pay or status. A very simple recommendation is just to consider how can we can empower our staff to do even better. We should acknowledge that there will be mistakes, but they will be far less than the total gains.
- “Need to know” should be a dead phrase, so help staff understand goals and strategies. The more we trust staff to understand these strategies, the more likely they are to embrace them.
- I believe “leadership” is an obsolete term. The best leaders I have seen are people like head nurses, restaurant expediters, triage managers, and legal assistants. They coordinate and manage various (and frequently much higher paid) participants. The process involves gaining their cooperation and motivation to execute a great final result. In contrast, authoritarian (rather than expert or professional leadership) is usually more harmful than helpful.
- Many financial and analytical models focus on a single or best solution. I recommend focusing on the parameters of alternative models. Then you can manipulate the model to evaluate alternatives. For example, we have developed a dynamic operating profit model that allows you to analyze the interaction and impact of various factors like price, cost, margin, distribution marketing etc. It has been effective in helping clients understand retail and online opportunities. Download it here.
In summary, automation and AI offer great opportunities to improve performance, especially when used with analytics. These strategies should also include empowering the organization. In particular, we should continuously challenge assumptions, review alternatives and evaluate progress.
Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.net ) has an MBA And PhD from the Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startup and small businesses.
by Bert Shlensky | Jun 21, 2018 | Marketing
Some Simple Suggestions to Improve Branding
The potential and strategies of branding are critical today, yet the practices and requirements are dramatically changing. In particular, branding is still dominated by marketing, differentiation, and promotion activities. Right now, technology, customer needs, and operations are becoming vital components of the branding process.
In particular, I argue that many branding experts focus too much effort on packaging, advertising, logos, and copy. At the same time, they often ignore issues like value, service, quality, culture, and our digital environment. If you don’t believe that, just compare the focus of many brands on department stores versus places like Amazon and Costco.
Here are some ways to improve branding:
1. Digital Branding
Brand management frequently does not pay enough attention to the digital world. Branding efforts need to be comprehensive, so it is good to support your efforts with a web site, social media, brochures, etc.
Automation, efficiency, and digital solutions have also allowed us your focus on solutions rather than just meeting customer’s needs. Market the real product your customer wants to buy. For example, the same customer may want the prestige of a designer purse name, and then buy generic labels at the grocery store to save money.
2. Operations
Service, image, and culture are frequently the biggest (and often least expensive) opportunities for small companies to develop a brand and differentiate themselves. Some suggestions:
- Focus on your target market, segment, and your ideal customer.
- Be polite, listen and then act based on what you have learned.
- Become a trusted resource to your prospects by providing 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 customers and existing customers.
3. Quality
Quality needs to vary by customer and need. Let’s face it: IKEA makes great utilitarian, well-priced, and good-looking furniture for many young people. However, it really isn’t made to last a lifetime. Other products (like pizza) probably have more variance in the perceptions of the consumer than in the actual quality of the ingredients.
4. Convenience
In this day and age, if you’re not offering some sort of ease of use or accessibility, you’re dead in the water. So, try and angle your brand to offer some sort of convenience, such as easy payment, delivery, and contact (24 hour customer service). These are just some options for offering efficiency to your customer in some way.
5. Value
It’s one thing to nab the customer…. But to keep them coming back? That’s the golden ticket. Your product or service can’t be just a one-time thing. It has to be a many-time thing! It’s called customer retention – keep them coming back, and you’ve got guaranteed revenue.
Remember that value can vary, and it often depends on the situation and the perceptions. For example, Nieman Marcus, Costco, and Amazon all offer quite different products, but since they have quite effective value, many customers shop at all three retailers. As an aside, I love the free samples at Costco.
6. Company Culture
In researching this blog, I searched branding on Google. The articles barely mentioned culture (if at all), which I consider to be 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. A great strategy, without a supportive culture, will undoubtedly fail… I’ve seen it happen too many times.
Setting the right expectations, providing support, and accepting responsibility as a leader are all non-negotiable aspects of nurturing the culture in your company. In addition, you must never cease to measure what seems unquantifiable (in order to consider your attempts at creating a successful company culture).
There is no better example of this than the Golden State Warriors, who just won their third NBA title in four years. Much of the attention is given to their super stars, but if you look behind that, you see how the entire organization (including the training staff, coaching staff, medical staff) are all united to create excellence and a unified brand.
In summary, branding and differentiation are two of the key areas required to bring even the greatest new products and services to market. These two strategies are linked and are primarily a function of ensuring that your product or service meets the needs of your consumer.
As one expert said “We all know the adage…. features tell, benefits sell.” If this is true, why do so many entrepreneurs still speak in terms of the features of their product or service and not its benefits? Your prospective customers does not care what your product or service does… they only care about what it does for THEM!
Ready to achieve success by improving your company culture? Contact us today.
Dr. Bert Shlensky, president of Startup Connection (www.startupconection.net) has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startup and small businesses.
by Bert Shlensky | Jun 7, 2018 | Operations
It would be pretty cool to be a super-secret agent like James Bond, or Jack Bauer, or Jason Bourne — or ETHAN HUNT! Yeah, that guy from the films “Mission: Impossible” played by the one and only Tom Cruise. What’s funny is that the best business culture out there embodies the secret agent accomplishing amazingly insane feats, hanging by a thread on a plane or scaling a big building. Maybe disabling a bomb with a toothpick? Now I’ve got your attention, but you’re pretty confused: how can your business culture be like that? Easy:
The Trick to Your Business Culture Being Like Espionage Is Competitive Analysis, Namely KNOWING HOW TO PRICE YOUR PRODUCTS EFFECTIVELY!
And it’s no easy feat. Take our word for it. Many small businesses have the tough challenge of trying to price their products at the right amount — not too cheap, not too expensive. They want to be competitive enough…. But not sell themselves short. And honestly more often than not, you’ve got a lot of businesses out there pricing way too low.
The trick is to analyze the competition. Spy on them. Sort of “break in” to their secret facilities and know how they operate. This is especially the case when it comes to the biggest e-commerce giant Amazon as the lead competitor. How it relates to business culture? Your team, your entire business, needs to review everything the competition sells, in and out.
Scout the websites. Look at what Amazon is doing. What they’re selling. How they’re selling it. How much are they selling their stuff for. See if you can dynamically offer something better, something more unique. Match the price, look at your overhead. It allows you to be more competitive when you’re willing to spy on the competition, and believe me: it’s a lot easier to do that!
No lasers to do cartwheels over. No masking the traps or finding the loopholes. Back in the day it was hard trying to analyze the competition given the brick-and-mortar, but nowadays with websites just a click away, it’s pretty easy slipping into Amazon and getting the inside scoop.
So Make Sure Your Business Culture Is Doing Exactly That: They Need to Be Go-Getters, Predictors, Forecasters, Finders…. TRENDSETTERS. SECRET AGENTS.
Now we won’t say you could ever take Amazon down completely…. But you’ll definitely carve your niche and let the big boys know that you own it. And no on else will. Want to know more?
Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.
by Bert Shlensky | May 24, 2018 | Marketing
Many marketing guides start with developing strategy – understanding your focus and defining your brand. I argue that execution and excellence are more important than developing vague brand and marketing strategies. As Walt Disney said:
“Do what you do so well that they will want to see it again and bring their friends.”
While this quote may seem obvious, it has a number of implications that are frequently ignored. For example, when I talk to marketers, they frequently discuss the latest hot trend – targeting, SEO, social media, videos, paid search, etc. However, how we execute these strategies for our situation may be more important than the specific program. In addition, many marketers downplay measuring the results of marketing efforts. Now, digital marketing allows you to develop, test, measure and adapt. You can now test various programs and strategies before making expensive commitments. Paid search is an example where key words, offers, and links, are frequently the keys to success. Thus, testing various alternatives can dramatically help focus a program. However, many advocates will recommend spending thousands of dollars a month with little clue of what will work. Similarly, many marketing programs get enamored with technology while ignoring basic execution concepts. For example, I recently read some exciting marketing plans from a client that included videos, links, and many other details. However, they were so focused on technology that they forgot simple things like phone numbers, e-mail addresses, and how they would help their customers.
Here are some tips related to execution in your marketing programs:
- Goals – What are your long-term volume and image expectations? Are you building sales just for today, or are you seeking long term customers? What are your organizational and financial resources? Who is your target market? What is your competitive positioning? The answers to these questions can change during the marketing strategy process, and they will affect your program as you begin to execute in the real world.
- The Internet – It’s fast, centralized, and cost-effective. Traditional print media and many retailers are dying compared to Internet retailers like Amazon (who represent between 35-45% of internet consumer sales, and are growing at about 20% per year.)
- Pricing, Stock, Forecasting, and Value – Now with the ability to reach customers in remarkable ways, you must consider all of these as part of your plan.
- Product Expectations and Customer Service – You’re a brand. People expect a certain kind of quality based on your target demographic, so keep that aligned with your goals.
- Develop, Test, Measure, Adapt – This is the scientific method for a Lean Startup Strategy, and thanks to the Internet you can do all of this really quickly. One of the key recommendations of Eric Ries in The Lean Startup is to “test, measure, and pivot until you get it right.”
- Customer Retention – Satisfied customers are the best, most cost-effective way to grow a business.
- Traditional Advertising – While firms generally are spending less money on traditional media, it can still be an important component of good marketing (especially if your products and services lend themselves to such media).
- Distribution – How are you selling your products or services? Trends in distribution are changing rapidly, and your process needs to be in sync with the times. For example, automation and customer service are replacing the direct salesperson. Money can be saved by eliminating traditional channels and substituting direct shipping and the Internet
- Integration – The key to an excellent marketing plan is to employ all of the tools you consider relevant and affordable, and to develop a targeted plan with clear action steps and benchmarks. First and foremost, the plan must fit your goals and your budget. It is then critical to measure the results and adjust to maximize your goals and profit.
- Risk and Openness – I encourage you to consider more risk in our changing environment, and I also suggest changing the business culture to encourage more risk-taking. I often say, “If you aren’t making mistakes, you aren’t trying hard enough.” Mistakes mean you and your business are growing. Consistently exploring alternatives and evaluating your decisions will help you figure out what’s working.
- Measurement – A number of general guidelines should be followed when making goals and measuring them. First, make goal-setting a process and communicate these goals to those involved. Second, be certain to understand the different needs in different situations. Third, be sure to use clear and simple measurement tools. Fourth, be sure to use the process for improvement (rather than simply as a tool for criticism). Focus on the mediums that work the most; not based on trends, but on what has the best outcomes.
Dr. Bert Shlensky has an MBA and PhD from the Sloan School of Management at MIT. He is the President of the New York-based consulting firm The Startup Connection, where he uses his 30 years of high-level business experience to guide his clients towards maximum sales and profit. For a free consultation, please visit www.startupconnection.net.
by Bert Shlensky | May 17, 2018 | Marketing
The original concept in 1908 by Pareto was that 20% of the population controlled 80% of the wealth. In the modern business realm, it has been proven time and time 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 also frequently adds confusion and complexity. At StartupConnection, we help our clients prioritize.
While much of following the 80/20 rule is focused on analytics, the most important (and sometimes simplest) way to keep existing customers happy and is to exceed expectations. As Walt Disney said, “Do what you do so well that they will want to see it again and bring their friends.” Satisfied customers, repeat customers, positive social media, and referrals are the best and least expensive marketing a business can have. There is no substitute for a satisfied customer. In contrast, dissatisfied customers, poor service, and negative referrals can offset even the best marketing efforts.
Some specific examples of using the 80/20 rule with my own clients:
- We helped a number of businesses create sharing sites for parties, home services, programming etc. While the concept is relatively simple, the cost of finding suppliers and developing marketing programs can be both expensive. I have been successful in encouraging these businesses to focus on the services that have the most potential.
- We helped a textile company prioritize its product offerings; at first they were focused on being all things to all people. We worked on developing groups of products, increasing design and marketing efforts, and eliminating over 40 % of the products (which represented less than 10 % of sales.) The result was greatly improved efficiency, but more importantly, the ability to add products by more integrated merchandising.
- Prioritizing and following the 80-20 rule can be easily improved by just taking care of your best customers. For example, why do new customers sometimes get better discounts than the best old customers? I encourage clients to treat the best old customers really well, in addition to seeking out new customers.
Here are some tips to consider when executing the 80/20 rule:
- Reduce inventory. By following the 80/20 rule, you’re choosing to operate using less inventory. You must first admit that certain products (even if you truly believe in them), simply are not selling. This leaves more room for carrying the products that do sell.
- You should spend your resources on what you know will provide a return on your investment. Reducing products that may or may not be a good fit for your customers can save you money. Also, think of all the headaches, space and time you’ll save by not having to market obsolete inventory.
- The 80/20 should not preclude development and testing of new products. However, this usually requires more analysis of the program, evaluation of results, and withdrawal if success is not apparent.
- Simplify products and services. Your customers will also appreciate this. Think about the last time you went to the store to buy one simple thing, and you saw enough options to fill a late 1980s Sears catalog up. It made it difficult to choose the right product, didn’t it?
- 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 to shift over to 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.
- Have you run an unsuccessful AdWords campaign lately? It may be the actual product or service that you’re marketing and not the ad. If you’ve followed every best practice and your product isn’t selling, maybe you have to blame the product, and not the ad.
- I know you hate developing complex forecasting models and spending lots of administrative time on the logistics of obsolete products, but you’ll get over it. Who knows? You might even find some more leisure time.
- Suppliers also like the 80/20 rule, and they may reduce prices or increase service if their orders are more concentrated. Everyone in the supply chain, right on down to the customer, is much happier as a result.
This brings me to my next point… what is the MOST important reason the 80/20 rule works? Happy Customers! Want to start rocking your business by following 80/20? Contact me and I’ll get you started!
Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.net ) has an MBA And PhD from the Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startup and small businesses.
