Measuring for sake of measuring is a waste of time. In order for measurements to be a valuable part of an effective strategy, they need to be more than passive content that’s mostly used for identifying problems.
To be successful, we need to know what we’re measuring and why, use clear and simple measurement tools, and clearly communicate processes and results. And, here’s the key, measurement is a process for improvement and shouldn’t be used as a way to beat ourselves or our team up.
To help you avoid common pitfalls, here are some helpful hints for making the most of your measurements.
Measurement should clearly relate to goals. Since goals can be complex and you’re often operating with more than a single goal, this can be tricky but is essential and starts with strategic goal setting. For example, focusing exclusively on short term profits can reduce efforts towards critical factors like investment, innovation, satisfaction, effectiveness, and growth. Corporate strategy and sports teams demonstrate this by reducing long term focus on growth to meet immediate needs.
“Regression to the mean” is a well-respected and valid tool you should be utilizing. While it sounds complicated, the term is just used to describe the statistical tendency for data to trend towards an average. For example, the average U.S. male is five foot nine inches tall. Estimating the average height of men after viewing a bunch of 6-foot athletes is disruptive. However, we do this exact thing regularly when it comes to measuring the stock market, the weather, and sporting events.
The 80-20 rule generally works. 80 percent of your efforts generally account for only 20 percent of your results. However, the flips side of that means that just 20 percent of your customers and products can be prioritized to produce 80 percent of your success — and that’s pretty cool.
You need both objective and subjective measurement. We tend to rely on quantitative measurement because it is believed to be more reliable, consistent, and, valid. While true, we need to make sure we’re looking at subjective measurements as well. Qualitative measures like effectiveness, quality, prioritization, and satisfaction can be just as – if not more – important to the success of your business.
Perceptions and bias can greatly affect measurement. Selection and sampling can affect the measurement process. So can our own internal biases and perceptions – without us even being aware of it! Our perceptions are frequently based on recent events. We tend to ignore simple cultural situations like weather, group history, and success. My simplest recommendation is to avoid being the last to speak to a hungry audience!
Measurement must consider change. We’re often slow to modify measurement activities. COVID and the associated years must be considered when analyzing data moving forward. For example, 2020 and 2021 data can be outliers in any trend analysis. Without considering the change in external circumstances, we’re likely to draw incorrect conclusions from the data. Economic, political, and social changes can also alter results. For example, the aging of our population, the popularity of remote work, Zoom meetings, and increased income inequality are having dramatic impacts on consumer behavior and the economy. The real question isn’t whether things will change — it’s whether you will change with them.
Don’t eliminate outliers. Risk tends to scare people. Our first thought is often that we’re going to lose money. In reality, many low probability alternatives have huge payoffs and limited risk. For example, young people should embrace risk in their early career efforts since job turnover rates are high anyway. Even as you move up life’s ladder and start investing, the mentality remains the same and your portfolio should include some high-risk investments. This concept plays out regularly among gamblers – who pursue the best odds, not the lowest ones – and sports statistics that now include 3-point shots, fourth down conversions, and bases stolen.
Different efforts are required for considering alternatives and decisions. Effective solutions are limited by the alternatives considered. Making decisions is based on establishing criteria and eliminating alternatives. Thus, developing alternatives requires open and widening efforts.
A relationship does not mean cause and effect. Ice cream sales and violent crime are related. However, extreme heat- not the two factors themselves – are the cause. Nevertheless, variables like weather, demographics, and the economy can be related to any number of factors. Resist the urge to automatically assume causal relationship where there is none.
Understand the diversity of data distribution. Typically, we just assume that data is distributed normally – with a high midpoint and fairly equal higher and lower numbers. If you’re measuring something like height, this is pretty accurate. When you start measuring more complex things like wealth, things get more complicated. Understanding the diversity of data means considering the impact that issues like change, disruptions, and uneven growth have on results.
Is your measurement valid and accurate. Not everything can be measured or always be effective. For example, for decades the measurements used to create baseball statistics neglected to take the Negro League into consideration — and, therefore, presented inaccurate data. Recently, this has changed and stats now include the Negro League and include discussions about how many no-hitters Satchel Page (since many were previously unrecorded).
Understanding the strengths and weaknesses of your measurement is critical to success. There are a number of tools that can help mitigate the challenges.
Historical or similar data can sometimes serve as a surrogate
Simple estimates can provide a range of solutions
Comparing the consequences of different alternatives can show the implications of different solutions.
In summary, measurement is an opportunity to improve performance and shouldn’t be feared or neglected. Set goals, use clear and simple tools, utilize the process for improvement and take comfort in the fact that even if you don’t reach your goals, you’re further along than where you started.
Dr. Bert Shlensky, President of Startup Connection, offers experience, skills, and a team devoted to developing and executing winning strategies. We’re here to help you get on track and stay there as you move forward. We welcome comments, suggestions, and questions.
Let’s get real about something that’s been buzzing around lately. People are going bananas over how Nvidia’s sales shot up from $27 billion in 2022 to a jaw-dropping $60 billion in 2023, with profits skyrocketing from $4 billion to $30 billion. That’s over a 500% increase. Naturally, everyone’s on the hunt for the next Nvidia.
But here’s the kicker: research by Anthony Pisano and others tells us that only about 25% of public companies actually see significant growth. Hitting a 10% growth rate is considered top-notch, and even that doesn’t last forever. As it turns out, about 75% of companies barely budge in terms of yearly growth.
Realistic Expectations and Strategy
The above results suggest several strategies that should be considered:
Consider that real potential for growth frequently gets overestimated.
Companies tend to forget that products have life cycles—sales can start strong, take a dip, and then drop after a peak (Peloton is a great example). Plus, we tend to miscalculate the math. Growing 20% yearly for five years sounds great until you realize maintaining that momentum is a Herculean task.
Companies can also overestimate growth potential of diversifying or adding products.
When it comes to diversifying or adding new products, more isn’t always better. Just throwing in more colors, models, or features often doesn’t do much. Diversification needs the same magic touch as your core offerings and can also see diminishing returns. Remember the 80/20 rule? It’s real—80% of your sales come from 20% of what you offer. And “stick to your knitting” isn’t just a quaint saying; it’s solid advice that often holds true.
Companies need to consider other growth alternatives to increaseeffectiveness.
Should companies pay more dividends and do buybacks rather than invest in growth strategies? Should efficiency and effectiveness be considered more than growth in strategic planning?
Pricing Strategies in the Mix
Pricing Opportunities Continue to Grow.
Increased tipping pressures are starting to reach backlash. Many grocery chains are adding prepared foods to capture some of the eat-in market and to offer an alternative to the high prices of dining out.
Amazon continues to loom large, not just with prices but with selection, service, and speedy delivery. For example, one day shipping can be a game changer compared to visiting a store with low inventory, poor service, and inadequate staff. This puts traditional retailers in a tough spot, especially when they’re cutting back on offerings and service to boost margins, making Amazon even more appealing.
“Free” is not a dirty word. The concept of “Freemium” is more than a business model. It’s also a pricing strategy. Offering something for free and then charging for upgrades is a proven model (think Google and Facebook). Ancillary aspects of the Freemium strategy include samples, blogs, demonstrations, contributions to charities, etc. — these can all create new opportunities.
The Power of Logistics and the Internet
Logistics, sourcing and distribution efficiencies can drastically increase sales and profitability.
Efficient logistics, sourcing, and distribution can significantly cut costs and boost sales. Fast shipping and direct delivery methods can also make a big difference in pricing and profit.
Embrace the Internet.
The internet is a game-changer. Google, Facebook, and Amazon are essential players, whether as suppliers, customers, or information sources. Using the cloud, analytics, email marketing, and online ads can significantly enhance sales and leads.
Culture and Intangibles
In observing organizations, I consistently find culture, expectations and excellence greatly affect success more than we acknowledge.
While skills, finances, competition, and operations are all crucial, it’s often the intangibles that set you apart. For example, embracing risk, fostering passion, and cultivating a collaborative environment can greatly enhance effectiveness.
In summary, chasing growth for growth’s sake can be a wild goose chase. Instead, focusing on sharp execution, exploring alternatives, and prioritizing efficiency and profits might just be the smarter move.
I’d love to hear your examples of how growth can be achieved through a variety of strategies. You can find me at Bshlensky@startupconnection.net or 914-632-6977
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies for your new or established business. Our strategies help you increase your bottom line, and includes clear steps, with access to over 150 free articles and templates, to help facilitate your efforts and guide your process to profitability today. We are here to help you get on track and stay there as you move forward with your business.
It’s easy to get started! Just email Bshlensky@startupconnection.net or call 914-632-6977.
When it comes to improving decision-making and performance, two strategies are often discussed: providing more support, positive feedback, and cooperation – or offering more challenge, testing, and experience. I argue both can be accomplished together.
Choosing Challenges Over Easy Wins
Consider this scenario: Would you prefer competing against an expert, facing challenges, and learning from the experience, or compete against someone where you clearly have the upper-hand? Most individuals lean towards the former, seeking challenges, gains, and knowledge.
For example, many women basketball teams will have some practices against men so their actual games against the competition seem less physically demanding. Even kids competing seek a greater challenge when they know parents are letting them win.
The Crucial Role of Culture
Achieving a balance between support and challenge hinges on fostering a culture of learning, growth, and experience rather than one centered on failure and win-lose outcomes.
Let’s look at the example of elite college admissions to schools like Havard and Yale where only about 10% of applicants are accepted. Instead of solely pursuing prestige and competition, individuals should also weigh factors like scholarships, specialized programs, diversity, and campus life when making decisions Schools like Cal Tech, Johns Hopkins, Northeastern, Carnegie Melon, Berkeley, Georgia Tech and University of Texas at Austin are examples of competitive choices.
Efforts to Foster a Positive Culture
In order to balance support and challenge, we need to identify and evaluate alternatives. Comparing resources, probability, potential results, and fit can add to success without the stress of win-lose.
The alternatives must be evaluated within the context of individual needs and goals. For example, retirement portfolios must balance income, growth, risk, probability, inheritance and other goals. My view is that we can afford more risk as we age, as expenses decline and investments increase.
Testing and Learning from Experience
There are more opportunities to test decisions than we often consider. Testing outcomes with simple models, evaluating alternative behaviors, risks, probabilities, and time frames contribute to informed decision-making.
Experience and practice reduce the challenges and provide support for future success. Many training programs are based on continued training, mentoring and trial and error. Even some aspects of surgery can be practiced on a computer. Hospitals with the most activity in providing a particular service have better results. Making the first souffle seldom succeeds, but practice can make them delectable. It is also beneficial to grow gradually and increase difficulty as you progress. For instance, I was surprised to learn that swimming is more difficult to develop conditioning in than running.
Setting Goals and Priorities
What are your goals and priorities? Financial versus social; long-term versus short-term; excellence versus perfection; development versus success; individual versus group. It is important to consider these dimensions and avoid conflicts and confusion.
Passion as a Success Factor
Passion is highlighted as an underestimated factor in success, yet it provides extra motivation, enables risk-taking, and often yields greater satisfaction upon success.
Understanding and Using Algorithms Better
We use algorithms but could understand and use them better. Don’t be afraid of math, probability and analyzing risk. Developing and using proven processes for activities can add to success. Even simple behaviors like eating, driving, exercise and health can be improved. I’m diabetic and know the guidelines, but sometimes I don’t follow them.
Innovation versus Experience
It’s important to evaluate the need for innovation versus experience. Complex problems frequently require innovation, while detailed procedures require more experience, as in, for example, open-heart surgery versus car repair.
When do you need to develop new solutions versus execute effectively? What is the balance between excellence and perfection in an effort? I argue we can frequently be more effective if we are striving for excellence.
Understanding the support and challenge game in management is key. Develop tools, consider alternatives, aim for win-win situations, measure outcomes, and set priorities. Ultimately, fostering an effective culture and open processes is essential for effective problem-solving, with a simple reminder to see the glass as half-full rather than half-empty.
Let’s start a conversation – no matter what stage you are in with your business. As an exercise, tell us how you have better managed challenges. Then, tell us what areas you to need focus on in order to see improvement.
Dr. Bert Shlensky , President of StartupConnection.net, earned a PhD from the Sloan School of Management at M.I.T., mentored a few thousand clients at Score and in his own practice, grew Sure Fit products from $50 million to $150 million in sales, including $60 million of direct internet sales, was President of WestPoint Pepperell’s Apparel Fabrics Business and headed the $400 million Culet Shirt Group. Dr. Bert knows what works and can help lead your company to greater profitability and success. For a free initial consult, reach out at bshlenksy@startupconnection.net or 914-632-6977.
There is an excellent Jewish expression called “bubbie-meise”, which refers to old wives’ tales. Some examples are: It’s bad luck to open an umbrella in the house! You can’t go swimming for one hour after you’ve eaten or you’ll drown! Eat all your food, there are starving children in Europe! And my favorite, Chicken soup can cure anything!
One does not have to belong to any religion to believe in such things. We generally tend to accept assumptions, beliefs, or superstitions as valid. Such anecdotes have been passed down for generations. But in the world of business, clinging to faulty data and being too stubborn to accept change cannot be cured buy a bowl of chicken soup, however tasty it may be. We need to test assumptions to ensure better decisions.
Perceptions and inherent patterns cause us to rely on invalid assumptions. People tend to be risk adverse, avoid change, and accept the most comfortable alternatives. However, just as we can develop routines to help us through our day, we can also develop routines to reduce the chance our assumptions are wrong. Risk can never be fully eliminated, but understanding how it can be reduced can help us immensely. It’s why we check the weather forecast before going outside or use the crosswalk to cross the street.
Analytics alone cannot resolve a conflict; it needs to be supplemented with passion, effort, commitment, and focus. Analytics can be less reliable when the data is wrong, when relationships are invalid, when sampling is inappropriate, and when risk is not considered. For example, the more creativity and uncertainty involved in any given situation, the more intuition and a little luck will be required.
Many economic proposals ignore that the economy is getting even more diverse. In 2023 nearly all the stock market gains are in seven stocks. The comparable returns of stocks and bonds seem to gyrate every day. Inflation, bank results, foreign activities and other factors seem to affect the economy every day.
Some suggestions to better test assumptions are as follows:
Review and evaluate processes and decisions. For example, it is unreal to me that objective testing regularly outperforms personal evaluations in employees’ personnel decisions. The reason is mostly poor training and bias.
Data needs to constantly updated. The latest census shows some dramatic changes in the makeup of our country, and that diversity needs to be considered when we gather and analyze data. Different regions have significantly varied ethnic as well as economic characteristics. A great amount of data also needs to be adjusted for the impact of the pandemic. For example, comparisons to last year or 2019 can show quite different results because of social changes brought on by the pandemic; there are more stay-at-home workers than ever before.
Facts are frequently more independent that we think. If you flip a coin a certain number of times, the odds will always work their way back to 50-50 regardless of any streak of heads or tails. Cause and effect are frequently assumed rather than analyzed. Differing and multiple goals (such as short-term and long-term goals) can impact the understanding of cause and effect. Medical symptoms are frequently attributed to certain issues, while other factors may be the real cause. That’s why it’s important to get a second opinion if something does not sound right to us.
Bias is one of the greatest complications when it comes to accuracy in the analysis of decisions. This includes statistical problems like sampling, measurement, and development of information. I also believe that social bias can be more impactful than statistical bias. This includes our preconceived perceptions and assumptions about factors affecting decisions. Cultural and environmental factors also affect bias. Dress, demographics, weather, location, and culture all affect perceptions in the decision-making process. It is important to never assume anything based on the past. I would refer to the Odd Couple episode “My Strife in Court” to illustrate what the word “assume” is made of.
Risk assumptions and tolerance are critical to effective actions. Predicting results where there are significant and consistent historical data can be fairly simple; however, predicting results for new programs or with little or inconsistent data requires developing educated estimates. Assumptions regarding risk tolerance also need to be considered. For example, you generally need to be more cautious with regards to safety than low investment high reward opportunities like the lottery. It’s crucial to know where every dollar is going, and where it can reap the greatest benefits.
Organizations need to be open to measurement and feedback and understand cultural parameters. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. A management style such as “walking around” and checking in with employees can be priceless. Balancing short-term and long-term goals, understanding challenges, and tolerance for failure are examples of understanding the cultural environment.
Analytics, tradition and experience are all valuable tools to improve decision making. However, you need to ensure that the assumptions behind those tools are accurate and reliable. In particular, our rapidly changing environment involving issues like Covid requires regular testing and validation. Similarly, creativity and intuition that defy some analyses and are becoming increasingly required. We can help you objectively search alternative causes and solutions. Understanding that there are various solutions to the problems we face out there only helps us improve our business practices. It does not mean that chicken soup still does not hit the spot.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward. You might start with our quick video: https://www.youtube.com/watch?v=dhZ3LvSmZfw
We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
“If you aim for nothing, you’ll hit it every time.” These wise words from the famous author, salesman and motivational speaker, Zig Ziglar, are precisely why we must set clear, specific goals. Nearly every plan, budget, and proposal start with goal setting and establishing focus. In business, the next recommendation is to make a profit. The rest of the plan then details the programs to achieve that end.
It seems simple enough, right? However, the process of setting goals is far more complicated and can facilitate the remainder of a planning process.
A key issue in developing business and personal goals are the parameters. Even in sports, where the general goal is winning, there are complexities. For example, the goal of minor leagues is more about preparing players for the majors than winning every game. And in little league, things like development, training, participation, and teamwork can be as important as winning.
Goals also operate within the context of other needs. What are the opportunity costs of other activities? What are the costs, investment requirements, and rewards of an effort? What are the social, legal, and environmental considerations? How important are issues like innovation, time, safety, culture, and the whole group in an effort?
Here are some recommendations to consider in developing goals:
Exploring and understanding profit can add dimension to your goal setting. There is more than one description of profit. Some include: long-term profit, short-term profit, cash, present value on investment, profit before or after depreciation, interest or other factors, and expected value discounted for risk. Understanding profit and investment requirements also differ for service, retail, manufacturing, technology and other types of companies.
To compare varying goals, let’s look at small business entrepreneurs and venture capital investors. The small business entrepreneur is mostly concerned with earning enough cash to pay bills and stay in business. (If you recall, 90% of small businesses go out of business within five years.) Venture capital firms are looking at multiple investments and expecting that enough will make significant profit in a few years to more than cover the unprofitable ones. Even the venture capital business has changed dramatically in the last few years. Initial investments are smaller and for shorter periods, profit expectations are more carefully reviewed, and growth expectations are more reasonable.
Measurement is a critical aspect of goal setting. What, when, how and criteria of how we evaluate an effort are critical in decision-making and goal setting. For example, we debate the potential and impact of a recession. However, there are several different ways to measure it such as length, type, impact, etc. Measurement can also be considered from an absolute or relative perspective. In little league, showing up is frequently considered excellence. Improvement from a weak team can also be considered excellence while winning a championship is expected from the best teams. So, knowing what your measurement parameters are is key. Consider cooking, for example. We know measurement is critical, but when a recipe calls for a pinch, dash, shake, and smidgen… what exactly does that mean? It seems like only grandmothers really get it right.
Don’t forget about bias. Bias is, perhaps, the biggest culprit in distorting the development of goals. For example, when evaluating performance, profit can reduce the importance of variables like quality, customer service, logistics, etc. Bias can also cause issues because many non-quantitative goals are more difficult to measure. For example, sports teams generally focus on winning rather than development, culture, or team concept, which may be more important. Look how many teams in various sports have failed by trying to hire super stars and ignoring other requirements for winning.
Timing and time parameters are crucial. Long-term versus short-term is the most frequent difference. However, periods of time are also important. For example, the stock market has been highly volatile in recent years. 2020 and 2021 saw significant gains, 2022 saw significant losses, and 2023 appears to be regaining much of those losses. Goals will vary depending on whether you need cash immediately, are saving for your retirement, investing for inheritance, or any number of other needs and the timeline they require.
Flexibility is key. Businesses are subject to more radical change and need to build adaptable mechanisms into their processes. As we face more uncertainty and instability, we need to focus on changing and simplifying processes to reduce the risks, and our goals must align accordingly. Strategies like pivoting and develop/test/measure/adapt need to be built into our organizations.Examine alternatives and change when necessary. Reevaluate a system that isn’t working and set new goals that will yield worthwhile measurements.
Human and cultural factors must also be considered. How important are excellence and change in our processes? How much innovation effort is in our programs? How complex or detailed are our goals? And keep in mind that customer, supplier, and employee satisfaction can dramatically affect results.
The debate of pursuing improved excellence versus change is affected by a number of issues. We need to understand how problems affected by goals versus tactics can require different solutions. The most frequent issue with change is insufficient support and operations. For example, excellence in quality, delivery, and customer service are even more important during periods of innovation. As change is inevitable, organizations simply need to understand their new environment and execute fundamental change.
Make goal setting a priority and communicate your goals to those involved. Be certain to understand the varying needs of different situations. Use clear and simple measurement tools, and be sure to utilize the process for improvement, rather than criticism. And remember, we set goals to make progress, and even if we don’t achieve what we set out to accomplish, we still end up further along than where we started. So, stay focused on your goals, make them work for you, measure your growth, and keep moving forward.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward.We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
As we start wrapping up another year, it’s a good time to examine areas we are looking to improve. One proven way to get better results is to take more risks and then take even more risks.
Overall, we avoid reasonable opportunities to utilize risk to our advantage—most likely because we have an unhealthy relationship to the word. Maybe we need to start thinking of “risk” as the “potential to win.”
Recently, I saw a perfect example of how this detrimental aversion to risk actually does more harm than good. Two underdog football teams lost because they refused to take risks and be unconventional. I believe the coaches were simply afraid to be second-guessed and made decisions that were almost guaranteed to lose. Similarly, sports teams consistently take fewer three-point shots, steal fewer bases, and attempt fewer two-point conversions than the odds would dictate.
This phenomenon has also been well documented in organizations. Some of the most notable examples are Kodak refusing to recognize digital, Xerox basically abandoning Windows technology, and retailers failing to recognize the impact of the Internet. Currently, the financial markets seem hesitant to recognize the slowdown in tech stocks. Why do companies act this way in spite of the many cases in which change is both organizationally and financially justified?
If you’d like to avoid this tendency of evading probable wins, here are some strategies to increase risk with limited downsides:
Manage probability better. This can provide greater opportunities, including both value and probability of success. For example, when lotteries increase, the odds of winning remain constant, but the value of winning increases dramatically.
Keep your perspective in check. As uncertainty and change accelerate, probabilities can also change. For example, many analytical efforts are reduced by the volatility of 2019, 2020, 2021 and 2022, which need to be considered together. Getting excited or depressed about one year is erroneous. In general, the four years together provide a more positive and reasonable perspective than just one year. See also: Embrace Uncertainty with Positivity.
Don’t be afraid of losing. Many studies have shown that we are about twice as likely to avoid losses than pursue gains. For example, we will trade stocks with gains twice as fast as selling stocks with losses despite tax advantages for selling losses.
Understand and maximize goals and needs. The simplest technique is to understand the needs and goals of your partners in a relationship. For example, are you willing to endure short-term losses to develop long-term gains? Similarly, are you willing to invest in efforts like quality, customer service, and people to improve the chances of success? See Make Goal Setting and Measurement Work for You.
Reduce bias as much as possible.The greatest detractor from effective decision-making (which can be intentional, random, hidden, or even unknown) is bias. Probably the greatest source of bias is our own set beliefs, experience, and reliance on a “we have always done it that way” mentality. Thus, we simply ignore information or facts that are different than our own. Another factor is incomplete or wrong information. However, when we eliminate bias, we increase our probability for success.
Be more open. Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. Take advantage of simple research studies, which social media can provide. These are worthwhile tools to use regularly. A management style such as the “walk around” and asking simply, “How are you doing? Is there anything you need?” can be priceless.
Remember that mistakes are often the best way to learn and grow. One of my favorite phrases is, “If you aren’t making mistakes, you aren’t trying hard enough.”
Environmental and external influences can greatly affect risk as well. Inflation, oil prices, and supply shortages are causing great disruption today, but they will also create opportunities. Electric cars, the chip shortage, and logistics are areas where unknown opportunities will emerge.
Risk considerations are also affected by quantitative versus qualitative considerations. On one hand, quantitative data are measurable, objective, comparable, and easier to document. However, we must ensure we are using the right measures and analyzing correctly. Qualitative data, on the other hand, can measure issues we don’t always consider and allows for intuition. But these processes can be compromised easily or measure wrong factors. In particular, bias occurs much more frequently in qualitative analysis.
When it comes to risk, we also need to consider ignorance and ways to manage it. Ignorance shows up in a number of ways, which require different approaches. Some ignorance is just the unknown—like the economy next year, the long-term pandemic impact, and potential new technologies (such as a longer lasting electric car battery). While we can’t assure certainty, we can research alternatives and their consequences. Other forms of ignorance are the refusal to accept new information or unwillingness to remain open-minded.
Viewing risk as an as an opportunity rather than a danger can produce positive results. Change is occurring faster and faster and we must resist the urge to crave the comfort of consistency and reliability. We need to shift our mindset to one that expects and embraces risk. If we can learn to implement sound, proven strategies, we’ll simultaneously set ourselves up for success while being in a position to effectively and efficiently manage risk.
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 team of experts will address your particular needs while working to save you time and money.
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!
