Change Is Accelerating and Old Paradigms and Structures Are Failing

Change Is Accelerating and Old Paradigms and Structures Are Failing

by | Mar 1, 2023 | Planning

When it comes to change, are you focusing on the right issues? Just a few years ago, tech stocks like Amazon, Alphabet, Apple, and Microsoft accounted for over 50% of stock market growth and experienced 20-40% annual gains. Currently, they are experiencing slower growth and, consequently, laying off workers. Additionally, issues like climate change, immigration, and mental health are accelerating in importance and receiving little new attention.

Many businesses as well as political, religious, educational, and other institutions are facing crises because they fail to adapt. For example, it is generally accepted that pre-kindergarten programs dramatically impact education and long-term societal goals. Yet, few school systems nationwide have adapted them. Demographics make matters even more complex: Women will soon represent over 50% of the labor force, workers over 45 have increased from 31% to 41% of the population, and over 50% of births in the U.S. are non-white.

We need new approaches and strategies to properly address these changes.

Pricing is a great place to start when reexamining strategies. In general, companies price by old strategies related mostly to supply and demand. However, there are numerous alternatives available to increase sales, better serve the customer, and impact costs. One of the best examples is bunding and unbundling. Grocery stores like Wegmans have made significant gains in offering customers things like prepared meals, take out, meals to cook etc. that compete with restaurants and provide alternatives to cooking yourself. These are generally special produts at higher margins like all the Super Bowl offerings. The charcuterie board trend with prices ranging from $30-$100 is a great example of this markup. In contrast, marketers like Amazon and Costco are masters at unbundling and offering consumers value offerings with few amenities.

Charcuterie - a fancy French term for adult lunchable.

Today, businesses (large, mid-sized, small, and startups) and the business management need to focus more on openness, transparency, brainstorming, and support to stimulate innovation. We have seen and acknowledged the potential positive impact that open systems have on decisions, motivation, and profitability. Unfortunately, the reality is quite different, and they are rarely happening nor are they truly supported. Why is this? I would argue that it’s because business management is lacking a realistic view of many issues and the changing environment we live in.

The management structure of many organizations is what produces a lot of the disappointing results we see. Many seemingly successful companies have tunnel vision, organizational constraints, and ignore emerging technologies and opportunities. They lack the flexibility to respond to the needs of the market and use outdated solutions to new problems. They fail to allow the vision, entrepreneurship, and risk necessary to succeed.

See also: Business Success: The Crucial Need for Innovation and New Structural Paradigms

So what is the secret sauce to success? We need to look at what is increasingly emerging as a potential solution: the acceptance and reliance upon open systems and collaboration. Open systems have been around for a long time, but are becoming the norm for success. They reject bureaucracy, authority, hierarchy, and closed decision-making processes. They encourage participation, diversity, new rules, and to some extent, chaos.

Organizations need to be open to measurement and feedback. Understanding and sharing financials, operations reports, and sales reports are the first step. Basic research studies, social media, and other devices can be additional tools. You can also try adjusting management involvement through more inclusive approaches (this could include creating a safe company culture where everyone is encouraged to share ideas without judgment).

Managing probability and risk more efficiently can also provide greater opportunities. This includes both value and probability of success. For example, when lotteries increase, the odds of winning remain constant, but the value of winning increases dramatically. As uncertainty and change accelerate, probabilities can also fluctuate. Many analytical efforts are reduced by the volatility in 2019, 2020, 2021 and 2022, which all 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 alone. 

See also: Can Risk Create More Opportunities?

When talking about change, we would be remiss not to mention resistance. Because where there is change, there is always varying degrees of resistance. As a result, winning opportunities can often be overlooked. For instance, have you hugged your best customers today? We frequently take our best customers for granted and don’t thank them enough, help them adapt to changes in their needs, or simply listen to their concerns.

Cartoon - Man at office conference table saying to the meeting presenter "When it comes to customer service, hope is not a strategy. It must be done on purpose."

Similarly, are you honestly assessing where you are experiencing success and failure? I can’t tell you how many clients are not tracking sales by product or account, measuring Internet results, or even monitoring traffic and success. These are incredible tools for understanding your strengths and acknowledging where there are opportunities to grow. We need to learn from failure rather than deny it and recognized when to abandon programs that aren’t working.

Finally, organizations often find themselves surprised by circumstances rather than consistently managing their environment in order to be prepared for change. On a number of different levels, factors like global warming, aging of the population, product life cycles, technology advancements, and the Internet are highly predictable. What is frequently missing is the acceptance that our world will always be in a constant state of change and the open-mindedness and flexibility required to respond and adapt effectively.  

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.

You can reach Dr. Shlensky at: 914-632-6977

Or email:bshlensky@startupconnection.net

How Things Change is Just as Important as What Things Change

How Things Change is Just as Important as What Things Change

by | Jun 24, 2022 | Planning

A year or so ago, I wrote about how fast change is occurring and how we needed to adapt faster. At that time the pandemic, unemployment, economic growth, and unequal worldwide wealth were among the key issues. Fast-forward and change is still happening faster than we seem to be able to adapt. However, the issues are also changing. Today, inflation, the war in Ukraine, crime, trust, and mental health seem to have taken over our focus.

"Intelligence is the ability to adapt to change." - Stephen Hawking

In any discussion about change, it’s imperative that we look at the process of managing change as well as the specific issues being affected by it. In particular, we need to consider parameters, institutions, and processes.

When it comes to disruptive change, we must remember that parameters change. For example, inflation (which was a key economic factor, but has been relatively dormant) has suddenly become relevant again. The concern is that we may view inflation as too much of a crisis rather than a parameter to be considered. For example, decades ago, I supervised a company in Mexico that collected payments every day because inflation could eat up their profits. 

A critical issue in managing change is the increased impact of social, economic, and political volatility in our institutions. In particular, the social aspects, which are frequently disruptive and somewhat new, have been underestimated. These include the pandemic, partisan politics, increased income inequality, and crime. Commodities like lumber and wheat, which traditionally trade in narrow ranges, are doubling and halving in a few months. Disruptions like supply chain, labor shortages, chips, and baby formula are happening regularly. In addition, these disruptions can take months rather than weeks to resolve.

Comic showing executives at a conference table, one asking "What if we don't change at all... and something magical just happens?"

The pandemic and economic recovery have produced imbalances in processes that analysts have failed to consider adequately in AI and other tools. Timing and reacting to special events have been a major missing element, especially where supply chains have long lead times. In addition, the problems are not recognized early in the process and the extent of fixes is underestimated. We also misjudge the interaction among factors. For example, rates and shipping times are not balanced in considering ocean shipping issues. We also underestimate the impact of virtual monopolies in industries like baby formula and computer chips. Thus, minor disruptions can cause major crises. 

AI and other tools also assume you have proper information and can develop accurate analysis. The biggest problem is bias, which is frequently unknown or unintentional. I am reading about Apple after Steve Jobs and finding that the analysis, expertise. and skills are very impressive. However, their efforts are guided by many strategies, expectations, and even, “What would Steve do?” As a result, the analytical decisions can be compromised.   

Focusing on the processes and solutions relating to change can improve our responses:

  • Parameters need to be managed to improve decisions.
  • Understanding the risk, the rewards, and the importance of interconnected issues can improve outcomes.
  • Don’t allow fear, uncertainty, or tradition to lower your potential and prevent you from trying something new.

This goes for both analytical and social issues. The realities and changes in parameters like populations, the economy, political environment, and social values should all be reviewed and considered regularly. The most important thing to keep in mind is that many variables are changing faster and more often than ever before. So, not only do you need to understand parameters, you need to keep up with the latest ones!

"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic." - Peter Drucker

The bottom line is that change requires management and not just reaction. We can’t predict the future, but we can prepare for the unknown. Because how things change is just as important as what things change. When you have a better understanding of the “how,” you will be better equipped to respond to the “what.”

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