We surround ourselves with too much and superfluous information that complicates decision making and frequently makes it less effective. As a result, we are often incapable of determine what really matters and overwhelmed by the impossible task of focusing on it all. Stop trying to focus on everything! Instead, increase focus on the five areas that really matter.
The 80-20 Rule is a great tool to focus on the most productive activities
Before we review the 5 most important areas of focus, let’s review the 80/20 Rule. 80 % of your sales and profit will come from 20 % of your efforts.
Don’t believe me? Let’s look at what some of the most profitable companies and industries are doing:
Banks are focusing high wealth customers rather than spread their efforts among less productive clients.
Retailers are closing small stores and scaling back on inventory to allow them to focus their time and budget on their most profitable products and stores.
Companies are reducing unproductive practices to improve profits and reduce costs. Costo continues to thrive by offering fewer, more popular products.
As a startup entrepreneur, your primary goal is likely to develop as much positive cash flow as possible within a 12–18-month period. Laser-clear goals require laser focus.
5 Most Important Areas of Focus
Increase Focus on: Change
Change is the only constant in life. While it’s impossible to predict changes, there are ways to train yourself to become singularly focused on finding solutions and making improvements.
Rather than getting overwhelmed by the big picture, focus in on key areas that will jump start your programs. Simplify and reduce uncertainty and stress, understand what really affects your business, and allocate your concentration there.
Change your mindset. Rather than focusing on the hassle of making of changes; frame them as opportunities for increased sales, higher profits, and competitive positioning. This is the kind of flexible thinking that leads to success.
Increase Focus on: Open Systems
Despite the fluctuations, there are several tools for executing solutions and gains. Electric cars, women’s sports, and weight loss drugs are examples of emerging changes that will create massive opportunities
The first order of “open” business is facilitating open communication and collaboration. Empower your staff and management, and trust your employees. This may require reassessing your current workflow and hiring process to ensure you are hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times.
Embracing the “status quo” of how things have always been done is the biggest mistake business owners make. Not convinced, take a look at how executing innovative solutions has been a game changer for major corporations.
What did all the success stories have in common? They all embraced the pillars of open systems:
Open Assets
Open Engagement
Open Services
Increase Focus on: Prioritizing
Our problem is not a lack of choices, it’s lack of information about each of those choices. Without all the information, prioritizing is impossible – for business owners and customers alike.
Cheese, beer, bread, and turkey breast are among the most over-assorted products in our lives. Yet, stores spend little time educating customers on varieties, taste, and price of different products. Prioritizing consumer education improves consumer satisfaction, which – in turn – improves consumer retention (and revenue).
Consumer-Facing Prioritization: Prioritize providing what consumers actually want and how they want to get it. Amazon had about 22-24% of all web traffic this holiday season and, yet, we’re still talking about less successful alternatives like retail and Internet outlets rather than educating businesses on how to capitalize on Amazon’s success.
Internal Prioritization: Prioritize what you’re good at and pay less attention to your weaknesses. Much of analytics in sports is based on getting players to focus on the efforts with the greatest probability of success.
Increase Focus on: Managing Risk
We are frequently afraid of risk when dealing with the rapid changes in our society and environment. Relying on old methods and a “we’ve always done it that way” mentality can actually be riskier than adapting and making change.
One of the biggest opportunities in evaluating risk is dealing with innovation and the exceptional. Better data also needs to be accompanied with some risk in searching for the exceptional.
“Risky” Ways to Improve Company Results
Create an open culture within your organization
Encourage testing of ideas
Embrace and cultivate diversity
Permit (within reason) “deviant” behavior
Test innovative recruitment strategies
Increase Focus on: Process
Many planning programs put financial objectives at the end of the process. Developing financial parameters at the beginning and then revising as programs develop has many benefits. It particular, it can help you avoid pursuing poor paths and highlight opportunities.
Key Takeaways
Focusing encourages you to prioritize key issues and reduce attention to insignificant ones. We’ve identified key issues and provided suggestions to help prioritize and consider the most significant opportunities. Encourage out-of-the-box thinking and ideas and avoid normal day-to-day problem solving. Encourage testing new ideas and scrapping ones that don’t work. Also, recognize that you will make mistakes and focus on solving them rather than blaming someone.
And, As Always:
Don’t neglect key elements of success: We sometimes forget that the chain is only as strong as the weakest link. Operations, customer service, and logistics are just as important as traditional functions. They present huge opportunities for a business to become more efficient and differentiate itself (i.e. selling on Amazon or bundling products).
Always be willing to improve. What are some specific areas you’d like to improve? Focus on those. Try to channel your energy into clear goals rather than on general ideas. And remember that success takes time and consistency. It may not happen overnight, but if you keep putting in the work, you will see progress.
We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
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.
The challenge of learning through trial and error, not just getting a pat on the back, often leads to better outcomes. When I was a kid, all the neighborhood children, regardless of age, would play sports together. The little ones, like me, hardly stood a chance against the older kids, but they encouraged us to keep playing. I’ll never forget the thrill of hitting my first home run and seeing the older kids cheer because I had managed to do something remarkable. That’s a bit like how women’s college basketball teams improve by practicing with men—they get tougher and more skilled because of the higher challenge.
Both of these examples illustrate that facing a challenge head-on and even messing up a bit is more beneficial than just raking in trophies. Charan Ranganath points out that trial and error learning, like doing practice SAT tests, is more effective than just memorizing vocabulary. In general, learning through trial and error enables you to understand and learn from your mistakes.
When it comes to decision-making and performance, it’s not just about support and positive feedback; it’s also about embracing challenges and gaining experience.
Consider this scenario: Would you prefer competing against an expert, facing a challenge, and learning from the experience, or compete against someone where you clearly have the upper-hand?
Most people would rather spar with an expert and learn something valuable than easily win against a novice. Failure isn’t the opposite of success; it’s a steppingstone to it.
We’re often too scared of failure, avoiding risks even when they could lead to big wins. This fear holds us back in all sorts of ways, from trading stocks to making bold plays in sports. It’s not just about taking risks; it’s about being smart with the risks we take. Take Microsoft’s bold move with AI and Bing—while Alphabet played it safe, Microsoft embraced the chance to innovate.
Our reluctance to embrace new information or consider alternatives can stymie us, as we saw during the fluctuations of the pandemic. Yet, if we analyze, test, measure, and evaluate, we can learn from failure without being paralyzed by it. Kids are fearless experimenters, ever resilient, and we should take a leaf out of their book.
It is interesting watching emerging industries like A.I. and electric cars in considering success and failure. Every day there seems to be a story about emerging success or a bump in the road. In addition, the rewards for the winners will greatly justify the risk. These industries will continue to grow, and the risks taken now could pay off big time in the future.
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.
In the end, the real trick is to focus on growth and learning without the pressure of a win-lose scenario. That’s why practice teams for women’s sports emphasize skill development over direct competition—it’s about learning, not just winning.
Contact us for a FREE evaluation and get an alternative perspective on your business. We’d love to help you identify ways to adapt to current trends. No one has time for BS—so we’ll cut straight to the point and answer any questions you have. Reach us at:
Dr. Bert Shlensky, President of StartupConnection.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 & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: https://www.startupconnection.net/ for more information.
In a world that often feels like it’s on repeat, the allure of outliers—the unexpected, the overlooked, the underappreciated—beckons with the promise of untold rewards and opportunities. We tend to underestimate those who dare to look beyond the horizon of the familiar and the safe. Yet, amidst the constant hum of change, volatility, and disruption shaping our modern landscape, many of us find ourselves clinging to the comfort of the predictable. This, however, is precisely where we might be missing out on monumental growth opportunities.
Trailblazers of the Uncharted Path
Consider the luminaries who’ve left indelible marks on the canvas of history: Steve Jobs, who was ousted from his own company only to return and redefine the technology landscape; Thomas Edison, whose relentless experimentation illuminated the world; Stephen Spielberg, whose initial college rejections did not deter him from becoming a cinematic titan; Bill Gates and Mark Zuckerberg, whose college dropout status did not prevent them from building empires. Their journeys underscore a pivotal insight: greatness often emerges from the outliers, from the willingness to embrace risk, to venture where intuition leads, even when it diverges from the well-trodden path. Seek outlier opportunities.
Capitalizing on the Edges of Expectation
The realm of outliers is not just about the people; it’s also about seizing on phenomena, trends, and opportunities that lie at the edges of our expectations. Like umbrella vendors who materialize at the first hint of rain, those who prepare to capitalize on these outlying events are the ones who often reap outsized rewards. Major corporations like Home Depot, The Red Cross, and Walmart exemplify this approach, developing contingency plans for unforeseen weather events, thereby not just mitigating risks but also turning potential crises into opportunities.
Harnessing Demographic Transitions
The most evident way to pursue outliers is to capitalize on emerging trends. One such fertile ground for outlier opportunities is the aging population. As we stand on the cusp of a demographic shift, with a significant portion of the global population moving into retirement, the potential for innovation in services designed to enrich the lives of the elderly is vast. From enhancing mental and social engagement to addressing the specific healthcare needs of this demographic, the aging population presents a panorama of possibilities waiting to be explored and cultivated.
Innovating the Financial Norms
The financial landscape is also ripe for outlier strategies. Traditional investment advice, like the 60-40 stocks-to-bonds ratio, is being challenged by the stark variances in returns, particularly highlighted by the tech sector’s explosive growth. These divergences signal a need for more nuanced, dynamic investment approaches that can adapt to the ever-evolving market trends.
Mastering Disaster with Cooperation
We need to recognize that volatility and change should be viewed as landscapes brimming with potential. Companies that have learned to navigate and even thrive in the face of disasters—be it Home Depot with hurricanes or schools enhancing safety protocols—demonstrate that with preparation and adaptability, challenges can be transformed into lucrative ventures. One major improvement is the cooperation rather than friction among agencies in dealing with disasters. For instance, Governor Hochul of New York even promotes that New York is the “Master of Disaster”.
Anomalies and Untapped Potential
Outlier opportunities also occur from anomalies that just occur. Consider the legal industry transformation led by firms like Skadden Arps and Wachtel Lipton, which, in the face of discrimination, carved out new niches in litigation and corporate takeovers, reshaping the legal landscape. Similarly, dealing with poor facilities, limited coaching and recruiting, and weak marketing all kept women’s sports in the background. Powered by exceptional talents like Caitlin Clark, women’s sports growing recognition points to the vast potential in markets and domains that have been historically undervalued or ignored.
Shifting Academic and Economic Landscapes
Other anomalies providing huge opportunities are the switches in college education from a focus on liberal arts to more employment-related majors. In particular, computer programming, design, engineering, and computer science are rapidly expanding while language, philosophy, and other traditional liberal arts majors are declining. In addition, schools like the U. of Illinois, Northeastern, Johns Hopkins, and Carnegie Melon are expanding, becoming more select and graduates are earning higher earnings.
Immigration as Economic Catalyst
While immigration has become a major political issue, it is more importantly a critical economic opportunity, and it presents yet another dimension where the narrative of challenge versus opportunity plays out. With economies grappling with labor shortages, the infusion of new talent and skills through immigration can act as a catalyst for growth, if navigated with foresight and strategic planning.
Rising from Challenge to Opportunity
Outlying opportunities also emerge from special events. The biggest barrier is that we become obsessed with the challenges and consequences rather than the opportunities. For example, we are still failing to manage the consequences of the pandemic. The nature of work and where it occurs have changed and we seem to adapt rather than manage. Working at home versus the office seems to be a political issue more than analyzing the economic, decision-making and social consequences.
Adapting Education in Post-Pandemic Times
Education seems to be making the least adjustment. While it is clear young children lost significant learning during the pandemic there seems little priority to restore the losses or ensure newer students get excellent opportunities.
Political and Economic Shifts as Opportunities
Political, social and economic events can create significant opportunities and challenges. Declining birth rates, geographic changes and climate control are also occurring and require better planning and management.
Health Innovations and Lifestyle Changes
With 39% of Americans considered obese and an additional 31% overweight, new weight loss drugs have the potential of having a major impact on diet and improving other health results like heart attacks and length of life. Weight loss programs, diet, exercise, and other programs have had limited results helping people lose weight and keeping it off. However, the new weight loss drugs have shown tremendous results in helping people lose weight and keep it off. They have even greater potential if issues like price, some side effects, and proving long term potential can be resolved.
Embracing Risks and Rewards in the Outlier Odyssey
Yet, the pursuit of outliers is not without its risks. The terrain is often uncharted, the outcomes uncertain. The key to navigating this uncertainty lies in a balanced approach—testing waters with modest commitments, being vigilant and adaptable, and never losing sight of the inherent passion and creativity that drive innovation. Exceptional customer service, the willingness to collaborate, and an open-minded approach to problem-solving emerge as critical enablers in this journey.
The Future Beckons: Will We Take the Leap?
So, where does this leave us? On the precipice of opportunity, with a choice to make. Will we tread the familiar paths, or will we venture into the realm of outliers, armed with the insights, strategies, and courage to explore the unexplored? The outliers beckon with the promise of growth, innovation, and transformation, challenging us to rethink our perspectives, to be agile, and to always be on the lookout for the next unexpected opportunity.
As we navigate this odyssey, let’s remember that outliers are not just about taking risks; they’re about understanding and managing those risks with intelligence, creativity, and a deep-seated belief in the potential that lies beyond the conventional. It’s a journey that demands resilience, adaptability, and a relentless pursuit of the extraordinary. And in this quest, the rewards—both personal and professional—can be as boundless as the outliers themselves.
In embracing the outlier odyssey, we might just find that what once seemed like distant possibilities are, in fact, within our reach, waiting to be seized and transformed into the next chapter of our success stories. The question is, are we ready to take that leap?
—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 of StartupConnection.net earned a PhD from the Sloan School of Management at M.I.T., mentored a few thousand clients at Score and his own practice, grew Sure Fit products from $50 million dollars 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. In short, he knows what works and can help you lead your company to greater profitability and success.
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.
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.
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