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
Use These Quick and Simple Ideas to Improve Your Business
With the end of the year quickly approaching, it’s a great time to reflect on where we are and where we’d like to be. But, since it’s that time of year when everyone’s schedules are impossibly full, we’ll keep this quick, simple, and practical.
Below you’ll find several resources to help improve your business. I suggest picking one or two posts, and committing to incorporating one or two suggestions from each. My personal recommendation is the 80-20 post, which is simple and almost guaranteed to produce results.
I also encourage you to provide feedback and let us know which suggestions you found the most useful.
And remember, as the end of the year approaches and stress levels tend to increase, be kind to yourself and others, find ways to relax, enjoy time with family, but also make time for yourself. Take deep breaths, cut yourself some slack, and know that your best is enough.
Hopefully this end of the year list inspires you to incorporate some fresh ideas into your business and explore various strategies. I also recommend using the content to develop and test new alternatives and solutions. In your efforts, don’t be afraid of some failures along the way—it’s the best way to learn and grow. Good luck!
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 expert team will address your particular needs while working to save you time and money.
What is success? It’s abstract, really. For some, it could be money and status. For others, it’s finding happiness. In business, we tend to measure success starting with profit.
In talking to entrepreneurs, I am always fascinated with the different perspectives of success. In general, they believe their ideas are incredible and the obstacles they need to overcome are constraints like finance, resources, marketing, and competition.
I argue that their potential barriers are actually achieving excellence in developing and executing great programs. Why do I think this? Well, 90% of new businesses fail withing five years, and that includes IPOs and venture capital efforts.
Consequently, there are several issues that need to be addressed in order for entrepreneurs to reach their full potential. When an entrepreneur thinks about starting a business, there are two distinct concepts that pop up time and again: Passion and Reality. These are both critical to success.
Passion was best described by Steve Jobs when he said, “Because the people who are crazy enough to think they can change the world are the ones who do.”
Reality is understanding the problems, limitations, and constraints associated with any undertaking. As Thomas Edison said, “A vision without execution is hallucination.” Passion is what gives us the drive to overcome these obstacles. It is the excitement and energy that drive a start-up. It is crucial to balance these two concepts if you want to execute a successful business.
You also need more than a good idea—they’re a dime a dozen. Your best friend might have the next million-dollar App idea. Ideas are great as they are the true engines of innovation. However, an entrepreneur needs to determine whether they can execute the idea and, ultimately, make enough sales to earn a profit. New businesses frequently fail because small (yet critical) issues are overlooked.
Here are some recommendations to help increase potential:
Plan smartly. Think of planning as a long arduous test with lots of work, incorrect assumptions, and missing analysis. For example, 2022 financial markets haveclearly made prior economic and financial assumptions in any plan highly uncertain. The solution is to make plans simple, flexible, and solely for the entrepreneur and not outside parties. It should be a guide, not a fixed template.
Keep plans current and active. A business plan is not a document to be stored on a shelf; it should establish parameters and be developed, tested, and continuously revised. Even with a “perfect” business plan, there will be hiccups and failures along the way.
Learn from failures. This is a critical component of the ongoing planning process.
Focus on passion. This will keep you going through the failures. Additionally, a successful business plan should express why you think the business is a good idea and why it will succeed. If you need to dress it up in a suit and tie to show to investors, do that later. A business plan should be YOUR vision.
Set realistic goals. While time frames, levels, and processes can vary, you need a plan to show profitability: the when and the how. You may do what you do for a number of reasons (passion, fun, fulfillment), but at the end of the day, a business needs to make money if it’s going to last. Make sure that you set your passion aside for a moment and make sure you’re on the path to profitability. What resources do you have and need? Many entrepreneurs follow guides related to large venture capital ideas while most small businesses earn less than $1 million per year. Be pragmatic in these matters.
Take risks. This is a critical part of every entrepreneurial win. Frankly, I think we all need more of it. We tend to think of risk as a taboo concept and it’s really not—once you understand it. In order to benefit from risk, you need to define what risk is to you. Some people view risk as the potential for harm or hazard (think bungee jumping). I view risk as an uncertain circumstance in which one manages to maximize the gains. But, how do accomplish this?
Utilize analytics. More analytics in sports is creating opportunities to assess strengths/weaknesses and create new winning strategies. It has enabled athletes to take more three-point shots, hit more home runs, longer golf drives, and score more touchdowns. More knowledge = more informed decision = less risk.
Consider value and probability. These should inform your goals and processes. For example, winning the lottery has an extremely high reward, but also has low probability. Purchasing investment bonds has lower return than buying stocks, but the risk and volatility of buying stocks is higher.
Be flexible. There are a lot of moving pieces involved in a business plan. And curve balls are inevitable as our world is constantly changing.
Remember it’s an ongoing process. It takes time, dedication, and consistent effort. Peloton, which was one of the hottest companies in the country, recently experienced over a 25% decline in sales. So, we need to constantly compare goals, risk, and the potential of alternatives.
Listen to your gut. Sometimes you just have to go for it. We tend to overthink things or let fear stop us from challenging the status quo. But, if your intuition is telling you something, it’s usually worth listening.
Just as there is no single definition of success, there isn’t a certain path to achieve it either. But, you can set yourself up to increase your chances by creating clear goals and understand the risk, the rewards, and the importance of developing a smart business plan. And don’t forget your passion—the reason you started your business in the first place. Success isn’t fun if you’re not enjoying what you’re doing.
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 expert team will address your particular needs while working to save you time and money.
Have you ever asked a question only to receive the dreaded, “Because I said so,” response? This is often a phrase repeated to children, but even adults are prone to hear things like, “Because this is the way we’ve always done it.” If you’ve been on the receiving end of these statements, you know that they are never satisfactory explanations to questions. They’re a cop out—a way to evade the underlying issues and, perhaps, an unintentional admission of one’s fear of change or refusal to embrace innovation. And, that is exactly how we get stuck in patterns that don’t work within systems that are unwilling to adopt new structural paradigms—even when it’s the obvious answer.
Many people, myself included, have been writing on this topic for 5-10 years—reiterating time and again that our economy is dramatically changing and many analysts are ignoring the consequences. What is even more perplexing is that we continue to ignore some proven models of success.Several years ago, Walter Isaacson wrote in The Innovators about the impact of technology, the digital computer, and Internet revolution. These trends have only accelerated in recent years. One of the most interesting themes is the commitment, diversity, collaboration, and even friction, among diverse participants in almost every phase of the revolution, such as Jobs and Wozniak or Gates and Allen.
The results of this technological shift are evident in a comparison of stock performance of traditional companies versus newer tech companies. The stocks of P&G, I.B.M., G.E., Coca Cola, Dupont, and AT&T have DECLINED an average of 8% annually over the last 5 years. In contrast, the price growth of companies like Google, Facebook, Apple, and Amazon has increased at a rate of 24% annually. This trend is also evidenced by G.E. and other huge companies’ recent decision to dissolve their outdated structure.
To put that in perspective: investing $100,000 in the traditional companies 5 years ago, would be worth about $66,000 today. Investing $100,000 in the tech companies 5 years ago would be worth about $300,000 today.
Financial advisors also seem to be reluctant to embrace this shift. For example, much of their discussions focus on bonds versus stocks rather than tech stocks versus industrial or value stocks.
It’s really no surprise that so many businesses are failing considering both society and business refuse to recognize that old paradigms and structures are already obsolete or are well on their way. For example:
Large corporate structures (like print publications and brick and mortar retailers) are all gradual losers, or worse.
Companies as well as society continue to do what they have done in the past, often with poor results. Despite massive economic and political efforts, issues like income inequality, healthcare, and infrastructure investment will continue to hold back our economy.
With little real attention to these changing trends, the poor performance of many organizations is virtually a given.
Even more distressing is that it’s the structural paradigms of these organizations producing much of the deficient results, rather than the typical financial discussions. For instance, the long-held propositions that business advantages, like economies of scale and utilizing expertise and marketing synergies, are simply false in many cases. Rather, these and other former industry leaders are failing because of the following limitations:
Many large companies have tunnel vision, organizational constraints, etc., 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, while heaping huge income growth on unproductive leaders.
In contrast, new structural paradigms are providing numerous opportunities for successful change:
The success of smaller, more innovative companies shows that many organizations should get smaller (or act smaller) in order to effectively deal with today’s environment.
Reducing layers and creating professional cultures are a start. Boards and management need to split up organizations like G.E., create spinoffs, or implement more independent groups. That may be what’s really necessary to maximize the potential of both individuals and organizations.
Large organizations say they want excellence, entrepreneurship, innovation, risk-takers, etc., but, really, they tend to encourage mediocrity. For example, short-term goals and reviews for both organizations and individuals actually inhibit the development of more positive cultural characteristics, rather than spur them on.
Testing and failure, which are critical parts of innovation, are punished more than rewarded. Even sound risk-taking is reduced because of the fear of repercussions within the organization. In short, organizations frequently ignore the advice, “you can’t score if you don’t take a shot.”
Organizations need to be open to measurement and feedback. Looking, understanding, and sharing financials, operations reports, and sales reports are the first step towards embracing new structural paradigms. Simple research studies, social media, and other devices are additional tools.
Open systems and collaboration are like winning the trifecta at the horse track. 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.
These new structural paradigms, cooperation, smaller can be better, and open collaborative systems, offer great hope for organizations. While they rely on innovative approaches to problems, the solutions are readily available. Therefore, once we acknowledge that different strategies are needed, we can implement new tactics, provide opportunity and education, and allow our organizations to be effective.
I strenuously argue that if we do not learn to accept and accommodate innovation and deviant behavior both inside and outside of organizations, we cannot change or achieve excellence.
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!
