When I started this article a few weeks ago, I thought things were getting less stressful with COVID starting to reduce and the economy booming. Since then, the Ukraine situation has escalated, inflation has increased, and stress seems to be rising again. All of this is a reminder that continual change seems more permanent, and we don’t necessarily know what it is or what it will be. Our strategy should focus on being flexible and preparing for whatever might happen.
For example, my and others stock portfolios dramatically increased between 2019 and 2021 by investing in high profile tech stocks like Amazon. In 2022, those and many other tech stocks are dramatically down. Thus, I am learning to diversify.
Similarly, things like COVID, mask mandates, going to back to work, entertainment, and restaurant businesses are experiencing continued uncertainty rather than a straight return to normality. In contrast, kids seem to be going back to school normally.
The most significant aspect of all of this continual change is increased stress and depression. While many of us experience the roller coaster effects of uncertainty every day, an increase in mental illness, drinking, suicides, and crime point to more long-term and serious implications.
So, what do we do? I recommend understanding some certainties, watching change, and developing more flexible strategies.
Some certainties:
There are new structural trends that are becoming embedded in our culture. While myself and others often discuss them, they need to be given more consideration in our strategies and programs. These include:
Income inequality continues to increase.
Technology continues to boom.
Bureaucracies continue to be less effective.
Some changes to watch:
The economy keeps growing.
Labor will continue to be tight.
These changes are producing inflation, which has not been significant for over a decade.
Ways to implement flexibility:
Review and measure your programs on a more regular basis. In particular, evaluate the potential of alternative strategies, such as Internet versus retail.
Allocate some of your time and financial resources to developing and evaluating new programs.
Understand and implement programs to better manage changes like work from home, revived entertainment and networking, school, and diversity.
While change and its uncertainty are increasing, we need to give even more attention to proven best practices. These include:
Utilize technology. It’s not going away. And, it can streamline many of your processes.
Diversify everything: portfolios, employees, your skill-set, etc. We can’t continue living in our own little bubbles. Diversifying also exposes you to more opportunities for return.
Be prepared to adapt quickly. Change is a constant and it’s happening rapidly these days. Don’t get left behind because you’re unprepared, or even worse, unwilling to change.
Prioritize the 80-20 rule. It has been proven time and again that 80% of business revenues are generated by just 20% of our customers. Yet, we all continue to waste time, money, and inventory dollars on customers that bring in a lower return. This tendency frequently adds unnecessary confusion and complexity.
Focus on service, image, andculture. These are frequently the biggest (and often least expensive) ways for small companies to develop a brand and differentiate themselves. Something to consider: In the current social climate, people are more inclined to connect with a brand or buy from a company that is aligned with a good cause and/or participates in charitable giving.
Consider structural changes. Open systems in particular have a number of benefits including more effective problem solving, leadership, communication, and planning. It might be time to reevaluate how your company functions on a structural level and whether or not it’s producing the results you want.
It always seems that as soon as we think things are “settling down” and we’re falling into a groove, that’s when we’re thrown a curve ball. This is because we’re utilizing a mindset that craves the comfort of consistency and reliability. We need to shift our mindset to one that expects change because, while none of us can predict the future, we can, with certainty, rely on change. This might make you feel uneasy, but know that we are all in the same boat. Try to remember that staying flexible will make adapting easier. And, implementing sound, proven strategies will not only set you up for success, but put you in a position to effectively and efficiently change with change.
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
Innovation. What does it mean to you? Is it something you embrace? Or is it an idea you find daunting and shy away from? If you find yourself in the latter category, it’s time to reassess your relationship with innovation because it’s imperative if you want your business to stay relevant in an ever-changing world.
As we continue to navigate through a global pandemic, specific recommendations on how organizations and individuals can be more innovative have surfaced from various sources. I argue, however, that we need a more flexible approach to innovation.
Now, in order to enhance innovation, we must first understand it and consider what our goals are in trying to do it. For example: There is a big difference between writing a new song and developing a vaccine for the Coronavirus.
Some questions to consider:
Are you tweaking a problem, examining alternatives, or creating an entirely new solution?
Does the problem involve diverse expertise, extensive analysis, and extensive outside resources?
What resources, constraints, risk, and requirements will affect innovation?
Let’s expand on a few of these issues:
Are you solving problems or developing new concepts?
Much of corporate innovation revolves around finding better or new solutions to existing problems. For instance, for many years, car companies focused on developing better combustible engines, retailers focused on developing better shopping experiences, and IBM focused on building bigger and better computers. In contrast, other companies focused on developing entirely new solutions, which gave us the electric car, E-commerce, and the cloud.
Decisions regarding these issues involve a number of considerations. Do you give research groups complete freedom or do you require specific goals and financial objectives? How much risk and error do you encourage and allow? In general, venture capital firms allow more risk and pursue a home run while corporations tend to stick with more planned efforts.
While new markets and technologies are exciting, minor innovations can also be very productive. Logistics involving areas like inventory management, customer service, and sourcing can have dramatic impacts on cost, sales, and profits. In particular, Amazon has become extremely good at what they do: Prime, their own truck fleet, and automated safe warehouses have dramatically stimulated their performance.
Simple measurement and focus can dramatically improve results. Reviewing sales by product, P&L, and the 80-20 rule can inspire effective new practices. I have a client who switched 70% of her business from retail to E-commerce and has grown 40%. The process also requires new strategies on pricing, inventory management, and marketing. One huge advantage was that she was able to introduce new products on the Internet almost immediately rather than waiting 6-12 months for the retailers to make and execute decisions. In this instance, a problem was solved using existing concepts, but it was innovative for her specific company.
How are your decisions affected by analytics and intuition?
Decision-making used to be a simple choice between things like experience and intuition. However, Artificial Intelligence and other tools have added a new dimension to reduce the uncertainty of decisions. There are even major breakthroughs in medicine regarding the diagnoses and treatment of disease using improved statistics and analysis. The development of the Coronavirus vaccine has also been greatly accelerated by new technologies and processes.
Tools and presentations are also dramatically changing. For example, a colleague of mine objected to my website because it was too dependent on PowerPoint and Excel. While these are great tools and are the most used for analytical and presentation methodologies, they do have many limitations. The information can be old, longitudinal analytics is frequently lacking, they are not interactive, and they may not be visual enough. The lesson being: we must continue to challenge our ways of doing things…
Analytics as a new dimension requires consideration of new parameters. The most important is replacing hierarchal structures with collaboration, analysis, and facts. Many organizational structures are based on hierarchy and this simply needs to be replaced by a search for excellence and consideration of alternatives. Additionally, as we deal with more complex goals and analysis, we must remember that intuition is still important. In particular, the more creativity and uncertainty there is in a situation, the more intuition is required.
Some of this dilemma is created by the differences between “left-brain” and “right-brain” thinkers. Left-brained people are said to be more analytical, logical, detail and fact orientated, numerical, and more likely to think in words. Right-brained people are said to be more creative, free-thinking, intuitive, able to see the big picture, and can visualize more. So, whichever you are, perhaps try asking someone who thinks differently than you how they would handle something you’re working on—you might realize they have an entirely different approach that may or may not be better than your own.
The most important aspect of this discussion is to understand the use of analytics versus intuition in your decision-making process. We love to hang on to our hunches, beliefs, experience, and hierarchy. We even twist facts and ignore reality to provide continuing support for an argument. But, we need to invest time and money to analyze, filter, and review ideas. New analytical tools can enhance our flexibility, testing, ability to adapt, and the evaluation of alternatives.
Are you focusing on excellence and collaboration?
Innovation requires collaboration. It thrives with participation, diversity, new rules, and (to some extent) chaos. It also rejects bureaucracy, authority, hierarchy, and closed decision-making processes.
A major component of collaboration is excellence. Large organizations say they want excellence, entrepreneurship, innovation, risk takers, etc. However, they often fail to revise practices that encourage mediocrity (i.e. hierarchal structures and non-diverse cultures). Testing and failure (both 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.”
It’s also important to note that exceptional people are often eccentric and can be challenging to manage. You may find that these employees like to work odd hours, need specific environmental stimuli for inspiration, and, generally, refuse to do things in a traditional way, which can often be disruptive to an organization’s flow. The upside, of course, is that they’re producing remarkable work.
Does your company culture encourage innovation?
While we tend to focus on innovative methods and technologies, we sometimes forget that culture can dramatically affect innovation. For example: California has about 15,000 patent applications a year compared to less than 200 in eleven other states. There are simply more resources and a more comfortable culture in California, which spurs innovation. Some organizations encourage testing, failure, and research while others believe in the “we have always done it this way” approach (which never stands up to the test of time). You need a forward-looking company environment for innovation. For example, market research should be a tool rather than an absolute. As Steve Jobs said:
Are we having fun yet?
In order to balance innovation, you must enjoy what you’re doing. You started your business because you had passion—Don’t lose that! If you’re truly happy doing what you’re doing, your customers will want to buy into that. They will feed off of your excitement!
You have to be willing to change with the times. And you have to give emerging business trends more than just a passing thought or you may miss out on big opportunities. Consider multiple and dynamic alternatives, goals, and methods. Innovation is the key to growth, profit, and sustainability. And the great thing is: there’s no one way to do it. Be innovative about innovation—the possiblities are endless!
Dr. Bert Shlensky, president of Startup Connection (www.startupconection.net) is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business as well as the President & CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startups and small businesses.
Do you ever feel like you’re spreading yourself too thin across too many endeavors? It’s a common occurrence among ambitious people trying to achieve excellence. There’s this notion that we can either be adequate at several things or excellent at one (maybe two). There is substance to this idea: Think of Olympic athletes—they train all day, every day striving to be the very best at what they do. Undoubtedly, this comes with many sacrifices, but no one can argue that they are not exceptional at what they do.
We live in a society where unsolicited advice is shoved at us day in and day out. This comes in the form of advertisements, social media posts, news articles, friends/family, etc. These opinions include recommendations to change this or that, be flexible, be more analytical, more inclusive, more supportive, and so on and so on. While these all seem like noble endeavors, are we spending enough time attempting to truly do them right? Are we dedicated to putting in the work necessary to ensure our efforts make a difference?
Some examples:
Everyone says rely on science and data. However, we frequently advocate conclusions without validating the assumptions. For instance, remote education has become increasingly popular. For the most part, however, eLearning does not properly address the need for one-on-one contact especially among children with special needs.
Organizational structures, procedures, and communication are being challenged because of antiquated practices. However, new approaches may not be adequately researched, tested, or measured. Nearly every retailer that is in bankruptcy or consolidating (such as Penny’s or Hertz) has been advocating new strategies and regularly changing chief executives for years, but with dismal results.
We quickly fall in love with innovation especially when it comes to technology and services (think Airbnb and Uber). Yet, many of these efforts lose millions of dollars and will never actually be profitable. WeWwork and Gilt are notable current examples.
We need a shift in perspective regarding change, execution, and excellence. The following are some specific instances where organizations simply need to better understand their new environment and work to more effectively execute fundamental change:
Demographics are a critical factor for most businesses. The world is simply getting older and more ethnically diverse. A critical issue that affects excellence is: Do you understand your target audience? This includes all of the nuanced social characteristics that go along with it. For example, if your product is geared toward people under the age of 25 and you don’t have a website or online presence, you do not have a clear grasp on the buying habits of your demographic.
Organizations that don’t understand and use the digital transformation need to change, rather than just execute. Opportunities like the cloud, Google, internet, CRM systems, digital phones, apps, etc. are simply changing the processes, costs, and marketing of businesses. Amazon and other online retailers will continue to revolutionize—requiring traditional brick and mortar stores to react and adapt. Similarly, companies like Uber and Airbnb are significantly transforming their industries and will continue to do so.
In the current state of the world, businesses are and will continue to be subjected to radical and continuous change. In order to survive such a turbulent climate, they need to build mechanisms into their processes that can adapt quickly. As we prepare to face ongoing uncertainty and instability, we must focus on changing and simplifying processes in order to reduce risk. Therefore, strategies such as pivoting and “develop/test/measure/adapt” need to be built into our organizations.
Despite the fact that we consistently praise excellence, we frequently ignore opportunities to pursue it and actually do things better. Some simple ways to improve performance and incorporate excellence into your business practices include:
Review how and why you do things the way you do them. Eliminate ineffective practices from our organizations. Some practices may be outdated or just flat out not working.
Focus on customer service. Many companies are devoting new efforts to improve this department. However, these efforts are limited without a culture to reinforce them. Consider this: Do companies really care about their customers and get excited when a customer has a great experience? Many companies treat their customers and employees like expendable pieces of the machine. A critical element of culture is trusting employees and staff. This requires 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—mistakes that need constructive correction and not just reprimand.
Consider pricing adjustments. Pricing is not a dirty word and there are numerous tools to improve results without deteriorating your brand. Packaging efforts like bundling and unbundling, quantities, timing, quality, the Internet, and service are all elements that should be part of pricing strategies. For example, Costco and Four Seasons Hotels follow quite different, but successful value strategies.
Analyze and analyze some more. All of the aforementioned efforts will be even more successful the more open and analytical your organization is. Businesses need to understand their environment, review their successes and failures, listen to new ideas, and be willing to accept the truth even when it’s not what you want to hear.
Remember that business is about people. They are your most important assets. Hire excellent people and then listen to them and reward their behavior. A simple please, thanks, and “How are you?” go a long way. Kindness and appreciation are incredibly easy and efficacious efforts.
When it comes to achieving excellence, remember to evaluate situations and determine the appropriate strategy. Assumptions, efforts, process, and results are greatly improved with analysis. Additionally, evaluating alternatives can also help build support for any processes that are executed.
At the end of the day, keep in mind that you’re only one person and you can’t do everything. And if you try, as mentioned earlier, you’ll probably only achieve mediocre results. So, in your pursuit of excellence, remember that we each have limited financial and human resources. Prioritize and learn to focus on the areas where you can have the greatest impact and the aspects of your business that customers really care about. Training always sounds good, but it frequently fails to achieve its goals. Instead, consider hiring people who can specialize in the areas where you may be lacking and delegate tasks in such a way that will encourage excellence across the board. Finally, when it comes to matters of safety, health, social values, and civil rights, we must incorporate these issues into our values and efforts so as to facilitate excellence and not impede it.
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. Check out his books for the business entrepreneur: Marketing Plan for Startups & Small Business and Passion & Reality for Business Success. Both are available at www.startupconnection.net.
The pandemic is rapidly teaching us that personal, organizational, and structural change is going to be tougher and faster than expected. Consequently, we must accept that dramatic solutions are necessary to manage, what is now, an entirely new landscape. We all need to be adapting to the pandemic.
There are several significant changes that have already occurred (and are not going to disappear in the near future) that are worth taking into consideration:
We are implementing financial deficits at local, state, and federal levels that, prior to this, were never considered acceptable.
Health care and service workers are receiving (long overdue) recognition and appreciation. Experts are also saying practices like home care and virtual appointments, which are eliminating marginal procedures and improving efficiency in medical care, will become a more permanent standard.
Social distancing policies are forcing behaviors such as hugging, kissing, and shaking hands to be revolutionized and avoided.
The magic word seems to be “remote.” Tele-doctors, homeschool e-learning, working remotely, food delivery and pickup are becoming the new normal, but standards, expectations, and productivity are still unstable and unsustainable. Adjustments will need to be made to accommodate shifting trends and other obstacles. For example, many pizza parlors are experiencing dramatic increases, but the volume is mostly at dinner rather than a steady all-day flow. Parents are finding it difficult to work while simultaneously caring for their children. And, teachers are struggling to manage students and cover the same amount of material in a virtual classroom.
On one hand, we need faster and more dramatic change. On the other, we need more science, testing, and technology to ensure success. Imagine how an increase in things like control groups, curves, models, and logistics could improve our effectiveness and efficiency as we are adapting to the pandemic.
There are several key areas where dramatic and structural change will be necessary to adequately adapt to a vastly changed environment:
The most dramatic (also evidenced in the 2008 financial crises) is that the big will survive much more effectively than the small. In the last few decades, the number of banks and public companies has reduced by over 30 percent. In contrast, the number of restaurants (about 600,000) has remained the same for years. It’s estimated that 10-20% of those and other small businesses will not survive this crisis. That will significantly alter the opportunities and challenges of small business.
We need to focus more on efficiency and restructuring over simple cost reduction. Amazon and other tech companies have become the main targets of criticism regarding questionable practices. However, we should also recognize their contributions in expanding things like communication, home delivery, cloud sharing, etc. For example, I have a consumer products client who has lost much of her retail business. However, she has more than offset it (via sales on Amazon and on her own website) with higher margins and lower prices.
Better management of increased risk and uncertainty is required. Companies are unwilling and unable to forecast 2021, which makes 2022 equally uncertain. Thus, capital, operations, personnel, and marketing decisions are basically on hold. However, we can look at history, industry, and probability models to provide a little more predictability. In particular, looking at alternative scenarios and their probable outcomes can be a valuable effort.
Technology will be king. Amazon, Google, Facebook, and Apple will survive and grow as they become even more innovative and efficient. Traditional retailers with large real estate platforms and margin requirements are at great risk. Consumers are enjoying many aspects of the work-at-home, delivery, virtual lifestyle. These conveniences will be expanded and must be integrated into our systems.
We need to face tough decisions in maximizing our success. While the specifics may be uncertain, most organizations require more technical and analytic skills. Can you provide challenges and opportunities for your best people rather than drowning them in bureaucracy? Can you retrain or replace staff who are less effective? How can you create a supportive culture that values risk-taking, innovation, diversity, and embraces the importance of learning from mistakes?
Learn to prioritize. What is working, what is failing, and how do you devote more resources to the successes? Sometimes our fear of change limits our effort to understand that opportunities, not challenges, have the greatest impact.
The most important aspect of adapting to the pandemic that we’re currently experiencing is to recognize its significance and aggressively find solutions. It does require an openness and willingness to test new ideas. Don’t let emotion or bias affect you. Remember that passion, energy, and commitment are strong determinants of success. Take comfort in the fact that risk can be reduced greatly with testing, research, and analysis. And embrace integrated approaches that incorporate new strategies and activities. As Sheryl Sandberg said:
Dr. Bert Shlensky has an MBA and a PhD from the Sloan School of Management at MIT. He is the President of the New York-based consulting firm, The Startup Connection, where he uses his 30 years of high-level business experience to guide his clients toward maximum sales and profit. For a free consultation, please visitwww.startupconnections.net.
Now, before anyone gets up on a soapbox with an opinion
about whether or not stereotyping is “politically correct,” let’s just take a
step back. Of course there are bad stereotypes—ones that cultivate hate,
encourage inequality, and perpetuate racism. This article is not about those. That type of stereotyping is
ignorant, misinformed, and detrimental to society as a whole, in addition to
being harmful to your business.
The stereotyping
we’re dissecting today relates to trends and analytics. The bottom line is: negative
and harmful stereotyping stems from ignorance, assumptions, fear, and
misunderstanding, while a healthy stereotype comes from research data and an
analytical point of view.
A large part of marketing revolves around segmenting and focusing on selected consumer groups. The “stereotype” that older people are less likely to utilize technology is a helpful bit of information (supported by research) that may influence your marketing strategy, especially if your target audience is over the age of sixty (of course, there are always exceptions to the rule, but you can see where I’m going with this…) This demographic is also more interested in things like adult diapers, medical services, and reverse mortgages. They may not even understand things like streaming services, apps, or YouTube. These may sound like generalizations, but these particular stereotypes, when supported by data, are useful to your marketing strategy.
When You Stereotype
Others
Stereotypes, traditionally, have been used to divide people.
They create an “us and them” mindset. However, I argue that stereotypes can be
used for good if they come from an attempt to unite people and find
commonality. For example, a
recent study showed that teachers were more effective with students who shared common
demographics like sex and race. Educators can use that information to find the
best academic fit when they are seeking employment.
Another
positive way to utilize stereotypes is to find ways to relate to others. In
business particularly, creating rapport with investors, customers, co-workers,
or vendors is an important element to success. Finding common ground—whether that’s
background, hometown, religion, etc.—may help you connect with others. We infer
things based off of what we know about others. So, you might ask a person from
Chicago if they’re a White Sox or Cubs fan. The assumption that he or she is,
perhaps, a fan of a particular sports team based off their hometown isn’t
offensive in any way and it may spark a conversation about rival teams.
A
common stereotype, that I find beneficial, is considering the implications of
whether someone is “right brained” or “left brained.” In particular is someone
more creative or intuitive (right brain) or rational and analytical (left
brain). Factors like fact, logic, emotion, and passion can vary depending on
the audience and situation. These two types generally excel at very different tasks
and have specific ways in which they work best.
When Others Stereotype You
You can
argue all you want, but looks matter. Studies have shown that it takes just 30
seconds for someone to form an opinion about another person upon first meeting
them. We’ve all heard it before, but how we choose to present ourselves makes a
difference. And like it or not, people will make assumptions and stereotype you
based off what you wear and how you look. It may work for or against you, but
the key is knowing that it will happen and working to present yourself in the
way you’d like to be perceived.
When it comes to business, I suggest knowing your goals,
understanding your consumer’s needs, and keeping your audience’s perceptions in
mind. Perceptions are imperative.
This includes perceptions of you, your product/service, your brand, your
marketing, etc. Whether you’re selling a product, developing a relationship, or
impressing an audience, you need to consider how your and your message come
across, what assumptions people will make, and the impression you want them to
walk away with. You can’t control what people think, but you have the power to
influence their inferences.
Have you ever been a victim or beneficiary of
stereotyping? What stereotypes have been applied to you? Were they offensive?
Have you ever judged a book by its cover and been wrong?
I’d especially love to hear how stereotypes have helped you develop more effective messaging. Contact me today, and let me know your thoughts.
Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. Though technological, social, and online integration, he can help launch your business to the next level.
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!
