by Bert Shlensky | Aug 9, 2018 | Operations
There are two seemingly conflicting trends in organizations regarding technology and innovation. The first is a trend towards autonomy, which focuses on organizational goals, as well as cooperation and empowerment. The second is a trend towards automation, which simplifies work requirements and can result in fewer workers. I argue you can have both autonomy and automation… You simply need to focus on improving the autonomy at all levels as you increase the automation.
The autonomy approach is described by Fred Kofman, who promotes cooperation and voluntary exchange for mutual gain. According to this theory, motivation, culture and collaboration produce better solutions than pure self-interest. In short, organizations should focus on winning for the organization, and not just the individual silos of participants.
Organizations in Silicon Valley often devote their attention to things like automation and AI. However, they are held accountable for the trend that some jobs are being replaced by robots. This includes jobs like taxi drivers (replaced by self-driving cars), hedge fund managers (replaced by algorithms), or financial journalists (replaced by chatbots).
This idea was brought home to me a few weeks ago, during a visit to an 1850’s restoration community Sturbridge Village. They had little cottages doing various tasks to make clothing (like cleaning wool, spinning, weaving and sewing). The work that went into production of a few yards or one shirt was incredible. In contrast, my experience in the apparel industry was that we could weave millions of yards in short periods, thanks to automation.
Similarly, Google and others are developing AI programs to write and develop artistic works. They argue that this technology will greatly enhance an artist’s ability to create, while others argue that it will just replace artists. My own experience in the apparel industry is that automation greatly enhances the artist’s potential by reducing mundane tasks. Instead of it regretting the displacement caused by automation, we need to focus more on realizing its potential for individuals. For example:
- Don’t let automation or analytics give you one simple answer. Programs and situations are diverse, and require a variety of solutions. A great example is the success of the Golden State Warriors and LeBron James in basketball. The Warriors win by an integrated team that gets the ball to the open man, and passes more than any team in history. LeBron’s teams have won by making LeBron the focal point, and supporting with complimentary plays and personnel.
- Similarly, organizations need to consider their goals and processes. Do you need more expertise and experience, or more creativity? Are you maximizing the potential of your stars and developing collaborative solutions? Do you need diverse expertise on a problem?
- Most people I see working care about their jobs and try to do them well, regardless of pay or status. A very simple recommendation is just to consider how can we can empower our staff to do even better. We should acknowledge that there will be mistakes, but they will be far less than the total gains.
- “Need to know” should be a dead phrase, so help staff understand goals and strategies. The more we trust staff to understand these strategies, the more likely they are to embrace them.
- I believe “leadership” is an obsolete term. The best leaders I have seen are people like head nurses, restaurant expediters, triage managers, and legal assistants. They coordinate and manage various (and frequently much higher paid) participants. The process involves gaining their cooperation and motivation to execute a great final result. In contrast, authoritarian (rather than expert or professional leadership) is usually more harmful than helpful.
- Many financial and analytical models focus on a single or best solution. I recommend focusing on the parameters of alternative models. Then you can manipulate the model to evaluate alternatives. For example, we have developed a dynamic operating profit model that allows you to analyze the interaction and impact of various factors like price, cost, margin, distribution marketing etc. It has been effective in helping clients understand retail and online opportunities. Download it here.
In summary, automation and AI offer great opportunities to improve performance, especially when used with analytics. These strategies should also include empowering the organization. In particular, we should continuously challenge assumptions, review alternatives and evaluate progress.
Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.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 and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startup and small businesses.
by Bert Shlensky | May 17, 2018 | Marketing
The original concept in 1908 by Pareto was that 20% of the population controlled 80% of the wealth. In the modern business realm, it has been proven time and time 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 also frequently adds confusion and complexity. At StartupConnection, we help our clients prioritize.
While much of following the 80/20 rule is focused on analytics, the most important (and sometimes simplest) way to keep existing customers happy and is to exceed expectations. As Walt Disney said, “Do what you do so well that they will want to see it again and bring their friends.” Satisfied customers, repeat customers, positive social media, and referrals are the best and least expensive marketing a business can have. There is no substitute for a satisfied customer. In contrast, dissatisfied customers, poor service, and negative referrals can offset even the best marketing efforts.
Some specific examples of using the 80/20 rule with my own clients:
- We helped a number of businesses create sharing sites for parties, home services, programming etc. While the concept is relatively simple, the cost of finding suppliers and developing marketing programs can be both expensive. I have been successful in encouraging these businesses to focus on the services that have the most potential.
- We helped a textile company prioritize its product offerings; at first they were focused on being all things to all people. We worked on developing groups of products, increasing design and marketing efforts, and eliminating over 40 % of the products (which represented less than 10 % of sales.) The result was greatly improved efficiency, but more importantly, the ability to add products by more integrated merchandising.
- Prioritizing and following the 80-20 rule can be easily improved by just taking care of your best customers. For example, why do new customers sometimes get better discounts than the best old customers? I encourage clients to treat the best old customers really well, in addition to seeking out new customers.
Here are some tips to consider when executing the 80/20 rule:
- Reduce inventory. By following the 80/20 rule, you’re choosing to operate using less inventory. You must first admit that certain products (even if you truly believe in them), simply are not selling. This leaves more room for carrying the products that do sell.
- You should spend your resources on what you know will provide a return on your investment. Reducing products that may or may not be a good fit for your customers can save you money. Also, think of all the headaches, space and time you’ll save by not having to market obsolete inventory.
- The 80/20 should not preclude development and testing of new products. However, this usually requires more analysis of the program, evaluation of results, and withdrawal if success is not apparent.
- Simplify products and services. Your customers will also appreciate this. Think about the last time you went to the store to buy one simple thing, and you saw enough options to fill a late 1980s Sears catalog up. It made it difficult to choose the right product, didn’t it?
- By focusing on the products that you know your customers want, you’re making them feel much more confident (especially when you’re selling online.) Instead of finding new ways to market products that simply aren’t selling, you may be better off to shift over to what is selling. If you give people what they’re searching for, they’ll buy. If you don’t, they won’t. It’s that simple.
- Have you run an unsuccessful AdWords campaign lately? It may be the actual product or service that you’re marketing and not the ad. If you’ve followed every best practice and your product isn’t selling, maybe you have to blame the product, and not the ad.
- I know you hate developing complex forecasting models and spending lots of administrative time on the logistics of obsolete products, but you’ll get over it. Who knows? You might even find some more leisure time.
- Suppliers also like the 80/20 rule, and they may reduce prices or increase service if their orders are more concentrated. Everyone in the supply chain, right on down to the customer, is much happier as a result.
This brings me to my next point… what is the MOST important reason the 80/20 rule works? Happy Customers! Want to start rocking your business by following 80/20? Contact me and I’ll get you started!
Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.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 and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he now focuses on working with select startup and small businesses.
by Bert Shlensky | Oct 10, 2017 | Operations
Technology vs. Human Instinct
Technological advances provide efficiency and analytics. The web, AI, cloud, CRM systems, etc. are taking over. Great improvements are being accomplished and organizations are making better decisions. Yet, how do we ensure that creativity and the human instinct continue to be cultivated without us getting too comfortable with our technological supports? How do we beat the nerds ?
The purpose of this article is not to reduce these efforts, but rather ensure that creativity, innovation, and excellence are also preserved. Specifically, there are several indications that the analytical approach may have some unintended consequences:
- The stock market is a great indicator of world’s dynamics, and innovative companies like Amazon, Apple, and Alphabet are thriving, while traditional companies like IBM and GE are struggling.
- Authors, like Adam Grant in the “Originals,” and many others, point out that progress is dependent upon nonconformists and people who go against the grain.
- Organizations preach objectivity, yet they follow the HiPPO decision process (Highest Paid Person’s Opinions).
How Do Creative and Innovative Individuals Thrive in the Growing Trend of Reliance of Analytics? Beat the System!!!
This may sound impossible, but here are some easy tips:
- Challenge Assumptions. Many analytical models contain numerous assumptions that are seldom challenged. In particular. the data can be highly biased, because it can ignore critical factors or be based on preordained goals. If factors are not appropriate, this can result in incomplete or wrongly determined data. Find the parameters the system has missed and provide appropriate information to complete, or redirect, the research data assessment process.
- Ensure The Analysis Is Dynamic. Our lifestyles have increased in complexity with continual changes; many analytical models avoid difficult issues and, thus, can create incomplete data. Find the issues that have been avoided in your analytical model(s) and advocate for their inclusion and how it affects the outcome.
- Consider Alternatives and the What-Ifs? Most analytical solutions involve a single outcome. The reality of life and business is the need for varied solutions and backup plans. Review the alternatives, and the different outcomes, which could affect the results and probabilities. For example, bringing diverse resources into a situation can greatly alter the excellence in execution.
- Understand Risk. In general, we avoid taking risks. It is more comfortable to stay in the status quo than to uproot and change direction. But, we all know those that don’t risk, also don’t succeed. Taking healthy risks is important for growth of self and companies. We are more afraid of losses than the probability of gains. People are more likely to say “I could get fired,” than “I could get promoted,” regardless of the probabilities or impact. There is a balance between risk and caution.
- Set Multiple Goals. Most analysis focuses on singular goals, like short-term profit. A company needs to consider measuring multiple parameters, such as developmental, personal, staff, and branding.
Analytics and current technological advances provide us tools to make better decisions. The key to success is to not solely rely on them, but to integrate them. Our natural human intuitive forces continue to lead with the support of the new technologies. Freeing yourself from restrictive thought processes, especially in bigger corporations, like “We have always done it this way,” is dead. New paradigms: speed, expertise, flexibility, innovation, and collaboration, produce more dramatic change for organizations. Incorporating new technologies, while cultivating innovation and creativity in the business, will allow new approaches to problem resolution.
Creativity Is Allowing Yourself to Make Mistakes. Art Is Knowing Which Ones To Keep.
Dr. Bert Shlensky, President of StartupConnection.net, is a graduate of the Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business, and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select startup and small businesses.
by Bert Shlensky | Aug 2, 2017 | Operations
We think there are a lot of stigmas out there when doing business. Better yet: stereotypes. And some are more prevalent than others. That, however, doesn’t mean you should neglect those ‘others’ for the ones that seem to make more sense: like the business logo, or product development, or how you market and brand your business. Believe it or not, but if you want that business of yours to be successful, make sure you’ve checked this off your list — packaging and distribution!
You Won’t Believe How Important It Is to Ensure You’ve Got That Process in Place When Doing Business
How are you ‘packaging’ your product and service? Are you? If not, you’re missing out on a very valuable piece of the marketing pie. After all, where the heck is the logo going to go? On the package.
Delivery is even more important as you study and research your industry. Logistics is a no-brainer. You have a physical product, you have to get that product in their hands, or else it really doesn’t matter how cool your product is. If the customer can’t get to it, you don’t make money.
But delivery isn’t necessarily about physical transportation. You could have a product or service that’s 24/7, on-call service, or an online product of some kind. Think of the newer-age business brands out there like Uber, Amazon, Airbnb, and Zappos — distribution has become something way more complex and effective than just simple packaging and trucking.
Perhaps you sell digital marketing services, and your work is done via account management. Lay out your delivery processes and make sure your prospective customers know what to expect — and when you’ve got that out of the way, make sure it gets done every time.
After All, Your Customers Can’t Buy and Keep Buying If They Don’t Get Your Stuff Somehow
Be it brick-and-mortar, online e-commerce, or just a delivery service — whatever it may be, get it situated. Make sure the operations are in order. Because you don’t want to launch without having all of those details etched in stone, ensuring customers know what’s coming. In many ways, this is the final gift to great service — they finally get it, use it, love it, and then, of course — they come back for more of it.
That’s business success.
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. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.
by Bert Shlensky | Jun 4, 2015 | Operations
We make numerous decisions every day like what to wear, what to eat, and what form of advertising should our business pursue?
We even make a decision to defer a decision, or we decide to procrastinate.
We spend too little time on the how and the why of our decision-making, decisions that deeply affect the outcome of our business. (more…)
