Everyone is aware of and considers change, but the rate and impact keep accelerating faster than our ability to manage it. In addition, it is happening in all aspects of our lives. As a result, we need to focus more on identifying and understanding change and then developing responses. Here are some recent examples in various environments:
A Presidential candidate was shot in the ear, and another withdrew from the race in the last few weeks. Neither has happened in decades and we had two together.
Banks, airlines and other industries were recently shut down because of a glitch in a computer upgrade and have taken days to get back to normal.
The weather continues to experience more volatility with hotter, more wildfires and more hurricanes etc.
The pandemic is an event that has impact on change won’t go away. For example, the impact on decreasing the economy in 2020 was followed by a recovery in 2021. Thus, GNP increased an average of 2.9 % between 2016 and 2019. But if you include 2020, it only increased 1.4 % annually. Similarly, between 2020 and 2023 the economy increased about 4 % annually. But if you exclude 2021 it only increased 2.5 % annually. This is significant because these periods include presidential election years and can thus be notable examples of “How to Lie with Statistics!!
The dynamics of our economy continue to evolve. For example, 60-80 % of letters and checks have been reduced in the last 20 years. We keep focusing on manufacturing jobs but service, entertainment, health, government and entertainment keep growing and are becoming the real strength of the economy.
Demographics and in particular diversity continue to change. We are getting older, more Hispanic and more geographically in the southwest.
We need to expect, understand, manage and adapt to change. One of the best organizations in managing change are fire departments because they work hard at being prepared for fires. Their major focus is on prevention rather than simple reaction. They then train organizations in equipment, prevention, best practices and responses. Inspections are designed to help organizations rather than focus on enforcement. They also maintain records to be prepared for when incidents occur.
Women’s basketball is another example of adapting to change. The presence of a few new star athletes has caused dramatic multiple increases in attention, attendance and T.V. viewing. Thus the sport has been forced to adapt and improve attention, salaries, facilities, T.V. schedules, security and even travel methods.
While organizations are changing faster than ever and, it still seems we aren’t changing fast enough to keep up. This may be the result of tools that are designed to limit risk and are unable to accept compromise and open systems. For example, changes in Ukraine, mid-term elections, inflation, and economic growth seem to modify our decision parameters almost daily.
We must not only embrace change but be actively working to create transformative change as well. Much attention is often given to analytics, expertise, profits, and science. However, these tools sometimes ignore critical requirements for change and better decisions: passion, focus, trust, effort, risk, and commitment. Unchecked, analytics may hinder transformative change.
Here are some suggestions to develop and execute more transformative change:
Consider structural changes. Society and business fail to recognize old paradigms and structures are failing. Large corporate structures, like print publications, big banks, and brick and mortar retailers, are all gradual losers, or even worse. 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. Organizations frequently fail to consider how multiple factors like marketing, logistics, and finance, interact to affect success.
Imitate small businesses. 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 or create more independent groups.
Invest in innovation. Large organizations say they want excellence, entrepreneurship, innovation, risk takers, etc., but, really, they tend to encourage mediocrity. For example, short term goals, testing, and failure, which are critical parts of innovation, are punished more than rewarded. In short, organizations frequently ignore the advice, “you can’t score if you don’t take a shot.” Analyzing alternatives and their potential consequences can both understand current decisions and develop new ones. be a
Look at disrupters. Mackenzie Scott (Jeff Bezos’ ex-wife who has $60 billion) and Melinda Gates are changing the structure of charitable giving. They are focusing on unrestricted gifts (no building or school names), donate significant funds to lesser-known institutions, like black colleges and community organizations, to help transform their entire organization and require minimum proposal and reporting requirements .
Implement more risk. There are more and greater opportunities. Even in sports, home runs, the three-point play, and passing in football are rapidly increasing as coaching, athletes, and analytics improve. We underestimate the potential of frequently unlimited upsides compared to limited downsides. Test more and accept that failure is frequently a requirement for success. We also need to seek transformative solutions, which may be unknown when we start a decisions process.
Remember technology is 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 proving to prefer the perks of working at home, fast delivery, and other convenient Internet processes. Virtual offerings will continue to expand and be utilized and, therefore, they must be integrated into our structures.
Don’t forget that service, image, andculture are frequently the biggest (and often least expensive) ways for small companies to develop a brand and differentiate themselves. Some suggestions: Focus on your target market and segment your ideal customer. Be polite, listen, and then act based on what you have learned. Become a trusted resource to your prospects by providing useful information that will help them make a viable choice.
So, where in your life, business, or community, do you see a need for transformational change? And what actionable steps are you taking to fuel it? And are you committed to making those actions a habit? Because that is what it takes to truly change. Remember you need the resources, readiness, support and willingness to 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
Everyone talks about demographic statistics like age, race, and geography without giving much attention to the cultural implications that go along with these demographics.
For example, 42% of the current population was born before 1980, making them 45 years or older. That means that about 60% were born after 1980 and have no memory of things like Kennedy’s death, the Vietnam war, The Beatles, using World Book instead of Google, and more. These are two large demographics with completely different sets of lived experiences and – as a result – wildly different worldviews.
I’ll illustrate how this plays out in daily life with two personal examples.
Growing up in the late 1940’s, my parents attached bells to clothes so they could find me when I ran out to play with the neighborhood kids. Today’s parents keep their kids on a much tighter leash — as evidenced by the fact that my neighbor just put up a fence to ensure his toddler would stay in the yard where he could see him.
As a doctoral student in the 1960’s, I researched my Ph.D. thesis at M.I.T. The department of Political Science – which did war research on Vietnam – was next door to our department. Thus, we had bomb scares a few times a week and I was required to haul computer punch cards home every night to ensure they were safe. Do young people today even know what punch cards are? Have they even heard the phrase “do not fold, bend, or mutilate?” Furthermore, people of my generation finished their schooling without laptops, Microsoft Office, or cell phones — a reality that is unfathomable to today’s students.
The most significant demographic consideration today is the nation’s aging population and its impact on economic growth. Contrary to popular opinion, supporting a 2-3% annual economic growth rate requires us to welcome 1-2 million immigrants every year.
While unemployment rates get the most press, it is actually labor shortages that are causing critical economic dilemmas — and this fact directly correlates with immigration.
Currently, a significant share of the about 300,000 jobs created monthly are from immigrants filling some of the over 9 million job openings. This trend is projected to continue for several years, especially with declining birth rates and a declining population in the child-producing ages. Without welcoming immigrants into our country, the lack of available laborers will continue to result in labor shortages and economic struggles.
In contrast, as the population lives longer, many older individuals face critical financial and social challenges. Dementia and Alzheimer’s have become significant dilemmas, especially as financial resources and government benefits decline. Health care needs, safety concerns, and loneliness become significant as friends and relatives pass away. Options for transportation, housing, and entertainment become limited and difficult to execute. A significant number of low-and medium-income seniors experience financial challenges that require them to extend their retirement plan. With increased longevity, even those individuals who have the means to retire want to stay in the workforce longer.
Hispanics make up about 20% of the U.S. population, compared to 7% in 1980. The average age for the Hispanic population is 30, compared to 39 for the total U.S population. This population tends to live in the Southwest. Most have been in this country for more than 10 years, over 80 % speak fluent English, and the average income is $ 59,000. The bottom line is that the Hispanic population is growing, assimilating, and contributing to the economy. Thus, they expect more and more recognition like native Americans.
In general, we need to recognize the diversity of the U.S. population. In the sixties, the nuclear family was considered the norm and typically considered of a white husband and wife, two kids, and a dog. Today, our country has diversified and families look different. Sex, race, national origin, sexual preferences, and age all vary dramatically and need to be recognized. Many of the social issues facing today’s society result from not recognizing and embrace diversity.
Demographics are more than just statistics. Specifically, these cultural shifts provide numerous opportunities and challenges. In particular, as our society becomes more complex, the cultural impact of demographics becomes more significant. In particular aging, Hispanic population increased, and diversity are providing numerous opportunities for better decision making. You must make certain to constantly evaluate relevant demographics and demographic trends as they relate to your business both in the now and in the future. This includes both local and national trends. Demographics can be one of the keys to your business’ success or failure.
Contact me to learn more about how you can research demographics in order to help you market your business more effectively and remove that old elephant from your closet.
Dr. Bert Shlensky, president of Startup Connection, is a graduate of 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. Having provided counseling to over 2,000 clients, he focuses on working with select start up and small businesses.
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.
I recently spoke with two aspiring entrepreneurs about launching new businesses. Unfortunately, their chances of success seemed slim because they were more focused on their dreams of wealth than on the essential groundwork needed to thrive. They were simply unwilling to do the thinking, research and planning to be successful. Try not to be part of the 90% of entrepreneurs who fail within 5 years.
For example, the first requirement is to simply write things down. Let’s break down what’s crucial: first, you need to document your plans. This doesn’t have to be fancy; goals and strategies. Start with a flexible document that evolves as you progress, focusing on substance over style. If you can’t articulate your plans in writing, you probably haven’t thought them through.
The initial requirement to develop a successful business is to be able to describe it. What is your business concept? What do want to do, why are you different and why will you succeed? This will change as the concept evolves, but you need a framework to develop and evaluate the components of your business. This framework further guides your development and evaluation process as your idea evolves. Entrepreneurs who fail frequently don’t do this.
Consider the key components of the business. Pricing, quality, service, variety, distribution and marketing are just some of the considerations. Your approach will vary greatly depending on whether you’re selling high-ticket items or everyday goods. For example, selling Superbowl tickets for thousands of dollars is quite different from the cheap umbrella salesman who suddenly appears when it rains.
Communicate your unique value proposition to your target audience. This is one of the most difficult tasks of launching a new business. We all get excited about our differences, but does anyone understand them? Do enough customers care about your difference to change their behavior, or are they committed to a “we’ve always done it this way” mentality?
Develop, test, measure, and adapt. Business is dynamic, so your approach must be too. Many plans, forecasts, and proposals are done in a static format, with one-dimensional analysis and results. Often, they are flawed because we live in a more dynamic and interactive world.
For example, branding, marketing, pricing, and operations all must be viewed as an integrated program rather than separate and isolated activities. Similarly, businesses need to have alternatives at the ready, and processes in place to adapt. Mistakes will occur. Remember, Thomas Edison tested thousands of light bulbs before succeeding.
Will you make money? Many entrepreneurs who fail start with the wrong question: How do I raise money? But they haven’t worked out the details of why they need money, what they will do with it, and how they will pay it back.
I suggest an almost opposite approach. Develop your needs, resources, plans and cash flow and then execute programs to raise capital. Some tips to improve this:
Develop initial timed estimates that will be continually revised.
How much revenue, expenses and profit will you generate over certain periods?
What assets do you and associates have and how much can you afford to risk?
When it comes to financing, focus on understanding your needs, resources, and cash flow before seeking capital.
There are a number of tools to reduce investment needs. These include borrowing against cash flow, outsourcing, pledging personal assets, and developing investments as the business progresses. Outsourcing efforts like manufacturing, distribution, services, and rent are particularly recommended to reduce requirements and adjust as the business grows.
As a rule, most businesses take six months to a year to even start. Consider how long it will take to get off the ground and calculate your startup expenses accordingly. Have you detailed the startup expenses and investment costs to start the business? Those include overall expenses, equipment, salaries, website development, product development, administration, pre-payments (like rent deposits) and more. Remember that upfront marketing, promotions, public relations, and development costs can affect income and cash on hand.
Digital is a critical aspect of almost any entrepreneurial pursuit today. Digital tools are essential in today’s business landscape, so plan to invest in a website and other tech necessities. Digital marketing, like Google ads, frequently has the advantage of both testing and pay as you go. As a result, revenue can occur much earlier than with traditional marketing efforts.
Can you deliver what you sell? Operations and logistics are frequently viewed as secondary functions that can be outsourced. However, efficient management of inventory and staffing can make or break a business.
Balancing and managing inventory to serve demand and reduce closeouts can be critical to success. Even in service businesses, scheduling staff to meet demand and avoiding time and money wasted can be critical to success. Reducing lead times, improving flexibility, and planning can improve effectiveness and lower costs.
Many operations experts have shown that 80% of sales are derived from 20% of offered products or services. Simplicity is key. Entrepreneurs waste time, money, and frequently add confusion by adding too much complexity to their business models. When and if possible, always go to the KIS Method (Keep it Simple).
In summary, success in entrepreneurship requires careful planning, evaluation, and execution. Many failures could have been avoided with better preparation. As my former manager once said, our low success rate wasn’t due to lack of effort; it was because many entrepreneurs were better off keeping their day jobs.
Starting a business is not easy. An entrepreneur needs to understand and express his/her passion. To do so, means to develop a mission statement and a plan. But that’s just the tip of the iceberg. Starting a business also requires enthusiasm, energy, and persistence to market your business concepts to suppliers, customers, and investors.
For more information download a free copy of my book, Passion & Reality for Business Success.
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.
At StartupConnection, we’re all about delivering blogs that are not just informative but also packed with actionable insights. We understand that information overload is real. So, we’re testing a new approach – a blog solely dedicated to parameters, giving you the space to prioritize what truly matters. We’d love to hear your thoughts on this, so feel free to drop us some feedback! In this post, we will be discussing optimizing strategies regarding making decisions and taking action.
Developing Programs with Precision
Sometimes, we’re so engrossed in creating programs that we forget about the parameters needed for optimizing strategies. Let’s simplify it. Here are some straightforward tips to consider parameters effectively:
Crafting Your Money-Making Plan
The “Pro Forma Income Statement”
This may sound a bit grand, but it’s your roadmap to cash flow.
Consider how a big marketing budget can affect your income. It may seem counter-intuitive but spending more on marketing might just boost those unit sales.
Investor-Worthy Plans
Investors crave plans but hate wild guesses. Be the entrepreneur who delivers realistic projections using templates. Specific numbers matter, even if they’re just a start. Remember that sales volume goals and pricing strategies are the building blocks of any plan.
Holistic Planning
Comprehensive Considerations
Levels of marketing, overhead, and administrative costs – they all play a role. Analytical, social, and intuitive considerations should also blend seamlessly into your plan.
Adaptability is Key
The world changes fast, and so should your strategy. Regularly review parameters like population, economy, and social values. Stay updated as the latest variables might just be the game-changer.
Navigating Cause and Effect
Decoding Relationships
Cause and effect can be spurious. Relationships involve a mix of factors. Analytics is critical, but don’t ignore intuition, risk, and low probabilities. Just like Gates, Bezos, and Jobs – master the art of thinking outside the box. It is the outliers and risktakers who create much of the innovation, excitement and change in our society.
Managing Bias and Embracing Risk
Navigating the Bias Maze
Bias, especially in small businesses, is human. Be mindful; assumptions, analysis, and data can sway your decisions. Consider different age groups without falling into bias traps.
Risk and Outcomes
Predicting results with historical data is straightforward. However, for new programs or inconsistent data, it’s about educated estimates. Embrace risk as it’s where innovation thrives.
Commit to Action
Nike’s Wisdom: JUST DO IT!
Not making a decision is a decision in itself. Recognize the importance of parameters in your decision processes.
Balancing the 80-20 Rule
Strategic Account Maximization
The 80-20 rule suggests maximizing old accounts with increased potential before reaching out to new accounts. Balance critique with support, collaboration, and teamwork.
The Expertise Quotient
Seeking and using expertise might be the missing link in your strategy. Collaboration enhances effectiveness, so let’s focus on teamwork as well as obtaining expert support.
In summary, understanding and incorporating parameters into your decision-making process is the secret sauce for success. So, let’s navigate these parameters together and remember that optimizing strategies will help to pave the way for effective and strategic decision-making.
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.
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!
