What’s an easy decision? Do they exist? Perhaps, deciding whether you want chocolate or vanilla ice cream… You have two choices, which do you prefer? Seems pretty simple and straightforward. Now, what if you’ve set a goal to eat less sugar… The scale tips toward vanilla… but, you’ve also set a goal to save money and the chocolate is on sale… Now, there’s even more to consider.
Although choosing an ice cream flavor may seem trivial, is exemplifies a very important point: The more moving pieces involved in a decision, the more difficult it is to make. And while more information enables better decisions, more variables make the decision-making process more complex.
The same applies to goal setting and measurement. We all recognize their importance, but achieving accuracy is more complicated. Setting goals and measuring used to be fairly simple as they usually related to maximizing and measuring dollars in a particular period. But, as is often the case, times change and now traditional guidelines are almost obsolete and need revision.
For example, in our growing and more complex economy, millions of workers have been leaving their jobs and pursuing other options. Work at home, lifestyle expectations, stress, and work environment are all supplementing wages as key factors in employment and turnover decisions. Additionally, climate change, current events with Russia, inflation, COVID, the stock market, politics, and diversity are all experiencing rapid changes and simultaneously impacting our economy and lifestyles.
Consequently, these societal changes also affect goal setting and measuring.
So how do we improve goal setting and measurement to make them work for us?
Consider the details surround a goal: Long-term versus short-term, quantitative versus qualitative, risk, and objective versus subjective. We also need to think about the process and complexity of setting goals. For example, do you want realistic and achievable or stretch goals? If goals are too simple, they can ignore important aspects of a situation. On the other hand, if there are too many aspects to consider, there can be a lack of focus.
Focus on key elements: Measurement has become quite complex. Ask yourself how important are the results, speed, innovation, and quality when measuring performance? For example, I believe automation has improved the speed and efficiency of many customer service processes. However, customer service and satisfaction are frequently sacrificed. How many times have we been completely frustrated with ineffective electronic customer series efforts? There is a trade off here that needs to be taken into consideration.
Make communication a priority: In most efforts and organizations there are multiple goals and demands. With so much to manage, critical issues can arise in the areas of prioritization, comparison, and measurement. Communicating goals and their measurement throughout an organization is frequently a secondary priority. Why have them if you don’t manage them?
Examine alternatives and change: Do we understand and really believe our goals? For example, nearly everyone acknowledges that the college admissions and decision processes are a mess. Measurements gathered from a broken process don’t tell us anything useful. Reevaluate a system that isn’t working and set new goals that will yield worthwhile measurements.
Get specific: We all understand the importance of goals, purpose, and direction in cultivating commitment, success, teamwork and coordination. Yet, somehow the execution often goes awry. One common reason for goals not being set correctly is that it can be a difficult process. One of the advantages of professional sports is that the goal of winning is simple and clear. It’s not always quite that simple in other businesses, but the more specific you can get, the easier it will be to execute.
Consider various angles: Short-term versus long-term goals is the best example of how goals may conflict. Much of the financial crises in 2008 resulted from short-term greed conflicting with long-term rationality. Remember to look at things from various perspectives and how time may affect progress.
Don’t forget about bias: Bias is, perhaps, the biggest culprit in unreliable results. For example, customer service surveys are notoriously designed to create positive publicity rather than fair evaluations. The purpose of measurement should never be to confirm your positive bias.
Goals and measurement need to be a tool for business improvement rather than an end in itself. Goals are not easy to develop or measure, but the process is critical to organizational success.
Set goals to motivate you and your team to grow and use measurement to genuinely gauge where you’re at and where you need improvement. Ask yourself (and answer honestly), “What am I measuring? How am I measuring? And what is the purpose of my measurement?”
Whether it’s sales, profits, service, customer satisfaction etc., reliability and measurement over time are vastly underrated!
Make goal setting a priority and communicate your goals to those involved. Be certain to understand the different needs of different situations. Use clear and simple measurement tools, and be sure to utilize the process for improvement, rather than a tool for criticism. And remember, we set goals to make progress and even if we don’t achieve what we set out to accomplish, we still end up further along than where we started. So, stay focused on your goals, make them word for you, measure your progress, and keep moving forward.
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
If you think are you aren’t susceptible to denial, you’re in denial. It’s a difficult thing to manage, compared to simple lying, because much of denial can be unconscious and, as a result, more difficult to recognize and change. But, change we must, because denial prevents us from seeing and addressing critical issues that could greatly affect outcomes, both personally and professionally.
I find that, except for the news, we favor positive circumstances and sometimes deny challenges. We “see what we want to see” by checking the stock market or the score of the game only when we’re ahead. We look for positive weather forecasts and focus on the great things about our kids. This type of tunnel vision can make it hard to see the whole picture. It can also affect decision-making in cases where positive bias greatly alters assessments.
Psychologically, denial is a mechanism that results from the inability to cope with reality. However, there is an immutable fact about denial: it does not work as a long-term problem-solving mechanism. Reality always wins. And when it does, the next step in the process is blame, which shifts responsibility onto someone or something else. Blame eases the pain when reality bites. But, we need to take ownership of our actions and recognize that if we work to avoid bias and denial, we can often avoid having to face a harsh reality down the road.
Bias is one of the greatest deterrents of accurate scientific analysis. I also believe social bias can be more impactful than statistical. These include our preconceived perceptions and assumptions. I am always amazed that many programmed employee selection tools outperform interviews, especially in jobs requiring specific skills. Similarly, the perceptions of many presentations are established in the first minute or so.
Cultural and environmental factors also affect bias. Dress, demographics, weather, location, and culture all affect perceptions in the decision-making process. These can also be used to your advantage when talking to colleagues by increasing bonding with similar people. Whenever I meet someone who is also from the Southside of Chicago like I am, agreement on differences becomes much easier.
Denial is more prone to happen when there is more complexity and variables involved in a situation. Our brains try to counter this by attempting to create simplicity. Once we understand that this is what is happening, we can use to our advantage. For example, we all know simplicity can help decision making by prioritizing, focusing, and pursuing clear goals. On the other hand, we need to consider multiple factors like rewards, probability, environment, resources etc. in making our decisions. Here are some examples where the two strategies can be complementary:
The 80-20 rule (which states 80% of results are from 20% of effort) calls for focus to be more important than ever. Eliminating unproductive efforts is the most important aspect of the 80-20 rule.
More data, variables, and analysis are generally good, but it must be useful, valid, and correct. For example, if you are measuring an outcome, pinpoint the important factors rather than trying to measure everything. In particular, you should be careful to avoid random relationships and misinterpreting cause and effect. For instance, pre-pandemic data may be less relevant than before.
Most efforts have multiple goals like sales, growth, profit, quality, good will, satisfaction, etc. What is the priority and importance of these goals and how are you measuring them? Personally, I am always battling writing long blogs that are intellectually interesting versus short practical blogs with specific recommendations.
There are tradeoffs among innovation, experience, excellence, risk, and quality. Quite simply, the more innovation you pursue, the more trial and error. In contrast, you want experience and quality if you are doing things like open-heart surgery.
Denial reduction can also be affected by our attitudes and mood. Don’t underestimate the benefits of just taking a break or getting enough sleep in developing a more realistic approach. One of the side effects of working from home may be an endless workday and a lack of distractions, which provides no time to relax and reenergize.
Balancing simple and complex tasks can be improved by focusing on your strengths and paying less attention to your weaknesses. For example, I have a client who has the best product in the industry, but charges a little more money. She has achieved success by moderating some prices, but mostly developing messages that explain her quality difference.
Don’t underestimate intuition, which is quite different from denial. While we continually get more data to make better decisions, we should not forget our gut feelings. Someone does win the lottery and some of the best outcomes come from low probability efforts. For example, the pandemic has caused great uncertainty about 2022 and there are lots of opportunities to take a little more risk.
The use of virtual rather than rigid models can help deal with complex issues. They are easier to understand, diagnose errors, and manage multiple situations. In general, we are moving towards more flexibility in decision-making.
Openness can also facilitate avoiding denial. Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. Simple research tools that social media can provide can be used regularly. A management style such as the “walk around” and asking simply, “how are you doing, is there anything you need?” can be priceless. Look for alternatives and ‘what if’ discussions.
We all experience denial, but it is our responsibility to admit when we’re allowing our own biases to influence us or giving in to our brain’s desire to simplify complex issues. Therefore, we must constantly work to develop safeguards that will help recognize, test, and avoid denial. Because when we can see the full picture clearly, we are able to react and respond in the most effective way.
It is always incredible to see the training, skill, and excellence displayed at the Olympics. However, the passion, focus, and commitment are even more impressive. When working toward a goal, we want to see that our efforts are producing successful change. Yet, too often, the majority of our focus is centered on analytics, expertise, skill, profits, and science. Unfortunately, these tools sometimes ignore other critical requirements for successful change and better decision-making, such as: passion, focus, trust, effort, risk, and commitment.
These elements of successful change are frequently lower priorities because they are difficult to measure and make analysts uncomfortable. For example, decision makers frequently hate considering risk, despite the fact that it is present in almost every issue. Additionally, due to the high levels of uncertainty involved, we are often slow at measuring results in periods of rapid change like a pandemic, inflation, and new innovations.
Change is hard, even when it’s successful change, we are often hesitant to adapt.
As a business consultant, I constantly hear, read advice, and see comments focused on worries, concerns, caution, etc.—basically, all the old paradigms related to achieving business success. In my experience, more attention needs to be given to the areas that are difficult to measure. Some suggestions to accomplish this include:
Positive thinking is vital. A good chance at success requires a balance between reality, paranoia, action, and positive thinking. An interesting tactic is to focus more on how you succeed with some clients than fail with others.
Positive thinking does not necessarily mean avoiding or ignoring negatives. Instead, it involves making the most of the potentially bad situations, trying to see the best in other people, and viewing yourself and your abilities in a positive light.
Create a positive culture. Say please, thank you, and show that you care about people via praise and encouragement.
Accept that operating a small business is a process. Recognize that you will make mistakes. Your goal must be to develop, test, measure, and adapt rather than give up after the first or second problem.
Encourage open communication, a sense of realism, and focus on problem solving. Be sure to constantly assess your situation. Develop expert support and, when appropriate, have discussions with outside and inside colleagues.
Be prepared to pivot quickly. The market changes constantly and so do your customers’ lifestyles. So, you need to be able to shift along with it. By expecting that your market can change from year to year, you’re being proactive in your thinking, and can create flexible plans to adapt to these changes.
Know your sh*t, but be ready to listen. There is extensive research supporting the idea that people don’t change unless they believe in it.So, when given the opportunity to argue your case, try to emphasize the benefits for the other party. It’s well proven that tactics like collaboration, trust, and listening work better in decision making than dictating, lecturing, and proclaiming false expertise.
Develop, test, measure, and adapt. Many plans, forecasts, and proposals are done in a static format with one dimensional analysis and results. They’re usually 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, as well as a process in place to adapt. Mistakes will occur, but remember, Steve Jobs got fired and Tom Edison tested thousands of light bulbs before succeeding.
Understand your goals, resources, and risk. In particular, really understand your market analysis, competition, how and why your company is different, and why customers should care. Are you focused on long-term growth or quick profits? While testing alternatives is a great strategy, ensure that you are focused on priorities that you can execute well and that will have the most potential.
Analytics is an incredible tool for improving progress, developing alternatives, and measuring outcomes. However, in order to achieve successful change, it needs to be supplemented with passion, effort, commitment, and focus. Without these, it’s much easier to throw in the towel when things get difficult. You may have been born with the innate skills necessary to win countless gold medals, but without the drive, determination, and dedication to go for it, those natural abilities may not reach their full potential. It’s the passion that pushes you to succeed.
Dr. Shlensky is a graduate of Sloan School of Management at M.I.T. He servedas 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 now focuses on working with select startups and small businesses.
Success is affected by a variety of factors. Sure, people get lucky and win the lottery while other people spend years focusing on excellence and perfecting their talents without ever catching a break… But, when it comes down to it, most of us usually need a mixture of excellence and luck to succeed.
Not surprisingly, circumstances also affect success. Last year, the pandemic left millions of workers unemployed whereas, this year, many employers can’t find workers. Was the loss of jobs simply “bad luck?” Is the inability to find workers due to a lack of excellence? It’s difficult to say when circumstances are not black and white if it was due to excellence or luck.
In contrast, many efforts like sports and skilled trades require a certain level of excellence to succeed. The application process for elite colleges provides a good example of this. Hundreds of thousands of students with excellent grades, test scores, and experiences apply to the top universities. Many of these universities admit only 3-5% of the applicants. Thus, like many efforts, there is a level of excellence required to participate, but luck can play a part in the final selection process.
So, how do we change our efforts to develop better chances of success?
When it comes to luck, there are lots of ways to improve your chances:
TRY. As Wayne Gretzky said, “Only one thing is ever guaranteed, that is that you will definitely not achieve the goal if you don’t take the shot.” So, buying more lottery tickets or applying to more schools can improve your chances!
Understand your environment. This can include the economy, culture, demographics, etc. You clearly have better chances of succeeding in today’s environment than during the pandemic. Women and minorities are also gaining more employment opportunities than in the past.
Look at more alternatives. The discussion should not be retail versus E-commerce, but how to maximize both. Outsourcing and expert resources should be regular considerations. Automation and the development of inexpensive accounting, inventory, and financial tools can create significant improvements.
Prioritize. This is a critical tool to improve what we perceive as luck. Using the 80-20 rule, eliminating ineffective programs, and focusing on winning results can all benefit effectiveness. For example, I am always amazed at the time and emotion we spend caring about sports teams that have no chance of winning.
In general, there is more potential in improving excellence and effectiveness rather than focusing on luck. Some ways to boost excellence:
Find what you do best. Walt Disney once said, “Do what you do so well that they will want to see it again and bring their friends.” This is one of the best mantras for excellence. Do I (and does our team) have a sense of pride and passion for our efforts?
Spend more time reviewing the processes of change versus excellence. The debate of pursuing improved excellence versus change is affected by a number of issues. We need to understand how problems affected by goals versus tactics can require different solutions. Here are some examples where organizations simply need to understand their new environment and execute better:
Demographics: The world is simply getting older and more ethnically diverse. For example, minority births represent more than 50% of current U.S. births.
Digital transformation: Businesses need to change rather than just execute. Opportunities like the cloud, Google, CRM systems, digital phones, apps, etc. are simply changing the processes, costs, and marketing of business. Amazon and other online retailers are revolutionizing the need for traditional brick and mortar stores. Similarly, sharing sites like Uber and Airbnb are revolutionizing their industries.
Adapt and fully implement change. Businesses are subject to more radical change and need to build mechanisms into their processes. While we will face more uncertainty and instability, we need to focus on changing and simplifying processes to reduce the risks. Strategies like pivoting and develop/test/measure/adapt need to be built into our organizations.
Focus on your customers. Are you satisfying their product, service, and value needs? For example, many companies have improved results by setting a goal of exceeding rather than just meeting customer needs.
Develop a stronger pricing strategy. 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.
Set goals and measure results. Focus on judgement measures as well as quantitative. We must have greater awareness of what, how, and why we are measuring. In particular, it is sometimes easier to measure activity (visits, clicks, customers) than results (sales, conversions, and profits).
Pay attention to how bias and prejudice affect decisions. Last year, everyone criticized the NBA for not hiring black coaches. This year, most of the hiring changes were black. The best part was that race did not seem to be a part of the process.
Excellence and luck are both important for success. They need to be understood and managed rather than viewed as excuses. Understanding the risk, the rewards, and the role experience and skill play in our decisions can improve outcomes. Don’t allow fear, uncertainty, or tradition to lower your potential and prevent you from trying something new.
Everyone’s situation is different—you may start with a little luck and need to focus on excellence or you may be at the top of your game, but just can’t catch a break. Wherever you find yourself, take a step back and look at what you’re working with—what do you need more of? Excellence or Luck? And what will you do to obtain it?
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 and President & 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. For more information, please visit our website: https://www.startupconnection.net/
When it comes to decision-making, the buzzwords are analytics, science, and facts. These are definitely important aspects to consider, but we must be careful not to ignore the influential and (often) unconscious factors: guilt and denial.
Examples of how guilt and denial influence decision-making:
Sexual harassment scandals are riddled with guilt and denial. The result is delayed progress and little to no corrective action. For example, a few years ago, several leaders introduced an effort that would require independent judgement of sexual harassment cases in the military. However, the military argued that they would manage it themselves, but literally nothing happened. The new leadership team has finally agreed that independent management is required, but it took years for any action to actually be taken.
Many financial advisors recommend a 60%-40% division between stocks and bonds for personal investing. First, they frequently try you use a simple solution rather than customize for individual needs. Second, it has been proven over 10-20 years that stocks have outperformed bonds by at least 10-20%, which has cost investors. Many advisers are in denial and refuse to acknowledge their errors while continuing to advise against changes to portfolios.
The pandemic produced great fear and uncertainty. However, there is clear evidence that economic improvement and the vaccine can rapidly improve things. Despite this, many people seem to be in denial (about the effectiveness of the vaccine and/or the possibility of economic recovery). The result is a deceleration in vaccinations, a continuation of people resisting proper mask use, and a standstill in returning to normal life.
Analysis, statistics, and data can greatly improve our understanding of guilt and denial. However, we also need to acknowledge that the parameters, method of analysis, misinformation, sources, and bias can significantly alter results and conclusions.
Some things to consider:
One of the biggest changes in traditional business is the lack of understanding regarding goals and measurement. We can analyze the strengths of our team and focus on accounting tools like sales, gross profit, EBITA, inventory turn, R.O.I., present value, etc. However, e-commerce and Internet business evaluations are based more on growth, execution, and retention. Consequently, we sometimes deny that clicks, conversions, retentions, and interaction are replacing more traditional measures.
Bias itself is a form of denial and it is one of the greatest complications when it comes to accuracy in the scientific 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. I’m always amazed that many programmed employee selection tools outperform interviews—especially for jobs requiring specific skills. (One rather surprising bit of evidence that supports this finding is that 3% of the male population is over 6 feet 2 inches tall. However, 33% of CEOS are over 6 feet 2 inches tall.) In particular, tests remove factors like unconscious age, sex, and racial discrimination. Cultural and environmental elements also affect bias: Dress, demographics, weather, location, and culture all affect perceptions in the decision-making process.
Risk also plays a critical part in creating guilt and denial. Frankly, I believe we all need more risk, but there are plenty of people who will deny this out of fear. We tend to think of it 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. Risk needs to be managed rather than feared. Understanding the risk, the rewards, and the importance of each can help you improve outcomes. Don’t allow fear, uncertainty, guilt, or tradition to prevent you from trying something new. Only those who dare to risk going too far can find out how far one can go.
A more open and honest culture that encourages communication and collaboration can provide a greater understanding of guilt and denial. Empower your staff and management and trust your employees. 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. Encouraging and supporting open dialogues sends the message that issues will be taken seriously and addressed appropriately.
As we’ve seen, analysis, statistics, and data can greatly improve decision-making. However, we must also acknowledge that the parameters, method of analysis, misinformation, sources, bias, denial, and guilt can greatly alter perceptions, results, and conclusions.
To avoid these traps, try incorporating a “devil’s advocate” approach in the decision process. Just take a moment to look at things from a different perspective—it might help you see the bigger picture more clearly. Maybe some self-reflection will debunk a previously believed theory or, perhaps, it will strengthen your convictions. Either way, you (and your decisions) will be better for it.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. This combination has been the key to client success. We welcome comments, suggestions, and questions. You can write him at: bshlensky@startupconnection.net or call at 914-632-6977
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