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
Whether it’s implementing a business strategy or taking a family vacation, we all want to plan accordingly. We try to rely on analytics and intuition. We look at business trends in an attempt to make educated decisions and we check weather forecasts hoping we won’t get stuck in the rain. And, with so much technology and Artificial Intelligence (AI) are our fingertips, the ways in which we can make these assessments are abundant. But, how can we know what the best strategy is? When is Analytics most reliable and when should we ignore technology and stick with our instincts?
When it comes to predictable events, Analytics is fantastic for providing insight and additional analysis. Currently, there is significant hype for new AI tools. GPS, improved forecasting, trend analysis, and selection have all experienced dramatic gains. I am amazed, for example, how GPS systems monitor traffic and predict an arrival time. However, it’s noteworthy to ask ourselves if we’re simply using them for efficiency and ignoring important considerations. This is one of the problems of using analytics and intuition.
There are two questions we must ask when using AI and Analytics:
First, are the assumptions, data, analysis, and conclusions really valid?
Second, do we limit the use of intuition and small measures in using these tools?
One of the biggest issues with AI is that we simply accept the results because they are impressive or too complicated to understand. We need to review the validity of the data, measurement, and analysis.
For example, the pandemic will require adjustments for data analysis. How do you compare changes from 2019 to 2020 and 2020 to 2021? In particular, how do you forecast 2022 and beyond? How important is an annual average and should you use 2019 or 2021? The analysis is highly dependent on issues like assumptions, demographics, time periods, etc. The answers can also be more dependent on a specific situation rather than general rules. Forecasting things like workers going back to the office, students going back to the classroom, airline passenger growth, business meetings, entertainment, and apparel trends all have different parameters.
We frequently just assume cause and effect when the relationship can be nonexistent. Statistics make it very easy to assume that a relationship among factors is a straight line. However, most relationships involve a variety of factors, as shown in the chart below:
Significant issues with analytics and intuition also occur when intuition, risk, and low probabilities produce better results than analytics. We all know the lottery is a bad bet, but some people do win. Similarly, many billionaires like Gates, Bezos, Jobs, and Must have achieved fame by pursuing high-risk and out-of-the-box alternatives. Many analytical recommendations encourage the “most likely” rather than the best alternatives.
More importantly, the reality is that outliers create much of the innovation, excitement, and change in our society. Steve Jobs probably said it best: “The people who are crazy enough to think they can change the world are the ones who do.”
In their new book, Noise, Daniel Kahneman, Olivier Simony, and Cass Sunstein point out how Analytics can fail to include key metrics. For example, mood, bias, mental state, etc. can alter judicial decisions. Variables like hunger, how much sleep we got, and personal preferences can all affect decisions.
While using Analytics based on AI has limitations, here are several suggestions to make it more effective:
Keep the goal in sight to improve your decision-making. The goal of Analytics is to improve decision-making and identify great alternatives. Focusing on satisfying investors, suppliers, employees, etc. is simply an invitation to long-term problems. Similarly, you need to understand the goals, timeframe, and precision in your research. Are you simply trying to make a living in a short time or build a giant business that you know will lose money in the first few years?
The biggest problem with decision-making is bias. Whether we admit it or not, we all have biases. Analysists love to discuss mathematical formulas and measurement in affecting bias; however, most bias (especially in small businesses) is simply human. For example, our most recent experience can have a significant impact on decisions.
Keep it simple. Simplify wherever possible. Focus on factors that really affect your business so you can understand them and estimate factors that are not as significant. For example, look at aggregate costs and administrative expenses rather than trying to forecast small items like telephone, utility, and insurance costs.
Be more open. Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports is the first step.
Develop, test, measure, and adapt. Many plans, forecasts, and proposals are done in a static format with one-dimensional analysis and results. Often, these end up being flawed because we live in a more dynamic and interactive world. For example, branding, marketing, pricing, and operations must all be viewed as an integrated program rather than separate and isolated activities. Remember the 80-20 rule, which states that 80% of your sales will come from 20% of your products and/or customers. Are you measuring your sales, key items, and customers?
Embrace change. Don’t just talk about change. Take action! Responding to disruptive change like the pandemic requires finding a way to incorporate data, analysis, and pre-existing models while also embracing out-of-the-box thinking and flexibility.
Don’t neglect key elements of success. Operations, customer service, and logistics are just as important as traditional functions.They present huge opportunities for a business to become more efficient and differentiate itself (i.e. selling on Amazon or bundling products).
Relax. You can’t do everything in one day. Pace yourself and remember that there will always be uncertainty and change. Stay focused and take it one day at a time.
Always be willing to improve. What are your biggest challenges? Where are you overlooking potential opportunities? In what areas could you do better? Remember: more Analytics is generally useful for small businesses; however, one must be sure the foundation, reliability, data, and processes of the Analytics have a firm base.
Understand diversity. Demographics are affected by age, location, socioeconomic status, race, gender, etc. Current events have certainly affected trends relating to racial and female groups. Staying up-to-date on your target consumer and their habits will help inform your decisions. Do you know who your customers are and what demographics they belong to?
Analytics provides astute insights for business decisions and should not be underestimated. However, its value is highly dependent on how effectively it is used and the recognition that intuition is still an important factor. In particular, the more creativity and uncertainty involved in any given situation, the more intuition will be required. It is important to use both analytics and intuition.
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: www.StartupConnection.net for more information.
All of our decisions, both personal and business related, are influenced by issues of support versus tough love. When it comes to small business, I prefer an approach that ensures adequate understanding and support in order to help someone develop the confidence and skills required to make sound decisions. This approach can also facilitate tough love strategies (when needed) that require analysis, reality, and challenge. Choosing the timing and nature of the combination can be made effective.
Training, mentoring, teamwork, and confidence are critical for effective decision-making. Nevertheless, tough love in the form of technical information, probability, and risk are necessary to validate the decision process. In other words, you must develop methods of support to realistically assess the tough love components of decision-making.
Here are some suggestions to achieve that balance:
Start with understanding the culture and participants. For example, I tend to be left brain and more technical. Others are more right brain and supportive. You need both. Yet, many people are too proud and reject help. It’s easy to be so convinced of what you’re saying that you end up ignoring how your listeners will receive your words. For example, if you take into account who your audience is, you can cater how you present your information in order to be more effective. This is especially important when dealing with technical information and strong opinions.
Age, status, education, and reputation of the listener and communicator can all dramatically affect perceptions. We frequently underestimate the importance of the perceptions of analytical information in communicating arguments among different groups. For example, our treatment of minority groups like Asians and Native Americans is frequently not considered. If you don’t understand where your audience is coming from, you’re probably not going to be able to help them or communicate effectively with them.
Improve Decision Making. We like simple and easy solutions. People with great intentions can sometimes lack understanding. Simple, clear, and actionable efforts can resolve this. A simple suggestion: annual analysis is much simpler to understand and analyze unless you need the monthly changes.
Communication also needs a “WIN-WIN” mindset instead of a competitive environment. We know positive feedback is received more favorably and, yet, how often do we see (or even participate in) criticism, blame, and one-upping when we find ourselves in pressure situations? Can you find ways to compromise and look for solutions that benefit all instead of just one? For example, following the 80-20 rule and focusing on the best opportunities is one of the most productive efforts to be supportive and address tough love issues.
Tom Peters’ book, Management by Walking Around, is the best management tool for mitigating the support versus tough love dilemma. It encourages a relaxed atmosphere where one can understand the context of an issue or the background of an individual. A corollary of that tool is maintaining informality, which is important in the pandemic environment. Informal meetings with customers and colleagues as well as informal lunches or social events can be highly beneficial. One of the simplest and best tools to develop support is to simply say please, thank you, and ask, “How are you?”
Environmental issues can be the most ignored factor in creating a culture. Hierarchical structures, formal office settings, and even dress code can affect problem solving. We need to understand and adjust to new rules of communication and collaboration. The pandemic has forced us to adapt in a plethora of ways: work from home, social gatherings, video meetings, etc. And there will continue to be change as the “new normal” becomes more defined. It’s important to keep working to understand the environment and how it affects you and your employees, coworkers, and customers. Furthermore, what type of environment can you create to support your small business?
Organizations and individuals with more open communication are more effective. Practices like “need to know” are simply obsolete. The more people know, the more effective they can be in their work. When everyone is on the same page, more gets done efficiently.
We cannot ignore facts, analysis, and challenges when making decisions. It’s critical to remember that they’re most effective when used to support, improve, and understand decisions rather than simply challenge them. Tools like exploring alternatives, listening to experts, writing things down, and informal communication can frequently improve the process. We also need to consider the accuracy and validity of the information, the risk involved in various decisions, and personal preferences. Like so much in life, it’s about finding the right balance and it won’t be the same for everyone. So, take some time to consider: Where can I afford to be more supportive and where do I need to administer some tough love?
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: 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!
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