The pandemic has caused some chaos, to say the least. The uncertainty and severity of the situation has caused most of us to shift focus, reconsider our efforts and priorities, and question risk. As a result, it’s critical to reexamine how to maximize opportunities, results, and challenges. While there’s still plenty of unpredictability, there are several clear rules to follow that will help you prioritize and improve results.
I believe the 80-20 rule (which states 80% of results are from 20% of sales) is one of the most useful guidelines. Reassess and renew efforts on programs that have the most potential. But, it is equally important to eliminate unproductive efforts.
Bigger is getting more important: For example, between 40-50% of online consumer sales are on Amazon. You can’t ignore that impact and its affect on results.
Prioritize innovation. Culture, execution, measurement, marketing, and operations are critical elements that support success from innovation.
Learn to prioritize more effectively. Focus on what you’re good at and pay 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 by developing messaging that explains her quality difference.
Limit objectives to a handful. Limiting strategic priorities allows you to focus on what matters most. It can also serve as a way to drive a decision when faced with difficult trade-offs, which can also increase results. We are frequently encouraged to develop multiple alternatives; yet, spending time on weak alternatives can be extremely wasteful.
Make the hard decisions. We need to be flexible in order to evaluate alternatives and respond to change, but we also need to make firm choices to manage challenges and trade-offs.
Address critical vulnerabilities. We tend to focus on strengths and opportunities and ignore challenges, but this can lead to neglecting a vital aspect of a plan. For example, logistics, customer service, and safety are frequently overlooked, but they can provide important differentiation that will make your business stand out.
Provide specific action plans. They should be concrete enough that participants throughout the organization can understand what to focus on and what to avoid.
Eliminate costly and unproductive activities. This is key. Consider cell phones, email, social media, and the Internet: Most of it is time-consuming junk that can be eliminated or reduced (or, at least, not viewed every minute of the day). Develop a master list of activities and then categorize them into areas like: urgent, maintenance versus development, cost, risk, results, probability of success etc. This will help you see which activities need more focus and which need less as you prioritize.
Consider culture. It’s a critical component of establishing priorities. Sometimes, “now is not the time” is an appropriate response. Other times, opportunities for change are required and you need to be as prepared as possible. For example: Issues like safety, stress, and uncertainty have become critical elements and adapting to the pandemic is unavoidable.
Opportunities to expand your market will arise—so keep the 80-20 rule in mind as things change. Some efforts could be declining while new critical opportunities may be emerging. These instances are worth serious consideration—especially when the investment is minor. You may open up a door to a broader 20 percent.
So remember: prioritization can produce dramatic results. Spend more time analyzing your priorities and watch how that affects your results.
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 start-up and small businesses.
I live in New Rochelle, New York and was part of the first quarantine after the pandemic hit the United States. I think, because we were first, our neighborhood may have learned to cope slightly better than some other areas. We walk, we talk, we shop, we distance. We wear masks and, in general, we seem to be much more supportive of one another than what seems to be happening elsewhere. People were even helping each other during the power outrage that lasted several days. I am diabetic and three of my neighbors with generators offered to store my insulin. I talk to people from other neighborhoods and, from what I’ve heard, many of them could be coping better with the impact of the pandemic. I’m not referring to the poor and the sick, but people who are still working, but stressed out far too much.
But, how do you improve your coping strategy amidst so much uncertainty and tension? A good place to start is to manage your expectations and focus on the things you have control over. In recent years, the U.S. experienced 9-11 as well as the 2007-2008 economic decline. Both of those events caused short-term disruption and long-term consequences. We are now seeing the same things happening with the pandemic and there are three key pandemic impact areas that I think should be considered as we forge ahead:
1.The most important factor is simply the pandemic itself, which is causing dramatic health, economic, and social consequences that will last through much of 2021, if not longer. There have already been approximately 200,000 deaths in the U.S. and we aren’t even close to a vaccine yet. There’s also been a shift in healthcare with Tele Visits becoming the new norm. Even if a vaccine does become available, healthcare will never be the same. Nursing home protocol, hospital financing, and virtual medical care are among the areas facing significant change. For example, it is even estimated that births in the U.S. will decline by about 500,000 or 10% in the next year.
2.Another major impact will be economic. While much of the economy is slowly returning, industries like entertainment, travel, restaurants, and sports will undergo dramatic change. We have no idea when and how these businesses will return, but they will certainly be quite different from what they once were. For example, it is estimated that there were 600,000 restaurants in the U.S. before the pandemic. At least 20-30% will probably close within a year. Similarly, most forecasters are predicting 6-10% unemployment next year.
Additionally, working from home has become a major social phenomenon that will definitely impact the economy. People have learned that they can stay home and be more productive while having more time for themselves. This is a result of not having to commute, reducing meetings, and eliminating long lunches. Many are estimating that work-from-home could replace 20-40% of office work, especially for the next two years. This will result in several byproducts including a decline in real estate and urban stores. And as more people move to the suburbs, several other markets could dramatically be affected as well.
The greatest impact, however, will most likely be the continued growth of income inequality. The thirteen wealthiest Americans increased their wealth almost $1 trillion dollars since the pandemic started. In contrast, the poor have increased hunger, loss of healthcare, and unemployment (especially among minorities).
3.The third key area is political and many do not want to discuss it because there is too much emotion and uncertainty attached to the subject. However, the election this November will have a dramatic impact on our society. Our lives will be affected drastically based on who is elected—and this applies on a national, state, and local level. Minimally, there could be more diversity and focus on areas like criminal justice, income inequality, health care, and education. While partisan politics will probably increase, it is always important to focus on solutions rather than rhetoric after elections.
Now, how do we deal with all of this pandemic impact when we don’t know the what, when, or how surrounding them? The most important thing you can do is to recognize change and deal with it. Don’t be surprised or stressed out by the changes because they’re not going away. So, consider alternatives and ensure that you relax. Accept that the next several months will be like “flying an airplane while you are building it.” Sure, that might sound scary, but try to shift your thinking. Attempt to approach daunting situations like they’re challenges rather than obstacles.
Accept the inevitable and search out opportunities. E-commerce, delivery, work at home, and tech are all growing. My local pizza parlor added lobster Wednesday night, a friend in advertising is doing yard signs for drive-by parties, drive-in movies are doing well, and other events—like virtual baby showers—are becoming popular. Companies are developing all kinds of programs in addition to Zoom that will make working from home more effective. Embrace your challenges and set your mind on problem solving.
Consider the increased opportunities for risk during this uncertain period. Basically, everything is pretty much up in the air anyway, so what do you have to lose by taking more risk? Additionally, there are lots of opportunities in areas that are permanently affected by the pandemic. Home delivery, virtual technology, and online shopping are all currently booming businesses. Even the gains in the stock market have shifted to new companies like Zoom and Tel-a-Doc.
In this rapidly changing environment, you should also do a brief self-assessment to evaluate your status quo and consider potential changes. The purpose should be to better understand challenges and opportunities rather than simply make changes. This review might include looking over your resume, evaluating your employment status, assessing potential changes in your status, education, and living environment. You should also consider what you like about yourself, your job, and your employer.
Extra Credit: Do something nice and maybe even outrageous for yourself. You probably used to spend gobs of money on restaurants, sports, travel, clothes, gas etc. that you aren’t spending now. Consider an extravagant treat for yourself. A special meal, a trip to the gourmet grocery, a health/spa treatment, a new pair of shoes, or a chauffeured car tour could all be nice distractions during this crazy time. (There are limits, however. I passed on a $50,000 chartered trip to California… and that was before meals and hotels…)
While we’re not sure what the new normal will require, we do know many of the opportunities and challenges. Avoid guaranteed failure with obsolete or doomed activities and, instead, embrace innovation, testing, and new paradigms. These cultural changes must include openness, infrastructure, and measurement. And cut yourself some slack and be kind to your neighbors… these are difficult times for us all.
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
All living creatures are biologically self-interested. We are programmed to prioritize our survival. Therefore, we don’t usually make bad decisions on purpose. Nevertheless, mistakes happen and poor decisions will be made now and then. But, is there a way to limit or even stop making bad decisions?
When it comes to analysis, the topics that dominate the conversation are: sampling, statistics, and accuracy. This is where things can go wrong because the process of measuring needs to be reviewed—not just the results. In other words, we think we are making a good decision based off of accurate data when, in fact, we are making an uninformed decision based off a faulty measurement process.
For example, let’s say a child wants to go on an amusement park ride that has a minimum height requirement. The ride attendant measures the child and the results say he/she is tall enough so the child is allowed to ride. This seems like a good decision until we learn that the measuring stick was in feet instead of meters. So, the decision was actually based off wrong information and, as a result, the child’s safety is jeopardized.
If we are to stop making bad decisions, we need to study the following are issues that affect the measuring process:
Confirmation Bias
This is one of the biggest problems when gathering data as we try to stop making bad decisions. Confirmation bias happens because we (consciously or subconsciously) want to support our own views or predictions. As a result, our preconceived ideas restrict fair analysis. For example, most people judge a presentation within 90 seconds based almost entirely on appearance rather than content.
Confirmation bias can also be a result of efforts to simplify the decision process. For example, doctors and other professionals frequently make early hypotheses and seek evidence to support that diagnosis. While that approach can be effective, it ignores contrary information.
We need to recognize and reduce our “tunnel vision” by working to stay curious, exploring opposing views, and truly listening to what others think and why. This can help us see things from another perspective more clearly.
It’s also noteworthy to mention that how we explain our success or failure is often a byproduct of confirmation bias. No one likes to accept poor results or defeat. Therefore, when we lose, we often attribute it to unfair conditions or make up some other excuse. However, when we win, we chalk it up to our great skills and valiant efforts. This is a biased way of thinking and one that we should all keep in mind when analyzing results.
Measurement
We frequently mix measurement components. There’s a famous story about a young man who visited the Museum of Natural History. He asked the guard how old the tyrannosaurus rex was and the guard told him it was sixty-five million and thirty-eight years old. The boy then asked how he knew that. To which, the guard replied, “The skeleton was estimated to be sixty-five million years old when I started to work here and I have been here thirty-eight years.” Obviously, two methods of measurement were used and combined to get a very specific, but most likely, inaccurate number.
It’s very interesting to see how people try to explain why results are “wrong” rather than accepting and admitting that their measurement was flawed. For example, end of the world forecasters will blame timing, weather, and other phenomenon when their predictions are incorrect rather than just admitting that their measurements were wrong and the world didn’t end.
Presentation
How data is presented also affects how it is interpreted. For instance, if you attach a number to a concept, it will be believed more. There is even a concept called “Potemkin Numbers” (or Potemkin Village) that exemplifies how made up numbers can enhance belief in an idea.
Relativity can also sway measurement perceptions. For example, the perception of numbers can vary based on presentation as an absolute number, percentage or ratio. Additionally, charts are frequently scaled to show the most or least degree of change, depending on the goal of the people presenting the information. In short, the method of measurement and the manner in which results are revealed can play a huge role in the accuracy of data (and/or the interpretation of that data).
Parameters
Sometimes we ignore the information needed to make good decisions. This could result in focusing on the wrong customers or choosing the wrong branding information. Paying attention to the appropriate information is critical. For example, ignoring safety or customer service in today’s environment can destroy a great business. On the other hand, providing clientele with a sense of confidence during a pandemic can greatly enhance effectiveness. (Many companies attempted to do this right away—we all got an abundance of emails from businesses assuring us that they were taking all the necessary precautions to keep customers safe during this uncertain and scary time.)
In general, we understand what risk is, but measuring it can be as uncertain as the risk itself. For example, we frequently categorize risk as high, medium, or low with literally no definition of what that means. As a result, people have quite different definitions of those terms if not given clear parameters.
Misinformation and Misunderstanding
Cause and effect is a highly misused concept. Just because factors seem related does not mean they are a result of cause and effect. For instance, it is clear that poor living habits can contribute to poor health. However, that does not mean that factors such as injuries, the environment, heredity, etc. can’t also play a role in poor health. Therefore, you cannot conclude that poor living habits exclusively cause poor health.
Inadvertent decisions can also stem from confusion. A key strategy of large law firms is to overwhelm poor plaintiffs with as much information as possible. Planning can reduce confusion and may help us stay focused, but we are repeatedly warned that too much planning can disrupt the creative process. The point being: long and short-term goals, profit versus growth, and qualitative goals (like happiness) can all affect our perceptions, which play a role in our decision-making. Knowing where you want to end up will help you make good decisions to get you there (while still giving you some freedom in the process of how you’ll achieve that destination). In other words, it will you you stop making bad decisions.
Perceptions and inherent patterns can also cause inadvertent actions. Recently, social scientists have focused on how we make seemingly obvious decisions. For example, we tend to be risk adverse, avoid change, and accept the most comfortable alternatives. So, while bad decisions can be changed at any time, we frequently avoid, delay, or defer change. So, while we know eating unhealthy is bad for us, making the shift to buying organic foods and incorporating new, nutritious recipes might feel overwhelming and, as a result, we put off making the good decision to improve our eating habits.
Analysis, statistics, and data are important aspects of decision-making. However, we also need to acknowledge that the parameters, method of analysis, misinformation, presentation, and bias can greatly alter results and data. A simple tool to help avoid these pesky issues: Include a “devil’s advocate” in your decision process. Just taking a quick moment to look at things from a different perspective can help you see clearly… maybe it debunks your theory or, perhaps, it strengthens your convictions. Either way, you (and your decisions) will be better for it. Stop making bad decisions.
What are you struggling with? Do you have a decision you’re wrestling over? Want to learn more about how to stop making bad decisions? Has a bias affected your outlook? Whatever obstacles you’re facing, I’d love to discuss options to improve your business.
Contact:bshlenksy@startupconnection.net or 914-632-6977 Dr. Bert Shlensky earned a PhD from the Sloan School of Management at M.I.T., mentored a few thousand clients at Score as well as in his own practice, grew Sure Fit products from $50 million dollars to $150 million in sales including $60 million of direct Internet sales, was President of WestPoint Pepperell’s Apparel Fabrics Business, and headed the $400 million Culet Shirt Group. In short, he knows what works and can help you lead your company to greater profitability and success.
A compelling book title is fantastic and it may even entice people to pick up your novel, but if the content is sh*t, then what’s the point? You’ll quickly be found out and considered a phony. The same goes for any endeavor: a great idea is swell, but without substance to back it up, it’s just another half-baked plan and soon-to-be failure. In my experience, entrepreneurs are superb at expressing their ideas, passion, and excitement. However, their biggest misstep is neglecting the basics, which make a business successful. A great business idea is swell, but you need to lay the essential groundwork. A common “oops” moment is when an entrepreneur has failed to develop any estimates or parameters to understand their potential sales and profits.
While these obvious mistakes are unsettling, I find that many entrepreneurs are shortsighted when it comes to many basic business requirements. They skip vital steps (perhaps without even realizing they’re doing it), which can really leave holes in a business plan or proposal. You need to lay the essential groundwork.
The following is a list of basic considerations for small business managers. These topics are the essential groundwork of any successful business:
Set personal goals. What are your goals and priorities? And which of those need the most improvement? Remember the saying, “If you don’t know where you are going, any road will get you there.” You need to have a vision and some direction. And, in the middle of a pandemic, simply pausing or surviving might be the best goal.
Don’t be afraid of risk. There are numerous opportunities to take more risk. A great starting place is: Do something instead of nothing. Explore new options, get rid of failing efforts, and try utilizing outside ideas (whether it’s a think tank or hiring new employees with specialized skill sets).
Continue learning. Education is a key element to growing and staying relevant.Utilize books, the Internet, and external resources to make better choices. Pay attention to data, but don’t forget to trust intuition as well. You can also look to other businesses’ failures and successes to better understand your industry and market trends.
Embrace Change. Don’t just talk about change. Take action! Responding to disruptive change 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. (Like selling on Amazon or bundling products.)
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?
Measure and assess. 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?
Know your parameters. As the saying goes, “A chain is only as strong as its weakest link.” Make sure to figure out where your weak links are as well as your strengths.
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? Don’t be afraid to ask yourself, “How am I doing?” And then answer honestly.
People often hear “back to basics” and think, “That doesn’t apply to me. I’ve been doing this for years!” But, that mentality is detrimental. Performing a check-in is not regression. In fact, successful people frequently use a “back to basics” approach to keep themselves sharp and focused. Lay the essential groundwork. Fundamentals are important; they set us up for greater achievements.
Yoga is a great example: If you haven’t mastered the basic yoga pose, you won’t be moving on to that handstand or anything else more advanced. Yogis often perform check-ins by doing foundational poses to reset and strengthen the core of their practice. This approach is beneficial for everything we do—from relationships to business to athletics. An example would be checking in with a partner and doing the consistent work required to keep the foundation of your relationship strong. Or, it could mean reevaluating your business goals and analyzing your process to ensure you’re staying on track and heading in the direction you’d envisioned. In both cases, however, the benefits of going “back to basics” once in awhile can definitely help keep you focused and headed for success.
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 we expect a certain level of quality from ourselves, we tend to work harder to meet those expectations. If we don’t believe we’re capable of achieving greatness, we probably won’t. In other words, we perform to the standards expect from ourselves. We must turn expectations into probable results.
My favorite musical has always been My Fair Lady because of the Pygmalion effect, which infers that having positive expectations leads to enhanced performance, which results in a higher probability of success. The implication is that confidence and energy will increase if we believe in ourselves. On the other hand, a negative self-perception results in a significantly lower chance of succeeding. What we think we’re capable of, therefore, basically becomes a self-fulfilling prophecy. We can turn expectations into probable results.
It’s important to attribute this effect to human behavior rather than science. For example, in a coin flip, the odds of getting “heads or tails” will not change even if you’re full of hope and positive thinking. Similarly, expectations and attitude can help when it comes to things like sports. So, a team might play better if they believe in themselves (the movie Major League is a great and hilarious example of this). BUT, talent, practice, and consistency also play important roles in success—so positivity can’t guarantee that a lousy team will win a championship.
Additionally, if you enjoy what you’re doing, you also have a higher probability of success.
So, when we discuss “projections,” it’s important that expectations and probability (how likely it is that something will happen) are both taken into consideration. For example, when flipping a coin, the probability of getting “heads” is 50 percent. However, the probability of winning the lottery is 1 out of millions. This illustrates how probability is greatly affected by percentage, BUT it is also affected by volatility and variance. For instance, the pandemic is creating highly uncertain and volatile circumstances, which makes it nearly impossible to accurately forecast anything.
Despite this, it is my opinion that dubious circumstances can create opportunities if we remain patient and seek alternative solutions. For example, many restaurants are experiencing immense difficulties, but pizza parlors seem to be thriving. Perhaps the takeaway here is that restaurants should look into cooking and preparing family-style meals to deliver. Another option would be to partner with delivery services like Uber Eats or Postmates, if they haven’t already. At some unknown point, we will go back to attending sporting events, concerts, eating out, and traveling, but until then, we must shift our focus to addressing the needs of the time. That might mean expanding your work-from-home options or pivoting to a different target audience—in other words: it will take work, but that’s business.
Now, in order to effectively utilize expectations and probability, it’s imperative to develop, test, measure and adapt different approaches. Many plans, forecasts, and proposals are done in a static format with one dimensional analysis and results. Those are usually all wrong because we live in a more dynamic and interactive world. For example, branding, marketing, pricing, and operations must all be assessed together rather than viewed separately as isolated activities. Similarly, businesses need to have alternatives plans in place and ready to go so they can adapt quickly. Mistakes will occur. So what? Steve Jobs was fired, Thomas Edison tested thousands of light bulbs before succeeding, and Walt Disney’s editor told him that he “lacked imagination and had no good ideas.”
So how do you use expectations to create positive outcome?
When it comes to the rapid changes that occur constantly in our society and environment, we are frequently afraid of risk. The Internet, digital technology, mobile phones, Google, and Amazon are all examples of technology that is transforming our lives. Therefore, relying on old methods or a “we’ve always done it that way” mentality may actually be riskier than making a change.
Similarly, business analysis, big data, the cloud, and other management tools are great resources to mitigate risk. I’ve done a lot of work testing different pricing strategies to improve performance, especially on the Internet. You can’t just stick with what used to work and, therefore, your expectations must include the assumption that you will need to adapt frequently.
Furthermore, your probability of success increases when your expectations include actionable goals:
If you expect big results, consider taking bigger risks.
If you expect accuracy, focus on obtaining better data and improving your testing, analysis, and measurement tools.
If you expect to keep up with competitors, include innovation and hire exceptional people (this might involve tolerating some “deviant” behavior from employees, but that’s often a side effect of utilizing out-of-the-box thinkers).
If you expect long-term success, create an open company culture that embraces diversity, change, collaboration, communication, and pushes boundaries.
If you expect greatness from your staff, empower them to do their jobs to the best of their abilities. This requires hiring and training good people, trusting them and giving them the authority, they need to perform effectively, and understanding that they will sometimes make mistakes.
If you expect to address and solve problems, develop reliable resources outside of your company. Don’t utilize friends and family who won’t tell you the truth in order to spare your feelings or who may not even understand your business’ needs. Visit places like Google, your library, and incubators for networking opportunities.
If you expect to increase profit, focus more attention on the process of decision-making. How good is the information you’re using, what are the consequences of possible mistakes, and how much risk can you afford? With the exception of issues like safety, I think we can all afford more risk. We’re generally overly concerned with the consequences of mistakes and we lose sight of the potential gains.
If you want to succeed, believe in yourself. Because if you don’t, why should anyone else? You need to turn expectations into probable results.
I have learned that traditional and detailed startup recommendations (like planning and budgeting) are not as important as we previously thought. Instead, a continuous process of analyzing, measuring, and adapting to ever-changing parameters, programs, markets, and risks has a much higher probability of success. Finally, expect greatness from yourself. Learn to turn expectations into probable results. Success requires positive thinking and high expectations. If you truly believe in something, you’ll work tirelessly to make sure it’s successful. So, why can’t that something be you?
Please visit our website www.startupconection.net to book a Free Session in which we can help you develop an action plan that will evaluate potential and risk. We always discuss process, expected outcomes, and cost before you make any commitment.
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.
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!