Do you ever feel like you’re spreading yourself too thin across too many endeavors? It’s a common occurrence among ambitious people trying to achieve excellence. There’s this notion that we can either be adequate at several things or excellent at one (maybe two). There is substance to this idea: Think of Olympic athletes—they train all day, every day striving to be the very best at what they do. Undoubtedly, this comes with many sacrifices, but no one can argue that they are not exceptional at what they do.
We live in a society where unsolicited advice is shoved at us day in and day out. This comes in the form of advertisements, social media posts, news articles, friends/family, etc. These opinions include recommendations to change this or that, be flexible, be more analytical, more inclusive, more supportive, and so on and so on. While these all seem like noble endeavors, are we spending enough time attempting to truly do them right? Are we dedicated to putting in the work necessary to ensure our efforts make a difference?
Some examples:
Everyone says rely on science and data. However, we frequently advocate conclusions without validating the assumptions. For instance, remote education has become increasingly popular. For the most part, however, eLearning does not properly address the need for one-on-one contact especially among children with special needs.
Organizational structures, procedures, and communication are being challenged because of antiquated practices. However, new approaches may not be adequately researched, tested, or measured. Nearly every retailer that is in bankruptcy or consolidating (such as Penny’s or Hertz) has been advocating new strategies and regularly changing chief executives for years, but with dismal results.
We quickly fall in love with innovation especially when it comes to technology and services (think Airbnb and Uber). Yet, many of these efforts lose millions of dollars and will never actually be profitable. WeWwork and Gilt are notable current examples.
We need a shift in perspective regarding change, execution, and excellence. The following are some specific instances where organizations simply need to better understand their new environment and work to more effectively execute fundamental change:
Demographics are a critical factor for most businesses. The world is simply getting older and more ethnically diverse. A critical issue that affects excellence is: Do you understand your target audience? This includes all of the nuanced social characteristics that go along with it. For example, if your product is geared toward people under the age of 25 and you don’t have a website or online presence, you do not have a clear grasp on the buying habits of your demographic.
Organizations that don’t understand and use the digital transformation need to change, rather than just execute. Opportunities like the cloud, Google, internet, CRM systems, digital phones, apps, etc. are simply changing the processes, costs, and marketing of businesses. Amazon and other online retailers will continue to revolutionize—requiring traditional brick and mortar stores to react and adapt. Similarly, companies like Uber and Airbnb are significantly transforming their industries and will continue to do so.
In the current state of the world, businesses are and will continue to be subjected to radical and continuous change. In order to survive such a turbulent climate, they need to build mechanisms into their processes that can adapt quickly. As we prepare to face ongoing uncertainty and instability, we must focus on changing and simplifying processes in order to reduce risk. Therefore, strategies such as pivoting and “develop/test/measure/adapt” need to be built into our organizations.
Despite the fact that we consistently praise excellence, we frequently ignore opportunities to pursue it and actually do things better. Some simple ways to improve performance and incorporate excellence into your business practices include:
Review how and why you do things the way you do them. Eliminate ineffective practices from our organizations. Some practices may be outdated or just flat out not working.
Focus on customer service. Many companies are devoting new efforts to improve this department. However, these efforts are limited without a culture to reinforce them. Consider this: Do companies really care about their customers and get excited when a customer has a great experience? Many companies treat their customers and employees like expendable pieces of the machine. A critical element of culture is trusting employees and staff. 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—mistakes that need constructive correction and not just reprimand.
Consider pricing adjustments. Pricing is not a dirty word and 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.
Analyze and analyze some more. All of the aforementioned efforts will be even more successful the more open and analytical your organization is. Businesses need to understand their environment, review their successes and failures, listen to new ideas, and be willing to accept the truth even when it’s not what you want to hear.
Remember that business is about people. They are your most important assets. Hire excellent people and then listen to them and reward their behavior. A simple please, thanks, and “How are you?” go a long way. Kindness and appreciation are incredibly easy and efficacious efforts.
When it comes to achieving excellence, remember to evaluate situations and determine the appropriate strategy. Assumptions, efforts, process, and results are greatly improved with analysis. Additionally, evaluating alternatives can also help build support for any processes that are executed.
At the end of the day, keep in mind that you’re only one person and you can’t do everything. And if you try, as mentioned earlier, you’ll probably only achieve mediocre results. So, in your pursuit of excellence, remember that we each have limited financial and human resources. Prioritize and learn to focus on the areas where you can have the greatest impact and the aspects of your business that customers really care about. Training always sounds good, but it frequently fails to achieve its goals. Instead, consider hiring people who can specialize in the areas where you may be lacking and delegate tasks in such a way that will encourage excellence across the board. Finally, when it comes to matters of safety, health, social values, and civil rights, we must incorporate these issues into our values and efforts so as to facilitate excellence and not impede it.
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. Check out his books for the business entrepreneur: Marketing Plan for Startups & Small Business and Passion & Reality for Business Success. Both are available at www.startupconnection.net.
Functioning during a pandemic is the ultimate conundrum. While constant uncertainty, risk, and complexity complicates (and slows) every decision, the pressing need for immediate change, adaptation, and redirection never lets up. It’s a relentless balancing act between immediate survival and long-term success and the only sure thing is inconsistency. Amidst so many necessary adjustments, it’s difficult to know the best way to advance effectively as we are maneuvering through a pandemic. But, alas, advance we must.
Are baby steps the answer or is big change the way to go?
As we find ourselves maneuvering through a pandemic, on one hand, some baby steps are critical because problems continue to develop every moment that require urgent and immediate changes. While we are rushing to develop solutions, the nature and complexity of immediate goals has dramatically shifted. Safety must be at the forefront of every program and decision. Short-term financial constraints have become paramount while uncertainty is limiting most forecasting through 2021 at least.
Crises Response:
With forecasting unavailable in a rapidly changing business environment, instant flexibility and response are crucial. For example, work-from-home, online shopping, and crowd avoidance will continue to evolve over the next few months.
People management is requiring more quick decisions and administration. When, who, and how do you bring back staff? How do you make decisions and adapt the organization while considering factors like work-from-home, more volatility, and more uncertainty? Should you consider hiring creative types or especially skilled people who can offer new solutions?
Pricing strategies during a pandemic are critical both in controlling costs and generating volume. In particular, you need to recognize new costs and new customer preferences; which will require analysis and measurement using multiple small trials. Consider alternative pricing tactics as well as the entire pricing package. Online sales, measurement, and flexibility will make these rapid changes executable.
The latest trends in dealing with the crises also bias our decisions. For example, many businesses are executing 25% operating formats that most experts think will fail. Every business owner needs to continue to test a lot of alternatives that integrate expectations, uncertainty, psychology, culture, risk, quality control, consumer confidence, and values.
Planning ahead:
Short-term small efforts must be integrated and designed with long-term strategies and operational efforts in mind. Start with a quick assessment of who you are and where you are going with your business. Don’t worry about the details. Just take a half hour or so and write down key goals, challenges, and opportunities. Make it short so you can focus on priorities rather than overwhelming yourself with too much. You can (and should) come back and revise this list frequently.
Assess your potential profitability and financial needs. There are simple profit models that can help you easily determine your viability, key issues, and alternatives. In particular, the analysis should focus on the impact of various factors on your profitability and potential. One of the surprising aspects of this analysis is that growth and prioritization are frequently more important than cost cutting in business success.
Focus on what you do well and eliminate efforts that will fail.
Keep strategies and programs integrated. Issues like rent, supplier relations, marketing, operations distribution, etc. are critical and must remain flexible on a daily basis. And while finances may be tight, marketing could be the best opportunity for success. Additionally, collaboration with suppliers and landlords will be essential for success. Many tenants and landlords seem to avoiding each other, but I suggest negotiating new rent requirements and marketing efforts in order to survive and generate more business. There are also a number of marketing efforts that can be tested and purchased on a reduced or trial fee.
A lot of great discussions are taking place regarding working-from-home, office spacing, and communication. However, most of the talk revolves around physical settings to accommodate spacing and other requirements. We need to also examine the impact on structure, communication, social interacting, and decision-making.
The new normal must include tools that encourage informal communication in order to help develop relationships, build trust, encourage new ideas, and create safe feedback. Examples: some in-office meetings and social events, including part-time or other department staff, promote health and wellness, and develop community efforts to replace interactions that no longer exist such as “water cooler chats.”
“I just thought we should talk more.”
In general, I support developing confidence and taking more risk. In many cases, we overestimate the costs of failures and underestimate the value of success. Midst pandemic, constant uncertainty makes risk more prevalent in all decision-making. Make sure you understand the value, alternatives, and the probability. Similarly, analytics frequently ignores the potential of innovation and out-of-the-box-solutions. Adapt and be flexible. Most efforts won’t succeed on the first try, but practice integrating the positive components from each trial with some different approaches.
Traditional organizations will most likely fail in the wake of the “new normal” because they are inflexible, hierarchical, and change too slowly. Walter Isaacson’s book, The Innovators, illustrates how commitment, diversity, collaboration, and friction among diverse participants such as Jobs and Wozniak or Gates and Allen led to success. The structural key to change is the need to be open to measurement and feedback. Looking at, understanding, and sharing financials, operations reports, and sales reports are the first step. Simple research studies and social media can be additional tools.
As we find ourselves maneuvering through a pandemic, the solution seems to be found in a paradoxical combination of immediate change and big baby steps. Inarguably, the slate needs to be wiped clean and new paradigms are a necessity. This will include immediate crises and opportunity management as well as long-term strategic considerations. A focus on cooperation, open collaborative systems, and trying to keep in mind that “smaller can be better” may offer hope for organizations as they restructure. Finding a way to stay afloat and, ideally, thrive during such a transformative time requires nuanced decision-making. You’ll need to find a balance between small steps, immediate action, gradual shifts, and drastic change while determining which approach works where and deciding if it’s a short-term response or a long-term solution. Sure, it sounds complicated, but that’s the nature of business. And you already knew that.
At some point, through everything COVID, we’ve all wondered: when will things return to normal? The short answer is: never. Things won’t (and can’t) return to the way they once were. And, despite extensive planning and attempts to reopen the economy, there will be change and it will usher in a new normal.
Nowhere is this more evident than with the economy. Every day we hear success stories like Peloton and Papa John’s Pizza who are absolutely thriving. However, this drowns out the noise of businesses like Hertz, JCPenney, J. Crew, and Wework who have gone (or are in the process of going) out of business. Everyone is touting the need to preserve and support small businesses with absolutely no idea how to save them. The reality is that hundreds of thousands of small business are no longer viable and will be gone. Industries such as airlines, travel, gyms, hotels, recreation, sports, and restaurants will need completely revamped models in order to survive.
The economic issues are compounded by the integration of social circumstances. Social distancing is the elephant in the room and it’s completely disrupting many industries: 25% to 50% restaurants, hotels, airlines, and theaters cannot function (profitably) this way. Simultaneously, we are learning to like and, perhaps even enthusiastically, incorporate certain aspects of the current situation into our daily lives. Working from home, delivery and take out, and Zoom meetings are all becoming preferred activities.
An obvious game changer would be a vaccine. However, the uncertainty of when and how that might happen leaves us with no choice but to forge ahead with the information we have and the circumstances in which we currently we find ourselves. So, let’s examine some obvious changes that need to be managed to get to a new normal:
Office space, rush hour, lunchtime eating, and traffic will reduce by at least 15-30% as working from home becomes largely preferred.
Entertainment, sports, restaurants, and travel will reduce by 15-30% as patronage drops due to capacity limits / spacing requirements, cleaning protocols, and other restrictions.
2020 is and will continue to be a chaotic disaster. There is already overwhelming uncertainty regarding a vaccine, the virus itself, the economy, unemployment, education, the upcoming election, and increased social unrest in the form of protests.
Many forms of stress release have been taken away or changed due to the stay-at-home order (i.e. entertainment, exercise, visiting with friends). Unmanaged stress can lead to depression, unhealthy behaviors, and increased instances of family abuse.
Other major concerns: absorbing shutdowns, 10% unemployment rate, 100,000 virus deaths, -5% GDP decline, and a few more government stimulus programs.
As states start the process of reopening the economy and more businesses and schools startup again, we might expect a second wave of the virus followed by another (full or partial) shutdown.
Therefore, amidst all of the uncertainty and change, it’s absolutely necessary to focus on stabilizing, developing alternatives, and accepting that a new normal is inevitable.
In contrast, 2021 could offer some huge opportunities and a turnaround in regard to many of the things above. The election, fewer deaths, 4-7% unemployment, 2-5% economic growth, and a gradual relocation / increase of public activities are fairly reasonable predictions.
So, how do we move forward effectively?
Hope for a vaccine should not be discarded, but it also shouldn’t be counted on.
Don’t get distracted looking for quick solutions rather than attempting to implement new paradigms. Drive-in movies and restaurants may be nice temporary activities, but they are not long-term solutions. Meanwhile, opportunities to work-from-home and Zoom calls are providing whole new structural alternatives. The problem, however, is that we need to maximize their potential rather than just settling for their existence.
The pandemic has shed light on the fact that many of our institutions (such as schools, health care, social services, and retirement homes) are extremely broken and require structural change. We need to learn to focus on developing great programs rather than simply putting Band-Aids on problems. For example, nursing homes should be smaller and more patient-centered instead of resembling an overstocked warehouse. Many nursing homes have very diverse populations grouped together with little hope or expertise to service individual needs.
Many other businesses and industries (like post offices) are changing as well. Discussions generally focus on close, fund, or shrink, but alternatives (such as changing models, merging, adding programs etc.) should receive more attention. For example, I have an apparel client who is now making masks and safety equipment. Shifting needs requires shifting business models.
Remote efforts, technology, and innovation are the key trends to keep an eye on. Activities and services that require crowds and/or physical contact will continue to be problematic. I think much of the discussion to follow will be about the technologies regarding issues like social distance in public (i.e. elevators) and how to improve working from home. We have the opportunity to create new work environments and should start by considering the goals, strengths, and constraints. For example, it’s easy to advocate only allowing half the people in an elevator at a time, but that doesn’t get thousands of people up the elevator of a 30-story building in a timely manner.
Everyone tries to discount politics in forecasting, but it is critical during this period. I believe the Democrats will have a landslide in all areas including state and local government. This would certainly embrace climate change, infrastructure, education, health care, taxing the 1%, immigration, and social rights. Less of a landslide or loss would bring about very different changes. Either way, we must incorporate our assumptions into our actions and not ignore politics simply because it’s an uncomfortable topic.
While we’re still not sure what exactly the new normal will require, we do know many of the opportunities and challenges that will come with it. Avoid engaging in obsolete or doomed activities and, instead, embrace innovation, testing, and new paradigms. All cultural change starts with openness, includes a focus on infrastructure and measurement, and requires an awareness of biases. And, ideally, those steps lead the way to cultural change that ends in positive progress.
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
The coronavirus crisis has caused a plethora of financial issues that businesses must now face. All of my clients are dealing with dilemmas concerning customers, credit, future sales, financing, planning cash flow, forecasting, etc. when it comes resolving financial stress.
For the most part, we still live in a world with an old system of small business financing. Most financing (including institutions like banks and the SBA) is based on antiquated businesses, such as manufacturing and retailing, where financing was handled mostly through asset loans, guaranteeing debt via family assets, and personal savings.
However, things are very different today. Most new businesses are service or technology-based, and require much less investment.
Many clients start the financing process by asking the age-old question, “How do I raise money?” That’s an outdated way to start and I believe it’s a mindset that needs to be changed in order to be more successful. For example, traditional style advisors often recommend raising as much money as possible. In contrast, I suggest minimizing to reduce costs and risk, keep equity, and avoid excessive financing charges.
Some of the biggest changes that need to take place involve utilizing alternative techniques to minimize financing needs and marketing opportunities to accelerate growth. I recommend a more comprehensive and flexible approach to the process which focuses on key issues like: How much money do you need? How and when will you pay it back? Why should someone invest or partner with you?
Additionally, we live in an environment with low interest and inflation rates, and lots of capital to invest. The rest of this article will discuss financing suggestions that take into consideration new trends and current events. For example, the government has instituted $2 trillion of relief programs for salary, unemployment, and investment that must be considered.
Operational Financial Resources
The simplest source of funds is to reduce the need for funds through regular business tactics. This can be accomplished with strategies such as outsourcing, contracting services, utilizing sharing resources, and testing. While not all of these strategies may be appropriate for every business, consider the ones that have most potential to save cash:
Plan and manage inventory to maximize return: focus on the 80-20% rule that states: 80% of your sales will come from 20% of your products. Additionally, manage inventory and services for seasonal and market changes.
Consider direct shipping from your facilities or organizations like Amazon.
Minimize investment through strategies like renting or sharing. For example, warehouses, cooking facilities, and manufacturing can all be outsourced. One caution: doing things in your home will frequently result in long-term, operational, and legal issues.
If asked, suppliers are often willing to help a business with things like financing, holding inventory, reducing production times, and direct shipping.
Use services for internet management, warehousing, and programming.
Understand and minimize complexity. For example, there’s a big difference between selling a shoe (with various sizes, colors, widths, and styles) versus selling food products (which have a few ingredients that can made into a number of items.)
Analyze why you are really spending and what you will get from it.
If the business is profitable and growing, you can frequently finance the growth with working capital from profits. This also means giving up less equity.
Expanding Marketing Efforts
Don’t wait for business to come to you, but consider the rule: you have to spend money to make money. Analytics, internet marketing, and outsourcing programs provide numerous opportunities to grow and make money faster:
A website and a simple marketing statement provide basic information for potential customers. These can be inexpensive through programming tools like WordPress.
Amazon is the fastest growing retailer in the country and controls about 30-50% of most internet sales. It is easy to set up and relatively inexpensive.
Paid search through organizations like Google and Facebook are underestimated. These options can be inexpensive and fast, and the results can be measured.
There is nothing as productive as Networking, Networking, Networking!
These tactics must be tested and measured. Kill or modify the ones that fail and expand the ones that succeed.
Non-traditional Sources of Capital
Crowdfunding was initially used by “social entrepreneurs” to fund their projects, films, books, and social ventures. It’s becoming more popular as it allows small investors to back your business through organizations like Kickstarter.
While credit card interest can accrue (at a high rate) if not paid off right away, some credit cards do offer a 30-day free program, or zero interest (for sometimes up to 18 months) with a new account.
Bartering, alliances, and exchanges are viable methods to get both excellent services and save cash.
Community based lenders (such as non-profit, independently financed, or private organizations) often make loans to small businesses or entrepreneurs who do not qualify for traditional commercial bank loans.
Traditional Sources of Capital
Equity from yourself, friends, and family. This is the amount of money you can put into the business on your own, and you don’t have to pay it back until you see profits. It may include sweat equity or contributed assets. It also provides other investors with more confidence in your commitment.
Outside equity has the same properties except it involves giving up at least some of your own equity in the company. It can come from a variety of places such as partners, venture capitalists, private equity dealers, private offerings, and private investors.
Traditional banks and loan institutions are focused on reducing risk and making certain they get paid back. These are usually asset-based loans or are combined with equity contributions.
Raising capital is a two-way street that requires honesty, understanding, and communication. Understand your needs and the risks involved in order to find the right type of investors.
Don’t overestimate your potential or what is needed to meet your goals.
Develop plans, measure results, and satisfy investor requirements.
Significant changes are occurring in financing. There will be more risk, more volatility, more uncertainty, and more focus on profit and cash flow. Thankfully, there are numerous tactics to manage these shifts. As these changes progress, consider including more alternative methods—especially cost reduction, analyzing goals and strategies, and focusing on the dynamics of the financing rather than just how much money you can raise.
Dr. Bert Shlensky has an MBA and a PhD from the Sloan School of Management at MIT. He is the President of the New York-based consulting firm The Startup Connection, where he uses his 30 years of high-level business experience to guide his clients toward maximum sales and profit. For a free consultation, please visit www.startupconnections.net.
Seems
a bit like an oxymoron, no? Well, that’s exactly what analytics have become
these days: an oxymoron. A real conundrum. On one hand, data helps us predict
change and plan for the future. On the other, that data can be wrong or
misleading and, therefore, really screw things up. So, I say, take it all in,
but then let (most of) it go.
There’s an ongoing debate regarding the roles of data and entrepreneurship. In particular, the increased availability of analytics data and tools is making planning, scheduling, and analysis much simpler and more accurate. Amazon is one of the best examples of using analytics to improve logistics (i.e. more one-day shipping).
In contrast, the argument stands that these tools are less effective than originally expected. The most significant instances are incorrect data, method, and change. If the data is wrong, access to more data does not improve analysis. Mistakes like Boeing, Afghanistan, WE WORK, G.E. and retail stores represent diverse examples where people simply focused on wrong information. The existence and use of the phrase “alternative facts” supports the unnerving idea that it’s easier to make up lies than it is to refute those lies. That alone does not bode well for analytics and data.
Data can also be misleading when a dramatic change occurs.
Disrupters like E-Commerce, ride share apps, and food delivery dramatically
affected markets and parameters. Consequently, significant shifts in culture,
politics, and buying habits also make economic forecasting much less reliable.
Additionally, analysis is dependent on using the right
tools and methods. Many assumptions and approaches may not be appropriate. For
example, investment advisors frequently tout their individual excellence while
changes in the overall market are usually the largest factor in investment
success. Mathematics shows that the more history one has on a topic, the more
accurate the analysis. However, if parameters change, history may become
irrelevant.
This is why we take it all in. Think on it. Absorb it. Let
it all sit for a bit. And then throw most of it out the window.
You should absolutely consider what they teach on the first
day of a statistics course (Validity, Reliability, and Accuracy) rather than
ignore it.
A recap in case you need a refresher:
Validity is simply focusing on whether
your methods are valid. While sampling, correlation, and other tools can improve
performance, the analysis must be valid. For example, many of us predict that
our team will win. However, the odds in most professional leagues are that
about 3% of approximately 30 teams will actually win.
Reliability is the repeatability
of results. Differing results in political polls or verifying results of
medical tests are examples of reliability issues.
Accuracy is just the correctness of
the measurement process. The most violated rule of accuracy is that you are
only as accurate as your least accurate number. There is a famous story about a
museum guard answering a child’s question about how old a dinosaur was. He said
280 million years plus 39 years and 20 days. When asked where the number came
from, he said, ”When I started, they told me it was about 280 million years
old. I have been here 39 years and 20 days.” While this number certainly seems precise, it probably isn’t very accurate.
I would add a fourth factor to this list, which is probably
the most important: Bias. On one hand, bias is a complex mathematical
term correlated with sampling, randomness, analysis, and other things. On the
other, it is how our culture, background, gender, age, and preconceptions etc.
affect our attitudes and decisions. For example, many studies have shown that
we form an opinion about a presentation within 90 seconds of it starting. I
highly recommend that, in dealing with bias, you manage its existence rather
than trying to deny it.
Finally, tools as well as methods of reporting are
dramatically changing. A colleague of mine recently challenged my website saying
it was “too dependent on PowerPoint and Excel.” While these are both great
tools and are the most dominant analytical and presentational methodologies,
they can have many limitations: The information can be old, longitudinal
analytics is frequently lacking, they are not interactive, they are not visual
enough, and they can be very boring and/or misleading. Nothing is worse than being
forced to sit through a PowerPoint presentation that is too long and loaded
with endless Excel sheets.
In summary, analytical tools offer great potential for success, but they need to be utilized properly and in conjunction with intuition to be effective. So, gather all that data and pay close attention to it, but don’t be afraid to toss it all out.
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!
