Have you ever met someone and, after they introduced themselves, you forgot their name within seconds? Why does this happen? Why does so much information go in one ear and out the other? Are we at capacity and simply cannot retain any more data? Or are we too distracted thinking about what we’ve going to say next? Why are we not listening to each other?
Listening is key for communication and building positive relationships—both personally and professionally. When we improve listening, we improve our interpersonal connections and our collaboration skills.
When it comes to getting others to listen to you, think about how you are presenting the information and how you want it to be received. Consider factors like timing, delivery, and environment. When, where, and how are you telling someone something? In general, the audience, whether on the Internet or in person, forms perceptions of a presentation in the first 90 seconds—that gives you a small window to capture their attention and make a good impression. Environmental issues can be the most ignored factor in communication. For example, if you’re giving a presentation in a room that’s too hot or has a lot of distractions, your audience is less likely to retain what you say.
Additionally, when we engage others genuinely, they are naturally more inclined to pay attention. Too often we underestimate the power of a smile, a kind word, an honest compliment, or the smallest act of caring. The most effective tool to enhance listening that I use is the “out of the box” approach of “FOOD WORKS.” Fruit and penny candy are truly unheralded aids in making a great presentation.
Here are some specific suggestions to help improve our own listening as well as get others to effectively listen to us:
Have a clear focus especially with regard to goals. Time frame, perceptions, quantity versus quality, topic, and especially the sharing of goals can critically affect listening. Providing an outline is helpful so people can see what will be covered and can easily follow along.
Don’t ignore bias. Whether we admit it or not, we all have biases. And it’s a huge problem when it comes to listening. 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, preferences, and desires can have a significant impact on what we hear.
Be willing to hear both sides. It’s important (and frequently imperative) to take risks in order to expand, grow, and adapt. By listening to the real benefits and potential consequences of actions, you may be willing to take more chances. Additionally, this will help you make more informed decisions overall.
Don’t assume people know what you’re talking about. For example, common business terms like Gross Profit, EBITA, Clicks, Conversions, Fixed Costs, and Investment may not be understood by some of the audience.
Be clear and concise. Simplify wherever possible and focus on factors that really affect your presentation. The audience will lose interest if the presentation is too long, complex, or poorly communicated.
Be the expert. If you’re not confident in what you’re saying, you’re more likely to communicate it wrongly or ineffectively. Make sure you know what you’re talking about.
Prioritize openness. Does the listener trust what is being said? And does it cover relevant issues? When we share information openly, we establish a sense of trust.
Actively look for ways to improve. Discuss challenges and opportunities. For example, if miscommunications are happening, find the source of the problem. Is it coming from the presenting side or the listening side? You can then implement supportive strategies.
Understand the audience and diversity. Demographics are affected by age, location, socioeconomic status, race, gender, etc. Current events have certainly affected trends for many minority groups. Staying up-to-date on your target audience, the issues they face, and their habits will help improve your awareness and communication.
Listening should always be a priority. Understanding the purpose, content, and importance of communication can help you improve outcomes. You should also consider your own listening process. The next time you catch yourself asking someone to repeat their name or find yourself zoning out during a presentation, ask yourself why? Figure out where the communication failed and learn from it. Maybe the speaker wasn’t being clear or maybe you’re someone who needs to take notes or repeat a name out loud in order to retain it. The more you understand your own communication strengths and weaknesses, the better equipped you’ll be to listen and be heard.
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. For more information, please visit our website: www.StartupConnection.net.
Establishing the value of your business investments can be difficult. While well-known valuation methods can give you a rough idea, ultimately your business is only worth what someone is prepared to pay for it.
In 2001, there were over 1,000 public offerings. Few flourished and several lost much of their value or went out of business. The culprit seems to have been excessive forecasts and losses in addition to a decline in the economy and tech forecasts. Greed among many of the participants, including prominent venture capital and investment banking firms, was also a significant factor. As a result, there were few new issues in 2022 and they are only now starting up again in 2023.
In contrast, there are over 1 million new small business startups since the pandemic. While many have achieved their goals, a significant number of them never really became significant or will exit the market within 5 years. These are mostly individual or small entrepreneurial efforts with expectations of less than a few hundred thousand dollars in volume. Their goal is to provide income, growth, and a better lifestyle for the entrepreneur.
These differences illustrate the need to understand goals and parameters when analyzing the value of your business or stock. For example, retirees building a nest egg for their heirs have quite different perspectives from families who need their wealth to fund their own retirement. Additionally, much of our country’s wealth is concentrated in 5-10% of our population. Thus, in 2002, much of the tech stock decline had minimal impact on wealthy individuals while affecting the income of retirees with investments of less than $100,000.
A critical and frequently overlooked factor in evaluating investments is risk. Investors seem to be willing to take higher risks in order to get higher returns. Much of the debacle with the 2001 new issues was due to funding extreme forecasts with high risks. Venture capital firms do mitigate some of the risk by funding many deals and only needing a few successes. In contrast, most individuals are more risk averse, especially people planning retirement.
Tools and criteria to evaluate businesses greatly affect valuations as well. Long-term versus short-term, fixed versus variable streams of income, risk, growth versus income, and earnings can all affect perspectives. Just consider the variations in value between your home, a fixed pension, and tech stocks.
Special features like skilled employees, intellectual property or other special strengths of your business can increase investment value. A few years ago, “tech” was almost holy as an investment. Basic industries like autos, housing, retail, and utilities may have significant fluctuation as they are experiencing little long-term growth. In contrast, A.I. and electric cars seem to be the major hot industries today.
There are several standard techniques that can be used to provide a benchmark to determine the value of your business investments. Using different valuation methods can help you come up with a range of valuations for your business. Values are also affected by social, economic, and psychological environments. For example, values of sports teams have experienced unimaginable growth because of the desires and wealth of many billionaires.
Measures like P.E., present value and discounted cash flow are generally considered the standard for evaluating investments. One of the advantages is they can be analyzed to consider factors like annualized returns in order to compare investments. For example, growth companies will expect higher P.E.’s than stable companies.
Profits and cash are critical factors in evaluation particularly for small entrepreneurial companies. These measures need to be mitigated by benefits, taxes, and investments not apparent in cash benefits. For example, a significant advantage of many tech companies is the minimal investment aside from people and marketing. Thus buildings, factories, equipment etc. are not required. Even manufacturing is frequently contracted out to reduce investment and provide cheaper sourcing. Many public companies have also modified disbursements to owners. In particular, stock buy backs rather than dividends allow more flexibility and tax benefits.
The value of assets and liabilities in your investment is a critical factor in your valuation. These values can be significantly different from book value and need to be considered Real Estate valuations, and the ability to borrow money at reasonable interest rates is a critical consideration.
Startup or entry costs are also significant aspects of valuation. The valuation includes the costs of purchasing assets, developing products or services, recruiting and training staff, and building up a customer base. For example, a pharmaceutical company might want to choose between buying a biotechnology business and investing more in its own research and development operations.
Different industries also have their own rules of thumb that can be used to calculate a value of your business. For example, many retail businesses are valued as a multiple of turnover. Other common valuation methods are based on the number of customers, clicks, or the number of outlets. Industry rules of thumb like these are often used in sectors were buying and selling of businesses is common.
In summary, valuing your business and investments involves a number of considerations. What are your goals, constraints, risk levels, and alternatives? Plan ahead – the more time you have, the easier it will be to show your business in the best possible light. Sort out systems – strong management information and operating systems give the purchaser confidence that there won’t be any unpleasant surprises. Structure the transaction to maximize the price, process, and requirements. Consider issues like taxes, timing, and operations that can have an impact.
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 team of experts will address your particular needs while working to save you time and money.
When it comes to change, are you focusing on the right issues? Just a few years ago, tech stocks like Amazon, Alphabet, Apple, and Microsoft accounted for over 50% of stock market growth and experienced 20-40% annual gains. Currently, they are experiencing slower growth and, consequently, laying off workers. Additionally, issues like climate change, immigration, and mental health are accelerating in importance and receiving little new attention.
Many businesses as well as political, religious, educational, and other institutions are facing crises because they fail to adapt. For example, it is generally accepted that pre-kindergarten programs dramatically impact education and long-term societal goals. Yet, few school systems nationwide have adapted them. Demographics make matters even more complex: Women will soon represent over 50% of the labor force, workers over 45 have increased from 31% to 41% of the population, and over 50% of births in the U.S. are non-white.
We need new approaches and strategies to properly address these changes.
Pricing is a great place to start when reexamining strategies. In general, companies price by old strategies related mostly to supply and demand. However, there are numerous alternatives available to increase sales, better serve the customer, and impact costs. One of the best examples is bunding and unbundling. Grocery stores like Wegmans have made significant gains in offering customers things like prepared meals, take out, meals to cook etc. that compete with restaurants and provide alternatives to cooking yourself. These are generally special produts at higher margins like all the Super Bowl offerings. The charcuterie board trend with prices ranging from $30-$100 is a great example of this markup. In contrast, marketers like Amazon and Costco are masters at unbundling and offering consumers value offerings with few amenities.
Today, businesses (large, mid-sized, small, and startups) and the business management need to focus more on openness, transparency, brainstorming, and support to stimulate innovation. We have seen and acknowledged the potential positive impact that open systems have on decisions, motivation, and profitability. Unfortunately, the reality is quite different, and they are rarely happening nor are they truly supported. Why is this? I would argue that it’s because business management is lacking a realistic view of many issues and the changing environment we live in.
The management structure of many organizations is what produces a lot of the disappointing results we see. Many seemingly successful companies have tunnel vision, organizational constraints, and ignore emerging technologies and opportunities. They lack the flexibility to respond to the needs of the market and use outdated solutions to new problems. They fail to allow the vision, entrepreneurship, and risk necessary to succeed.
So what is the secret sauce to success? We need to look at what is increasingly emerging as a potential solution: the acceptance and reliance upon open systems and collaboration. Open systems have been around for a long time, but are becoming the norm for success. They reject bureaucracy, authority, hierarchy, and closed decision-making processes. They encourage participation, diversity, new rules, and to some extent, chaos.
Organizations need to be open to measurement and feedback. Understanding and sharing financials, operations reports, and sales reports are the first step. Basic research studies, social media, and other devices can be additional tools. You can also try adjusting management involvement through more inclusive approaches (this could include creating a safe company culture where everyone is encouraged to share ideas without judgment).
Managing probability and risk more efficiently can also provide greater opportunities. This includes both value and probability of success. For example, when lotteries increase, the odds of winning remain constant, but the value of winning increases dramatically. As uncertainty and change accelerate, probabilities can also fluctuate. Many analytical efforts are reduced by the volatility in 2019, 2020, 2021 and 2022, which all need to be considered together. Getting excited or depressed about one year is erroneous. In general, the four years together provide a more positive and reasonable perspective than just one year alone.
When talking about change, we would be remiss not to mention resistance. Because where there is change, there is always varying degrees of resistance. As a result, winning opportunities can often be overlooked. For instance, have you hugged your best customers today? We frequently take our best customers for granted and don’t thank them enough, help them adapt to changes in their needs, or simply listen to their concerns.
Similarly, are you honestly assessing where you are experiencing success and failure? I can’t tell you how many clients are not tracking sales by product or account, measuring Internet results, or even monitoring traffic and success. These are incredible tools for understanding your strengths and acknowledging where there are opportunities to grow. We need to learn from failure rather than deny it and recognized when to abandon programs that aren’t working.
Finally, organizations often find themselves surprised by circumstances rather than consistently managing their environment in order to be prepared for change. On a number of different levels, factors like global warming, aging of the population, product life cycles, technology advancements, and the Internet are highly predictable. What is frequently missing is the acceptance that our world will always be in a constant state of change and the open-mindedness and flexibility required to respond and adapt effectively.
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 team of experts will address your particular needs while working to save you time and money.
Skills are the groundwork for excellence. And the mastery of any skill requires time and commitment. While innovation is necessary for progress, skills are the backbone enabling advancement.
I recently had minor surgery to get a pacemaker. The experience, skills, and attention of the supporting nurses and staff were amazing. They know their jobs and execute the needs of the surgeons superbly. In a similar instance, it appears that Damar Hamlin, the football player, was saved by the skills of the emergency team that cared for him. They integrated knowledge, experience, and teamwork to revive and save him almost immediately.
We frequently underestimate the role of knowledge, experience, and skills in solving many issues. Take the Southwest Airlines holiday disaster as an example. The lack of knowledge, planning, and care led to a system-wide meltdown and the disruption of millions of travelers’ plans, from which they are still trying to recover.
In general, we neglect the importance of balancing planning, skills, and experience with innovation and intuition. The more history, expertise, and data, the more analytical and proven methods are preferred. The more uncertainty, change, and volatility, the more intuition and innovation are required. However, our organizations seem to be moving towards more uncertainty and volatility and, therefore, require more thought in our decision-making.
Utilizing skills to forecast and plan:
While we all value analysis and A.I. to improve results, we sometimes ignore the accuracy and validity of that analysis. The pandemic has made much of the data from 2019-2021 less reliable in forecasting. Economic, political, and environmental changes can impact the assumptions and process of our analysis. For example, higher winds and higher water temperatures from climate changes have worsened the impact of weather. Structural changes like the war in Ukraine, crime, and inflation can also affect our assumptions and analysis.
Timing and situation should also greatly affect analysis versus intuition. While many understand product life cycles, we forget how age, competition, and technology can affect our progress. For example, over 60% of advertising is over the Internet rather than traditional media. Age is another factor we frequently ignore. Many politicians and managers continue to serve despite waning capabilities and energy.
With uncertainty high in many areas, requiring more intuition and innovation in our planning, we can trust that skill and experience will successfully inform intuition.
Capitalizing on innovation:
There are many opportunities to capitalize on the need for intuition and innovation. The pandemic stimulated new opportunities like work from home and virtual learning that need to be allowed to reach their potential. For example, small Universities are sharing courses with other local Universities to expand the offerings to students. These need more analysis and objective thought rather than simple opinions to have success.
When dealing with innovation and change, psychological issues need to be managed rather than feared. Hatred and threats are the tools of the extremists. They need to be managed, understood and not allowed to disrupt our efforts. In particular, we need to build positive relationships and improve communication.
The most frequent issue inhibiting progress is bias. Our enthusiasm or mindset frequently cause us to overestimate markets, ignore competition, and not consider the issues in execution. Again, the more we can rely on skill, the more we can eliminate bias.
So, how can you balance innovation with skill to improve the way you run your business?
Replace Hierarchy.
Most organizations are based on hierarchy, but this system is obsolete and, more often than not, fails. It is a structure that rewards people at the top who may not be competent rather than seeking expertise. We should constantly be striving to improve and that is impossible to do if we rely on an inflexible system. The world is constantly changing and we need to adapt accordingly.
Informed decisions require a variety of input and diverse skills to manage that input. It’s always important to consider various perspectives and options. As technology becomes more complex, additional expertise, teamwork, resources, and responsibilities are required to manage operations.
Pay Attention to Data.
Frequently, we think we know best, even when data tells us otherwise. Too often, analytics are ignored due to pride or a “we’ve always done it this way” mindset. In recent years, data is informing us that consumers want to associate themselves with and buy from socially conscious companies. Taking a stance on social, environmental, and political issues is increasingly becoming a must-have for business success and consumer loyalty.
Focus on Process Not Plan.
Many experts tout that the holy grail of a successful business lies in the plan. However, the process of implementing that plan is far more important than the plan itself. Generally, plans are static, lack insight, and are missing operational details. Not surprisingly, this results in poor execution. For example, plans seldom predict and account for rapid changes in the economy. A successful plan is flexible and can adjust accordingly when those inevitable and unexpected obstacles arise.
Consider dieting. You can design a great weight loss program, but if you can’t properly implement that program into your lifestyle, you aren’t going to lose any weight.
Balancing intuition and skill doesn’t have to be as complicated as we make it out to be. Think about an incredible guitar player. Before they can write an incredible song or play a mind-blowing solo, they need to know the basics of playing the guitar. The same goes for any endeavor. Before you can get creative, you need to master the skills that will make your innovation a success.
Dr. Bert Shlensky, president of Startup Connection, prides himself on his ability to define what is unique about each and every business. He works closely with individuals to develop a personalized approach that targets specific areas of concern and offers solutions based on his 40+ years of experience. His expert team will address your particular needs while working to save you time and money.
As we start wrapping up another year, it’s a good time to examine areas we are looking to improve. One proven way to get better results is to take more risks and then take even more risks.
Overall, we avoid reasonable opportunities to utilize risk to our advantage—most likely because we have an unhealthy relationship to the word. Maybe we need to start thinking of “risk” as the “potential to win.”
Recently, I saw a perfect example of how this detrimental aversion to risk actually does more harm than good. Two underdog football teams lost because they refused to take risks and be unconventional. I believe the coaches were simply afraid to be second-guessed and made decisions that were almost guaranteed to lose. Similarly, sports teams consistently take fewer three-point shots, steal fewer bases, and attempt fewer two-point conversions than the odds would dictate.
This phenomenon has also been well documented in organizations. Some of the most notable examples are Kodak refusing to recognize digital, Xerox basically abandoning Windows technology, and retailers failing to recognize the impact of the Internet. Currently, the financial markets seem hesitant to recognize the slowdown in tech stocks. Why do companies act this way in spite of the many cases in which change is both organizationally and financially justified?
If you’d like to avoid this tendency of evading probable wins, here are some strategies to increase risk with limited downsides:
Manage probability better. This can provide greater opportunities, including both value and probability of success. For example, when lotteries increase, the odds of winning remain constant, but the value of winning increases dramatically.
Keep your perspective in check. As uncertainty and change accelerate, probabilities can also change. For example, many analytical efforts are reduced by the volatility of 2019, 2020, 2021 and 2022, which need to be considered together. Getting excited or depressed about one year is erroneous. In general, the four years together provide a more positive and reasonable perspective than just one year. See also: Embrace Uncertainty with Positivity.
Don’t be afraid of losing. Many studies have shown that we are about twice as likely to avoid losses than pursue gains. For example, we will trade stocks with gains twice as fast as selling stocks with losses despite tax advantages for selling losses.
Understand and maximize goals and needs. The simplest technique is to understand the needs and goals of your partners in a relationship. For example, are you willing to endure short-term losses to develop long-term gains? Similarly, are you willing to invest in efforts like quality, customer service, and people to improve the chances of success? See Make Goal Setting and Measurement Work for You.
Reduce bias as much as possible.The greatest detractor from effective decision-making (which can be intentional, random, hidden, or even unknown) is bias. Probably the greatest source of bias is our own set beliefs, experience, and reliance on a “we have always done it that way” mentality. Thus, we simply ignore information or facts that are different than our own. Another factor is incomplete or wrong information. However, when we eliminate bias, we increase our probability for success.
Be more open. Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. Take advantage of simple research studies, which social media can provide. These are worthwhile tools to use regularly. A management style such as the “walk around” and asking simply, “How are you doing? Is there anything you need?” can be priceless.
Remember that mistakes are often the best way to learn and grow. One of my favorite phrases is, “If you aren’t making mistakes, you aren’t trying hard enough.”
Environmental and external influences can greatly affect risk as well. Inflation, oil prices, and supply shortages are causing great disruption today, but they will also create opportunities. Electric cars, the chip shortage, and logistics are areas where unknown opportunities will emerge.
Risk considerations are also affected by quantitative versus qualitative considerations. On one hand, quantitative data are measurable, objective, comparable, and easier to document. However, we must ensure we are using the right measures and analyzing correctly. Qualitative data, on the other hand, can measure issues we don’t always consider and allows for intuition. But these processes can be compromised easily or measure wrong factors. In particular, bias occurs much more frequently in qualitative analysis.
When it comes to risk, we also need to consider ignorance and ways to manage it. Ignorance shows up in a number of ways, which require different approaches. Some ignorance is just the unknown—like the economy next year, the long-term pandemic impact, and potential new technologies (such as a longer lasting electric car battery). While we can’t assure certainty, we can research alternatives and their consequences. Other forms of ignorance are the refusal to accept new information or unwillingness to remain open-minded.
Viewing risk as an as an opportunity rather than a danger can produce positive results. Change is occurring faster and faster and we must resist the urge to crave the comfort of consistency and reliability. We need to shift our mindset to one that expects and embraces risk. If we can learn to implement sound, proven strategies, we’ll simultaneously set ourselves up for success while being in a position to effectively and efficiently manage risk.
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 team of experts 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!
