Imagine you’re taking a road trip. You’ve planned out your entire route. You know every highway you’re going to take and every stop you’ll make along the way. Now, imagine you’re following the directions you’ve made when suddenly there is a huge detour. A landslide is blocking the road—rocks and debris everywhere. What do you do? Forge ahead on the same dangerous path even though it would utterly ruin your car and cause you injury? No. Of course you wouldn’t do that. That would be dumb. You would find another, safer road to get to your destination successfully.
This is exactly why we need to realize that the best plans are flexible. Too many times, we create a plan and think that it’s final. But, how can something be final when you don’t know what variables will exist down the road (pun intended!)?
And yes, you do need a plan, but it needs to be dynamic and flexible so that it can adapt to changing circumstances. Long detailed business plans designed for a third party like an investor or a plan that has no flexibility are usually not productive because they are too static to be useful in a real-life scenario. A popular alternative, based on a variety of “lean startup principles,” is to skip the plan in favor of an organic plan that tests alternatives, measures, and adapts to changes in your business and the environment. Try to remember that the best plans are flexible.
A dynamic plan has some significant advantages. It allows you to examine options like a good, better, and best forecast. Dynamic plans also allow you to gain some understanding of the interaction of variables. For example, it can show you how variables like growth, marketing, operating expenses, and investment affect sales, profit, and growth. Most importantly, it encourages the exploration of alternatives rather than relying on a fixed model.
Developing a dynamic plan still requires covering traditional basics, such as:
Plans must balance the need to dream with the need to be realistic. The solution is frequently to develop backups, prepare for contingency, and accept failure. In particular, failure is often a requirement for success. Yet, we sometimes fail to recognize its value in the process of achieving success. For example, fear and uncertainty accelerate the concerns about failure. Many studies have shown that we are about twice as likely to avoid losses as pursue gains. We must listen to that little voice that whispers, “How will you know it won’t work if you don’t try?”
And, if it doesn’t work, you have more information to utilize for the next attempt.
Finally, setting clear goals is essential to an effective plan. As Mark Twain said, “If you don’t know where you are going any road will get you there.” The distinction between dynamic and focused are not contradictory. You need a concise summary of what the company is about and how it will achieve its mission. If you’re a human being living on Earth, you probably know that it’s very rare for things to go exactly as planned. Therefore, your business plan needs to focus on how your company will succeed in various circumstances. It should also define the target market, financial parameters, and define operational requirements. Understanding that the best plans are flexible will help you, and your business, succeed.
Remember, your plan is a tool—like a map—that is regularly considered, and modified when you come up against those landslides. Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: www.StartupConnection.net for more information.
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.
Use These Quick and Simple Ideas to Improve Your Business
With the end of the year quickly approaching, it’s a great time to reflect on where we are and where we’d like to be. But, since it’s that time of year when everyone’s schedules are impossibly full, we’ll keep this quick, simple, and practical.
Below you’ll find several resources to help improve your business. I suggest picking one or two posts, and committing to incorporating one or two suggestions from each. My personal recommendation is the 80-20 post, which is simple and almost guaranteed to produce results.
I also encourage you to provide feedback and let us know which suggestions you found the most useful.
And remember, as the end of the year approaches and stress levels tend to increase, be kind to yourself and others, find ways to relax, enjoy time with family, but also make time for yourself. Take deep breaths, cut yourself some slack, and know that your best is enough.
Hopefully this end of the year list inspires you to incorporate some fresh ideas into your business and explore various strategies. I also recommend using the content to develop and test new alternatives and solutions. In your efforts, don’t be afraid of some failures along the way—it’s the best way to learn and grow. Good luck!
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.
What does it take to change? As in, truly change? It is said that it takes 3 weeks or more to turn an action into a habit. And, the older we get, the more set in our ways we become. So, how then, do we enact change—within ourselves, our businesses, or even society?
In a time when being adaptable is crucial to success, organizations are changing faster than ever and, yet, it still seems we aren’t changing fast enough to keep up. This may be the result of tools that are designed to limit risk and are unable to accept compromise and open systems. For example, changes in Ukraine, mid-term elections, inflation, Trump investigations, and economic growth seem to modify our decision parameters almost daily—are our tools taking all of these factors into account in their analysis? Doubtful.
That means, in order to “keep up” with the times, we have to pay close attention to these parameters ourselves. We must not only embrace change, but be actively working to create transformative change as well.
Much attention is often given to analytics, expertise, profits, and science. However, these tools sometimes ignore critical requirements for change and better decisions: passion, focus, trust, effort, risk, and commitment. Unchecked, analytics may actually hinder transformative change.
Here are some suggestions to develop and execute more transformative change:
Consider structural changes. Society and business fail to recognize old paradigms and structures are failing. Large corporate structures, like print publications, big banks, and brick and mortar retailers, are all gradual losers, or even worse. Many large companies have tunnel vision, organizational constraints, etc., 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.
Imitate small businesses. The success of smaller, more innovative companies shows that many organizations should get smaller, or act smaller, in order to effectively deal with today’s environment. Reducing layers and creating professional cultures are a start. Boards and management need to split up organizations or create more independent groups.
Invest in innovation. Large organizations say they want excellence, entrepreneurship, innovation, risk takers, etc., but, really, they tend to encourage mediocrity. For example, short term goals, testing, and failure, which are critical parts of innovation, are punished more than rewarded. In short, organizations frequently ignore the advice, “you can’t score if you don’t take a shot.”
Look at disrupters. Mackenzie Scott (Jeff Bezos’ ex-wife who has $60 billion) is changing the structure of charitable giving. She is a disrupter in that she focuses on equality, gives only unrestricted gifts (no building or school names), and donates significant funds to lesser-known institutions, like black colleges and community organizations, to help transform their entire organization.
Implement more risk. There are more and greater opportunities. Even in sports, home runs, the three-point play, and passing in football are rapidly increasing as coaching, athletes, and analytics improve. We underestimate the potential of frequently unlimited upsides compared to limited downsides. Test more and accept that failure is frequently a requirement for success. We also need to seek transformative solutions, which may be unknown when we start a decisions process.
Embrace the relative importance of marketing over sales. Digital analysis and marketing, the Internet, and account management are examples of efforts that are replacing the good old days of personal selling and relationships.
Focus on reducing stress. The pandemic and rapid change has caused significant stress and unhappiness and we need to take action to reverse some of that damage.
Remember technology is king. Amazon, Google, Facebook, and Apple will survive and grow as they become even more innovative and efficient. Traditional retailers with large real estate platforms and margin requirements are at great risk. Consumers are proving to prefer the perks of working at home, fast delivery, and other convenient Internet processes. Virtual offerings will continue to expand and be utilized and, therefore, they must be integrated into our structures.
Don’t forget that service, image, andculture are frequently the biggest (and often least expensive) ways for small companies to develop a brand and differentiate themselves. Some suggestions: Focus on your target market and segment your ideal customer. Be polite, listen, and then act based on what you have learned. Become a trusted resource to your prospects by providing useful information that will help them make a good choice.
The post-pandemic changes we’re seeing should be viewed as a critical opportunity to improve sales, profit, and competitive positioning. Many include transformational change. The current state of organizations and the rapid advancement of technology are stimulating perpetual change that cannot be ignored. But, with the right mentality and a willingness to incorporate tools that will help you successfully adapt, you can thrive in this new normal.
So, where in your life, business, or community do you see a need for transformational change? And what actionable steps are you taking to fuel it? And are you committed to making those actions a habit? Because that is what it takes to truly change.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward. We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
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.
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