If you think are you aren’t susceptible to denial, you’re in denial. It’s a difficult thing to manage, compared to simple lying, because much of denial can be unconscious and, as a result, more difficult to recognize and change. But, change we must, because denial prevents us from seeing and addressing critical issues that could greatly affect outcomes, both personally and professionally.
I find that, except for the news, we favor positive circumstances and sometimes deny challenges. We “see what we want to see” by checking the stock market or the score of the game only when we’re ahead. We look for positive weather forecasts and focus on the great things about our kids. This type of tunnel vision can make it hard to see the whole picture. It can also affect decision-making in cases where positive bias greatly alters assessments.
Psychologically, denial is a mechanism that results from the inability to cope with reality. However, there is an immutable fact about denial: it does not work as a long-term problem-solving mechanism. Reality always wins. And when it does, the next step in the process is blame, which shifts responsibility onto someone or something else. Blame eases the pain when reality bites. But, we need to take ownership of our actions and recognize that if we work to avoid bias and denial, we can often avoid having to face a harsh reality down the road.
Bias is one of the greatest deterrents of accurate scientific analysis. I also believe social bias can be more impactful than statistical. These include our preconceived perceptions and assumptions. I am always amazed that many programmed employee selection tools outperform interviews, especially in jobs requiring specific skills. Similarly, the perceptions of many presentations are established in the first minute or so.
Cultural and environmental factors also affect bias. Dress, demographics, weather, location, and culture all affect perceptions in the decision-making process. These can also be used to your advantage when talking to colleagues by increasing bonding with similar people. Whenever I meet someone who is also from the Southside of Chicago like I am, agreement on differences becomes much easier.
Denial is more prone to happen when there is more complexity and variables involved in a situation. Our brains try to counter this by attempting to create simplicity. Once we understand that this is what is happening, we can use to our advantage. For example, we all know simplicity can help decision making by prioritizing, focusing, and pursuing clear goals. On the other hand, we need to consider multiple factors like rewards, probability, environment, resources etc. in making our decisions. Here are some examples where the two strategies can be complementary:
The 80-20 rule (which states 80% of results are from 20% of effort) calls for focus to be more important than ever. Eliminating unproductive efforts is the most important aspect of the 80-20 rule.
More data, variables, and analysis are generally good, but it must be useful, valid, and correct. For example, if you are measuring an outcome, pinpoint the important factors rather than trying to measure everything. In particular, you should be careful to avoid random relationships and misinterpreting cause and effect. For instance, pre-pandemic data may be less relevant than before.
Most efforts have multiple goals like sales, growth, profit, quality, good will, satisfaction, etc. What is the priority and importance of these goals and how are you measuring them? Personally, I am always battling writing long blogs that are intellectually interesting versus short practical blogs with specific recommendations.
There are tradeoffs among innovation, experience, excellence, risk, and quality. Quite simply, the more innovation you pursue, the more trial and error. In contrast, you want experience and quality if you are doing things like open-heart surgery.
Denial reduction can also be affected by our attitudes and mood. Don’t underestimate the benefits of just taking a break or getting enough sleep in developing a more realistic approach. One of the side effects of working from home may be an endless workday and a lack of distractions, which provides no time to relax and reenergize.
Balancing simple and complex tasks can be improved by focusing on your strengths and paying 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 developing messages that explain her quality difference.
Don’t underestimate intuition, which is quite different from denial. While we continually get more data to make better decisions, we should not forget our gut feelings. Someone does win the lottery and some of the best outcomes come from low probability efforts. For example, the pandemic has caused great uncertainty about 2022 and there are lots of opportunities to take a little more risk.
The use of virtual rather than rigid models can help deal with complex issues. They are easier to understand, diagnose errors, and manage multiple situations. In general, we are moving towards more flexibility in decision-making.
Openness can also facilitate avoiding denial. Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. Simple research tools that social media can provide can be used regularly. A management style such as the “walk around” and asking simply, “how are you doing, is there anything you need?” can be priceless. Look for alternatives and ‘what if’ discussions.
We all experience denial, but it is our responsibility to admit when we’re allowing our own biases to influence us or giving in to our brain’s desire to simplify complex issues. Therefore, we must constantly work to develop safeguards that will help recognize, test, and avoid denial. Because when we can see the full picture clearly, we are able to react and respond in the most effective way.
The last couple years have been stressful, unpredictable, and rocky, to say the least. Getting back on track and accomplishing more in 2022 is going to take dedication and focus. This may feel like a major feat after so much uncertainty, but, rather than looking at the big picture, which can often seem daunting, let’s focus in on some key areas that will jump start a successful year.
How exactly do we reduce feelings of overwhelm and hone in on specific goals? Here are some key focus areas for success in 2022.
Focus on: Simplifying
We need to take it one step at a time. Focus on individual issues and their consequences rather than the overall uncertainty and stress in the economy and within ourselves.
A corollary of focus is “keep it simple stupid.” Simple also relates to the characteristics of your forecasts. Focus on factors that really affect your business so you can understand them and estimate factors that are not as significant. For example, look at aggregate costs and administrative expenses rather than trying to forecast small items like telephone, utility, and insurance costs on a monthly basis.
Simplify, wherever possible, so you do not lose sight of the forest for the trees.
Focus on: Change
While change continues to dominate and disrupt our society, we need to focus on solutions and improvements. The most recent examples are the resurgence of COVID cases, the uncertainty of “build back better,” and inflation, which will have an unknown impact on our economy and political environment.
The post-pandemic changes we’re seeing should be viewed as a critical opportunity to improve sales, profit, and competitive positioning. While there are some technical aspects to this, it is the thinking and integration of the components that can lead to success. Read more on this topic here.
Bottom line: Forecasts are often wrong. Change is inevitable. Be prepared to be flexible.
Focus on: Technology
Despite the fluctuations, there are several tools for executing solutions and gains in 2022. These are based on the strong growth and development we’ve seen, especially in technology, over the last few years.
Technology is accelerating and will have long-term effects on our economy as well as our lifestyles. Tech companies like Facebook, Microsoft, Google, and Amazon are dominating. Tech stocks still represent about 50% of growth in the S&P and tech is the focus of many startup ups.
Focus on: Prioritizing
We have too many choices, but aren’t informed about our options. Cheese, beer, bread, and turkey breast are among the most over-assorted products in our lives, but stores spend little time educating customers on varieties, taste, and price of different products. Making it a priority to educate consumers about their options would improve customer satisfaction.
Additionally, prioritize providing what consumers actually want and how they want to get it. Amazon had about 22-24% of all web traffic this holiday season and, yet, we’re still talking about less successful alternatives like retail and Internet outlets.
Consider Focused versus Comprehensive solutions: There is a big difference between ensuring that you focus on key issues and trying to cover every possible variable. We frequently make decisions and develop strategies based on general goals and assumptions rather than focusing on specifics.
Prioritizing can dramatically improve results. Focus on what you are good at and pay less attention to your weaknesses. Much of analytics in sports is based on getting players to focus on the efforts with the greatest probability of success.
Focus on: Removing bias from data
Comparing forecasts to 2021, 2020, and 2019 requires some special consideration to understand the differences. The biggest problem with forecasting is bias. And, whether we admit it or not, we all have them. Analysts love to discuss mathematical formulas and measurement in affecting bias, but most bias, especially in small businesses, is simply human. Your assumptions, analysis, and data can all unknowingly affect results.
A key element of balancing expectations and probability is to develop, test, measure, and adapt.
Focus on: Risk
We are frequently afraid of risk when dealing with the rapid changes in our society and environment. The Internet, digital technology, mobile phones, Google, and Amazon are examples of technology that is transforming our lives. Relying on old methods and a “we’ve always done it that way” mentality can actually be riskier than adapting and making change.
Focus on: Process
Many planning programs put financial objectives at the end of the process. Developing financial parameters at the beginning and then revising as programs develop has many benefits. It particular, it can help you avoid pursuing poor paths and highlight opportunities.
Additionally, work to create a more open and honest culture, which encourages open communication and collaboration. Empower your staff and management, and trust your employees. This may require reassessing your current workflow and hiring process to ensure you are 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.
As we head into a year new, what are some specific areas you’d like to improve? Focus on those. Try to channel your energy into clear goals rather than on general ideas. And remember that success takes time and consistency. It may not happen overnight, but if you keep putting in the work, you will see progress.
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.
We’ve seen a multitude of change since the start of the Pandemic and it’s continuing to come full speed. Although change is inevitable, we must work to remain equipped to handle the drastic and rapid post-pandemic change we’re experiencing. To do this, there are some areas that deserve our concentrated attention.
Here are some current realities that continue to change and will require us to pay attention, keep up, and take action:
The pandemic is over 18 months old and is not yet over. It will undoubtedly have dramatic long-term effects on our society in ways such as continued stress, virtual work and school from home, vaccines, and new social norms and public regulations. Schools are already planning to cancel snow days and utilize e-Learning when weather is bad. A multitude of businesses are requiring proof of vaccination to enter—this includes restaurants, bars, sporting events, concerts, etc. We need a better understanding of issues and responses to post-pandemic change.
Technology is accelerating and will have long-term effects on our economy as well as our lifestyles. Tech companies like Facebook, Microsoft, Google, and Amazon are dominating. I just got the holiday wish list from my grandkids, which includes a new iPad and phone. Apparel, trips, and personal gifts are lagging while tech leads in sales.
Climate change, slower population growth, and more diversity are significant features of our society. Except for Africa, much of the world is getting older and experiencing slower growth than in previous decades.
Equitable policies and opportunities. The general response to ignore these and other critical issues is unacceptable. Political, social, and economic change are dramatically slow. For example, the time it has taken to adequately address discrimination against minorities and women is embarrassing. Sexual harassment policies and enforcement are decades behind where they should be. 18% of the population is Hispanic and they are virtually ignored.
Stress levels are heightened as evidenced by increased crime, suicides, shootings, drinking, and divorce.
Wealth inequality around the world is increasing and no one is doing anything to stop it. The number of billionaires increased from 1,000 to over 2,000 between 2010 and 2020. Their wealth grew from $3.7 trillion to over $8 trillion. The top 10% represent 80% of the wealth in our country making wealth and income very different things.
The most perplexing part about all of this is that there are solutions to most, if not all, of these problems. We simply refuse to adapt or we adapt too slowly. How have we done a good job in reducing things like car fatalities, drunk driving, diseases like Polio, etc. when we seem completely unable to reduce bullying, illiteracy, poverty, discrimination, gun violence, and climate change?
Not only do we need to possess the willingness to embrace change, we also need to be equipped with the tools that will enable us to react to change and create an action plan to keep up. Here are some suggestions to improve the speed and effectiveness of change and adaptation:
Consider structural changes. For example, there are numerous articles and books on how elite universities recruit and educate the top 1% with little progress in growing or expanding diversity. They also have billions of dollars in endowment and have been growing their endowment funds at rates of 20-40% per year recently and, yet, they are doing nothing to enact change.
In contrast, 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, to help transform their entire organization.
Focus on reducing stress. The pandemic has caused significant stress and unhappiness and we need to take action to reverse some of that damage. My neighborhood has made an effort to increase socialization, warmth, and fun. They sponsor holiday parties, social event, networking meet ups, etc.
In general, friendliness, courtesy, and decency could significantly improve things. Greeting someone hello, saying please/thank you, giving hugs, checking in on neighbors, and offering to lend a hand really goes a long way.
Prioritize the 80-20 rule. In the modern business realm, it has been proven time and again that 80% of business revenues are generated by just 20% of our customers. Yet, we all continue to waste time, money, and inventory dollars on customers that bring in a lower return. This tendency frequently adds unnecessary confusion and complexity.
By focusing on the products that you know your customers want, you’re making them feel much more confident—especially when you’re selling online. Instead of finding new ways to market products that simply aren’t selling, you may be better off pivoting and concentrating solely on what is selling. If you give people what they’re searching for, they’ll buy. If you don’t, they won’t. It’s that simple.
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.
Assess your digital branding and Internet presence. If you research anything about business today, it’s obvious that Apple, Google, and Amazon are three of the most important sales and communication vehicles. Nearly everyone uses their phone and/or laptop to research as well as buy products and services. I argue that digital activities and marketing need a special place in organizations and should be a major part of programs.
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. Build an email list and send informative mailings on a regular basis. Keep in touch with potential and existing customers.
Creating and maintaining a positive company culture is a critical component in achieving excellence and establishing a great brand. A great strategy without a supportive culture will undoubtedly fail—I’ve seen it happen too many times.
Open systems are also becoming a critical aspect of great cultures as they often reject bureaucracy, authority, and hierarchy. Open systems encourage participation, diversity, new rules, and to some extent, chaos.
The post-pandemic change we’re seeing should be viewed as a critical opportunity to improve sales, profit, and competitive positioning. While there are some technical aspects to this, it is the thinking and integration of the components that can lead to success. This should not, however, become an excuse for ignoring basic good practices. Too many small business owners are getting burned by executing untested marketing strategies—and while it can be easy to get enamored with the latest technology or fad, don’t forget the importance of factors like analysis, expertise, and experience.
The current state of the world 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.
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
Success is affected by a variety of factors. Sure, people get lucky and win the lottery while other people spend years focusing on excellence and perfecting their talents without ever catching a break… But, when it comes down to it, most of us usually need a mixture of excellence and luck to succeed.
Not surprisingly, circumstances also affect success. Last year, the pandemic left millions of workers unemployed whereas, this year, many employers can’t find workers. Was the loss of jobs simply “bad luck?” Is the inability to find workers due to a lack of excellence? It’s difficult to say when circumstances are not black and white if it was due to excellence or luck.
In contrast, many efforts like sports and skilled trades require a certain level of excellence to succeed. The application process for elite colleges provides a good example of this. Hundreds of thousands of students with excellent grades, test scores, and experiences apply to the top universities. Many of these universities admit only 3-5% of the applicants. Thus, like many efforts, there is a level of excellence required to participate, but luck can play a part in the final selection process.
So, how do we change our efforts to develop better chances of success?
When it comes to luck, there are lots of ways to improve your chances:
TRY. As Wayne Gretzky said, “Only one thing is ever guaranteed, that is that you will definitely not achieve the goal if you don’t take the shot.” So, buying more lottery tickets or applying to more schools can improve your chances!
Understand your environment. This can include the economy, culture, demographics, etc. You clearly have better chances of succeeding in today’s environment than during the pandemic. Women and minorities are also gaining more employment opportunities than in the past.
Look at more alternatives. The discussion should not be retail versus E-commerce, but how to maximize both. Outsourcing and expert resources should be regular considerations. Automation and the development of inexpensive accounting, inventory, and financial tools can create significant improvements.
Prioritize. This is a critical tool to improve what we perceive as luck. Using the 80-20 rule, eliminating ineffective programs, and focusing on winning results can all benefit effectiveness. For example, I am always amazed at the time and emotion we spend caring about sports teams that have no chance of winning.
In general, there is more potential in improving excellence and effectiveness rather than focusing on luck. Some ways to boost excellence:
Find what you do best. Walt Disney once said, “Do what you do so well that they will want to see it again and bring their friends.” This is one of the best mantras for excellence. Do I (and does our team) have a sense of pride and passion for our efforts?
Spend more time reviewing the processes of change versus excellence. The debate of pursuing improved excellence versus change is affected by a number of issues. We need to understand how problems affected by goals versus tactics can require different solutions. Here are some examples where organizations simply need to understand their new environment and execute better:
Demographics: The world is simply getting older and more ethnically diverse. For example, minority births represent more than 50% of current U.S. births.
Digital transformation: Businesses need to change rather than just execute. Opportunities like the cloud, Google, CRM systems, digital phones, apps, etc. are simply changing the processes, costs, and marketing of business. Amazon and other online retailers are revolutionizing the need for traditional brick and mortar stores. Similarly, sharing sites like Uber and Airbnb are revolutionizing their industries.
Adapt and fully implement change. Businesses are subject to more radical change and need to build mechanisms into their processes. While we will face more uncertainty and instability, we need to focus on changing and simplifying processes to reduce the risks. Strategies like pivoting and develop/test/measure/adapt need to be built into our organizations.
Focus on your customers. Are you satisfying their product, service, and value needs? For example, many companies have improved results by setting a goal of exceeding rather than just meeting customer needs.
Develop a stronger pricing strategy. There are numerous tools to improve results without deteriorating your brand. Packaging efforts like bundling and unbundling, quantities, timing, quality, the Internet, and service are all elements that should be part of pricing strategies. For example, Costco and Four Seasons Hotels follow quite different, but successful value strategies.
Set goals and measure results. Focus on judgement measures as well as quantitative. We must have greater awareness of what, how, and why we are measuring. In particular, it is sometimes easier to measure activity (visits, clicks, customers) than results (sales, conversions, and profits).
Pay attention to how bias and prejudice affect decisions. Last year, everyone criticized the NBA for not hiring black coaches. This year, most of the hiring changes were black. The best part was that race did not seem to be a part of the process.
Excellence and luck are both important for success. They need to be understood and managed rather than viewed as excuses. Understanding the risk, the rewards, and the role experience and skill play in our decisions can improve outcomes. Don’t allow fear, uncertainty, or tradition to lower your potential and prevent you from trying something new.
Everyone’s situation is different—you may start with a little luck and need to focus on excellence or you may be at the top of your game, but just can’t catch a break. Wherever you find yourself, take a step back and look at what you’re working with—what do you need more of? Excellence or Luck? And what will you do to obtain it?
Contact us for a FREE evaluation and get an alternative perspective on your business. We’d love to help you identify ways to adapt to current trends. No one has time for BS—so we’ll cut straight to the point and answer any questions you have. Reach us at:
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business and President & CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. For more information, please visit our website: https://www.startupconnection.net/
When it comes to decision-making, the buzzwords are analytics, science, and facts. These are definitely important aspects to consider, but we must be careful not to ignore the influential and (often) unconscious factors: guilt and denial.
Examples of how guilt and denial influence decision-making:
Sexual harassment scandals are riddled with guilt and denial. The result is delayed progress and little to no corrective action. For example, a few years ago, several leaders introduced an effort that would require independent judgement of sexual harassment cases in the military. However, the military argued that they would manage it themselves, but literally nothing happened. The new leadership team has finally agreed that independent management is required, but it took years for any action to actually be taken.
Many financial advisors recommend a 60%-40% division between stocks and bonds for personal investing. First, they frequently try you use a simple solution rather than customize for individual needs. Second, it has been proven over 10-20 years that stocks have outperformed bonds by at least 10-20%, which has cost investors. Many advisers are in denial and refuse to acknowledge their errors while continuing to advise against changes to portfolios.
The pandemic produced great fear and uncertainty. However, there is clear evidence that economic improvement and the vaccine can rapidly improve things. Despite this, many people seem to be in denial (about the effectiveness of the vaccine and/or the possibility of economic recovery). The result is a deceleration in vaccinations, a continuation of people resisting proper mask use, and a standstill in returning to normal life.
Analysis, statistics, and data can greatly improve our understanding of guilt and denial. However, we also need to acknowledge that the parameters, method of analysis, misinformation, sources, and bias can significantly alter results and conclusions.
Some things to consider:
One of the biggest changes in traditional business is the lack of understanding regarding goals and measurement. We can analyze the strengths of our team and focus on accounting tools like sales, gross profit, EBITA, inventory turn, R.O.I., present value, etc. However, e-commerce and Internet business evaluations are based more on growth, execution, and retention. Consequently, we sometimes deny that clicks, conversions, retentions, and interaction are replacing more traditional measures.
Bias itself is a form of denial and it is one of the greatest complications when it comes to accuracy in the scientific analysis of decisions. This includes statistical problems like sampling, measurement, and development of information.
I also believe that social bias can be more impactful than statistical bias. This includes our preconceived perceptions and assumptions. I’m always amazed that many programmed employee selection tools outperform interviews—especially for jobs requiring specific skills. (One rather surprising bit of evidence that supports this finding is that 3% of the male population is over 6 feet 2 inches tall. However, 33% of CEOS are over 6 feet 2 inches tall.) In particular, tests remove factors like unconscious age, sex, and racial discrimination. Cultural and environmental elements also affect bias: Dress, demographics, weather, location, and culture all affect perceptions in the decision-making process.
Risk also plays a critical part in creating guilt and denial. Frankly, I believe we all need more risk, but there are plenty of people who will deny this out of fear. We tend to think of it as a taboo concept and it’s really not—once you understand it. In order to benefit from risk, you need to define what risk is to you. Risk needs to be managed rather than feared. Understanding the risk, the rewards, and the importance of each can help you improve outcomes. Don’t allow fear, uncertainty, guilt, or tradition to prevent you from trying something new. Only those who dare to risk going too far can find out how far one can go.
A more open and honest culture that encourages communication and collaboration can provide a greater understanding of guilt and denial. Empower your staff and management and trust your employees. This requires hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times. Encouraging and supporting open dialogues sends the message that issues will be taken seriously and addressed appropriately.
As we’ve seen, analysis, statistics, and data can greatly improve decision-making. However, we must also acknowledge that the parameters, method of analysis, misinformation, sources, bias, denial, and guilt can greatly alter perceptions, results, and conclusions.
To avoid these traps, try incorporating a “devil’s advocate” approach in the decision process. Just take a moment to look at things from a different perspective—it might help you see the bigger picture more clearly. Maybe some self-reflection will debunk a previously believed theory or, perhaps, it will strengthen your convictions. Either way, you (and your decisions) will be better for it.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. This combination has been the key to client success. We welcome comments, suggestions, and questions. You can write him at: bshlensky@startupconnection.net or call at 914-632-6977
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