93% of businesses abandon their original plan



I wrote in 2009 that: I DON’T BELIEVE IN BUSINESS PLANNING. That got quite a few comments, some in agreement and some not.

I was told by one commentator: If you plan and never do then fail is assured.

And another said: To succeed long term though, (…) require planning, unless the plan is to react in a status-quo knee-jerk manner.

To prove my point, I followed that post up by taking a dig at the inability of all the ‘business planners’ to see the GFC coming.

Well, it seems as if a Harvard Professor agrees.

Amar Bhidé researched and wrote The Origin and Evolution of New Businesses (Oxford University Press,) and found that 93 percent of all successful companies had to abandon their original business plan — because the original plan proved not to be viable

Roy Williams (Wizard of Ads) writes on Bide’s work and concludes:

Successful companies have an ability to improvise. Unsuccessful companies blindly "stick to the plan.

The principal difference between hope and a plan is presumption about the future.

The intended plan is deliberate.
The improvised plan is emergent.

Eric Barker describes the difference between ‘deliberate’ and ‘emergent’ as follows: 

"Deliberate is what’s in the business plan, the PowerPoint deck, the list of goals. And that’s what ends up changing 93% of the time. Emergent is what you find along the way. It’s when your baby nephew ignores the gift you bought him… but LOVES the shiny wrapping paper. The heart medication research… that ends up becoming Viagra."

I called the ‘emergent plan’ the business model – that is the FRAMEWORK that describes how you intend to produce money in your business. I have written many times that our ability to change is the core capability we must acquire.

And now the professor agrees. Read that opening line again: 93% of successful businesses abandon the original plan.

Despite the poor track record and low probability of success of a business plan, WHY do organisations, banks, consultants and the like STILL insist on business planning as some sort of panacea?

I think the world is catching on and moving on. In the current internet start-up culture we even have a word for it – you ‘PIVOT’ the business.

  • GROUPON started as ThePoint.com, a site launched in November 2007 that lets you start a campaign asking people to give money or do something as a group 
  • INSTAGRAM founders started a location-based service called Burbn, most comparable to Foursquare.
  • FLCKR started a ‘Game Neverending’, a massively multiplayer online roleplaying game
  • And FACEBOOK once was Facemash, a site comparable to HotOrNot.com, putting two pictures of people next to each other and asking the user to identify which one was 'hotter.'

There is a very long list, Google the topic if you are interested.

The first flaw of every plan is that it fails to appreciate that the future is not more of the past. And even if the planners can see that future clearly, it suffers from the second flaw of all business plans; that it reflects the prejudices, the fears and the internal politics of the people writing the plan.

The solution is to develop and/or understand your business model very clearly. Then construct a business system that will help you become antifragile (not merely resilient) so that you constantly adapt (and pivot) towards success.

What you need to know about pricing in retail (geeks only)

I don’t often do this, but this is the entire executive summary of a serious research paper on Pricing. The fact that I am doing this now, hopefully suggests that it is important.

Executive Summary by Ametoglu et al, 201o) on a paper titled:

Pricing Practices: Their Effects On Consumer Behaviour and Welfare.”

(Clicking on the link will download the PDF of the paper.)

The pricing practices discussed in this paper are highly prevalent in today’s society. While classical economic theory suggests that people will act rationally, using cost benefit analysis to make choices, scientific research shows that this is not the case. Humans do not have the capacity to recognise and evaluate all the available information in today’s complex environment, nor the time or motivation. Instead, people use mental short-cuts, or heuristics, to deal with this complexity.

Whilst heuristics can usefully guide our behaviour and allow humans to function in the world, they are not perfect calculations and are subject to occasional and sometimes costly mistakes. Importantly, heuristics leave people exposed to external influences, including pricing cues. The literature on pricing practices suggests that pricing cues provided by retailers can affect consumer behaviour and value perceptions.

Compared to presenting a total price partitioning prices into a base price and surcharge can significantly increase consumers’ positive evaluations and purchase intentions, and can lower search intentions. This is because consumers may fail to fully adjust from the initial (lower) price of the base good and therefore underestimate the total price of the product.

Evidence suggests that people tend to stick with the default option, even when this option has major, long-term consequences.

There is a large body of evidence to show that the presence of an advertised reference price increases consumers’ valuations of a deal and purchase intentions, and can lower their search intentions. Reference prices can have a significant impact even when these are disproportionally large and when consumers are sceptical of their truthfulness. The effects of reference prices are stronger when consumers are not readily able to compare them to an industry price, such as with unbranded, or retailers ‘own brand’ goods, and with less frequently purchased and more expensive items.

The available evidence on the effect of offering a “free” product in a bundle (e.g. 'buy one get one free') is mixed. While some studies show that this practice can increase consumer valuations and demand, others show that a freebie designation does not increase consumers’ perceptions or willingness to pay for the bundle.

One large scale study suggests that the bait-and-switch practice may have a substantial (negative) impact on consumers. Moreover, consumers are drawn in to promotions and where the item is out of stock, they predominantly switch to another item within the same store, due to lowered search intentions.

Compared to a single unit price promotion, a multiple unit price promotion (volume offer) increases the quantity consumers buy, even when the discount does not differ and consumers do not receive an incremental saving. This effect can be substantial. Importantly, a bundle discount can increase quantity decisions relative to per unit discounts even when consumers may not purchase enough of the products to qualify for the bundled discount.

The effects of bundles (pure or mixed) are partially explained by confusion in that consumers generally believe that bundles involve discounts (i.e. infer savings) even when they do not and no such information is presented. Bundling can also influence choices because it decreases cognitive effort.

Evidence specifically looking at the effect of time-limited advertising is inconclusive. However, it seems that under conditions in which time-limited offers do trigger feelings of scarcity, consumers are more likely to overestimate the product quality, or the value of the deal, lower their intentions to search, and have higher intentions to buy. Shorter time limits may augment this effect (though very short time limits may have an opposite effect).

Research suggests that pricing practices may be less effective in conditions where consumers are readily able to make memory based price comparisons, or have quick and easy access to price information, such as in online environments. On the other hand, pricing cues put forward by sellers both online and offline may still influence consumer behaviour, indicating that learning and/or easy access to information does not eliminate the impact of these practices.

If you don't like people

If you do not like people then RETAIL is not for you.

When we start our retail presentations or training sessions then we most of the time start with these words: “If you do not like people then retail is not for you”.

Personally If find people fascinating: I always wonder what happened to them just before they came into the shopping centre or the grocery shop, or why they buy the most outrageous ice-cream concoction in the ice-cream shop.   I always wonder why they are chomping their food down, why are they in a rush, why are they rude to staff members, why are they flirting with each other or why they walk so slowly, and why they do not see the big advertising board right in front of them?

I was shopping this week and observed an elderly couple, walking around painstaking slowly. She took the lead and he held onto the trolley for dear life with trembling hands. I couldn’t help but wonder about their story. Not long after, I found myself in the line behind the elderly couple at the checkout.
The staff member greeted then with the robotic “how are you today” as she turned her body away from them, following the correct procedure - just on auto pilot.

Then the lady answered: “Not well today, but I am sure you do not really want to know?” The staff member did not answer her, it was an awkward moment for all the customers in line waiting to pay. The elderly woman again repeated by saying again: “You most probably don’t want to know”.

All customers in the line were staring the staff member down, challenging her to say something, anything.  She just ignored the woman, settled in behind the cash register and started to ring up her groceries.

People do not come to your store to merely buy stuff. They are human beings coming in with a lot of baggage, with expectations, with sadness and with happiness and we have a responsibility to treat people as humans before we serve them as customers. You may agree with or believe this is just how the cookie crumbles.

Everyday we have moments where we can make a difference to someone out there. Serving them, just answering them, looking them in the eye, respecting them and laughing with them. And that is the most valuable customer service moment you have in your store.

And if you think we are exaggerating, let me leave you with this thought: Tom Peters, one of the great living Management Thinkers, recently published his BIG SIX – motivational    quotations that meant the most to him. Read the list carefully and you will see the central theme is one of humility, sacrifice and service. It is not old-fashioned – it is about LEADERSHIP.

  • “We do no great things, only small things with great love.”—Mother Teresa
  • “I long to accomplish a great and noble task, but it is my chief duty to accomplish humble tasks as though they were great and noble.”—Helen Keller
  • “How wonderful it is that nobody need wait a single moment before starting to improve the world.”—Anne Frank
  • “Character may be manifested in the great moments, but it is made in the small ones.”—Churchill
  • “To affect the quality of the day, that is the highest of arts.”—Henry David Thoreau
  • “Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances.”—Victor Frankl

Working in Retail may seem trivial and mundane, and in many ways it is. But no matter how trivial it seems, the opportunity to do good and to be great hides in the minutiae of daily interactions between humans for us to discover our soul.

[Written by Moonyeen Price]

Extracted from our (approximately) fortnightly newsletter.  THIS plus heaps of links and other insights.

How good are you at your Underground Job?


Image: gradrecruit.com.au

Image: gradrecruit.com.au

Your jobs does not comprise of one job, but three distinct ones. Your success or failure at your job is determined by the extent to which you understand the difference and the skill you have to do ONE of those jobs better than anyone else.


(This is the job we get paid to do)

This is what they tell you in the interview. This is the job you get HIRED for.

We arrive at work. We answer emails. Attend meetings. Sell stuff. Write reports. We draw, we make, we carry, and we inspect – all those TASKS that we will ostensibly be evaluated on when it comes to bonus time.

But if you listen carefully during your performance appraisal, you will find that rarely will your skills to do those tasks be questioned. (Occasionally, particularly in jobs that have clear, unequivocal outcomes – like sales jobs, or programming jobs – or relatively menial tasks - like manual labour - will there be some discussion around that, but that is the exception rather than the rule.)

Your skills at these jobs are rarely questioned or questionable as you most likely have the basic skills set in order to be offered the job.


(This is the job we don’t get paid to do)

These tasks are not in your job-description, but everyone does some of these at some point. The Job # 2 is the shadow job.

All those tasks that you have to do as part of Job #1, have a shadow job:

Helping a colleague solve a problem. Organising the Christmas party. Cleaning up in the kitchen. Baby-sitting a new employee.

It is about arriving early and staying late. Going the extra mile.

We all willing contribute on those extra jobs in category #2. We think it will make us stand out. We hope others will notice that we are team players. Organisations rely on this large pool of unpaid labour – corporate volunteerism that is driven people’s insecurities and needs to fit in. I would hazard a guess that if people didn’t participate in the Job #2s, few organisations would turn a profit. (Incidentally, labour unions thrive on isolating those extra bits and attempt to extract payment for it which is why corporations don’t like unions.


(This is the job that gets you paid.)

This is the most important job of all. If you don’t succeed at this job, you won’t be employed for very long and your success will be limited. This is the job you get FIRED for.

There is the good stuff:

Being nice. Being liked. Smiling when you don’t want to. Dressing appropriately. Keeping up appearance. Swallowing a sarcastic comment.

And there is the bad stuff:

Undermining someone. A gentle backstab here, an assassin’s smile there. Adding a bit to the gossip and tapping into the grapevine.

We all SAY we love doing job #1. We ALL say that Job #1 is what really matters. We sign up for Job #1 and we think that is the job that really matters. But it doesn’t.

Career advisors try to match your skills and interests with the tasks of Job #1. This is a futile exercise, because ultimately, every job becomes a sales job as you must learn to sell yourself.

Go on leave for a month, and somehow things still get done. It just shifts around as Job #2 for others to take care of. NO matter how indispensable we think we are, the jobs always get done.


You design your resume to show of your skills and experience in Job #1 – The Ostensible Job.

You interview to show off your ability and willingness to do Job #2 – The Shadow Job.

You keep your job by delivering sufficiently on Jobs #1 and #2.

You succeed or fail by your ability to do the Underground Jobs - that is Job # 3, and the hardest of all.

There you go, the secret is out.

A list of 15 simple things to improve retail customer service

A few weeks ago I passed on a few tips on where to stand when selling to a customer.

This week I am passing on another 15 practical tips – many of these grounded in neuroscience and other based on common sense and personal experience. But they ALL WORK and they are free and easy to implement.

Image: gagdonkey.com
  1. Make eye contact when you greet the customer.
  2. Nod affirmatively when the customer explains what they want
  3. Empty the dustbins. Close drawers. Close doors that lead to back of hose from customer view.
  4. Hand the bag to the customer in such a way that THEY get to grab the handle directly.
  5. Ask if they want the receipt in the bag. (Don’t tell.)
  6. Offer to carry heavy items to a car. (If you sell them, you must be staffed/ equipped to deal with it.)
  7. Open on time and don’t close early.
  8. Set the music volume to the level customers will enjoy. (Not staff.)
  9. When customers buy something – affirm it by telling them it was good/smart choice.
  10. Clean windows, floor and shelves. In fact clean the whole store while you are at it.
  11. Come out from the behind the counter where ever possible. (If the store is designed in such a way.)
  12. Pay specific attention to how the customer wears/uses whatever it is that you are selling.
  13. Say something complimentary about the customer – bonus points for referencing #12 above.
  14. Be a great advertisement for your own product. Wear it. Show it. Use it.
  15. Make sure the spotlights in your store actually illuminate the merchandise, not the floor or walls. (The way it was designed to do.)

It is not like it is ME telling YOU how to run your business here. What I am doing is I am passing things on from the CUSTOMER’S perspective in the hope that you will see it that way and make the changes.

You see, you may want to go multi-channel and all that fancy stuff, but if the foundations of your business is not build on a great service delivery platform, technology will amplify your mistakes. And I really mean AMPLIFY.

(If you don’t believe me, just google ‘PR disasters, brands’ or something like that and see what technology will do tot the ill-prepared.)

Like the previous post, it will be fun to collect all YOUR little tips to improve customer service. Maybe we can crowdsource a customer service manual in the comments section below?

Have fun


GANADOR: Skills. Strategies. Solutions.


The truth about brainstorming (Friday Funny)

There is a word that may cause offense. By the standards that apply to workplace conversations today, I hesitate to call it NSFW, but apologise if the word offends. What I would like to commend to you is the sentiment and the message. Have fun.



Ganador Blog is about #thinkdifferent. We cover topic of business- and personal development aimed at entrepreneurial marketers. (c)Applies. Posts authored by Dr Dennis Price.

8 scientific insights about Life that are well worth learning

Here is a summary of eight insight that are - AT FIRST - surprising, but once you start thinking about it, it becomes obvious why it is so.

  1. Optimistic people are much less likely to die of heart attacks than pessimists, controlling for all known physical risk factors (Giltay et al., 2004).
  2. Women who display genuine (Duchenne) smiles to the photographer at age eighteen go on to have fewer divorces and more marital satisfaction than those who display fake smiles (Keltner et al., 1999).
  3. Positive emotion reduces at least some racial biases. For example, although people generally are better at recognising faces of their own race than faces of other races, putting people in a joyful mood reduces this discrepancy by improving memory for faces of people from other races (Johnson & Fredrickson, 2005).
  4. Externalities (e.g., weather, money, health, marriage, religion) added together account for no more than 15% of the variance in life satisfaction (Diener et al.,1999)
  5. Economically flourishing corporate teams have a ratio of at least 2.9:1 of positive statements to negative statements in business meetings, whereas stagnating teamshave a much lower ratio; flourishing marriages, however, require a ratio of at least 5:1 (Gottman & Levenson, 1999; Fredrickson & Losada, 2005).
  6. Self-discipline is twice as good a predictor of high school grades as IQ (Duckworth & Seligman, 2005).
  7. Happy teenagers go on to earn very substantially more income 15 years later than less happy teenagers, equating for income, grades and other obvious factors (Diener et al., 2002).
  8. How people celebrate good events that happen to their spouse is a better predictor of future love and commitment than how they respond to bad events (Gable et al.,2004).

The nature of the internet is such that we are exposed thousands of potential life-changing insights on any given day. The eight listed here all have that potential, but chances are that all that they get is a cursory glance.

More's a pity...

Turns out there is a recipe for happiness after all

It just isn’t what you may think, or think you want.

ABD AL-RAHMAN III was an emir and caliph of Córdoba in 10th-century Spain. He was an absolute ruler who lived in complete luxury. Here’s how he assessed his life:

“I have now reigned above 50 years in victory or peace; beloved by my subjects, dreaded by my enemies, and respected by my allies. Riches and honors, power and pleasure, have waited on my call, nor does any earthly blessing appear to have been wanting to my felicity. I have diligently numbered the days of pure and genuine happiness which have fallen to my lot: They amount to 14.”

WOW! That is the only appropriate response, right? In 50 years of unequalled power and wealth and good health, he achieved two weeks of happiness.

When you really think about, you will realise that our evolutionary drivers (and maybe even our sinful nature) means we are hardwired to seek four things. The first three of these are:

  • Fame
  • Wealth
  • Sexual variety

These things make us more likely to pass on our DNA. Had our cave-man ancestors not acquired some version of these things (a fine reputation for being a great rock sharpener; multiple animal skins), they might not have found enough mating partners to create your lineage.

But, cruelly, these things help us procreate more effectively to increase the likelihood of survival, but do not necessarily produce happiness. The article I found on this topic simply suggests that Mother Nature is cruel because she does not care/ require us to be happy.

I actually think that is the fourth element of this evolutionary quartet. IF fame, wealth and sexual variety made us content and happy, it would actually be counter-productive as it would incentivise us to rest on our laurels at some point.

By causing perpetual UN-happiness instead, it ensures we continue to pursue more and more of those things that ensure our survival, and entrenches our unhappiness.

I have redacted this wisdom from an article I found online. Read the whole article here – it is probably the best 10 minutes you will spend this year – if you actually turn the advice into action.

The recipe for success I promised in the title is this: LOVE PEOPLE. USE THINGS. (And not: LOVE THINGS. USE PEOPLE.)

(This post was the introduction to our Fortnightly #thinkdifferent newsletter. You can have a look at our archives – and subscribe - HERE to get more of it if you like.)

12 trends and ONE thing you can do about it

The following changes will materially affect your retail future:

1.      Manufacturers in retail

2.      Wearable technology

3.      Mobile phone usage

4.      Ageing workforce, ageing market

5.      Ethnic diversification

6.      Multi-channel delivery and engagement

7.      Social media communications strategies

8.      Diminishing career loyalty

9.      Price convergence online/offline

10.   Drone technology in the supply chain

11.   3D Printing

12.   Peer2Peer Transactions


Of course there are more – but you get the idea: change is relentless, overwhelming and unpredictable. You have two options to deal with this future:

A.     You can develop strategies for each one, assign resources and monitor progress in order to respond. You anticipate, you react. You constantly fight. You win some and you lose some – but you can never stop worrying.

B.     Or can you build your organisational culture to be an adaptive system. A system that is self-governing that thrives on complexity and is anti-fragile.

Which one is the hardest? Which is the most effective?

Most importantly, what do you choose?

How do you like living under THIS regime?

Pop-quiz: Can you name the Regime I describe below?

  • There is complete control over communications network where every person using it can be identified within minutes down to the exact location.
  • Every piece of communication is archived and is accessible in perpetuity, and the State has access to it at any time. (Anything you say can and will be used against you.)
  • There is no privacy.
  • There is a cadre of hundreds of thousands of people who freely volunteer their time and resources to assist the regime to monitor all communications made by citizens.
  • Anyone who is deemed to make an inappropriate comment or communication is immediately identified; their transgression publicised, and is mocked and ridiculed by all other citizens relentlessly.
  • Perceived transgressors are then marked for life and are monitored by other citizens, the press or anyone who stands to gain from any further transgression.
  • The standard of what is acceptable is very narrow, and must conform to the view of the masses in every respect. These standards are not published anywhere and are subject to change at any time at the whim of the opinion leaders. Additionally, these standards govern a wide range of issues, including matters of opinion, science, religion, politics, sport entertainment – in fact it covers every sphere of life.

Can you guess the regime?

This is how Wikipedia describes the role of STASI in the Nazi Regime:

One of its main tasks was spying on the population, mainly through a vast network of citizens turned informants, and fighting any opposition by overt and covert measures including hidden psychological destruction of dissidents.

Or were you thinking maybe Cuba or North Korea? Russia perhaps - despite the demise of the Cold War and Communism?

Sadly, it is Australia.

Actually this regime is everywhere. It exists in your pocket or wherever you keep your mobile phone. It exists pretty much everywhere you care to go and every one of us now lacks the freedom to speak our minds. It's the new internet.

I am not suggesting the impact is anything like what happened in Germany and I am not trying to suggest the situation then and situation now are the same, except for the process by which one group dominates the conversation. I am using an extreme example to illustrate that suppression of free speech is a bad thing; even if you happen to agree with the argument, the other side should always have the right to argue their case peacefully.

The left-leaning pseudo-intellectuals have taken over public discourse and they shall brook no interference. On social issues; unless you are pro-climate change, pro-gay marriage, pro-abortion, anti-racism and anti-religion; you don’t have a voice the vigilante trolls will allow.

  • Speak your mind at a conference and you will be howled down.
  • Publish a tweet and you are tolled into submission.
  • Publish a disagreeable blog and you become a hashtag.
  • Published a book and the critics are scathing.

Of course, they often hide behind the anonymity of an avatar.

The latest example of this is that of Gavin McInnes being asked to take leave of absence for publishing this article. (WARNING: Don’t read if you are easily offended.)

Naturally there are contrarian views around; human nature will see to it that there always are. What has changed now is that social media has equipped individuals with a megaphone that enables them to have a disproportionate influence on any debate.

The notion of ‘Social Proof’ has now entered the everyday lexicon so most readers will be acquainted with the idea. It is indeed a powerful motivator of human behaviour and is the force behind ‘crowd mentality’. And now we are the rule of this mindless mob.

Too often the loudest voices are least qualified to articulate an issue and their responses are characterised by a pseudo-intellectual self-righteousness that boggles the mind more than a Vodka smoothie.

And it is not only individuals who suffer:

There are literally too many to mention: Google “PR disaster on twitter” and you get almost 12 million results and “celebrity disaster on twitter” gets you 29 million plus.

Tell me what we have today is not a close sibling of that STASI regime of the NAZI era?

Soon, Christians and Conservatives will have to consider whether they ‘come out’ to society. Doing so will jeopardise their employment prospects and social standing. If you don’t believe Climate Change is what the climate lobby makes it out to be and if you dare question the science or methodology, then you do so at your own risk.

If your response is ‘serves them right’ or ‘now they will know what it feels like’ you exhibit exactly the infantile powers of reasoning that determines the level of the debate.

In the world we live in now, these are the things that are now normalised:

  • Using illicit drugs is now socially acceptable.
  • Calling someone a c*#t is OK too.
  • Mocking all forms of authority (from the PM to the local police officer) is a badge of honour.

As it happens, I share some of the views of the rabid rabble, even as I seek to distance myself from their general conduct. I have written about this before in 2012, and it has only gotten worse.

In her biography on Voltaire, Evelyn Beatrice Hall wrote:

I disapprove of what you say, but I will defend to the death your right to say it.

This is often misattributed to Voltaire himself as an illustration of Voltaire's beliefs, but no matter who said it, Hall's quotation is often, rightly, cited to describe the principle of freedom of speech, and I personally could not agree more.

In Australia the Liberal Government recently tried to amend the definition of Free Speech by repealing a few words of Section 18C - that something that is ‘offensive’ should not naturally be classified as hate speech. The UK edition of The Spectator summarised it smartly:

If free speech is only for polite persons of mild temperament within government-policed parameters, it isn’t free at all.

(I found this piece when I was searching for the Voltaire quotation above, and it is along the same theme I am writing here – only written by a professional – Mark Steyn - who articulates some of the issues more eloquently. Well worth reading, and don’t miss the comments; all 1300 of them.)

I find it offensive that you may call someone a c&*t, but I respect the right you have to say so. Everyone is now gluten intolerant and pro-abortion. How the world turns on the whims.

I suppose that is what happens in the absence of an absolute moral authority when everything is relative; society begins to unravel at the edges as the moral tide ebbs and flows with the whims of the easily led masses.

C’est la vie.

The answers to the Retail IQ quiz

Here are the answers to THIS QUIZ.



3.      OPEN TO BUY




7.      ASSETS


9.      # of TRANSACTIONS


11.   The cycle of 4 week, 5 week, 4 week months of a typical retail calendar



14.    (GP$/Sales$) x (GP$/Ave Inventory at Cost)

15.   (Current Assets/ Current Liabilities)

16.   1.5 (Nothing happens when it is less, it is just unhealthy)

17.   1.2 – 2-2

18.   12% - 18% (for some it could be double that, but 15% is somewhat of a sweet spot)

19.   FIRST



22.   DEPARTMENT STORE (although some supermarkets are not selling e.g. clothes)

23.   Product, Price, Place, Promotion, Presentation, People

24.   Trade Area Analysis (of a retail precinct)

25.   OPPOSITE (each other)


Be ruthless and honest with your scoring and multiply by 4 to get your percentage. Let me know how you went…

Do you know your Retail IQ?

I thought it may be fun to do a quiz. It does not really test IQ, and it is not a predictor of success. It simply shows how familiar you are with some of the mechanics and jargon of retailing.

  1. Stockturn is defined by dividing Net Sales by _____
  2. Buying Margin is the equivalent term for ______
  3. Complete the following Acronyms: OTB
  4. Complete the following Acronyms: UPC
  5. Complete the following Acronyms: FMCG
  6. Complete the following Acronyms: DPP
  7. Would you categorise Lay Byes as Assets or Liabilities?
  8. Does Pharmacy, Newsagency or DDS typically have the lowest GP%?
  9. The Average Sale is calculated by dividing Sales by ________
  10. What is the single biggest expense for most retailers (not service/hospitality?)
  11. What does the 4-5-4 calendar refer to?
  12. Which line item would be the single biggest impact between the first margin and final margin?
  13. What is the formula (or definition) of ‘Trading Density’.
  14. What is the formula for GMROI?
  15. What is the formula for ‘Current Ratio’?
  16. What is the bottom end of a healthy Current Ratio?
  17. What is the stockturn for a typical, independent jewellery store?
  18. What is the average/typical Occupancy Cost for a specialty stores in regional shopping centres? (you have to know what Occupancy Cost is…)
  19. On a multi-level store, which of the following floors is most productive; first floor (one above Ground) or basement (one below Ground)?
  20. What is that called (in VM) when you group/sort merchandise together by colour? (You have to know what VM is…)
  21. In VM, merchandise is often arranged in a pyramid or other shapes with lines that lead the eye to a specific point in the display. What is this ‘point’ called?
  22. Will an ensemble display be more likely found in a Department Store or a Supermarket?
  23. List the six elements of the Retail Mix?
  24. What does the Huff Model measure?
  25. On a ‘Colour Wheel’, where would you find the (perfect) complementary colour for any colour?


After completing the quiz you can get the answers IN THE NEXT POST.  Do come back and let us know how you went…

Have fun!



GANADOR: Skills. Strategies. Solutions.


Why you can’t have what you want (in life and in business)

You can’t have what you want because what you want can’t be had.

And the reason why you don’t understand what can’t be had (and what can) is because you don’t understand systems thinking.

Let’s consider this on a personal level first, and then apply to business.

  • You can’t ‘faith’ but you can ‘believe’.
  • You can’t ‘happiness’ but you can ‘appreciate the moment’
  •  You can’t ‘wisdom’ but you can ‘choose wisely’
  •  You can’t ‘winner’ but you can ‘try hard’

But let’s start at the beginning.

In the world of systems thinking, it is a matter of first principles to identify Inputs à Processes à Outputs as a matter of course in every facet of life. A common mistake non-systems thinkers make is not confuse the outcome with the process and spend an inordinate amount of time trying to change an outcome instead of focussing on the inputs/processes that will deliver the outcome.

If you bake a cake that tastes like a turd, no amount of icing sugar will change it. Fix the ingredients or the process to produce a cake the way it should taste. Right?

(I have told you in 2007 that you should understand systems thinking. In fact, if you go to ganador.com.au, you will see an example of systems thinking on the home page.)

We constantly fail to identify something as an outcome and spend a lot of time trying to figure out how to fix it.

If you want (e.g.) HAPPINESS, realise that it is something that in of itself it cannot be ‘had’ directly. You have to do something else in order to achieve happiness. (Learning to appreciate the moment is one avenue to happiness. It is one of the processes that will lead to happiness.)

Systems Thinking explains how the world works and consequently that it is futile to focus on the outcomes, but rather to focus on the back-end inputs and processes that will produce those outcomes.

In business we are conditioned to ‘watch the scoreboard’. Of course it is important to have metrics, but it is about picking the right metrics too. The purpose of metrics is to guide us towards the decisions we must take and the things we must do.

Customer Satisfaction, Profit and Sales are examples of useless metrics. (Okay, maybe less useful.)

These are examples of OUTPUTS. They are the equivalent of the cake that tastes of turd. Nothing you can do about these variables.

It is beyond the scope of a simple blog post to change your philosophical perspective on business, but if you do embrace systems thinking, you will appreciate that measures of productivity are more effective measurements because it measures OUTPUTS relative INPUTS. E.g. Sales per Employee is more useful than simply measuring sales. Likewise, the Average Sale is more useful than sales for the same reason.

You can’t HAVE more SALES but you can have staff SELLING more and if you measure that, which is what will cause more sales to happen.

By focussing on the inputs (staff/skills) and the processes (selling/.service) you produce those outcomes that you really want.

Keep your eye on the ball, not on the scoreboard.

There is a Silver Bullet after all

This post is inspired by a podcast I listened to where the person had a stroke that affected his brain and the process he went through the re-train his brain. During that process he learned to meditate with a female Buddhist monk, who passed this insight on to him

Our stroke victim wanted to grow in his compassion for other people and he said he thought he had a lot of compassion. The Monk gave him some advice: She said he had empathy, but not compassion. He indicated that he thought it was very similar.

And this is the insight that followed:

No, she said: ‘Compassion is Empathy with a View.’

By that she meant that empathy had to be accompanied by ‘perspective’ or a view of the world and how it works.

The perspective or view of the world IS THE SILVER BULLET that puts the things you desire in context and makes you understand how to ‘view’ that outcome and to ‘appreciate’ it for what it is.

Having a clear view/ sense of purpose or a life plan helps explain what happens and helps direct your choices towards something in a cohesive manner.

On a personal lever your ‘view’ matters: The Christian sees God’s plan, the Hedonist sees pursuit of pleasure; and both of those views will inform how you experience everything. In the one instance pain must be endured and in another it must be avoided.

The Monk understood that empathy was something the individual experienced (internally) but that compassion was something that someone else experienced (externally). Empathy is a warm and fuzzy feeling, but compassion is something that reaches out and touches people.

If you want to be able to make sense of the world or have the ability to be resilient in the face of adversity or to be focussed on a specific outcome, the silver bullet is finding your sense of purpose.

Now for the part that most people miss.

Everybody HAS a view of life. And it DOES shape how you experience life. Only, most people don’t realise what it is nor how it works. Their view of life was formed by accident instead of by disciplined reflection.

Now for the sad part of all of this.

The DEFAULT view of life for most people is their own personal survival. And under the term ‘survival’ I include psychological survival, social survival and the like. We default to do that what is in our own best interests. Or more specifically, we default to what we THINK is the best for us.

The world is a much better place for all those people who purposefully choose to serve their Country, devote time to their Community or serve God – for instance – than for all the people who simply pursue their own personal happiness.

Not only is the world a better place, those people who choose an external focus for their lives are much better equipped to deal with the trials and tribulations of life, and consequently are happier.

There are many stories of people who won Lotto who, within a few years, end up exactly where they were before. (You of course believe you will be different.) The best view of these things was summed up in a Forbes article:

Achieving major life goals, including winning the lottery, or the more basic goal of getting married, doesn’t wind up making us as happy as we expect. (A) big positive event like a lottery win can impact happiness, but its effects diminish over time Why? Because while a lottery win can make a difference, it won’t affect the other conditions of your life, like who your siblings or parents are or your basic disposition.

There are many stories of people who suffered serious setbacks – for example by becoming disable – yet went on to live full and meaningful lives. Nick Vujicic is possibly the best example of what I am trying to say here.

On a corporate/ business lever your ‘view’ matters: A company with a clear sense of purpose – with a strong ‘view’ in the Buddhist’s terms - is one that can direct itself purposefully.

Let’s say you are struggling to be a successful entrepreneur. Your ‘view’ will determine what you do and how you cope and what eventually happens.

If you see business as a game, you will adopt different tactics, maybe hire a coach or even try and bend the rules.  Or of course you may simply practice harder.

The MISSION you have for your business is the director/founder’s attempt to articulate the VIEW of the business. It is the answer to the question: “What is this (business) all about?’

To have a clear sense of mission (a ‘view’) makes the present problems and opportunities so much clearer. In fact, unless you have the lens afforded by a clear and powerful vision, you won’t SEE the opportunities when they present themselves. And you will see insurmountable obstacles instead of challenges.

I have written elsewhere about systems thinking in the post ‘Why you can’t have what you want’. In that post I explain how the pursuit of outcomes is misguided, and why we should measure and focus on the Inputs and the Processes.

Your takeaway is to contemplate the inputs and the processes that will produce the outcomes you want – and to focus on that.

If it is that easy, why are you not doing it?

Don’t stand so close: the science behind serving a customer

Every day I see retailers and staff stand around retail stores. Waiting… for something to happen as they continue to shuffle merchandise around the store. And this makes me wonder about something.

I know there is something out there that is freely available. It is easy. It costs nothing to implement. It’s proven to improve performance. Yet no one is doing it. Why?

Consider this:

There are many easy to implement behaviours that can improve service and increase your ability to persuade the customer to buy.

The Triangle of Persuasion

Don’t stand opposite the customer. That is a confrontational position even though it feels natural to end there when you walk towards the customer. Walk around and stand next to the customer and turn your body 45 degrees towards the customer.

 Stay outside the customer’s personal bubble. This varies by culture, but usually about 2 feet (60cm) is acceptable to most people. Look for signals if the customer is uncomfortable.

Both parties should be able to face AND reach the merchandise or object of interest. Buyer and seller side-by-side should be able to focus their attention on the object of interest.

You should stand on the right-hand side of the customer where possible. Of course sometimes the design of the store or position of the customer makes it difficult to start there, but attempt to manoeuvre that way unobtrusively if you can.

Make sure there are no obstacles between you and the customer. This includes baskets, trolleys, equipment, prams or handbags – and especially the counter.

Ensure your customer is as comfortable as possible. Not too hot/cold. If seated, make the chair comfy. (Search Google for ‘embodied cognition’ if you don’t believe me – or read this as a primer.)

There is more. From the shape of your mouth to the colour of your shirt, there are a myriad influences that can easily be systematised to be part of how you do business – without adding any cost.

But WHAT these things are is not really the issue here.

Long-term readers may remember this blog on Inside Retailing was called Retail$mart (and so was the Ganador blog and still has that URL). That is because I have always tried to create products based on insights that are road-tested practices and scientific findings. Over the last seven years I have shared many of those here and there. I don’t believe in trade secrets and I am not using this to pitch for work – feel free to create your own training by using the tips provided above.

Over the last two years Neuroscience has entered the public sphere. (Along with it the obligatory pop-up gurus of course, but that is another story.) The popular accessibility of this knowledge raises a very important issue, and is the purpose of this post.

The real question at issue here is: if ANYONE can find these insights, and let’s face it this is not rocket science, WHY are people not using it?

It is freely available. It is easy. It costs nothing to implement. It’s proven to work.

Consider the six things I mentioned above.

How many of them are trained into and embedded in your business? If not, why not? Please share in the comments… I am really curious.

Forest Gump on Social Media

Forest Gump of course made these words famous:

‘My Mama said Life is Like a Box of Chocolates, you never know what you are gonna to get’

And I was thinking that is a bit like Social Media.

There is an element of delight and surprise that comes from trawling social media sites.

And just like chocolates, social media is also pretty addictive. Before you know it, you have wasted an awful lot of time pursuing rabbits down holes to no end at all.

And just like chocolates, every now then someone will claim they have some ‘health benefit’ – and whilst in a small, almost inconsequential way that will be true, the downsides of shoving a kilo of sugar down your throat far outweighs a miniscule amount of anti-oxidants you coincidentally consume.

But more than mindless time-wasting, swimming in that little cesspool of social media all day long makes me think that social media is NOT just the chocolates, it is also the box. The amount of groupthink is staggering. Just consider how success is measured on Twitter (trending hashtags, Retweets and Followers are all metrics of CONFORMANCE – not innovation or impact or intelligence.

Success is measure by how many people in that box agree with you, not the actual truth or the actual value or the actual quality.

Which explains the food porn, sunrises funny and cat memes.

And, just like chocolates, we always go back for more.

I rest my case.

What I said to a client before we parted company

Some months ago I submitted a proposal to a client to address four specific issues I anticipated on a project they were implementing. They never took up any of those options. This month they decided to evaluate the viability that particular project, raising four areas of concern and, you guessed it, these were exactly the concerns I raised six months ago.

The project is definitely needed and of crucial strategic importance, but as a large organisation they are struggling to be nimble and flexible and really lack the political will to persist. I was asked for some input and suggestions in preparation of that review meeting.

The following is directly redacted from the slides as the talking points of the conversation. I don’t reveal the client or the actual strategic solution because that is not relevant to anyone but the organisation. Of more universal relevance are the message and the context and the need to change.


The bad news things are not going as well as hoped for.

The good news is that all of this was perfectly predictable.

The best news is that it is easily fixed.


Be nice, hint at some issues and allude to potential fixes and leave here feeling warm & fuzzy.


Be brutally honest, cut to the chase and fix the problem, and leave here feeling pissed off.



… is hard because we are pulled back toward the status quo by our ‘baggage’ and every time we get sucked in because we think it is our ‘experience’.


Two things to happen – and whilst we are drawn to the second because it feels like we are taking action, it really is first things first...


Quite possibly the stupidest question of all time

Like the frog at the bottom of the well we can look at the world and see a slice of blue pie above us. The reality outside the well is radically different and obvious to all except to the frog at the bottom of the well!



The problem was solved in 1968

by BCG when the framed all the options in a simple matrix…


…because the same thing happens all the time.


  • That we have to change
  • Why we have to change
  • How it will painful and it will be different
  • What needs to be done



There are two requirements to implement ANY strategy successfully



  • To SEE a different future
  •  To BELIEVE that future
  • To DISCARD the old
  • To be BRAVE when facing uncertainty
  • And to COMMIT TOTALLY to it…


If XXX has X likes and X updates (on the Facebook page) in a 6 month period, the natural question is whether we are committed to making a success of the digital future?


There is always an argument to stop. There is always a reason to go back. If this happens, it is because there never really was a new mindset in the first place.



  • Consider all the OPTIONS
  • Make smart DECISIONS
  • Work like HELL

And the first step of developing a plan for the future is to understand a very simple and basic OVERLOOKED question:


You can’t articulate a credible new future if you don’t really understand what business you are in in the first instance.

The rest of the discussion is specific and confidential to that company. In the last few slides we covered:



Example 1








Have you heard the one about Bumblebees not supposed to be able to fly?

The myth loves on...

The myth loves on...

This myth was debunked very nicely by Dr Karl; and the story goes something like this:

According to John McMasters, who back in the 'good old days' was principal engineer on the aerodynamics staff at Boeing Commercial Aeroplanes, it seems the aerodynamicist of the myth was probably an unnamed Swiss professor famous in the 1930s and 1940s for his work in supersonic gas dynamics. The aerodynamicist was having dinner with a biologist. In the idle chit-chat, the biologist noted that bees and wasps had very flimsy wings — but heavy bodies. So how could they possibly fly?

With absolutely no hard data, but a willingness to help that overcame good dinner party etiquette, the aerodynamicist made two assumptions in his back-of-envelope calculations.

The first assumption was that the bees' wings were flat plates that were mostly smooth (like aeroplane wings). The second assumption was that as air flows over an insect's wings, it would separate easily from the wing. Both of these assumptions turned out to be totally incorrect — and the origin of our myth.

The aerodynamicist's initial rough calculations 'proved' that insects could not fly. But that was not the end of the story.

Of course, being a good scientist, his sense of curiosity got him interested in this problem. Clearly, insects can fly. He then examined insect wings under a microscope and found that they had a ragged and rough surface. In other words, one of his assumptions was way off.

But by then, overzealous journalists had spread the myth he had inadvertently created. The story had flown free, even though the bumblebee supposedly couldn't.

There is a lesson in that for all of us. In fact several lessons if we really want to be honest. For instance that much of what we ‘know’ isn’t really knowledge at all. But I want to focus on one particular epistemic principle that we will be well served remembering:

Things that we know today are always overturned in the face of advancing knowledge. As time goes by, we learn things that allow us to create better explanations. But no matter how good the explanation today, there is always a better one tomorrow.

This force of advancing knowledge has a profound implication for our everyday lives and specifically for business strategy:

Everything you believe and take as fact today is changed tomorrow in the light of new evidence.

Just like we once thought the earth was flat and that the start revolved around us, we now know better. Just as Newton’s explanations were eclipsed by Einstein’s theories, everything we know today is at best found to be only partially correct tomorrow.

So how can the Truth change? Well the answer is that it hasn't. The Universe is still the same as it ever was. When a theory is said to be ``true'' it means that it agrees with all known experimental evidence. 

SIDEBAR: This is a point where both THEISTS and ATHEISTS argue their own position. Theists claim that ABSOLUTE truth exists. This is a philosophical assertion based on the notion that ‘it is just so’ – it is something we simply intuit universally. The ATHEIST must argue necessarily that everything is relative. That is, that ‘truth’ is simply that which agrees with all current experimental evidence.
Every person (consciously or not) must take a position in one of these two exclusive camps; one where TRUTH is an absolute and one where it is relative. I find it absolutely hilarious how some people can’t argue against the notion of an absolute truth, but equally firmly adopts an atheistic worldview.

But science has taught us nothing if not that there is always a better explanation around the corner. Some take great comfort from science’s commitment to constantly disprove itself as if this of itself guarantees that we are getting closer to some grand unifying theory of everything. Of course it could just as easily be just a gigantic rabbit hole down which we chase that absolute truth denied by scientists in the first place.

Whatever way you choose, when it comes to human affairs like business strategy, marketing and management and the like, clearly there are no absolutes.

What is right today is wrong tomorrow.

Whoever is best at the strategic arbitrage opportunities and can identify the shifts and changes best and soonest stands to profit most.

But more immediately and possibly more relevant to most of us mere mortals, this shifting foundation of knowledge means that we should recognise this universal truth. The more convicted you are of your opinion, the more compelling the consultant’s exposition the more certain you can be that it, whilst it may seem right now, it is bound to be proven wrong tomorrow.

If you research and study the evolution of the ‘marketing concept’ and/or the ‘evolution of retailing’ then you will notice that ‘the right way’ is always the current way of doing it – the prevailing paradigm so to speak.

Current best practice is always superseded by something better. So a healthy dose of cynicism is a prerequisite in our modern world; for the lack of it will result in us chasing down the ephemeral promises of every fad that comes along.

The bumble bee that is not supposed to fly and the frog that gets slowly cooked in the pot of boiling water are great motivating stories – but nothing more than that. The absolute truth is a bit more elusive and it takes a lifetime to pursue and, who knows, may only be discovered once we pass away.

In the meantime, question everything.

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