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.

1.     AVERAGE INVENTORY AT RETAIL

2.      FIRST/PRIME MARGIN

3.      OPEN TO BUY

4.      UNIVERSAL PRODUCT CODE

5.      FAST MOVING CONSUMER GOODS

6.      DIRECT PRODUCT PROFITABILITY

7.      ASSETS

8.      NEWSAGENT

9.      # of TRANSACTIONS

10.   MERCHANDISE (COST OF GOODS)

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

12.   MARKDOWNS

13.   SALES PER SQUARE METRE

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

20.   COLOUR BLOCKING

21.   FOCAL POINT

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!

 

Dennis

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.


#1: QUO VADIS?

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.

#2: WE CAN PLAY THIS TWO WAYS

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

OR

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

#3: WHAT YOU ARE GOING THROUGH WAS DOCUMENTED IN 1972

#4: BUT, MAKING THE STRATEGIC SHIFT HAPPEN…

… 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’.

#5: A SUCCESSFUL STRATEGIC SHIFT REQUIRES…

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...

#6: MUST WE REALLY CHANGE?

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!

 

#7: IT IS OBVIOUS WHAT NEEDS TO BE DONE

The problem was solved in 1968

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

#8: THEY ALSO ANTICIPATED WHAT WOULD HAPPEN…

…because the same thing happens all the time.

#9: SO WE KNOW THIS…

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

 

#10: STRATEGIC PATH TO IMPLEMENT XXX

There are two requirements to implement ANY strategy successfully

#11: THE FIRST REQUIREMENT

1 >> A NEW MINDSET

  • 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…

SUCCESS WITHOUT COMMITMENT IS IMPOSSIBLE

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?

WARNING SIGN…

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.

#12: THE SECOND REQUIREMENT

2 >> A NEW PLAN

  • 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:

#13: WHAT BUSINESS ARE WE IN?

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:

WHAT BUSINESS ARE WE REALLY IN?

THIS RAISES STRATEGIC QUESTIONS ABOUT THE BUSINESS MODEL FOR YOU

Example 1

Example2

ONCE RESOLVED, THESE ARE THE CRITICAL IMPLEMENTATION DECISIONS

THEN TO THE SOLUTION

EXPLORING THE IDEA OF XXX

THE RATIONALE IS PRETTY SIMPLE…

ACTION RECOMMENDATIONS

SUMMARY




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.

How to build a business from $2m to $5m in five steps

That is a pretty rich title because I have not done it myself. In my defense, I have looked at the price to be paid and I have decided that I don’t want to pay that price. Or at worst I have convinced myself that I don’t want to pay the price when I am really afraid to try; but I am sticking to the former.

Then again, every great coach wasn’t necessarily the greatest player – and all that is required is that you must be a great student of the ‘game’ and it helps if you’ve coached and consulted to a fair few who have done so.

This post is triggered because I recently read an article, proffering the following platitudes that were disguised as advice:

  1. Build your brand with Social Media
  2. Focus on your goals
  3. Sales and Marketing has to happen daily
  4. Build your company foundation on process
  5. Employ performing staff

(I don’t want to link to it and give any more oxygen, because I really don’t think those platitudes are helpful at all.)

I equate that type of advice to telling fat people to lose weight or telling introverts to get out there and have more fun. Of course there is an element of truth to all those statements – as attested by over hundred affirming comments.

But if you want to know the REAL truth, here goes:

Irrespective of anything you DO about your business to take it to the next level, several other things must go right over which you have no control:

  • It must be a kind of business that is capable of generating $5m. That is there must be a market for whatever it is you are selling.
  • Hope that the government does not move the goal posts
  • Pray that a competitor with deeper pockets does not decide to muscle in
  • And so forth.

That is: you need some luck. Your timing and your environment must work for you and not against you. Luck is often the loser’s excuse, but that does not mean it doesn’t play a role in the eventual outcome of a business venture.

Assuming you have some luck, you will ALSO be making a million decisions a month to take your business in the right direction. You must be very skilled or very lucky that none of the decisions you take serve to derail your business. You could easily choose one wrong supplier, choose a wrong web-host, adopt a flawed pricing strategy or implement a promotion that drains cash and delivers no return. This does not mean you are not an entrepreneur or that someone else was smarter or better than you. They simply lucked out by not making the same mistakes. These mistakes are always easily identifiable in hindsight, rarely with foresight.

Now, if you are a bit lucky and you are reasonably competent decision maker then you are in with a chance. If you are already running a $2m business, chances are that you are doing something right; so the things you must do next are the key steps that will take you to the next level:

ONE: Formulate a clear vision of the NEW business model. Let me be very clear: your $5m business is NOT more of the same, it is different in almost every imaginable way. Understanding your new business model is a prerequisite because the decisions that follow are about implementing that vision with processes and resources that align everything towards that vision. (Note: a business model is not a business plan.)

TWO: Actively articulate the new mindset that is required to take you ahead. Almost everything that you did up until this point must be thrown out the window and you need to re-think how you do everything. What needs to be done is quite specific and quite radical. You must understand yourself, your default position and actively identify what needs to change and keep that in mind as you proceed. (I wrote about ‘defaults’ here.) You must really build a new mental model in your mind. (Everything that follows presumes this has happened.)

THREE: Assuming you have the right mindset, you must:

restructure your business so that you are made redundant

reassign responsibilities and accountabilities amongst different staff members

redesign the processes that govern all business activities in such a way that it can scale to the new level – this is what we mean by saying that you work ‘on’ the business and not ‘in’ the business 

FOUR: Do the basics well. This should be easy part, but sadly it isn’t always. Sales. Marketing. Branding. Visual Merchandising. Service. All these are basic processes in the retail environment and the nature of ‘success’ is clearly understood.

FIVE: Implement like hell. Commitment. Drive. Persistence. All these words come to mind for what comes next. It is not easy. Be prepared to fail. But get up, fix it and move on. There is a price to pay: you will be pushed out of your comfort zone and be pushed out of your bed earlier and more often than you would like, but trust me, if success comes easily then it is just luck. Real success is a harsh taskmaster that demands a steep price of its seekers.

These five steps are arbitrary because you could make it more or you could make it less. The aim is that they are not platitudes, but rather spells out concrete steps that can be taken. You may need help to get there, but with a solid game plan and a bit of coaching its amazing what can be accomplished.

Just ask the Waratahs.

Dennis

Ganador – architects of high performance business

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There is ALWAYS one... and you know it

There are things that make me sad, things that make me mad.

SAD

  • You are in a hurry, driving slightly over the limit in the right-hand lane and then you come up against someone cruising at just under the limit in front of you – and they don’t budge: there is always one.
  • You type a comment on Facebook and make a typo. Someone jumps on to correct it: there is always one.
  • You are shopping in a hurry and pick the Express lane. You land behind the person with 20 items in the basket: there is always one.

Those are all the negative experiences and problems.

Fortunately the universe does not discriminate; and the same rule applies to positive experiences and solutions as well.

  • Your week-long holiday may rain out, but there is always one sunny day.
  • For all the grumpy customers in the world, there is always one who will smile when they see you.
  • And most importantly, for all the retail formats that are struggling there is always one that is doing exceptionally well.
For all the problems you face, there are a thousand obstacles to finding a solution – but there is always one.

There IS always one. All we have to do is to find it.

It is easier said than done, and you are not going to find the answer here. But what I can share with you why the answer is so hard to find.

I was talking to a retailer the other day, and the conversation – after a long time allowing him to vent - went something like this:

Retailer: ‘It is the competition man. Everybody is undercutting each other.’

Me: ‘You can’t control the competition, so stop worrying about them. Focus on your business.’

(This repeats several times.)

Retailer: ‘But the customers don’t want to pay, they just want the cheapest thing and they always argue about price.’

I point out that none of the things you are wearing is the cheapest thing, if price was the only thing then there would only one survivor in every retail category, that customers seek value not merely ‘cheap’ and so forth.

(This repeats several times.)

Then I make some suggestions; and the discussion goes something like this:

Me: ‘Instead of selling that, why don’t you sell this?’

Retailer: ‘That wouldn’t work because…’

Me: ‘Instead of selling it that way, why don’t you sell it like this?’

Retailer: ‘That wouldn’t work because…’

Me: ‘Instead of getting it from there, why don’t you get it from there?’

Retailer: ‘That wouldn’t work because….’

 See where I am going with this?

This particular retailer has been in the (same) business for 17 years. He owns only that one business. He is doing what he did 17 years ago, and the store functions exactly as it always has.

He knows it is not working. But the stock response – his DEFAULT – position to every possible solution is to find a reason why it would not work. I don’t know what his solution is (he is not a client) but I know two things for sure:

  1. There is a solution.
  2. He will never find it.

And those are the things that make me sad.

MAD

Then there are the things that make me mad:

I walked up to a Patisserie the other day to order a bunch of snacky foods for a casual breakfast meeting. You know the sort of thing: a few pastries, a couple of muffins and a few pies. The order wouldn’t have come to $100 but still a bit larger than the average sale.

The sales person (I can’t really call her a sales person, but you know what I mean) responded as follows: ‘Sorry, we don’t do platters.’

Seriously?

You can’t pop into a supermarket and buy a $2 plastic tray and pop a few snacks on it? You can’t think of any way you could maybe make this happen even if I am giving you 3 days’ notice? Maybe bring a freaking tray from home and just make it happen?

I am pretty sure if I spoke to the manager or the owner, they would complain about the competition and the way customers only want the cheapest stuff. And if he or she did I would be too mad to listen because you really just get what you deserve.

How to live an inspired and inspiring life

The truth is you can't be anything you want to be and you can't do anything you want to do.

History proves that sometimes circumstance or destiny will force us down a path that is not of our choosing .

And common sense will tell you that if you are fixated on one goal, you are likely to miss every opportunity that comes your way

Preparing for your future and achieving the things you would like to achieve must be balanced with a certain joie d'vie and living in the moment. That, dear friend is the ART of living: finding balance between the things you have to do and the things you want to do and the balance between common sense and adventure.

This is ultimately the balance between being alive and living.

This inspiring talk by Andrew Solomon is well worth 15 minutes of your time as you contemplate why you are here.

Long-time readers will know that I have never been a great fan of that whole 'set a goal - believe and achieve' glibness that permeates self-help books and new age literature. Daniel Pink wrote a book called The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need to help young (and old) people understand the world of work. The 160-page graphic novel about a hapless office clerk, a tart-tongued sprite, and some magic chopsticks takes a whopping half-hour to read. The book’s 6 key career lessons:

1. There is no plan.

Make decisions for fundamental, not instrumental, reasons.

2. Think strengths, not weaknesses.

Do the things you do well — that give you energy rather than drain it.

3. It’s not about you.

The most successful people improve their own lives by improving others’ lives.

4. Persistence trumps talent.

There are massive returns to doggedness.

5. Make excellent mistakes.

Commit errors from which the benefits of what you’ve learned exceed the costs of what you’ve screwed up.

6. Leave an imprint.

Recognize that your life isn’t infinite and that you should use your limited time here to do something that matters.

The topic of this post may at first seem strange, but there is much to take from the underlying approach to life.

Read those six steps again and apply that to your business – and think about how your business would be different if you followed this approach to life and business instead.

Dennis

PS: This post is adapted from a previous post in my fortnightly newsletter which you can get here. (And a free eBook on Visual Merchandising emailed to all who subscribe.)

So, do you also pretend to seek the truth

OR: How TRUTH is an obstacle to leadership, success and achievement

The ‘truth’ is important – in theory and maybe it is even the most important thing – but in the way the world works practically, the truth is really quite irrelevant. Consider this:

In the world of business, brand is the story you want to tell to the world, not necessarily what you are. When you sell, you emphasise the positives and omit the negatives; not necessarily lying but not really telling the truth. When you go for a job interview, you flavour your experience to match the role and you don’t reveal your real weaknesses, just the ones that others can live with. When you work in a team you don’t call out the prick or confront the weak boss. We say we want to serve the customers, but we really want to make more money; and that is the truth.

In our personal interactions you ask someone how they are you are interacting in a societally-endorsed fashion often rather than because you complete, utterly care about the person. People say ‘thank you’ without being truly thankful. People say ‘sorry’ without sincere regret. It is quite ironic that the notion of ‘personal branding’ is such a hot topic – and NOT what Tom Peters intended when he introduced the idea in 1997.

The real truth is unhelpful in our everyday lives.

The last bastion of the truth is somewhere in our legal system, but even there it is being increasingly compromised with judgements coloured by politics, socio-cultural influence and personal bias.

We seek the truth when confronted with life and death or in pursuit of ‘justice’. In fact, we only seek the truth when it suits us. And at all other times we are happy to live with ‘the fudge’.

'That’s just the way the world works', I hear you say. And you are right. In the real, everyday world there is no place for the prophets and messengers of truth.

The truth does not matter. What does matter is being accepted; and your influence and success depends on the extent to which you can create an ‘appearance of things’ that are acceptable – irrespective of whether it is true or right.

The question we all face is whether we (a) accept the way the world works and work in it to achieve what we want or (b) whether we fight against the natural state of being in pursuit of the truth and pay the price for that?

You can view those who choose option (a) as realists or liars and you can view those who choose option (b) as self-righteous or as principled. In camp (a) are the achievers and the managers and the politicians. In camp (b) we have the artists, the mavericks and the crazy ones.

We all choose where we want to camp and reap the consequences.

Many reading this will say or think they belong in Camp B – because they are enamoured by the romantic delusion of the outsider. Just take a look around you and be truthful about the choice you have made.

The TRUTH is that few are willing to bear the burden of truth: unpopularity, victimisation, being denied opportunities, isolation and so forth. The TRUTH is that being a prophet of truth is not romantic and admirable.

The TRUTH is no one wants to hear they are fat, can’t sing, are a poor leader, have questionable hygiene and a worse sense of humour or are just plain dumb. Society demands that we pretend that we can be anything we like, that we all deserve a shot and that things can change. Society tells you there is no such thing is a stupid question and that all that matters is how hard you try. The TRUTH is that all of that is a lie.

If you are truly in Camp B, you are highly unlikely to be successful in terms of status, finances or reputation and you will boast few friends. If you think I am exaggerating, watch a clip of Jim Carey in Liar, Liar again and remind yourself how awkward the truth is.

Most of us have banished truth to the periphery of our lives and opted for a life of relative comfort instead; because that is just the way the world works.

In doing so of course we embed a fundamental weakness in our society. When everything becomes morally and socially and personally ‘relative’ – as it does in the absence of an absolute principle of truth – then we are figuratively building our house on a foundation of sand.

All those things that demand an absolute truth at its foundation, like justice, like love; all become relative and eventually unattainable.

I can’t imagine living in a world where the only thing that matters is what matters to any individual, but that is the world we inherit when we say ‘that is just the way the world works’ or when we believe there are times when ‘there is nothing to be gained from telling the truth’.

N Taleb is proud of the fact that he has 'fuck you money' which gives him the option to say whatever he thinks, and reckons you can't trust anyone who is beholden to anyone or anything.  When we choose to live in Camp A we are beholden to a fundamental falsehood of public opinion (as opposed to an objective truth). We choose to follow 'gurus' and those who claim to have found a 'secret to success recipe'; i.e. someone who has figured out a short-cut in the real world.

We choose acceptance over truth.

But who is prepared to be that crazy person in ash cloth and rags who will walk down the street and curse the morally bankrupt, the selfish, and the unjust?

No one yet.

For we all realise that we must be prepared to shine the spotlight of truth on ourselves first. Reveal the racism. Admit a bit of homophobia, or that you think you might be one. Announce your religion. Acknowledge midnight visits to the fridge, your secret addiction to porn, or that you are an executive who likes reading New Idea. Admit your fears and your resentment of another’s success. So many things, so many things.

It’s better to pretend and join the Crowd in Camp A. There might be no future in it, but at least we're not lonely.

***

PS: This little rant started out as a short intro paragraph to our bi-weekly newsletter, and turned into a post as I got angrier with myself. Anyway, you can get the newsletter on my website.

 

Three things to stop doing in your retail store

Sometimes the things we don’t do can make as much of a difference than the things we do.

Three counter-intuitive things to stop doing:

  1. Stop selling features. Customers don’t care about the biggest or fastest. They care about how bigger of faster might benefit them.
  2. Stop selling on price – people buy value. Do you drive the cheapest car you could find? Are all your clothes the cheapest you could find? 99% of people find the product that meets their needs and THEN don’t want to pay more than it’s worth.
  3. Stop configuring your store to prevent theft. Make it easy to shop. Most customers are not thieves and we should not punish (inconvenience) the good ones because of a few bad apples. MOST of your shrinkage can be attributed to your staff and admin errors. And the loss of sales far outweighs the benefit of not losing a few items when your focus on shrinkage instead of service.

Cutting Edge Retail - Using Philosophy to create Strategy

Don’t run away – but I am going to talk philosophy and how that will help you make money. Specifically I want to describe to you the dialectic process or cycle and how you might use that to your advantage.

The dictionary defines the dialectic’ (process) in many ways, including as:

The Hegelian process of change in which a concept or its realization passes over into and is preserved and fulfilled by its opposite. 

The dialectic process is pattern of thinking that can work to your advantage or disadvantage.

Consider for instance this observation:

The Hegelian dialectic is the framework for guiding our thoughts and actions into conflicts that lead us to a predetermined solution. If we do not understand how the Hegelian dialectic shapes our perceptions of the world, then we do not know how we are helping to implement the vision. When we remain locked into dialectical thinking, we cannot see out of the box.

The other way of looking at it is to use the fact that things are happening ‘in the box’ to your advantage - by predicting how things will play out.

In general terms

The dialectic process is characterised by the presence of three phases:

  1. The status quo is the stage labelled the THESIS. (It is ‘THE’ ‘IS’ – that what ‘is’.)
  2. Gradually, the opposite of the thesis – the ANTITHESIS develops. The anti-thesis is the opposite of thesis and emerges because it presents the natural opportunity – the GAP in the market so to speak.
  3. The thesis and the antithesis SYNTHESISE into a new reality – which is the new status quo or the new THESIS.

In retail business terms

The textbooks (the best one is Levy & Weitz available on Amazon) typically use this graphic to explain it. I think they all copy each other because none of them ever come up with a different example, but I will do that for you.

A few weeks ago, Brian Walker wrote about the rise of fusion retailing. This has been happening for awhile; for example Deus ex Machina on Parramatta Road in Sydney created a Harley Davidson ‘lifestyle’ store probably a decade ago and added a café subsequently; but it is true that there is an increase in the number of concepts. (Some great, some desperate.)

But this trend is entirely predictable if you follow the ‘dialectical process’.

The dialectic process explains the evolution of retail concepts. (It is not the only explanation, but if you read Levy & Weitz or google the bold words, you will see a few more.)



If you have a mechanism that helps you anticipate the next big thing in retail, then you can plan to be part of that future – or even better get one step ahead of the future. You can participate in the natural evolution or you can be creating the next stage of the evolution knowing that you are on the right track.

In the examples mentioned above, you can choose to go ‘fusion’ or you can start figuring out what is the opposite of fusion. More interestingly, you can either go multi-channel or figuring out what it the opposite of multi-channel – and there are already some really interesting concept emerging.



I call this ‘artisanal’ retail.

As sure as I am alive, the opposite of today’s buzzword will become the new ‘thesis’ one day. As with all things strategy and future – the challenge is rarely the ‘what’, but when it will happen. It is a fine line between being on the cutting edge and being on the bleeding edge.

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