Audrey Hepburn was an icon.
Becoming famous in the 1950s, she was one of the greatest actresses of her time. In 1953, Hepburn became the first actress to win an Oscar, a Golden Globe Award and a BAFTA Award for just one performance: her lead role in the romantic comedy. roman holidays.
Even today, more than half a century later, she remains one of 15 people to earn an "EGOT" by winning the four major entertainment awards: Emmy, Grammy, Oscar and Tony. By the 1960s, she was making on average more than one new movie a year, and by all accounts she was on her way to becoming a movie star for decades to come.
But then something funny happened: she stopped acting.
Despite being in her thirties and at the height of her popularity, Hepburn virtually ceased to appear in films after 1967. She would appear in TV shows or movies five times in the rest of her life.
Instead, she changed careers. She spent the next 25 years working tirelessly for UNICEF, the branch of the United Nations that provides food and health care to children in war-torn countries. She has done volunteer work throughout Africa, South America and Asia.
Hepburn's first act was on stage. His next act was a service. In December 1992, she received the Presidential Medal of Freedom for her efforts, which is the highest civilian honor in the United States.
We will come back to its history in a moment.
Efficient vs efficient
You have one, precious life. How do you decide on the best way to spend your time? Productivity gurus will often suggest that you focus on effectiveness rather than efficiency.
Efficiency is about doing more things. Efficiency is about getting right Things done. Peter Drucker, the well-known management consultant, once summed up the idea, writing: "There is nothing more unnecessary than doing effectively what should not be done at all."
In other words, making progress is not just about being productive. It's about being productive on the right things.
But how do you decide what are the “right things”? One of the most reliable approaches is to use the Pareto principle, more commonly known as the 80/20 rule.
The 80/20 rule states that, in a particular area, a few things make up the majority of the results. For example, 80% of the land in Italy is owned by 20% of the population. Or, 75% of NBA championships are won by 20% of teams. The numbers do not have to add up to 100. The point is, the majority of results are driven by a minority of causes.
The advantage of the 80/20 rule
When applied to your life and work, the 80/20 rule can help you separate "the vital few from the insignificant few." 1
For example, business owners may find that the majority of income comes from a handful of large customers. The 80/20 Rule would recommend that the most effective action is to focus exclusively on serving these customers (and finding others like them) and either stop serving others or leave the majority of customers gradually disappear because they represent a small part of the bottom line.
This same strategy can be useful if you practice inversion and look at the sources of your problems. You may find that the majority of your complaints come from a handful of problem customers. The 80/20 rule suggests that you can eliminate your backlog of customer service requests by firing those customers.
The 80/20 rule is like a form of judo for life and for work. By finding precisely the right area to apply pressure, you can get more results with less effort. It's a great strategy, and I've used it a number of times.
But this approach also has a downside and it is often overlooked. To understand this pitfall, we return to Audrey Hepburn.
The downside of the 80/20 rule
Imagine it is 1967. Audrey Hepburn is at the peak of her career trying to decide how to spend her time.
If she uses the 80/20 rule as part of her decision-making process, she'll discover a clear answer: make more romantic comedies.
Many of Hepburn's best films were romantic comedies like roman holidays, Sabrina, Breakfast at Tiffany's, and Charade. She starred in these four films between 1953 and 1963; in 1967, she was to have another. They attracted a large following, won him awards, and was an obvious path to greater fame and fortune. Romantic comedies were effective for Audrey Hepburn.
In fact, even if we factor in her desire to help children through UNICEF, an 80/20 analysis might have revealed that acting in more romantic comedies was still the better option, as she could have maximized its earning power and give the additional earnings to UNICEF.
Of course, everything is fine if she wants to continue playing. But she didn't want to be an actress. She wanted to serve. And no reasonable analysis of the best use of his time in 1967 would have suggested that volunteering for UNICEF was the most efficient use of his time.
This is the downside of the 80/20 rule: a new path will never look like the most effective option at first.
Optimize for your past or your future
Here is another example:
Jeff Bezos, the founder of Amazon, worked on Wall Street and rose through the corporate ranks to become senior vice president of a hedge fund before leaving everything in 1994 to start the business.
Had Bezos applied the 80/20 rule in 1993 in an attempt to uncover the most effective areas to focus on in his career, it's virtually impossible to imagine starting an internet company would have been on the list. At that point, there was no doubt that the most effective path - whether measured by financial gain, social status or otherwise - would have been where he pursued his career in finance.
The 80/20 rule is calculated and determined by your recent efficiency. Anything that appears to be the “highest value” of using your time at any one time will depend on your previous skills and current opportunities.
The 80/20 rule will help you find useful things from your past and get more of it in the future. But if you don't want your future to be more of your past, you need a different approach.
The downside to being effective is that you often optimize for your past rather than your future.
Where to go from here
Here's the good news: with enough practice and enough time, what previously seemed ineffective can become very effective. You become good at what you practice.
When Audrey Hepburn cut back on her acting career in 1967, volunteering didn't seem as effective. But three decades later, she was awarded the Presidential Medal of Freedom - a remarkable feat she probably wouldn't have accomplished by starring in more romantic comedies.
The process of learning a new skill or starting a new business or adventures of any sort will often appear to be an inefficient use of time at first. Compared to the other things you already know how to do, the new thing will seem like a waste of your time. He will never win the 80/20 analysis.
But that doesn't mean it's the wrong decision.
The biggest problem founders and small owners have is that they’re experts in their field and novices in what it really takes to effectively run a business. That’s what usually trips them up, sooner or later.
Don’t let that happen to you. Admit that you don’t know what you don’t know about business, starting with these 15 tips guaranteed to help keep you and your company out of hot water. Some are straightforward, others are counterintuitive, but they’re all true. And some day they’ll save your butt.
Always make sure there is and will be enough cash in the bank. Period. The most common business-failure mode, hands down, is course out of cash. If you know you’ve got a cash flow or liquidity problem coming up, fix it now. You can’t fire bad employees fast enough. You just can’t. Just make sure you know they’re the problem, not you ( see next tip ).
The problem is probably you. When I was a young directeur, my company sent us all to a week of quality training where the most important concept we learned was that 90 percent of all problems are management problems. When things aren’t going well, the first place to look for answers is in the mirror.
Take care of your stars. This goes for every company, big and small. The cost of losing a star employee is enormous, yet business leaders rarely take the time to ensure their top performers are properly motivated, challenged, and compensated. Your people are not your kids, your personal assistants, or your shrink. If you use and abuse them that way, you will come to regret it. Capiche ?
Learn to say ' yes ' and ' no ' a lot. The two most important words owners and founders have at their disposal are “yes” and “no. ” Learn to say them a lot. And that means being decisive. The most important reason to focus – to be clear on what your company does – is to be clear on all the things it doesn’t do.
It boggles my mind how little most entrepreneurs value their customers when, not only are their feedback and input among the most critical information they will ever learn, but their repeat is the easiest to get. Learn two words : meritocracy and nepotism. The first is how you run an organization – by recognizing, rewarding, and compensating based solely on ability and achievement. The second is how you don’t run an organization – by playing préférés and being biased.
Know when and when not to be transparent. Transparency is as detrimental at some times as it is beneficial at others. There are times to share openly and times to zip it. You need to know when and with whom to do one versus the other. It comes with experience.
Trust your gut. This phrase is often repeated but rarely understood. It means that your own instincts are an extremely valuable decision-making tool. Too often we end up saying in retrospect and with regret, “Damn, I knew that was a bad idea. ” But the key is to know how to access your instincts. Just sit, be quiet, and listen to yourself.
Protect and defend your intellectual property. Most of you don’t know the difference between a copyright, trademark, trade secret, and patent. That’s not acceptable. If you don’t protect and defend your IP, you will lose your only competitive advantage.
Learn to read and write effective agreements. You know the expression “good fences make good neighbors ? ” It’s the same in . The more effective your agreements are, the better your business relationships will be.
Far too many entrepreneurs run their business like an extension of their personal finances. Bad idea. Very bad idea. Construct the right business entity and keep it separate from your personal life. Know your finances inside and out. If you don’t know your revenues, expenses, capital requirements, profits ( gross and net ), debt, cash flow, and effective tax rate – among other things – you’re asking for trouble. Big trouble.
You don’t know what you don’t know. Humility is a powerful trait for leaders, and that goes for new owners, veteran CEOs of Fortune 500 companies, and everyone in between. More times than not, you will come to regret thinking you knew all the answers. Behind every failed company are dysfunctional, delusional, or incompetent business leaders. The irony is, none of them had the slightest idea that was true at the time. Even sadder, most of them still don’t. Don’t end up like one of them.
For every success you have in growing your market share, another or other businesses will inevitably lose ground. Here are 11 quick and easy tips to gain a competitive advantage over your rivals and insulate yourself from the threat of new entrants in the market.
Of course, we all want to spark business growth and increase revenue. But the way you do this in a sustainable way is to focus instead on the building of a loyal database of avid fans. Content marketing, paired with optimized website forms and compréhensif fax automation follow-up is critical to business success. This approach builds trust by giving away free value before asking for someone’s hard-earned money. Not an spécialiste in creating optimized lead generation pages on a website ? No worries, use a trusted tool like Leadpages to make it happen.
Like it or not, folks out there aren’t searching for your brand, they’re just looking to solve a problem or find a particular type of product ( unless you run Starbucks or Adidas ! ) Don’t list all the benefits your product brings. Focus on the solutions. Explain to the customer in simple, straightforward terms how or why your product can help them or assist in the attainment of their goals. Consider FedEx’s iconic slogan : When it absolutely, positively has to be there overnight. This was a clear example of addressing widely-spread anxiety about the reliability of delivery services. Run through some market research to profile your target customer. How does your product or service – and your delivery and and price point – solve other people’s problems and make their lives easier or more pleasurable ?
Dropping prices doesn’t necessarily raise sales, for instance ( though it will definitely squeeze margins ). If you place yourself as a premium brand, then your customers aren’t necessarily value-driven in the first place, and cutting prices could even tarnish your brand. Consider this case study from Robert Cialdini’s seminal book ‘Influence : The Psychology of Persuasion’ : a jeweller sold out of turquoise jewelry after accidentally doubling, instead of halving, the price. The inflated price tag lent the product an unwarranted cachet ! If you are a premium brand, there are ways to optimize your pricing without lowering prices. For example, offer the quality-conscious customer an ‘exclusive’ benefit that your rivals do not or cannot provide. If you are at the value-driven end of the market, on the other hand, don’t assume slashing prices means incurring a loss. Low pricing can help you rapidly onboard a heap of new customers who may also buy other items in your site and return again. Context also counts for a lot with pricing. The best way to sell a $5, 000 watch, for instance, could be by putting it next to a $10, 000 watch. Think strategically when it comes to deciding any price point.
Yes, it sounds obvious, but it’s so very important ! Whether consciously or not, people are more likely to buy a product if they like the sales assistant who’s attending to them. While the employee’s personality obviously has no bearing on the price or your product’s ability to serve their needs is irrelevant. Friendly customer-facing staff will always attract more sales. Be rigorous in hiring people who are genuinely cheerful, friendly and outgoing. Make sure your training program teaches them to adopt a consistently friendly approach that puts customers at ease and feel like a priority.
Say you’re a bricks-and-mortar store and you’re getting a rush of customers as closing time approaches… why not close up an hour later ? While this may cause disgruntlement among staff, solve this provenant by getting creative with rosters. Monitor customer footfall throughout the day and week to identify your busiest periods, and équipe people accordingly. You can also reduce headcount during quieter periods to offset the higher costs and longer sérieux hours created by your extended opening hours. It’s a win-win !
Even in the digital age, some customers will always prefer to contact you by phone rather than mail or Facebook. While many online companies with tight margins eschew manned phone lines altogether, it’s worth giving customers the option of having a voice-to-voice conversation with your brand. By all means, slash the time and cost spent responding to queries by funnelling customers to standardized, pre-existing responses on your webpage ( i. e., FAQs ). But if their query isn’t listed in the drop-down menu of FAQs, then don’t make them click more than once more to find your phone number. Put it front and center on your web page, particularly if you’re a retail offering. ‘Live chat’ bots are an inexpensive way of offering real-time communication, too.
Why not give your happy customers a voucher with their purchase to redeem on your products and services ? If they love what you do already, they’re only going to love you more for this. It’s good for you because : It guarantees they will return to your store again. People hate to waste freebies ! When they return to your store to redeem their voucher, they may buy other items, too. If your business operates online, then the freebie could be strategically timed to coincide with a special sale. Oh, and guess what ? Chances are customers who have received vouchers or freebies won’t stay quiet about it either, so you could enjoy some positive buzz on social media.
Local businesses can arguably connect with their unique communities with much greater authority than any global chain. A local retailer, hair mobilier or gardening company can sponsor a kid’s sports team and offer deep discounts for OAPs at the same time. Some cinemas feature special ‘sensory’ screenings where parents can bring kids with autism ( who would normally be overwhelmed by busy, noisy environments ) to enjoy a movie in a relaxed, stress-free atmosphere. This reflects well on them and also guarantees them a loyal customer niche. Whatever you choose to do to support your community, make sure it authentically fits with your brand offering and business journey to date.
Social media is a great medium through which to build a solid relationship with customers – just don’t forget what ‘social’ actually means ! Soul-less corporate shop-talk won’t work on Twitter. Try to give your brand some ‘personality’ when you write updates or posts. This can bring its own risks, évidemment. But if you get it right, the benefits can be très grande. Develop a tone of voice that aligns well with your brand identity. Seek to inform, help, entertain or amuse. And most importantly – given the dire PR consequences – don’t patronize, try too hard to be funny, or tweet after a few alcoholic drinks !
Sometimes it’s better to be a master of one discipline than a jack of all trades. Admittedly, multiple revenue streams do spread your risk : if one falters, others can take up the slack. Nevertheless, consumers often associate ‘specialists’ with higher quality products or services than generalists. And with good reason, too : specialists typically invest all their resources into perfecting a single product or service. So what should you specialize in ? to state the obvious, it should be something in which you excel. You could also pick something with rising or recession-proof demand which is resilient to technological change in which you possess a competitive advantage over your rivals or where there’s an obvious gap in your local market. Own it, whatever you do.
Don’t ever get too satisfied with your . You can always improve – and improve you must ! Don’t get me wrong : without the odd moment of smug satisfaction, what’s the point ? Do relish in the successful launch of a game-changing product or take pleasure in positive customer feedback. But don’t let your customers hear you banging on about it time after time ! Be alert to the common element that has led to the downfall of countless hitherto thriving brands : complacency. Imaginative, nimble and innovative start-ups often do better than big market précurseurs that just got lazy. You may be the disruptive innovator today, but tomorrow you could be the complacent market leader with a tired model. So try to be humble and always strive to improve. Seek inspiration from other entrepreneurs, from books and from seminars. The moment you think ‘mission accomplished’ is the same moment you become vulnerable to being usurped.
There are lots of ways in which you can improve your business, and not all of them are complicated ! Try out the above tips or integrate them with your existing strategies, and let me know how you go in the comments below. Guest Author : Faye Ferris is responsible for the day-to-day management of the Dynamis APAC Pty Ltd offices in Sydney. She develops the DYNAMIS ne change pas of brands and their expansion into the Asia Pacific region as well as BusinessesForSale. com, FranchiseSales. com and PropertySales. com. If you have an interest in partnering up with Faye or advertising on any of these websites in the APAC territories, please do not hesitate to contact her on faye@businessesforsale. com.