Behavioral Strategy in Business

Unfortunately, consequences of bad decisions are usually costly. According to the McKinsey Quarterly article “The Case for Behavioral Strategy,” the key to making good decisions is addressing subconscious biases. In many situations, these biases are the cause of poor strategic decisions.

Subconscious Biases

Biases are accounted for in most other business areas. Marketers weigh subconscious biases when developing marketing strategies. People who shape polices account for this factor when developing new polices. However, somehow, executives handling strategic decisions aren’t weighing this important component into the equation.

While marketers and policy makers are evaluating subconscious biases of other people, executives need to examine their own biases. Having a process for fleshing out these biases will aid executives in making better decisions. This will ultimately positively affect the bottom line.

Using Data Correctly

When most companies are investigating a new strategy, they gather data to make the decision. Based on the facts gathered and strategy analysis, the executives then agree on a decision. However, evaluating data doesn’t always produce the best strategic decisions. There’s something very important missing in this process.

Researchers have found that process matters more than analysis. Analysis is still very important; however, since process is more important, companies are missing out on a large opportunity. In further analysis, the McKinsey Quarterly found that boosting the decision-making process increased the return on investment (ROI) by as much as 6.9 percentage points. This proves the process behind strategies needs equal, if not more, attention to provide the best results.

Compensating for Subconscious Biases

Experienced senior managers might already have a process in place for dealing with biases. This process is usually very informal. It includes asking a third, impartial party to review the information and provide an opinion.

This approach is rather flawed. A formal process must be created to address biases. Such a process could be compared to the process in the legal system. A judge and jury in the legal system are human and imperfect just like executives in a corporate system. However, the law is concrete, which provides guidelines for the judge and jury to follow. Executives should account for biases using a similar process.

Uncovering Patterns

Executives need to identify patterns that could jeopardize sound strategy making. For example, an executive might notice a pattern of ignoring unfavorable information once the strategy has gained popularity. Executives may also have a pattern of relying too heavily on previous experience. Since each situation is unique, it must be evaluated on its own merits.

Identifying patterns openly will assist in creating a guideline for making decisions. Once executives understand problematic patterns, they can identify these issues and look deeper at the issues at hand.

Avoiding Blind Spots

Executives face a lot of pressure. Under the pressure to create a new strategy quickly, executives may become overly optimistic about an “average” strategy. This can leave blind spots, which may adversely affect the outcome.

To make matters worse, executives who aren’t overly optimistic may face criticism from colleagues. These executives, who present strategy risks, don’t receive positive reinforcement from co-workers which then discourages others from taking the same approach.

This hinders the process of finding viable strategies. It prevents decision makers from accurately evaluating benefits and risks. When you just evaluate benefits without all of the risks, saying “yes” is too easy. Executives should create an environment where dissent is respected. This creates an opportunity for executives to evaluate all outcomes of a potential strategy. In the long-run this will create better strategies.

Learn from Mistakes

When creating strategies, don’t ignore negative past experiences. Evaluate losses as much as you evaluate gains in strategy. Evaluating what went wrong with poor strategies will help you learn and create better strategies. It will also help identify areas that need improvement. For example, perhaps you need to divest a business you’ve been holding for too long.

Creating a formal process for making decisions will help compensate for biases that negatively affect strategy. Determining which strategies warrant effort, identifying possible biases and creating tools to create the most effective strategies will result in higher quality decisions. Implementing your best business ideas and strategic changes won’t happen over night. But, over time, changes will payoff with more engaged managers and greater success.

Why Start A Home Based Business Online

Is it a passing fad or is it a growing trend? Is it just a want, or is it a need? In these days, more and more people seems to be getting that bug of wanting to start their own online business. Maybe they’ve finally all heard that today, the internet is where the money is, and it’s easy money at that!

The one thing I know for sure and what’s a driving factor in my life is that I can not, and will not let someone else tell me what I’m worth ever again. Either it’s by the hour or in life as a whole, I will take control and determine my own income and wealth. The days of a regular 9-to-5 are long gone for me.

I had to be Independent! And you know the great thing about being financially independent? It’s that, you can do anything that you want. You can do it whenever you want, how you want, for as long as you want, and pretty much with whom ever you wanted to do it with. All because you’ll have the money to do it with.

They say that starting an online home base business is all about finding your niche. In other words you have to utilize your skills and/or find something that you are pretty knowledgeable about and turn that knowledge into a home based business. Hey everybody’s good at something right! Even if you are a Kung-Fu Master, you could use that knowledge that you possess and post it across the internet and make a killing! No, No, No, not like in the Kung-Fu sense, but as in a bag full of money sense. Because people want to know what you know and guess what, they are willing to pay for it!

There could be a lot of road blocks when first starting out with your own home based business so look out! First there could be that old learning curve of never-ending pitfalls that’s waiting for you to step into them, and then there is always the money factor. Come on you’ve heard it before., it takes money to make money. This seems to be the one thing that holds you back when looking to start working online with a new home based business.

If you’ve been told like I’ve been told that in order to start a business of any sort, you’re going to need a lot of Ducks to do it with! For most of us the reason for seeking to start the home base business online, is because we don’t have any money in the first place so we are in need of an economical way of doing it or in other words, to start-up for free.

Our whole goal and objective is to START making money online. Some would say it can’t be done without a lot of money. Now in most cases this statement would be true, but now today with so much technology, there are many home based business opportunities that you can start-up for free. Just think about it for a sec, you don’t have to spend a lot of money on start-up costs if you know what to do and how to do it. The key here is that you would be doing it online.

Keep in mind that online is a digital realm that can produce digital and physical products or services. Believe it or not, you’re likely have all that you need to start-up online right in front of you right now! A computer and access to the internet! This can be a powerful combination when used properly.

If you don’t have anything in mind to sale for a product or service, you can always do what you do best and search the internet. Sooner or later you will find something that will catch your attention and then you’ll say to yourself, hey, I can sell this, or hey, I can make money with that. But always be very careful when choosing your niche market.

It is your duty as a business person to be diligent in your review of the products or services that you are going to be selling online or anywhere for that matter. You do this to ensure that the product or service you are selling is of good quality.

If you are tending to become an affiliate of online sales, beware of affiliate program sites that promise you the world for nothing at all. Even thought it is the internet and strange and lucrative things happen here, you do have to put some work into it to make anything happen! That why it’s called work online, you have to be willing to do some work!

Most site that promise a whole lot of something for a whole lot of nothing are simply scams and they are meant to trick the money right out of your pocket. More often that not, these scams usually ruin it for other legitimate online business people with great opportunities for you obtain. So be cautious when searching online for a free home based business opportunity.

Now don’t get me wrong here, because one of the best opportunities available for online work is affiliate marketing. Just be careful when signing up and make sure you do your homework to find out how the program works and how you get paid. It’s a great way for you to start out and learn the ropes of how things work online and most affiliate programs will allow you to begin with no start-up costs at all.

If you start out this way you will have a lot of access to learn all about driving traffic to your site, their site, or anybody’s site for that matter, which could prove to be the most valuable knowledge and information that you could have online. After you start to make money, you need to start putting money back into your business to make it become to be more successful, so make plans to reinvest some of your gain right away. There are a lot free home based business opportunities out there. You just have to find the right one for you to take advantage of.

Affiliate Marketing is legitimate, but just be aware of the scams when you see them. I personally don’t fool around with a lot of survey site as I need more money for my time and I need it faster.

I would suggest searching the web for the most reputable of them and then choose to work with the ones that pay the most.

You can always look for review sites for online survey companies to determine which of these would be best to work for.

Some other good places to check out when looking for fast easy and no cost ways to start an online home base business is eBay and Amazon. They have many tools to get you started in the right direction. When it comes to buying and selling online these are some of the best places to be online. So go and check them out!

Buying and selling and making money online is easier than you think and starting up for free is not impossible. If you want to be successful, remember to reinvest into your business and avoid the scam artists and hijackers out to steal your time and your money.

10 Reasons That Could Be Holding You Back From Starting An Internet Business

Are you like a “deer in the headlights” when it comes to starting an online business? Are you overwhelmed, for whatever reason, and unable to move forwards towards your goal of an internet business?

Often people procrastinate when it comes to starting a business of their own out of fear. This article will hopefully lay some of your fears to rest and allow you to move through the “getting-started” to the “doing-it” phase.

The reasons that hold people back at this stage can be grouped into 4 broad categories:

• Fear of the unknown

• Fear of failure

• Fear of success

• Paralysis of analysis

So let’s explore some of the commonly asked questions that fall into these categories.

The Fear of the Unknown

Q1 – “Do I need special skills or degrees to start my own business?”

The internet is a great level playing field that allows even the smallest business to compete with the largest. To run a business successfully you do not need formal business or education qualifications – Richard Branson, for example, barely finished school.

Some knowledge in the field you’re going to embark in would be advisable or you must be able to learn what you need to know. Often simple research into your potential market on the internet will be sufficient to give you what you need.

It goes without saying however that if you’re planning on offering a service like web designing, etc. then you should have the relevant skills in that area.

Knowledge is basically the commodity of power online, so constant education and reading everything you can get your hands is one of the more important aspects of an internet business.

Q2 – “Will it cost a lot of money?”

The great thing about an internet business is that the investment is generally significantly lower than a traditional “bricks and mortar business”.

The money you need to put into it is usually for a computer, software, internet access, a website, hosting, and as just mentioned the necessary “education”.

For businesses where you will physically stock items, it will take some capital to build up the inventory, but for the most part though, you hopefully won’t have to run to your local bank to beg for a loan.

Q3 – “Will I still be able to start my own business online, even if I’ve never run my own business before?”

Absolutely! Hundreds of internet marketers have been very successful and started their own businesses with no prior business experience.

The internet has a wealth of information to help you learn every aspect of the business you want to start. You can find tips, tricks and all sorts of information from people who’ve been there and done it.

Q4 – “How much money can I make from an online business?”

This will vary on a lot of factors. What business you start, how much time and effort you put into it and the return of investment on what you’re offering? All these factors play a part in what you will essentially make.

Some internet marketers make a six figure income, while others make the same amount a full-time fast food worker generally makes.

No matter how much your business brings in, if you are doing what you enjoy you will be streaks ahead of those who commute to their daily grinds.

Q5 – “Do I really need a website?”

In a word, “Yes!” As the name suggests if you want an online business then you will need an online presence. It serves as your “office” or “storefront”, and the great thing is, you don’t need to rent out expensive space in a building.

Websites are pretty easy to create nowadays with many website design software programs or website building services. If you choose to, you can also hire a web designer to create an appropriate site for your business, so don’t let your lack of web designing skills hold you back.

Just be sure not to get an expensive beautifully-crafted website if all you need is a simple one page sales letter site.

Q6 – “I’ve never done sales before. Do I have to talk to my customers?”

The attraction of an online business is that most communication is automated through the internet and emails. So you don’t really have to wait in for those calls from your prospective customers.

Q7 – “I’m nervous about taking money from customers. What if I mess up the payment processing system?”

In the beginning you will want to use an online payment system like PayPal or Clickbank. These programs will take of the whole payment process for you including refunds so you don’t have to worry about data protection and your customer’s personal details.

The Fear of Failure

Q8 – “What happens if it doesn’t work?”

This is another common factor that holds many people back. What happens if you put together a product or service that no one buys?

Well unfortunately this can happen but what is important is to take the lessons learned and either, correct the failings of your first offering by refining it, or move on to create your next product / service with the knowledge and experience that the first has given you.

You’ll be amazed at what you’ll learn on the first project that will make the next one just a little bit easier, etc.

Napoleon Hill, author of Think and Grow Rich, wrote that “Every failure is a blessing in disguise, providing it teaches some needed lesson one could not have learned without it. Most so-called failures are only a temporary decision.”

However don’t give up if the next project doesn’t work either. Take the lesson to be learned onboard and then start your next project. Remember you are only one project away from success!

The Fear of Success

Q9 – “What happens if I put my product or service out there and everybody orders?”

Well isn’t this a great problem to have! Please remember that there are things to worry about and then there are things to worry about!

How am I going to pay for xyz… , or do I have enough savings for my retirement, etc. These are valid fears.

How am I going to supply this order in time, is not one to lose sleep over. It is usually when faced with such problems that one gets creative and gets the job done.

Paralysis of Analysis

Q10 – “What if I don’t know everything yet? Do I need to do a bit more research?”

There are 2 points to make here:

1. You will never know everything. (We are all constantly learning new things.)

2. Often we have so much information that we overload.

Let me tell you, it is no good just learning about something in theory and then NOT putting anything into practice. It is through practice that we can get good at something and the same is true for starting a business as any other activity.

Often the hardest part of making any journey is just to start.

I hope this has shown you not to be worried. All your issues can be overcome. You are not alone…
So now what’s stopping you from getting started?