Black Swans at the Movies: Three Stories with One Moral

Black_Swan_bg
If you had to name a “prophet” of the Great Recession, who would it be? Most would say Nassim Taleb, whose 2007 bestseller The Black Swan diagnosed the financial crisis so aptly, and preceded it so closely, that the events of that year almost smacked of book promotion.

Pardon our unorthodox nominee: Tom Hanks. The great one-liners of his career sequentially follow the arc of financial prediction in the 2000s – from hubris, to crisis, to dithering agnosticism.

In Forrest Gump he gave us our stock caricature of a financial skeptic, whose refusal to generalize from particular events masks his obliviousness to how they are connected.  It was a more heady and fearless age, and we were supposed to chuckle when the village idiot dressed up his bewilderment as sage wisdom: “Life was like a box of chocolates. You never know what you’re gonna get.”

The following year, in Apollo 13, he reminded us that even when failure is not an option, it is an inevitability. “Houston, we have a problem” can now stand for our sickening realization that the aerodynamic modern economy was built from fragile and crooked parts. Even the smartest people in the room were helpless before hidden variables.

Finally, in Cast Away, he staggered from the wreckage back to his Gumpian skepticism, embracing it without a hint of mockery. “Who knows what the tide could bring,” he earnestly declared, at the same time reminding us that self-proclaimed financial experts are at a crossroads, and also at sea.

Where do Tom and Taleb agree? Consider Forrest Gump and his knack for being in the right place at the right time – easier when you’ve been to a lot of places at a lot of times. Consider the Apollo crew and their readiness to abort a mission years in the making, concocting a desperate plan for survival (literally) on the fly. Consider the FedEx analyst and his struggle to unlearn the stable rhythms of civilization, after he is jettisoned into a state of total self-reliance.

There is a theme here that Taleb would probably endorse: In an unpredictable world, the best performances are improvisations. That’s why, at Blumberg, we can never get enough context. Whether we’re fine-tuning your Service Lifecycle Management, cushioning your supply chain with Reverse Logistics, or studying the impact of disruptive technology trends on your service supply chain, all of our business solutions are customized. The challenges that a business will face are far from predictable, so why should our solutions be?

If economics teaches us anything, it’s that learning to profit from serendipitous events is easier than trying not to suffer from disastrous ones. We believe in rules, but our mission is to give your business the gumption to cast away the rules that don’t serve you. Schedule an appointment with us today, so that together we can pull off a virtuoso performance – whatever the tide may bring.

 

 

Understanding and Unlocking Business Intelligence Potential

research2

After Market service companies often find themselves in need of a system that will provide them with an understanding of service performance and allow them to make improved operational decisions. This is known as Business Intelligence, and it helps After Market service businesses identify the following:

-Opportunities for service growth

-Ways to develop new services

-The profitability of these services

-How to improve delivery execution

-How to improve customer satisfaction

Simply put, good Business Intelligence leads to smarter decisions. Though catalogs of data are available for virtually every industry that provides aftermarket services, it’s your business’s ability to capture this data and compare against industry standards that will help it stand out and prosper. A few important areas to focus on might be:

-How problems are resolved at the first service call

-Whether service is incomplete due to lack of parts

-Revenue and Cost per call

These data points, among countless others, are available through companies that can either provide you with turn-key Business Intelligence solutions or perform a BI assessment for you. Either way, you can’t afford not to know how you compare to the competition. How else might you learn, for example, why customers frequently complain about service not being completed on the first visit? What’s causing this issue? Solid data can let you know whether it’s attributed to poor scheduling, disorganized inventory, or poorly trained personnel (to name just a few culprits). Without knowing the root cause of a problem, a resolution is next to impossible.

Having a plan in place for continuous BI support as well as allocating sufficient resources is essential for an Aftermarket Business. The benefits include:

-Improved profitability

-New opportunities for profit

-Better scheduling of staff – reduced overtime and expenses

-Better inventory management

-Improved customer relationships

Proprietary Research or Off-the-Shelf Research

BI for Aftermarket Services is a dynamic force as data is constantly changing; everything must be kept current so that operations can be fluid enough to make changes as industry demands shift. This usually means that off-the-shelf research is rarely appropriate or of significant value. BI that is stale is useless. Paradigms in aftermarket systems change quickly, so information must always be current.

A huge amount of manpower is required to obtain BI by analyzing off the shelf public records, such as annual/quarterly reports filed with the Securities and Exchange Commission, and creating a data collection method is very time consuming. Trade magazines may be mined for useful information, but their accuracy and age may be questionable.

Many businesses choose to have separate company help conduct their BI research. These companies have large data libraries organized by industry and provide a tailor-made, industry specific database for you to compare your company’s services to. Many companies store this data in the cloud where it can be updated frequently and is accessible to you 24/7. This type of BI program might be for you if you want the convenience and accuracy of a turn-key, customizable system. Many businesses find that using a proprietary research program is the most advantageous way to implement an aftermarket BI function.

If you’re looking to enhance your business’s BI program, let us know how we can help. Visit Blumberg Advisory Group’s website today. 

Tips for Entering a New Service Market

marketing

As the economy continues to find its footing again, a great deal of service organizations might be looking to expand their potential by moving into new markets. Companies are typically motivated to enter a new service market when one or more of the following conditions exist:

-Service revenues and profits have plateaued (or declined) in the heritage market

-Legacy products have been replaced by emerging technology

-Because utilization levels have declined, resources remain fixed to support the existing installed base

In recent study that Blumberg Advisory Group conducted among IT Service Providers, over 70% of the respondents indicated that tapping into a new marketplace has become a top priority for them. Regardless of whether or not youre an IT provider, if your business is facing any of the above issues, perhaps exploring uncharted market territory might be right for you, too. 

However, entering into a new market is easier said than done.  A majority of firms fail because they dont take the time to understand the dynamics, requirements, or competitive landscape of the new market. Quite often, they take a tactical approach to a strategic problem; they advertise their services without understanding whether a market exists or how to best serve it.  

Any successful business owner knows that he/she must think and act strategically. The same due diligence must be given to entering a new market as investing in a start-up or acquiring a new business. Here are a few tips to ensuring successful entry and long-term growth within a new market:

Gauge the market

Chances are, you wouldn’t dive headfirst into a pool without knowing how deep it is. The same goes for entering a new market. You must understand its size, its dimensions, and the direction it’s heading in. What stage of the lifecycle is this market in? Is it mature yet declining? Small but growing? Answering these types of questions will give you a clearer picture of when to enter said market and how much market share you might be able to capture. 

Know Your Prospective Buyer

You can’t close new sales without a firm grasp on the buyer’s needs and typical behavior. Who are these buyers? What do they buy, and how frequently do they do it? This knowledge will give you the tools you need to effectively win (and keep) business.

Who Else Do They Buy From?

As in any marketplace, your prospective client will have other options to choose from. How does your service compare to the competition? Why should this customer buy from you instead of brand X? It’s vital to be able to articulate what makes you different.

How Will You Go to Market?

It’s essential to determine your outcomes for the new market launch as well as your investment requirements far ahead of time. This might involve a process in which you adjust strategy based upon available budget—and vice versa. The bottom line is that you must have a clear, precise plan for sales, marketing, and operations. How much will you spend on marketing? What type of marketing will you implement? Will you need to hire more sales people? Your plan must answer all of these questions and more to ensure a successful launch. 

Train your Team & Measure Your Success

Educate your team. Make sure they’re trained in the ways of this new market. It’s a good idea to set calendar-based objectives for your team and obtain metrics on all the critical aspects of the sales and service delivery process. This way, you’ll understand what’s working and where there’s room for improvement.  

To successfully implement these 5 steps, you need access to good market data and the ability to hold yourself accountable for results. This is no small task and it’s easy to get discouraged or frustrated. An experienced consultant or business coach can play a key role in keeping you on track and achieving the desired outcomes in this new market. Visit our site to learn more about how Blumberg Advisory Group can be of service to your growing business.