innovation

What Uber and Taxis Can Teach You About Decision Making

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We spend a lot of our time making decisions. We make some choices on auto-pilot, like brushing our teeth in the morning; others are tougher, revolving around job opportunities, life partners or places where we’ll live. At work, managers and business leaders are always making decisions about new products, staffing or initiatives.

Sometimes the hardest part of decision-making is not the process; sometimes it’s merely making the best decisions that propel us forward and don’t cause a mess of other problems.

With every decision, there are always pros and cons. Everything comes at a price in life and business, and even an opportunity that appears excellent has some downside to it. That’s just the way it goes in life and work. There is no such thing as perfection, but that’s what helps keep us always striving for better.

The battle between Uber and the taxi industry is an excellent example of decision-making. Uber is valuated at around $60 billion, but the company, and its CEO, Travis Kalanick, have pushed it to a point where based on news reports you have to wonder what’s going to happen next––and not in a good way. We’ll see in the future if their decisions have been the best, both for Kalanick and Uber.

The Problems with Uber

A couple of years ago, Uber was all the rage. At the time, a medallion for one iconic yellow taxi cost $1.3 million. But, there was significant competition for the traditional cab as it seemed that everyone in Manhattan was calling an Uber taxi.

Last year as I was talking to a cabbie about the taxi industry and Uber, he informed me that some New York City taxi owners were trying to sell their medallions for $500,000. At the time, it sounded like the death knell was ringing for the old taxis.

As it turns out, not so fast.

Flash forward about another year, and yellow taxis have taken matters into their hands to compete against Uber. Their decision was kind of simple: let Uber crush them and destroy the traditional taxi business (still a possibility), or put up a challenge. In the meantime, Uber, the famed disrupter seems to face one problem after another.

First, a recap of how the New York taxi industry is dealing with Uber:

  • Fight fire with technology fire. There have been a handful of apps that have been used by the traditional taxi industry to compete with Uber. The apps have succeeded in fits and starts, but next time you’re in New York City and don’t want to take Uber, or hail a cab the old-fashioned way, take a look at Arro or GoCurb.
  • Compete on price. One of the reasons why Uber was initially so successful is because it used sophisticated algorithms to undercut taxi prices and then to use surge pricing when demand was high. The regular cabbie on the street, and the taxi industry for that matter, just couldn’t compete with the advanced technology of Uber. Traditional taxis took a beating, but they’re looking to compete on pricing.
  • Driver competition. If you speak to a cabbie in New York City, ask them how driving a yellow cab compares to Uber concerning earnings. Many drivers who went to Uber found themselves working more and earning less. It’s no news to learn that as the drivers see it Uber has not been terribly kind and, ultimately, they’ve made no secret of wanting to use driverless cars exclusively.

In an article posted on TheStreet, it was reported that Kalanick and Uber prided themselves on, “Nimble, creative decision-making.” It’s true that Uber is innovating and continually thinking out of the box to get ahead of its competition. However, there have definitely been challenges which have been detailed in news articles.

  • Does the business model work? Uber is not yet a public company with over $12 billion in investments, and one of the primary reasons is because it’s not yet fully confident that it’s able to provide its investors with a solid return on investment.
  • Drivers are not happy with Uber and to make matters worse, Travis Kalanick was caught on video telling an Uber driver that if he wasn’t making enough money, it was his fault.
  • Uber and ethical boundaries. Uber is a notoriously tough competitor, and its method is to not only disrupt but destroy. It’s reported that it used technology, called Greyball, to deceive legislative and regulatory officials in places where there’s been resistance to Uber.
  • Battle with Google. In the courts, a war of the tech titans is playing out as Waymo, which is owned by Google to develop the technology for self-driving cars, has sued Uber and its company, Otto, over stolen company technology secrets.

I can go on with Uber’s challenges at the present moment, but it’s clear that Uber is at some cross-roads. In the not-to-distant future, we can see Uber continue down a highly profitable road as the undisputed king of transportation (of course, ultimately without drivers). Alternately, we can see a company that is battered and continues to go from one problem to another until investors move on or the company and investors come up with a significantly alternate strategy to Kalanick’s playbook.

The reality for Uber is not that it’s not been making decisions.

It has.

The question with Uber is, is it making the most effective decisions?

So, in a world of options, how to do you make the right decisions? Or, perhaps a better question, is how do you make the best choice with the options, opportunities, and challenges you have at hand.

  1. The first place to begin is always with your values. In the case of Uber, as an outsider, it seems to value disruption, fierce competition and winning (at all costs). You can have good values, or you can have values that appear destructive to others, but whatever the case, decisions have to conform to values. Decisions are always better if they align with your values. You’ll find yourself more comfortable, and you’ll be rationalizing less, even in the face of challenges.
  2. Visualization of vision. In the past, I’ve sat in plenty of meetings where some manager tells the team to visualize financial success. Frankly, I always rolled my eyes. However, that’s not to say there isn’t truth to visualization and vision. When you’re in the process of making decisions, and you want to decide on the best course of option, you have to think through the end-results between options. For Uber, the company sees itself as the dominant global transportation company. That’s the visualization of vision.
  3. Paradox of choice. We live in a world where there can be too much choice. Too many options can keep us from making decisions, and we end up in a situation of inertia in the decision-making process. When you’re making an important choice, one of the things you want to do as fast as possible is to eliminate options quickly. If you have five opportunities for a decision, remove three as soon as possible. Then work on the remaining two.
  4. Situation guiding. Sometimes in life and business, you have events that happen that may or may not be in your control. The older you become and the more experience you have, you should use it to help inform your future. Even if you’ve had failures in the past, you have learned something. Keep going back to what those lessons have been. Use the lessons to inform your present situation. For the taxi industry in New York City, they relied for decades on their business model until it was impossible to continue. And now they’re fighting back with technology and trying to provide cabbies with better driver conditions. The situation Uber created has helped guide them as they try to beat back the completion.
  5. Someone asked me recently if I had to pick a single word for my life, which word would it be. That was easy: courage. Decisions take courage, especially when the challenges arise. No decision arrives without work. Even if you think everything is going to be fantastic with your life partner, the new job, city, business opportunity, etc., there’s always work to do––and sometimes it can be hard and painful. Courage in speaking about the inevitable challenges with those who are working with you, courage in moving forward when it’s easier to walk away and courage to make strategic adjustments will help you find validation and success in your decisions. In other words, stay the course and use the headwinds to your advantage.

I think it’s fair to say that the number of decisions that most of us make on a given day has multiplied. Technology and human advancement have provided us with enormous opportunity, but as the taxi industry, with unexpected challenges. However, any decision, even the toughest, can be made with focused and calm thinking. And, always bear in mind your values, the vision, choices elimination, the situation and courage despite the challenges that arise.

 

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Posted: May 23, 2017

© 2017 Savas Vikos all rights reserved. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Savas Vikos with appropriate and specific direction to the original content.

 

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4 Essentials to Maximize Your Strategic Planning

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Not too long ago I had a long conversation with a colleague whom I’ll call Peter about his start-up. He had given his all to his digital business, and it had grown, but it grew too fast. Peter and his team had plowed through the money to build institutional capacity, without keeping a careful eye on the revenue stream.

Most start-up organizations will not receive any start-up funding, even those in the digital and tech world. Let me give you some of the reality. In an article by David S. Rose, Founder and CEO, Gust, and described as “the Father of Angel Investing in New York” by Crain’s New York Business, he wrote:

“In very general terms, roughly 1,500 startups get funded by venture capitalists in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.”

As Peter and I sat together, we talked through everything about his business. As we shared experiences and ideas, there was nothing new that he didn’t know before our conversation. However, as he started to write the reminders down for what he had to do immediately to save his business, I was reminded of the points myself.

The first thing Peter recognized as we spoke is that he had to keep the rush to wanting to do something, anything, at bay. To move forward, he needed to take a step back, or at least pause, and survey everything that was in front of him regarding his business. And, once Peter was able to clearly see the landscape from a rational and not emotional point of view, we could proceed on how he could maximize his strategic planning. Peter realized that to stabilize and climb out of the hole he would have to have a plan or roadmap.

  1. Vision

I’m fascinated about how sometimes entrepreneurs get into the weeds––and stay there. They miss the opportunity to do that which is truly unique to a founder or entrepreneur, which is to set the vision.

Every day I have the chance to see the Mediterranean Sea. It’s an incredible gift. But, as someone who is not a sailor, I’ve often wondered how the ships get from one point to another. Think about it. At one point, these ships lose sight of the shore. So, how do they get to their destination?

The answer is that captains and sailors look to the stars, as they’ve done for millennia. Modern navigation has been with us since the 18th Century. And the tools used by captains to pinpoint their position relative to the stars are the sextant, navigation maps, and a chronometer. However, make no mistake, although we live in a world of advanced technology and GPS satellite information, captains are still looking up to the stars.

I reminded Peter that he had to get back to basics. Why had he started the business? What was the need he saw his company could serve? What was the top priority? In this case, it was business development. What was the target market that would be the easiest to sell? What was the next one and so on?

  1. Energy

Merriam-Webster Dictionary defines “energy” as,

1a:  dynamic quality narrative energy; bthe capacity of acting or being active intellectual energy; c:  a usually positive spiritual force the energy flowing through all people

2:  vigorous exertion of power:  effort investing time and energy

3:  a fundamental entity of nature that is transferred between parts of a system in the production of physical change within the system and usually regarded as the capacity for doing work

4:  usable power (as heat or electricity); also: the resources for producing such power

Energy is essential to propel anything forward. Let’s go back to the sea. I grew up by the sea, and I’ve loved it my entire life. When I moved close to the water again later in life, I told someone to keep an eye on the sea; she changes all the time and multiple times a day. The colors, the sky, the boats, the rhythm of the waves, the people on the beach or the birds flying out over it. There is always something different about the sea.

What if I told you that mountains change every day as well and there’s energy to a mountain? How can that be? They look the same every day. They’re in place; they don’t move. Not true. Mountains change every day. Tree leaves on a mountain may drop and dirt shifts. No mountain is ever the same day after day.

However, this energy doesn’t have to happen all at once. And, that’s what I told Peter. Retrench. Conserve your energy and decide where you’re going to focus it.

  1. Plan

It’s impossible to get from one place to another without a plan. You don’t have to detail everything, and sometimes a plan can be as little as a page, but you have to have some idea about all the of the roads necessary to get to your destination.

Having lived in New York City, I’ve always found Central Park as one of the most masterful strokes of urban planning ever engineered. Central Park is an urban park, and it’s the most visited in the U.S. It was created in 1857 and rests on 778 acres. Frederick Law Olmsted and Calvert Vaux designed it.

Think about New York City in the mid-1800’s. It was a busy place, even then, before the cars and skyscrapers. People visited cemeteries (it’s true) to find a little peace from the chaos. Urban planners and the New York government had the vision to see that they needed to create an urban park in a city that would eventually become a global metropolis. They then set out to create Central Park to give the citizens who were alive then and in the future a place to “get away.”

If that’s not a master stroke of genius, I don’t know what is, and that’s why over 40 million people visit it each year, and it’s a sanctuary for millions of New Yorkers. Vision––in this case, the future of New York’s residents and visitors––needed an urban plan for some nature and peace within this vibrant city, which came to be Central Park.

Peter and I talked about the top priority of business development, and then we sketched out a plan to increase revenue in the next 60 days by 10 percent on the back of a napkin. That was the plan, and all it took was a small square piece of paper.

  1. Focus

Finally, when the moment arrives for work, you have to focus. You can’t be distracted. When a business is under financial stress or any stress for that matter, it’s easy to become distracted.

The point is when you focus and contain your energy chipping away at the nut you have to crack, you’re going to arrive sooner than if you diffuse the energy in all different place. The worst thing you can do, and something I’ve seen done over and over again is panic setting in and then an explosion of energy to do something––anything. Wrong move.

Bruce Lee was a great person who’s wise words left a lot of lessons for all of us. As we all know, he was a martial arts master. He was able to overcome opponents much larger than him and do feats that were amazing because of focus. Take a look at this video of Bruce Lee if you want to see incredible focus. It’ll only take a few moments of your time, and it’ll drive home the point.

One of my favorite quotes by this martial arts master is, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

I reminded Peter as we were wrapping up our time together that the moment he walked into the office, he would have a thousand demands. He would have constant door-knocks and phone calls of people looking for his guidance. It would test his will to keep his focus on what he had to get done as the leader. No matter what happened, he had to keep chipping away at the problem. A change wasn’t going to come in one fell swoop. The change was going to occur by maintaining a laser focus on what he had to get done.

There’s no magic formula to strategy. There are countless theories. Some of them are solid and based on evidence. Others, come from experience. It doesn’t matter the approach you ultimately decide to choose. The point is to make a decision on a strategy that will get you closer to your goals and objectives. Do the work. Make it happen.

Please don’t forget to follow my blog at Living on Your Terms and like my Facebook Page.

Posted: May 9, 2017

© 2017 Savas Vikos all rights reserved. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Savas Vikos with appropriate and specific direction to the original content.

Simply Fearless

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Have you ever stopped and thought how debilitating fear is to our lives? It stops us cold on our tracks before we endeavor to work on anything. Fear in our minds is a goal and innovation stopper.

Although most of us realize fear, let me cover a couple of examples to see how it affects our lives.

What is fear? It is an emotion that is triggered in our minds before we venture to do something, when we are faced with an unforeseen situation and so on. The result of which is whether the situation we think we are faced with ends up happening or not, our body reacts the same way as if it happened.

This causes inability to continue, worries, unexplained uncertainty, change of plans, lack of confidence and, in addition, a plethora of physical problems that all stem out of excessive worry. Realize that fear is in our mind but we can learn to control it.

First, if you are working on a project, ask yourself, “What is the worst that can happen?” Set some parameters regarding worst-case scenarios. Life is meant to be enjoyed and not stay in the trenches without going after what we want because something might happen, the result of which would be devastating. Really now?

How can we progress from one level in our lives to another higher level if we do not go out with all of our might after whatever we seek?

Yes, I understand, there are times in life where not everything works and a different outcome might appear. So what? Try, try again. Do not let that stop you. To quote Wayne Gretzky, the hockey legend, “You miss 100% of the shots you don’t take.”

Would you want to wake up 20 years later and ponder what might have been if you tried?

All of us have something to fear. But if we can only train ourselves that, yes, life is uncertain, yes, it is difficult, yes, it is not fair, but what do we do then?

Still go after everything we always wanted. No matter how we feel inside. The more you do it, the more it becomes a habit. People have achieved so many records. They’ve conquered the highest peaks, ocean depths, become society’s benefactors, broken records in sports and athletics and make new inventions that can save lives. How would they have achieved all that if they didn’t try? I am certain they experienced the same emotions when they were starting their journey, but they found a way to cope with the uncertainty and think in the present versus what might happen to them.

The more you tackle everything in life this way, the more you strengthen your mind to not allow fear take hold of you. To paraphrase it, by going after everything you want to accomplish without being afraid of failure is like exercising your mental capabilities to a degree that makes them stronger.

It is like exercising your body muscles and next time you are able to lift more weight, run faster, swim better and climb higher.

People walk on burning coals, freefall from planes, sail through the treacherous Magellan Straits in South America or climb the North Face of Eiger to name a few. Do you think they’ve done this without fear? No, they just have mastered their fears and insecurities and they know how to keep them in check.

They don’t let fear become too big and take over their thoughts. They keep it well enclosed just enough to make them aware to be careful in what they’re doing especially if it is of a risky nature. They always ask themselves, “What’s the worse that can happen?” If they’re prepared for the unexpected, that makes everything workable and achievable.

Imagine what we could all accomplish if we just go for it no matter what!

Please don’t forget to follow my blog at Life on Your Terms and like my Facebook Page.

Posted: August 25, 2015

© 2015 Savas Vikos all rights reserved. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Savas Vikos with appropriate and specific direction to the original content.