Why Conventional Wisdom Can Lead to Big Business Problems

The “Mandela Effect” is a term describing large numbers of people believing something is true, when in fact it is not true.  The term originated from large numbers of people believing Mandela was dead almost 30 years before he died. There are lots of examples, such as most people think they can buy “Jiffy” peanut butter when the real name is Jif.  Or thinking Tupperware is non-existent when in fact it was still selling plastic ware until filing bankruptcy this week.

 

This podcast explains how in business there is one very deadly Mandela Effect.  That is the belief that long-term success comes from focusing on earnings and cash flow.  This belief will inevitably lead to failure – as case reviews of Boeing, Intel and Red Lobster were explained in previous podcasts – and how it is explained in this podcast via case study of Kmart and Sears.  Earnings and cash flow are the RESULT of better managing – meaning increasing – revenues.  A focus on revenues – like previously explained in the Microsoft podcast – is crucial for both short and long term success.  Only by looking at poorly met and unmet customer needs – things outside your “core” – can you keep revenues growing and insure you’ll have the desired earnings and cash flow in the future.

 

Thinking Points:

• Do you pay more attention to growing revenues, or growing earnings?
• Do you know your customers’ “pain points?”  Their poorly met and unmet needs?
• Do you use “gut instinct” for business decision-making, or do you focus on revenue impact?
• Are you ready to go outside your historical business model (and comfort zone) to increase revenues?