How to Thrive in Hard Times

Invest for the future, reduce your debts, and insure your income

How to Thrive in Hard Times

TODAY’S economy is vastly different compared with our parents’ generation, and even those of us in ‘stable’ jobs should be prepared for increasingly rapid technological change and a continued downturn.

The competitive landscape can change at any time and in ways that you may not have expected. If you are unexpectedly laid off or demand for your company’s products suddenly plummets (think Blackberry), then you will want to have a healthy financial buffer to buy you time to recover.

If you want to thrive during hard economic times, then consider adopting the following three remedies for an empty purse:

1. Invest for the Future

Regardless of your current financial position, it is wise to save a fraction of your current income and invest for the future. George Clason, in his best-selling novel The Richest Man in Babylon, provides the following advice:

  1. Save: save at least 10% of your income each time you get paid,
  2. Invest: put your savings to work by investing in sound investment opportunities which offer safety of principal and a fair return, and
  3. Grow Your Earnings Potential: pursue a life of continuous learning and constant improvement; invest in yourself with the aim of increasing your earnings potential.

2. Reduce your Debts

As you know, debt is a form of financial leverage which can enable you to spend more than you earn.

Debt needs to be used with extreme caution because, while defaulting on your debts may be possible (hat tip to Greece), bankruptcy is a sure path to conflict, instability, and personal suffering. In earlier times, bankruptcy was punishable by death. And while this may no longer be the case, bankruptcy will still expose you to social stigma, personal difficulties, and make it difficult to borrow money in the future.

You should keep your investment debts within reasonable limits, and eliminate consumer debt as far as possible.

Consumer debt includes things like credit cards, purchases on deferred payment terms, and fixed payment contracts like rental agreements and cell phone plans. The largest consumer debt for most people is their rental or mortgage payment obligations, and so a good way to significantly reduce your consumer debt is to work towards owning your own home.

3. Insure Your Income

Clason advises in The Richest Man in Babylon that you should “provide in advance for the needs of thy growing age and the protection of thy family.”

If you are not adequately prepared for hard times, then setbacks in your health, the economy, or a tougher than expected competitive landscape could have a long term impact on your family and your quality of life.

One way to protect your lifestyle and your family is to take out insurance: life insurance, income protection insurance, and property insurance.

Although Income Protection Insurance is an often overlooked option, it may be a sensible one since it can buy you time to recover in the event of an unexpected illness or injury. Income Protection Insurance is probably not appropriate for everyone but, if you are interested to explore the available coverage options, your best bet would be to speak with a specialist income protection provider in Australia or where ever you are currently living.

What is Social Customer Service?

Social Customer ServiceSocial Customer Service allows customers to ask questions, and have them answered by a staff member or another customer

AT THE CORE of every successful business are a few key ingredients, and customer service is one of them.

Customer service can be used to delight customers, boost customer retention and generate positive word of mouth.

For most people social media like Facebook and Twitter are mere playthings. But is it possible that social media could be used to provide effective customer service?

Below we explain Social Customer Service and highlight its benefits and potential downsides. You may want to consider deploying Social Customer Service in your business.

Social Customer Service Explained

To understand what we mean by ‘social customer service’, think about traditional channels for customer support: email, telephone, and face-to-face in store. Some of these are more effective than others, but all of them involve a question/response type scenario and are typically limited by the knowledge of the staff member who receives the query.

Social customer service allows you to open everything up using a social platform like Telligent or Jive Software. By using a Social Customer Service platform you enable customers to ask questions, and have them answered by a staff member or another customer.

Social Customer Service platforms can be customised, which means you can create ‘groups’ focusing on specific products or themes. For example, if your business has a new product coming out, then you could create a dedicated group where customers and staff can discuss any queries, qualms or questions that might come up in relation to the new product.

Benefits of Social Customer Service

Social customer service can provide your business with a number of benefits:

  • Customer retention; research suggests that 70% of users helped via social customer service return as a customer in the future;
  • Stronger sense of community where customers have the ability to help other customers;
  • Improved response times;
  • More collaborative responses making for better responses (two heads are better than one);
  • Cost-savings associated with reduced burden on existing customer service personnel; and
  • Better visibility for customer queries via notifications, @tagging and #tagging.

Downsides of Social Customer Service

Social customer service also comes with a number of potential drawbacks:

  • Setup and installation costs can be prohibitive for some businesses;
  • Reduction in direct or personalised support may annoy some customers; and
  • Issues could be solved incorrectly by other customers, which might paradoxically lead to increased support costs.

The reality is that adopting a social platform can expose your business to various risks. The drawbacks highlighted above are not an exhaustive list, and you may be able to think of others which apply to your business.

Protecting Yourself from Risk

Risk reduction is an important issue when it comes to running a business.

If you’re worried about risk, then you can always explore the types of business insurance which are available (there are a tonne of business insurance products out there).

While having appropriate insurance cover is important, it is unlikely to provide sufficient protection from risk. You have to be comfortable that using a social platform will work with your business model. For example, if your business serves high-end clients who expect dedicated and personalised support, then introducing a Social Customer Service platform may not be appropriate.

Your best bet is to properly prepare long before you implement any big change. Switching to a Social Customer Service platform is a paradigm shift – and you need to be ready.

Mercedes Leads the Race to Build Autonomous Cars

Look mum, no hands! Mercedes-Benz S500 Intelligent Drive has driven itself 125km through Germany without driver intervention

MERCEDES-BENZ has demonstrated its capabilities with self-driving technology and provided a glimpse of the future by successfully driving its prototype S-Class from Mannheim to Pforzheim without driver intervention.

Mercedes has successfully tested autonomous vehicles before. For example, in 1995 its autonomous S-Class successfully completed a trip from Munich to Copenhagen and back.

The new S500 Intelligent Drive is the latest iteration of self-driving technology, and the most advanced fully autonomous vehicle ever produced by Mercedes. What’s more, most of the  technology in the concept car is already in the current S-Class. The future is not far away!

With a hat-tip to history, the test drive followed the same route that Bertha Benz (wife of founder Karl Benz) followed in 1888 when she demonstrated the long distance potential of the world’s first car, the Benz Patent-Motorwagen.

Why Are Public Companies Too Short Term Focused?

Public Companies Too Short Term Focused 2Boards of public companies, responding to investor demands, often pressure management to meet short term earnings estimates

DOMINIC Barton, global MD at McKinsey, talks with Tom Keene about how corporate boards of publicly listed companies tend to be too short term focused.

Barton explains that corporate boards, responding to investor demands, often pressure management to generate strong quarterly earnings. An increasing trend over the last 30 years, this short term focus comes at the expense of longer term investments in the company’s future. Barton explains that, based on McKinsey research, 55% of CFOs will not take a value enhancing long term investment if it will negatively affect the company’s quarterly earnings.

If pressure from investors causes excessive short term focus, then one available solution for public companies is privatisation. Barton suggests that private companies have more time and opportunity to make bolder long term investments because they are not subject to constant scrutiny from investors.

This insight helps to explain Michael Dell’s plans to privatise Dell. Best known as a PC manufacturer, Dell aims to shift its business towards high-margin enterprise services, software and cloud computing. Dell’s Chief Commercial Officer, Steve Felice, has stated that privatising Dell will make transforming the business much easier:

“When you do something like that, it makes your results maybe less predictable … We don’t feel the current structure as a public company helps us move that transformation along. We would rather do it without people looking at quarterly results.” (The Australian)

We Think Therefore We Are

If you can imagine it, then it can become a reality

ADAM Spencer (no relation) gives a wonderful speech about the beauty of mathematics, the search for the largest prime number, and the age in which we now live – the age of machine aided human discovery.

As Adam poetically states, “numbers are the musical notes with which the symphony of the universe is written.” And machines are now being used to help us discover that universe.

In 2012, the world’s most expensive and complex machine (the Large Hadron Collider) was used to prove the existence of the Higgs boson; a previously unknown particle, which 50 years ago Peter Higgs and his team proposed should exist in order to explain why some particles have mass.

If you can imagine it, then it can become a reality.

What is your vision for the future?

Free Charities from The Idea of Charity

“We’ve put charities in a box for far too long, let’s set them free.”
~ Nat Ware, CEO of 180 Degrees Consulting

IN an informative and timely TED Talk, Nat Ware explains how society’s traditional notions of ‘charity’ often constrain the ability of charities to have a meaningful social impact.

Below we highlight three beliefs about charity that Nat argues are holding us back:

  1. Measuring social impact: we tend to assess a charity’s effectiveness in superficial ways. For example, we tend to measure a charity’s effectiveness based on whether it has low administration costs, ignoring the fact that higher administration costs may also mean much higher social impact. We also tend to assess a charity’s worth based on anecdotal evidence rather than objective data driven analysis. This is a problem since it means that we are probably misdirecting our charitable dollars and having less impact than we think.
  2. Operating for profit: we wrongly believe that a charity should never operate for profit.  This belief ignores the fact that organisations often need to generate profit so that they can attract investment to scale their operations and have a meaningful impact.
  3. Taking risks: we expect that charities will exist forever, however we don’t have the same unrealistic expectations about for-profit businesses. Nat explains that even the most successful business leaders (e.g. Steve Jobs, Bill Gates and Richard Branson) have experienced countless failures in the process of building remarkable and world leading businesses. By not allowing charities to fail, we are limiting the entrepreneurial innovation which is needed to solve many of the world’s biggest problems.