Tuesday, 25 September 2018

Trade Wars: Pros and Cons

The headlines are full of articles about the current US/Rest of the World trade war and the tariffs being introduced by the US President to combat what are deemed “unfair” trade practices by other nations.

Setting aside the question of who’s “right” and who’s “wrong” (the answer is usually both sides), the question is what’s the impact of sanctions in this case.

The US is the world’s largest economy and sucks in vast amounts of goods to keep the country and its people going, as well as exporting billions of dollars’ worth.  In such instances, there are buyers, there are sellers and those who transport those goods from where they are made to their final destination.  

In the age of global supply chains, the smartphone that you and I use may be assembled in China using parts sourced from Taiwan, Singapore and Malaysia which were manufactured using metals supplied by Australia and China and (perhaps) software developed in India before being loaded on ships flying registered in Panama and crewed by Indians, Filipinos or other nationalities.  

Raw materials have to be transported from where they were mined to where they will be assembled into finished products and then from the manufacturing country to another port where they are “transhipped” to another vessel for onward delivery to (say) the US. 

All the countries that take part in the process above employ people to mine/manufacture, document, inspect, programme, assemble and transport the goods.  

The purpose of tariffs is to ensure that local industries and workers are protected from “unfair” foreign competitors who may be able to produce the same goods (or an acceptable substitute) at a lower cost thereby competing against local manufacturers and perhaps driving them out of business.  This results in workers being made redundant and unable to earn a living if they can't find another job.

Where this is leading is that tariffs imposed by one country on another can actually have far-ranging globalconsequences.  To take an extreme example, if US buyers decided to buy local because the price was now the same, this should result in higher demand for US-manufactured goods, creating jobs, employment and a larger tax base for the Federal government.  

Following this, there would be no demand for goods manufactured overseas, putting workers out of jobs in the mines, factories and global transportation industry.  This is already happening in certain parts of Southeast Asia.   

Back in the US, buyers now pay more for goods that, when sourced overseas, used to be cheaper.  This would have several effects:
  • Higher prices cause inflation to rise due to the higher cost of goods now only manufactured in the US. 
  • This leads US businesses to close, raise their prices or lay off workers to remain in business.
  • Due to the increased cost of living, demands for increases in salary would rise, or workers would be laid off.
  • Countries affected by tariffs on goods exported to the US retaliate by imposing their own tariffs and refusing to buy US-made goods (this is already happening), affecting US workers’ livelihoods.  
  • Countries holding US Treasury Bills or other US government debt might decide to sell, driving the US Dollar down and forcing the US government to find other ways of financing the US budget.

In terms of US exports, Canada, Mexico, China, Japan and the UK imported $770.9billion worth of US goods totalling 50% of US exports in 2017.   Much of this was aircraft, automotive and machinery, all key industries in the US which could be impacted if “the rest of the world” decided to respond to like with like.  A total of 74% of US exports go to 15 countries.  That’s a lot of economic power in comparatively few hands.

There are other consequences as well in loss of goodwill, time wasted on renegotiating and lost trade. In short, whilst political egos may win, the “normal citizens” of most countries stand to lose.  


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Thursday, 13 September 2018

Booking Fees

Michael Nabarro, co-founder and managing director of Spektrix had this to say in response to a Which? survey on ticket booking fees:

“Yesterday’s Which? survey confirms long-held fears that industry practices around booking fees are putting many people off attending live events altogether. At a time when consumers have more options than ever for their entertainment spend, too many venues are shooting themselves in the foot.

“Instead of bolting onto advertised prices at the final stage of a ticket purchase, booking fees should be used to encourage – not penalise – online sales. Telephone transactions require the involvement of a sales agent so adding a small fee for these can make sense. Online transactions however require less staff resource and can generally make life easier for the venue involved.

“Smart promoters are already making online ticket purchases fee-free, whilst many not-for-profit theatres, hard hit by funding cuts, have grasped a fundraising opportunity: rather than impose an online booking fee, they close each ticket transaction with an option to make a donation. This makes even more sense when you consider that booking fees are subject to VAT. So charging a pound only nets 83p. (Note this applies in the UK only).

“More broadly, venues need to consider pricing from the perspective of customers. People don’t buy tickets, they buy experiences. Breaking the price they pay into base cost and fees just undermines the emotional impact of the purchase and dulls the enjoyment of a good night out.

“Purging online booking fees entirely will help improve customer relationships and encourage return attendance. Our sector needs to make hidden, last-minute top-up fees a thing of the past.”

How many times have we been caught by these “last-minute fees” when we are already emotionally invested in the transaction we’re booking, whether it be a bus journey, a theatre ticket or a flight on holiday?  Nabarro’s arguments make sense (assuming that online bookings indeed carry a lower “processing cost”) and I suspect that the business concerned is either recovering the cost of its investment into its new online booking system, or sees a way of making a bit extra.

General expectations of the digital business world are that it is cheaper, more efficient and less prone to staffing problems, so why pay more? 


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Wednesday, 29 August 2018

Claims, Claims and Higher Costs...

I see many advertisements for companies who promise to help with personal injury or other claims.  Are these really adding any value?

Yes, you might say. They help “victims” to obtain compensation that is “rightfully” theirs.  I understand this and, to an extent, agree.  After all, I’m no legal expert when it comes to knowing when I’m entitled to compensation for workplace accidents or unethical sales practices.  If I can get financial compensation to which I’m “entitled” (even though the corporate behemoth who caused the problem won’t tell me), then why not?  It doesn’t hurt anyone else apart from the “transgressor”, right?

Not necessarily.  

The claims specialists that act on my behalf on a “no win, no fee” or “you get the full compensation” basis make their money by adding their fees to the final claim on which the company against which I’m complaining (or they’re complaining on my behalf) has to pay out.  Even the pay-out may well be settled by that company’s insurer. 

This means that eventually the insurance company has to start raising its premiums, as it has to account for the extra fees of the claims specialist.  That results in higher costs for us to insure ourselves.  If, like me, you hardly ever claim, it means that you’re paying the salary of someone else who makes their living by adding little to the economy.

It’s tempting to use claims specialists to pursue a claim which you may think that you have, but in the end, it ends up adding to everyone’s bill.  Why would people use them?  Several reasons:

·     Lack of knowledge of what their rights to compensation may be;
·     Saves time (someone else does the “legwork” on your behalf);
·     May result in higher compensation than they would have won if claiming themselves;
·     Greed.

The easy answer is for people not to use claims specialists.  However, this is unlikely to happen.

What would be more useful is for the same claims specialists to share their data (insofar as confidentiality allows) about whom they pursue claims against and the amount of compensation extracted.  In this way, organisations with poor safety records or high levels of claims against them would be known and people could make more informed choices on whom to work for.  Insurers could then raise the premiums of those companies, rather than across the board.

In the case of car accident victims, the information shared could include the type of injury, vehicle and area in which the accident happened.  In this way, we would know whether certain vehicles were more often involved in accidents, or where particular “accident blackspots” were to be found.  Insurers could use names of claimants to track whether certain people were “victim specialists” and using the system to extract compensation wherever they could.

In the UK, banks accused of mis-selling Payment Protection Insurance (PPI) set aside billions to pay compensation.  The claims specialists involved could publish data on which banks they were seeing the most claims against (in terms of numbers of claimants andin terms of value) as well as in which area to help determine where the main problems lay.

Why not insist that claims specialists share their data to benefit society as a whole?


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Monday, 27 August 2018

Challenge

Different organisational cultures view questioning (“challenging”) one’s boss in different ways.  In some, it’s just not the “done thing”.  In others, it’s welcomed.

The aviation and medical industries are great proponents of the “2 Challenge Rule”.  This rule sounds like its name: a co-worker or subordinate may ask their leader or manager why they’re doing something or if they’re aware that something’s going on.  If the person being asked doesn't answer or respond twice in a row, they can be “relieved”. 

This has proven particularly useful in situations where lives are at stake (e.g. operating rooms or on aircraft flight decks).  In these situations, the surgeon performing the operation or the captain of the aircraft may be so focussed on their perception of the situation that they may ignore or not be aware of other factors which may cause a greater problem. Where lives are literally at stake, it’s vital that people can speak up.

Allowing people to speak up is easier said than done.  It’s not easy for a leader to admit that they may be wrong, even if it means coming to a better decision in the end.  They may worry that their subordinates will lose faith in them (valid, in some cases).  

Equally, their subordinates, may fear retribution, even if they’re aware of other critical factors that will have escaped the boss’ notice.  Some cultures frown upon “juniors” challenging their seniors – it “just isn’t done”.

Everyone wants the team to reach the best decision if they’re a true team player.  It has also been demonstrated that group decisions tend to be better than individual ones (try the Lost at Seaexercise to prove this).

The exception to this may be where the leader is the “acknowledged expert” in a particular field and has more specialised knowledge than their subordinates.  Whilst an Airline Captain may have more flying hours than his First Officer, the latter will still have been through the same flight training and recertification processes as the Captain and is well-placed to challenge.  

Getting comfortable with being challenged (let alone encouraging it) isn't easy.  No wonder people find it hard to implement as a general practice.


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.Challenge

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Saturday, 18 August 2018

It’s Not the Right Time…

“To discuss this”, “to plan right now”, “to improve my fitness.” We follow up with something like “but it’s on my radar” or “I’ll look into it,” “I’ll do it tomorrow/next week,” – anything to stave off the moment of having to do something outside what we’re comfortable with right now.

One thing I’ve noticed about entrepreneurs is that, when they want to do something, they’ll do it, even if they’re not totally prepared.  They “wing it” as they go along, trusting in their knowledge and skills to resolve issues along the way.  They know there’s no such thing as “the perfect plan”.

“I don’t have time” or “It’s not the right time yet” are what we say when we want to procrastinate or because we genuinely believe that we need more information or other inputs before taking decisive action.  It sounds good – we’re so busy that we can’t break off from our valuable activity just now because that’s more important.

We dohave genuine reasons: sorting out an “urgent and important problem” (“firefighting”), or a deadline that is due.  These are fine and are usually short-lived.  It’s when we just continually seem to think the time’s not “right” or that “there’s no time” that we have to ask about priorities.  I have the same answer every time someone tells me that “it’s not the right time”: “Tell me when the timeis right and I'll schedule it.”  Some try to wriggle out and say “I’ll let you know” so I ask for a date and a time in the future.  If they don't want to commit, move on.  When they ask why it wasn’t done, explain.

Equally, when people say “I don't have the time,” they’re mistaken.  They have the same as the rest of us (24 hours/day, 7 days/week).   Millionaires don't have more time that the rest of us; more money, yes but more time?  No.   

The point is, again, that it’s never the perfectly “right” time to do something.  Yes, there are temporary obstacles and others may arise along the way, and it’s OK to gather as much information as we can, but in the end we have to think like an entrepreneur and “go for it”.  

I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Wednesday, 1 August 2018

The “Perfect Storm”

In 2000, Warner Bros. released “The Perfect Storm” – a film about how in October 1991 a “confluence of weather conditions” created a “killer storm” in the North Atlantic.  Apart from the adventure of the brave souls on board a small fishing vessel, the film narrates the conditions that all came together at the same time.

I read an article today that referred to an industry sector in a particular country suffering from low sales in June due to a “Perfect Storm” of certain events all happening at more or less the same time to create a drop in activity.  Normally, businesses plan for disasters based on one unfortunate event happening, but it’s not common practice to think about what might happen if several events happened at the same time.  A typical example might be a hospital drama where the power gets cut off due to a city-wide outage and the hospital is inundated with victims of accidents caused by the same power outage affecting traffic lights, etc.  To complicate matters, hospital staff have been struck by a virus in the hospital and are unable to work…

A business is judged not by how it handles “business as usual”, but by how it handles problems. We have to produce “Business Continuity Plans” based on one catastrophic event, but we don't do it for several. To illustrate, in one area I worked, we had a plan for a hurricane striking the area and how we would manage to clear transactions.  We rehearsed it every year and were confident that we could recover to a level where things were running as smoothly as possible.

One of the conditions for things working was that two staff had to fly out to mainland USA to work from an office there.  We actually rehearsed getting them there and logging onto our systems.

Looking back, what we didn't account for was eventualities like those staff being unable to work (e.g. because of injuries caused by the hurricane, or not being able to fly out due to all aircraft being grounded at the airport).  We didn't factor in the effect of a regional pandemic incapacitating half our staff at the same time.  

The question is, how “bad” do things have to get before our business or organisation has to acknowledge that it can't operate?  Here’s a framework: ask yourself:
  • What could go wrong?
  • What could cause it to go wrong?
  • What could we do to eliminate or reduce the cause?
  • What could we do after to recover?

 It’s not pleasant to think of disasters and what might go wrong, but doing so shows us where we could tighten up and what we could do to mitigate or even prevent many of the effects of “The Perfect Storm”. 


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Tuesday, 24 July 2018

Complication Causes Complaints

My “unofficial mentor”, Michael Heppell, has just produced another brilliant view on why customer service is not always what we may expect.  To see the full review, click here.

Michael makes a very valid point: in our efforts to ensure our processes support the business, we risk losing sight of the fact that they don’t support the customer.  

We invent and adjust processes for any number of reasons:
  • They don’t exist;
  • They’re out of date;
  • We think it’ll be “better this way”;
  • To impress the boss…

What I only recently realised, thanks to the Temkin Group, is that before we change or add anything to a process that involves customers, we need to view it first and foremost from the point of view of whether it makes theirexperience better.  

The aviation industry looks at causes of errors using the “SHEL” framework where “SHEL” stands for:

Software
Hardware
Environment
Life/Liveware

To help understand better, think of things this way:

“Software”means computer software, manuals, procedures;

“Hardware”means tools, vehicles, PCs – anything the organisation supplies to staff to do their job.

“Environment”means the organisation itself, how t does things, its “culture”

“Liveware”means staff, clients, third party contractors – the “people factor”

Problems usually arise where there’s a disconnect between humans (“Liveware”), usually involving either a “Contributing Factor” or “Performance Inducing Factor” and the software, hardware or environmental elements of SHEL. These than result in an “event” (what we don’t want to happen, or the exact oppositeof what we intended or expected to happen) and consequences (customer complaint, loss of business…).

Often, the best way of making sure our processes do what we want is to keep them simple.  The more steps we introduce, the higher the chance that one of them won’t be carried out.  The more the number of functions or teams involved with a customer interaction, the higher the chance that something will go wrong.  

Are we trying “too hard” to please our customers?


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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