Validating Your Business Strategy; To Get Strategy Right, it’s an On-Going Process: Validation Keeps It on Track…

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Validating your business strategy is critical for business sustainability… But what should you validate? Validate everything having to do with the basic assumptions of the business, for example; two key factors include: 1. The ‘Problem’ you are trying to solve: You must ensure that the intended problem is ‘real’ and in fact, it’s an important issue that creates tangible pain or cost for the target customers… 2. The ‘Solution’ that’s being proposed to solve the intended problem: You must ensure that your solution, in fact, solves the intended problem and eliminate or mitigates the target customer’s pain or cost, and it does so by providing great value… According to Greg Githens; CEOs regard the ‘correct business strategy’ as the #1 success factor for strategic initiatives: Validation means getting it right… Moreover, you have a valid or correct strategy– when you have matched a ‘distinct problem’ or opportunity with a ‘effective solution’ and assured that your solution is adequately resourced and structured for implementation; that is, it’s a strong, logical coupling of a distinct problem/opportunity with a distinct solution…

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It’s important, from time-to-time, to ‘stand-outside’ your business and look at it from a customers’ perspective… while engaging the customer, face-to-face, so as to better understand the ‘work’ that they are trying to accomplish and how they are trying solve their pain… Then from these first hand lessons learned, you might determine that your business strategy is not working because you are trying to solve the wrong ‘problem’ or trying to solve the ‘problem’ in the wrong way… then, your remedy is to ‘pivot’ your business strategy: Update or completely change it, and repeat the process until you get the ‘solution’ right… Also, stand-outside the business to better understand the end-to-end customer buying process, identify the leverage points and if you find that your engagement is wrong, then again ‘pivot’. Throughout this process you must change course whenever you discover that the course is wrong… Understand that the key steps are; 1) identify the assumptions, 2) stand-outside the business to test the assumptions, 3) validate the facts by engaging customers face-to-face, then ‘pivot’ as needed…

Validating your business strategy can be a very disruptive process for a business; not every stakeholder in your business will agree with a proposed ‘pivot’, that is, a change in the coupling of the existing ‘solution’ with the ‘problem or opportunity’… An important leadership role is to meet and work with key stakeholders and get them to better understand the justification for a proposed ‘pivot’… Hopefully these interactions create a more solid framework for developing, strengthening, and validating the business strategy, at least temporarily… However, if there are disagreements you may have, at least, gained some useful feedback about the issues and concerns from key stakeholders, which may be useful for making adjustments, as needed… According to Paul Ricoeur; the logic of validation allows you to move between the two limits of dogmatism and skepticism...

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In the article Validate Your Vision And Strategy by Guy Rigby writes: A business with a clear ‘vision’ and a strategy designed to achieve it, will be far more likely to achieve success. Vision gives way to strategy: Once you have a ‘vision’, you should describe exactly what you want the business to look like (to become) in several years, using just a couple of brief sentences– you must be realistic and consider all available resources… and develop it from an analysis of the market, competition, opportunities and threats… as well as from a visionary prospective… Also, identify just a few (three or four) key ‘success factors’ that the business really hinges-on; critical factors that the business will depend-on in order for it to meet its multi-year goal… Describe each one of the factor in a couple of brief sentences, specifying targets and metrics that are to be used to show that the business is on-course to fulfill the vision, over the next several years…

Strategy gives way to tactics: Against each critical ‘success factor’, identify the tactics to be used to ensure successful delivery of each success factor, over the next several years… Also, clarify the specific responsibility for each delivery, and consider the risks, what could go wrong, and how you would reduce or manage these risks… Involve the team: Get the team actively involved in development of the ‘success factors’, since they can provide ideas, insights… By working through the process with the team you can develop a detailed understanding of the business objectives and success factors, and how they can be achieved… Implementation and execution is everything: Strategy is pointless if it’s not implemented and executed effectively, so make sure that people’s actions and responsibilities are clearly established at the outset and managed relentlessly… Circumstances change and strategy is emergent, so don’t be afraid to change plans and priorities, but in all cases there must be validation…

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In the article The Hidden Dimension of Business Strategy Validation by johnrchildress writes: It’s a sad truth but too often the only way you find out whether your business strategy worked or not is after its implementation… And even then it gets very confusing as to what actually caused it to fail. Was it a bad a strategy or was it just badly implementation-execution? This chicken and egg argument is rampant in academic business circles and in the literature on strategy… Hence, one of the first things you must do is spend time validating the business strategy before implementation… Most strategy validation exercises conducted by the big consulting firms involve lots of market research, weeks of data analysis, and analyzing the business strategy versus current and future market trends. This is an important piece of the business strategy validation process…

However, in many cases it’s surprising that even when the business strategy gets the green light from the consulting firm, it may still fail. Ah, then you say– its poor execution, that’s the culprit. Maybe you are right, but it would be great if there was a better early warning signal that the business strategy might fail, instead of waiting for months or years to determine the outcome… A complementary approach to business strategy validation has less to do with market and customer analysis and more to do with evaluating the internal company management alignment and commitment of the senior leadership team… It’s this alignment, or lack of alignment at the top, that is a critical factor in deciding whether a business strategy is valid or not, or will be successful or not… And this deciding factor is often overlooked and undervalued for its impact on the ability of a business to perform… Strategy validation is more than just analytics and market insights; there are people issues as well…

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Most business strategies don’t work because they are not ‘real’ strategies, in fact, they are just ‘hopes’ or something that the business management ‘wishes’ will happen… many stakeholders within an organization and even customers, often don’t really understand what a business might call a strategy, and even if they did understand it, they probably wouldn’t be able to implemented it… It’s vital to understand difference between a business management ‘intention’ versus what is ‘actually’ delivered… To be ‘validated’ a business strategy should pass several simple tests, for example: Does it really deliver the ‘right solution’ to the customer? Is it ‘rational, relevant, timely’ in its delivery? Is it ‘worth’ it, does it provide ‘real value’ to the customer? Evidence suggestions that many strategies do ‘actually work’, but only a small percentage are able to convincingly demonstrate that they provide ‘real value’…

According to Mike Moore; it’s important to look back at what worked (or didn’t)… validating a business strategy consists of adopting a reverse view: Look at the tactics that are being used: How successful are they? How did you arrive at these tactics? What actions would be more effective? Has the marketplace shifted? Examining all the strategic assumptions and analysis that are behind the game plan is critically important… The intellectual integrity of a business strategy should be vetted with all key stakeholders, including; entire management team, boards of directors, employees, customers, vendors…

According to Travis Newton; What is validation, you ask? I know what you’re thinking, for example; if the market is growing and all the research shows that this is a viable market, then why worry about validation? However, just because a market is purchasing a specific item, then what makes you think they’ll purchase yours? Validation of specific solution is critical for business sustainability… According to Steve Blank; one of the major outcomes of validation is a proven and tested business road map, and you can create this map, for example; by engaging a small set of early visionary customers, and the goal of this step is to validate your solution and identify a scalable and repeatable business strategy that works…

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Business is highly competitive and an ever-changing environment with new opportunities and threats arising at every turn, for example; technology change, increased regulation, globalization, development of international supply chains… these are just some of the factors driving change within domestic and international industries… And counter to popular thinking, the problem that many businesses face is not necessarily due to an absence of opportunity and choice, but rather its proliferation… A business must not only choose the markets they compete-in and their level of commitment, but also decide how to deploy finite resources to achieve progressively higher performance… the struggle of some organizations to effectively realize their business strategy is a real challenge, which includes; replacing dead-end business initiatives that don’t quite deliver the performance required– with relatively simple, easy-to-understand, implementable initiatives that can be validated with real evidence of success…

According to rianstefan; adapting your business strategy to changing competitive dynamics involves ‘risk’ to the business, which means that a business must plan ahead and examine alternative options before taking any action to modify existing business strategic, for example: Examine the ‘key performance indicators': Look at revenue, sales and other metrics… Review industry benchmarks to see if there might be a long-term industry shift that may impact the business… And most important, evaluate your business strategy every six months or so, and make adjustments, as necessary… Then, analyze these results and expand the business initiatives that show promise, and cut back or refine those that don’t… According to Michel Besner; sometimes good ideas are not ready for the market, yet. If customers don’t see the value or need– don’t just keep pushing because you think you are right. In some cases, it’s not a bad thing to park an idea for a while and focus on something else until the market is ready for your grand business strategy– the key is validation before committing to a specific business strategy…

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Commercial Drones are Big Business with Huge Economics: But First FAA Must Draft Regulations ASAP, or U.S. Losses…

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Commercial drones or, as the industry calls them, Unmanned Aerial Vehicles ( UAVs) are set to take over the skies soon, and become big business… According to Alistair Barr and Elizabeth Weise; the drone economy is booming abroad and an underground economy is growing fast in the U.S… But currently, it’s illegal to fly public commercial drones in the U.S… however, Federal Aviation Administration (FAA) is preparing to draft regulations for commercial drones in 2015.

But, many companies and entrepreneurs are saying that’s not quick enough, and many players are preparing their drones for private commercial use now, for example; thanks to drones’ ability to shoot aerial photos and video, as well as collect other data cheaply, drones are being used in many sectors, including; agriculture, construction, energy, mining, movie-making and television, sports… Most of the drone activity is outside the U.S. because of regulatory uncertainty, but despite the uncertainty the commercial potential of drones has begun to attract big investors and venture capital… The sky is the limit for drones when it comes to increasing profits and driving new sources of revenue… drones thXCOWPPRE According to some experts; once the FAA drafts its drone regulations, which will integrate unmanned aerial vehicles into U.S. airspace, then that could boost the economy by at least $13.6 billion in the first three years, and the economic benefit may top $82 billion between 2015 and 2025… It could also create more than 70,000 new jobs, including; 34,000 manufacturing positions, in first three years… but, according to other experts these numbers don’t account for impact of future regulation, focused on safety and privacy, which could increase the cost of operating drones and reduce the value of the technology…

According to Trevor Timm; there could be up to 30,000 drones flying in U.S. skies by 2020… According to Andrea Stone; right now the global market is worth $6 billion but it’s supposed to double to over $11 billion within the next decade… There are a number of obvious and many less-obvious applications that haven’t even been thought of yet, for example: According to Brad Mathson; the biggest opportunities, at least initially, is agriculture, for example;  using traditional methods, about 100 to 300 acres of farmland can be monitored a day, but by using drones that number can rise to 2,000 or 3,000 acres a day…

According to Ryan Kunde; drone can monitor on how grapevines are growing in vineyards– they can spot which grapes are developing quickest, which helps workers to decide where to harvest first… According to Gene Robinson; search and rescue service uses drones with high-resolution cameras and infrared sensors to track missing people, and helping authorities get access, more safely, to dangerous remote land areas. There many opportunities for entrepreneurs to apply drone technology for developing custom drone solutions for customers…  drones th In the article What to Know About Commercial Drones by Steve Dent writes: Do you know why you don’t see drones flying commercially  in the U.S.? It’s illegal. The FAA does not permit public– filming, crop-spraying, spying, tour-guiding, pizza delivery or any other commercial drone applications (however, you can fly one privately)… The FAA is charged with keeping the skies safe, and since drones could pose a danger to commercial aircraft, and also drones could be used to spy on individuals illegally, thus the FAA has been tasked with drafting  appropriate regulation for safe, legal operations. On other hand, the UAV industry is already large despite the handicap of being arguably illegal… Once drones became powerful enough to carry cameras, a cottage industry sprang up with services at a fraction of the price of manned aerial photography, or satellites… So, U.S. companies are pushing the FAA to approve public commercial drone usage, ASAP.

But, FAA is being very careful with their rules, since drones could negatively impact air safety. For starters, it’s easy to imagine a package-laden drone dropping out of the sky and injuring or killing bystanders. The tightly controlled airspace system around airports is also vulnerable right down to ground level (drones are banned at any elevation in those areas)… Despite potential economic benefits of drones, single accident would create a storm of negative publicity, particularly if it involved fatalities… Given complexity of the current airspace system, throwing tens of thousands of drones into the mix could create chaos. There have already been high-profile near misses between drones and commercial aircraft, including one incident that had the pilot actually bracing for a collision… drones3 th BI Intelligence Report says that there are issues and opportunities that will impact how the drone industry development, for example:

  • U.S. regulators plan to phase in public commercial drone flights beginning in 2015, starting with limited flights of small drones weighing 55 pounds or less.
  • Retail and e-commerce– along with the related logistics and shipping industries– arguably have the most at stake in the wide deployment of civilian and commercial unmanned aerial vehicles (UAV). Drones might be the missing link in the shipping chain that allows for nearly immediate e-commerce deliveries…
  • Currently, military applications dominate the global UAV market, but commercial applications will quickly ramp up over the next 10 years, particularly after 2020.
  • Privacy and safety concerns still pose the greatest risk of public commercial drones in many markets, but if UAVs are rolled out gradually they believe benefits of drone commercial applications, such as; environmental monitoring, shipping, agriculture… will ultimately prove to provide significant economic value…

In the article The Potential For A New Drone-Powered Economy by Marcelo Ballve writes: Not too long ago, when most people heard the word ‘drones’, they thought of unmanned military aircraft engaged in highly controversial clandestine operations. But when Jeff Bezos announced that Amazon was testing the delivering of packages via drones, he made drones within popular commercial application suddenly seem like a viable proposition. It’s estimated that 12% of an estimated $98 billion in cumulative global spending on aerial drones over the next decade will be for commercial purposes While drones are unlikely to become a part of your daily lives in the immediate future, they will soon begin taking on much larger roles for businesses and individual consumers, for example; delivering groceries, e-commerce orders, private security, farmers managing crops, and perhaps even aerial advertising… drones7 th In the article Drone-Assisted Farming are Taking Flight by Michelle Locke writes: Once strictly a military machine, drones have been slowly moving into civilian life. However, civil rights groups have raised concerns over possible invasions of privacy, especially in the context of law enforcement use… Commercial drones are not new, companies have used drones for agriculture spraying in Japan for over 15 years, and there are many companies interested in using drones in viticulture, for example; a Canadian company has modified a drone to resemble a hawk, initially using it to scare away grape-eating birds from vineyards, and they later realized they also could collect useful data on things like insect populations and diseased vines during the flights… But before the concept of vineyard drones takes off, grape growers are not convinced, yet…

According to Daniel Bosch; using the drone to fly along vineyard rows to get an idea of different levels of ripeness doesn’t save that much time, since it takes a while to watch the videos… On the other hand, there is potential to use drones to map vineyard temperatures more accurately than airplanes, since it can fly close to the vine canopy… However, an interesting use would be if an entire process could be automated, such as drones programmed to fly, complete a task, then return with the information…

Regulators are trying to crack the riddle of how to integrate drones into U.S. skies without jeopardizing air safety– but many drone developer describe the FAA process as a ‘frustratingly long wait’ for a solution… According to Robert Becklund; drones provides a great opportunity to shape a new age in aviation… there is no doubts that the ‘unmanned aircraft’ are absolutely going to change the civilian aircraft world. It’s already happening, all around us…

But despite the excitement around drones as the next chapter in aviation history, there is a growing frustration about the ponderous speed at which the new automated technology is being integrated into the national airspace. Under current FAA regulations, almost all commercial use of unmanned planes is strictly prohibited… aviation experts and UAV developers are concerned that the FAA’s slow rate of progress will jeopardize U.S. technological commercial leadership in unmanned aerial vehicles… According to Brendan Schulman; the U.S. may have already lost its edge… If you are a U.S. company with a promising drone product it’s very difficult to develop it in the U.S., so many are going to Canada, or UK, or Australia… where the regulatory environment is more friendly… drones5 th A U.S. Congress report on the proliferation of drones has confirmed a huge rise in the number of countries that now have unmanned aerial systems… The report states that between 2005 and December 2011, the number of countries that possess drones rose from 41 to 76… The report states that ‘the use of UAVs by foreign parties to gather information on U.S. commercial activity is already taking place… The report reveals that between 2005 – 2010, the U.S. approved over $380 million of drone exports…  In total, the U.S. government approved transfers of complete UAV systems in 15 cases over that period of time, and eight of the 15 countries names in the report, included:  Denmark, Italy, Lithuania, United Kingdom, Australia, Colombia, Israel, Singapore…

According to Dr. David Bridges; people are chomping at the bit to use unmanned aircraft for commercial purposes… The goal is to develop procedures that will safely integrate unmanned aircraft into airspace with piloted aircraft… Business is driving to deliver their goods and services– Faster! Cheaper! Better! And they see the use of drones as one place where these market drivers are converging. Direct warehouse to consumer shipping and reduction in manual labor are converging to change the mindset of delivery… Use of commercial drones will change, significantly, the economics and solutions for many businesses…

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Challenge of Managing Business Risk– Basis for Sustainability: Know and Understand Uncertainty and the Risk Landscape…

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Risk is defined as the probability of an unforeseen incident, and its penalty on the business… Whatever the purpose of an organization, the delivery of its objectives is surrounded by uncertainty which both poses threats to success and offers opportunity for increasing success… Business risk can range between over-reliance on a single customer, to the merger of two competitive companies… You can safeguard your business and increase its success rate by having an effective risk management policy in place. By identifying the risks before they occur, you will have the time and space to prepare and to put solutions in place if needed… Risk management may seem scary when you are planning your business. But by having business risk plan in place, you can ensure that you protect the viability of your business…

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Risk is defined as the uncertainty of outcome, and it must be assessed with respect to a combination of the likelihood of something happening, and the impact if it does actually happen. Risk management includes; identifying and assessing risks (‘inherent risks’) and then responding to them… The resources available for managing risk are finite and so the aim is to achieve an optimum response to risk, prioritized in accordance with an evaluation of the risks. Risk is unavoidable, and every organization needs to take action to manage risk in a way which it can justify to a level which is tolerable. The amount of risk which is judged to be tolerable and justifiable is the ‘risk appetite’.  Response to a risk situation may involve one or more of the following actions:

  • TOLERATE: The business’ exposure may be tolerable without any further action. Even if it’s not tolerable, the ability to do anything about some risks may be limited, or the cost of taking any action may be disproportionate to the potential benefit gained…
  • TREAT: The greater number of business risks will be addressed in this way. An action is taken to constrain the risk to an acceptable level…
  • TRANSFER: For some business risks the best response may be to transfer them to either reduce the exposure of the organization or because another organization is more capable of more effectively managing the risk, however, some risks are not (fully) transferable…
  • TERMINATE: Some risks will only be treatable, or containable to acceptable levels, by terminating the activity, and this might become more clear when the cost/benefit relationship is in jeopardy…

Effective risk management requires understanding more about what you don’t know than what you do know. In particular, it must recognize when new risks are emerging. Too often, risk assessment plot the usual ‘known knows’, leaving executives and directors under-whelmed because the process doesn’t really tell them anything they don’t already know…

World Economic Forum’s Global Risks 2013 Report is an annual survey of more than 1,000 experts from industry, government, academia and civil society who are asked to review a landscape of 50 global risks. .. The global risk respondents rated most likely to manifest over the next 10 years is ‘severe income disparity’, while the risk rated as having the highest impact if it were to manifest is ‘major systemic financial failure’. There are also two risks appearing in the top five of both impact and likelihood; ‘chronic fiscal imbalances’ and ‘water supply crisis’…Unforeseen consequences of life science technologies’ was the biggest mover among global risks when assessing likelihood, while ‘unforeseen negative consequences of regulation’ moved the most on the impact scale when comparing the result with last year’s…

Resilience is the theme that runs through this report. It seems like an obvious one when contemplating the external nature of global business risks because they are beyond any organization’s or nation’s capacity to manage or mitigate on its own. And yet these global risks are often diminished, or even ignored, in current enterprise risk management. One reason for this is that global risks do not fit neatly into existing conceptual frameworks, and fortunately this is changing… The report advises that building resilience against external risks is of paramount importance and alerts directors to the importance of scanning a wider risk horizon than that normally scoped in risk frameworks… When considering external risks, directors need to be cognizant of the growing awareness and understanding of the importance of emerging risks…

The 2014 annual Emerging Risks Survey (poll of more than 200 risk managers predominantly based at North American re/insurance companies) reported the top five emerging risks as follows: Financial volatility (24% of respondents). Cyber security/interconnectedness of infrastructure (14%). Liability regimes/regulatory framework (10%). Blowup in asset prices (8%). Chinese economic hard landing (6%)… It’s interesting to observe the diversity in understanding of emerging business risk definitions. For example; Lloyds: An issue perceived to be potentially significant but may not be fully understood or allowed with respect to– insurance terms and conditions, pricing, reserving or capital setting… PWC: Large-scale event, circumstances beyond direct capacity to control that impact in ways difficult to imagine today… S&P: Risks that do not currently exist…

In the article Managing Risk: Where Are You on the Curve? by Ralph Jacobson writes: The management of business risk is now forefront for senior leader’s key agenda items. Knowing how to assess risks and properly manage them is a critical organization competency that must be fostered for long-term business sustainability. To do so requires new language and tools to facilitate effective strategic thinking, decision-making, and decisive action… Here are some thoughts to help senior leaders transition to a world characterized by significant risk, for example; the S-curve is effective for evaluating risk and determining the various kinds of action that should be taken at specific points in time. The curve suggests that growth and change happen along an almost predictable trajectory of three distinct phases… Knowing where issues falls on the curve determines most effective action.

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One of the powerful attributes of the model is that it can provide a timely way to determine when a new discontinuous change occurs and its relationship to the current state. The S-curve can be used to determine the types of organization and leadership issues that will be encountered on the journey… It’s a Collision of two worlds: The generic S-curve suggests that when a few pioneers start a new S-curve (green line) they are initially ignored by those who remain intent on achieving the historical performance metrics and objectives… The existing stakeholders (pink line) view the green line as an unnecessary drain on resources at a time when financial and people assets will be at lower levels because the organization is experiencing ‘stage-3′ decline..

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Caught between these forces are those who resist change and those who under-appreciate the accomplishments of the past… senior leaders must help each side understand the need to do both; maintain the past approaches long enough to reap short-term benefits and focus on establishing the successful implementation of the new-to-achieve long-term benefits… The concept of the S-curve helps leaders frame the situation so that players depersonalize their negative energies, and help each side find value in the other. It’s in this manner that the senior leader can help balance such risks the ‘long and short-term'; current financial model and the new model…

Historically companies have viewed business risk through a functional lens (financial risk, human capital risk, supply chain risk, etc.), and by focusing on one distinct ‘silo’ you can miss the interrelatedness of risk to a company. that is, miss those connections and you may misfire when attempting to manage it… According to Robert S. Kaplan and Anette Mikes; Organizational biases inhibit the ability to discuss risk and failure. In particular, teams facing uncertain conditions often engage in ‘group think': Once a course of action has gathered support within a group, those that are not yet on board tend to suppress their objections, however valid and fall in line… Which means that many business rather than mitigating risk, they actually incubate risk by tolerating minor failures and defects– treating early warning signals as false alarms– rather than alerts to imminent danger…

According to Gerard Joyce; managing business risk makes company’s actions more predictable, thus more successful. The ISO 31000:2009 standard outlines principles and guidelines to follow in implementing a structured process for managing business risk effectively Managing business risk in a systematic way can be an enabler,e.g.; decision-making is more informed, presumptions and assumptions are challenged, and actions taken are more likely to achieve desired outcomes. A structured process highlights the ‘Key Risk Indicators (KRIs)’ or early warning signs that need to be monitored. These enables the organization to take pre-emptive action to avert or mitigate significant outcomes…

According to Jeanne Lauf Walpole; business risk management is identification, assessment and economic control of those risks that can endanger assets and earning capacity of business… Once a complete list of risks has been established, then each risk should be assessed for its probability of occurrence, for example: Very likely to occur; Some chance to occur; Small chance to occur; Very little chance to occur… Also, it’s important to evaluate potential financial damage that can result from each risk, and respond appropriately. Business risk management decisions must be based upon preventing, as much risk as possible although complete eradication may not be realistic, and/or mitigating risks at a level that’s at least tolerable for the business…

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According to Peadar Duffy; risk and strategy are intertwined, and one cannot exist without the other, and they must be considered together. Such consideration needs to take place throughout the execution of strategy. Consequently, it’s vital that consideration is given to ‘risk appetite’ when business strategy is formulated– and that requires a well-conceived business strategy and superior execution, on the one hand… and very serious risks assessment and process, on the other…

According to Adi Alon, Wouter Koetzier, Steve Culp; most companies opt to reduce uncertainty by leveraging the traditional– stage-gate innovation process. Stage gates are designed to identify the best ideas by putting them through multiple reviews or gates… This concept, in principle, is extremely effective but in reality new opportunities tend to be defined very narrowly. As a result, promising news ideas that are a little off center are often smothered. And while many of innovation initiatives that do gain approval are low risk, they offer only low returns– incremental improvements that usually do little more than maintain market share. Whereas, prudent risk-taking when managed properly is the foundation for business growth and sustainability…

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Crisis of Truthfulness in Business– Truth-Telling Without ‘Spin’– Lost Virtue in Workplaces: Lessons on Truthfulness from Islam

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Truthfulness is a critical building block for business success, and yet truth-telling is becoming a lost virtue in many workplaces. To be truthful means being honest, not deceitful or deceptive in everyday business engagements with– employees, customers, partnerships, suppliers, stakeholders… also, being truthful with yourself… Being truthful is not always easy, since truth is not absolute and often it’s never black and white; it depends on the prevailing culture and the perspective of the participates… For some people truth-telling is very uncomfortable; it can create conflict, negative emotion that can have a very negative impact on workplace productivity… The reality is that businesses are less efficient, and prone to poor decisions when truth is systematically kept hidden… truthfulness can even be obscure with the ‘unspoken truths’ that most organization have– its mokita (a New Guinean word meaning; truth everybody knows but nobody speaks).

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Adapting a Biblical principle: The truth will set you free, but first it will piss you off (quote: Gloria Steinem). Truthfulness is credibility, and it can easily be destroyed with just one simple untruth that’s told in a brief moment when you are; just trying to create a good impression, or deny involvement in an issue, or refuse to acknowledge that an incident had occurred… Recall Aesop’s Fablesboy who cried wolf: The boy lied so many times about the wolf being after the sheep that when the wolf really did attack, none of the villagers responded to his cries for help. Hence, if you are not truthful at all times, then people will be suspicious about your truthfulness: The moral of this story is always (well almost always) tell the truth!

According to Annual Edelman Trust Barometer; Public trust in leaders has fallen substantially; leaders are not seen as leading. People think leaders– just can’t get around to telling truth . The crisis of leadership is leading people to having a very different view of who they take seriously and actually listen to: An online survey queried 31,000 people in 26 countries, and then broke down the results between the general population and smaller sample of university-educated, higher income people dubbed members of ‘informed public’. Among ‘informed public’ group, 69% viewed– academics or experts as credible people, while 61% viewed ordinary people as credible (people like you)… CEOs lagged at 43% among this group. The most trusted business sector was technology, with a 77% credibility rate, while ‘banks and financial services’ trailed with 50%; just behind ‘news media’, which polled 53%…

According to Samuel A. Culbert; it’s time for corporate leaders to face the fact that they are the ones responsible for managing the culture of truth-telling in their workplaces… it’s time for leaders to understand that without careful vigilance for the truth, their companies can become a workplace of fear and intimidation… a workplace where truth is– only sometimes spoken and then only in the shadows… According to Laurie Weiss; it’s often difficult to find a balance between telling truths and protecting the feelings and reputations of everyone involved. Not only that, but honest well-intentioned people don’t always agree about what is the truth… 

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In the article Truth About Lying At Work by Lydia Dishman writes: Yes, admit it! You have called-in sick to work when you were not officially down with the flu, or some other contagious illness: It’s a common fib, especially when there are major sporting events… A global survey found that as many as 58% of employees call-in sick on days when they want to watch or attend a sporting event, even though 80% of them admit to feeling guilty for doing it. According to a study; this simple kind of twisting the truth can cost organizations  8.7% of payroll each year. According to Jeffrey Pfeffer; telling a lie is incredibly common in many businesses, for example; there is so much lying on financial statements that Dodd-Frank was passed to get CEOs to attest to the truthfulness of their financial statements… and even more troubling, some of the best leaders are great at self-deception and the best liars… for some leaders truth-telling is almost impossible. It was Mark Twain who said; if you tell truth, you don’t have to remember anything, just remember what actually happened and what words were actually spoken, rather than trying to remember a made-up story or a distorted version…

In the article Spinning Truth by Mark S. Putnam writes: Somewhere between the truth and a lie, there’s ‘spin’… We hear about politicians spinning bad news in their favor. We see journalists and pundits spin news stories to reflect a certain point of view: It’s easy. You too can spin if you look at data, filter it through your biases, and preach it like gospel. The rationale is that it isn’t really lying, just putting a bias on what is already true… Spinning is like any other kind of dishonesty, it’s wrong… It makes old-fashioned lying sound clever and trendy: It can be said that stupid people lie and smart people spin… For most people, it’s not so much about telling the big whopper lie as much as getting tangled in exaggerations and spins… Adding ‘spin’ to favor your side of a story doesn’t require much premeditation, in fact it may seem perfectly natural to talk fast and spin your response when your back is against the wall. Besides spin is not a real lie, because if you get caught you can always back out, spin some more or stand by the original spin and just say it’s a personal ‘opinion’…

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In the Be Open and Truthful by Cindy King writes: In a business, it’s not always easy to understand truthfulness in the context of cross-cultural international business relationships… Most people thinks of being open and truthful, but when dealing with many cross-cultural communication you must look a little closer… it’s easy to realize that different cultures have different interpretations and different ways of being open and truthful. There are many factors that come into play, for example; there are cultural taboos, which can be both direct and indirect communication… Cultures have different boundaries for what they consider as truthful:  Some accept distorted versions of the facts, while others do not.

Some cultures can accept to– avoid the real issue and still consider they are truthful, while others consider this as untruthful… Even when you strive to be truthful there will always be circumstances to challenge your own definitions. When this happens, it can become a personal exercise for understanding and developing stronger cross-cultural skills. The question of how truthful you are perceived by other cultures is vital to your international success. Being truthful and trustworthy are part of the core of business basics… And, If you are not perceived as being truthful then you lose trust, which means that nobody will do business with a company or person that they cannot trustHence, be aware of how your truthfulness is being perceived…

Most people hate being lied to and you would like to think that any information given to you is truthful. In a survey in Germany, the vast majority of responders felt– lying on minor issues to protect oneself or to protect others from harm is permissible and, in some cases, even necessary so that people get along with one another. And, a journalist wrote: to tell the truth and only the truth at all times is a noble ideal but, boring… Could it be that you prefer other people speak truth, and yet, at times, you eel that you have good reason not to speak the truth? Does it matter whether you tell the truth or not? But, why do people have the tendency to lie? ‘Greed'; its selfish ambition that is still very much the motivation that impels some people to lie…  Also, ‘Fear'; fear of consequences or of what others may think, if the truth is told… is probably the biggest reason for lying in the workplace…

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Many businesses create an atmosphere that discourages people from ‘telling the whole truth and nothing but the truth’… As a result, many bad decisions are made, not because of the information provided to leaders but because of information withheld for fear of retribution. Fear of the truth usually emerges when leaders have a ‘arrogance of knowledge’ or, conversely, when less than competent leaders dread exposure of deficiency, or the natural strata of a bureaucracy often appear designed to entomb the truth… The reality is that businesses are less efficient, prone to poor decisions when truth is systematically kept hidden… According to Ron Ashkenas; showing customers or partners what’s truly behind the curtain could undermine credibility and threaten the deal. The wiser course in many cases is to limit the truth and figure out how to ‘deliver’ it later… It’s easy to be judgmental about all these situations and to insist on absolute truth at all times, but people don’t work that way, and neither do organizations. As managers, the best you can do is to be more aware of why you avoid or shade the truth — and make sure that it’s an appropriate time to do so…

Islam and The Truth On Truthfulness (summarized and paraphrased): Truthfulness comes at the top of the list of morals and Allah considered it to be the foundation for all principles. Truthfulness, besides being an honorable trait, is a necessity in all public lives and perhaps it’s the greatest gate to happiness of individuals and their entire communities. For example, when one wishes to make a purchase, they will look for a salesperson that is known for their honesty. The most just and accurate scale of measuring a nation’s advancement is in the truthfulness of its people, whether in words or deeds. It’s a major crisis when trust is lost, and when people are dishonest in their dealings with one another. When this happens, lying spreads among the people – lying in words, deeds and intentions… Islam considers truthfulness as key to righteousness and lying as the key to evil… Lying is cowardliness, degradation and a transgression of boundaries… Beware of lying, even if it’s only once, as it will open the door widely for further lying: He who lies once will lose his position and trust in the eyes of the people…

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Cutting-Edge Thinking is Think about Thinking: Is the Internet Making You Stupid, in Your Thinking? Too Little, Too Slow…

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THINK! Think is a word that most people read but don’t do, or don’t do enough of … According to Gitomer; consider these elements of how thinking affects every area of your business: • Thinking is the process used to make a decision. • Thinking is vital to attitude. • Thinking is vital to response. • Thinking is vital to action. • Thinking is vital to outcome… Thinking is a process that’s developed through conscious practice… One of the classic objections (or stalls) of all time is– ‘I want to think it over’… Yes, THINK! is complex – that’s why most people don’t do it properly, or at all… John Patterson, founder of  NCR Company in 1880, created the word; THINK! as a motto, and directive for his business… Have you ever consciously thought about the way you unconsciously or subconsciously think? Have you ever thought about how thinking affects outcomes and results?

According to John Gottman; when you are thinking your unconscious is at work sifting through the situation in front of you, throwing out all the irrelevant information while zeroing in on what really matters; a person’s unconscious is really good at this… this process of thin-slicing information often delivers a better answer than more deliberate and exhaustive ways of thinking... According to Ricardo Oliveras; there are ‘thinking traps’ and a lot of them have to do with our natural bias, for example; thinking you are better than you are (i.e., overconfidence in your abilities, memory, intuition or gut)… Trying to confirm decisions you have already made (i.e., looking for confirmation, protecting status quo or sunk costs…), or unquestioning your thoughts and assumptions… You can avoid these traps by talking to people who hold different points of view– it’s important to have diversity in thinking, but there is one trap that is intrinsic to groups; the ‘group think’ trap. To avoid ‘group think’– be sure that dissenting opinions are heard, and that critical thinking is always being encouraged…

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Is The Internet Changing the Way You Think? According to Nicholas Carr; I’m not thinking the way I used to think; and the ever-deepening dependence on networking technology is indeed changing not only the way you think, but also the structure of your brains… We don’t bother to write down or memorize detailed information any more, we just do an Internet search to retrieve it, when we need it… The Internet has become a global prosthesis for your collective memory… And,  some experts say, that you may be losing some of your capacity for contemplative thinking that was fostered by the ‘print-media’ culture, but other experts say that you are gaining new and essential ways of thinking, working, living… through the Internet…

According to Sarah Churchwell; Is the Internet changing your brain?  As a writer, thinker, researcher and teacher, what I can attest to is that the Internet is changing my habits of thinking, dramatically… According to Geoff Dyer; sometimes I think my ability to concentrate is being nibbled away by the Internet; other times I think it’s being gulped down in huge, jaws-shaped chunks… I remember those quaint days before the Internet; at work, once you made it to your desk there wasn’t much to distract you; you could sit there working, or you could just sit there… But now you sit and there is a distraction; there is the Internet with a universe of possibilities– many of them obscurely relevant to the work you should be doing… According to Bidisha; the Internet is definitely affecting the way I think, for the worse. The Internet means that we can never get away from yourself, temptations and obsessions. There’s something very depressing about knowing I can literally and metaphorically log-on the same homepage, wherever I am in the world…

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In the article How To Think Differently by Haydn Shaughnessy writes: A basic definition of innovation is thinking differently– it’s a process of associative thinking, and it happens more when you mash-up a lot of ideas or sources of information... According to Daniel Kahneman, in his book ‘Thinking Fast and Slow’; he points out that we have two thought process: One is ‘slow’– expertise-building that allows you to organize and access a body of evidence about your reality… The other is ‘fast’ a style of thinking for rapid decision-making that you do when you are forced to recognize new patterns or responds to the emotional urges that govern how you treat people… You typically oscillate between these two modes of thinking, but in a rapidly changing world, it’s the ‘thinking-fast’ bit tends to dominate. The key to effective thinking is to balance the two– how you think differently and how to think so as to grow your expertise that’s relevant… The reality is that to think differently you must be good at thinking, you must be thoughtful, and this becomes your platform, your expertise… It’s a balance between– thinking fast and slow…

In the article Think Different About Business by Dr. Marc R. Dussault writes: If you were like most people then you do what most other people in your industry do… Yes, you develop your own processes, systems… but by and large you followed the methods of those that have gone before you. This process of copying what other business have done is called ‘mimiticisomorphic’ behavior. What academics have found is that an industry company will mimic the behavior of other companies and the actually ‘morph’ into them or become like them, over time… whereas, companies should strive to become  ‘anti-mimiticisomorphic’What this means is that you actually think and behave the opposite way to other companies in your industry. Instead of following the trends you buck the trends, so that if your competitors go left, then you go right…

Businesses tend to follow other businesses like sheep. If one company raises their prices, other companies raise their prices. If one company lowers them, other companies lower them. And yet, many times this is done in an unexamined and untested way, without serious thinking… So, what if you were to break out of this sheep mentality– think and find solutions that are– different, better, more innovative, then your competitors. This way of thinking will lead you to better outcomes than thinking like everyone else. Try thinking in new ways…

According to Michael L. Norton; if you are making-decisions the same way you have for many years, then it’s time to, at least, examine your thinking… there’s a large body of research about ways in which you should ‘think’ when making-decisions, for example; creating decision trees that map out different scenarios– if you want to do this, then you should do this and not that, or making lists of the pros and cons and making a decision based on which list is longer, and so on… But, many experts believe the notion that ‘over-thinking’ a decision can also lead to the wrong outcome… Having a leader who considers every detail of information sounds great in theory, but it can be less than optimal for moving forward with a decision: There’s a paralysis that can come with thinking too much…

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Wherever there is uncertainty ‘magical’ thinking finds a foothold, and  people resort to tradition, gut instinct, or the nostrum of the moment to dispel the anxiety of not knowing… According to Jason Gots; just ‘slow down’ and think about your thinking in making a decision… According to James Heskett; good leaders know when to think ‘slow’ or when to think ‘fast’– they understand the thinking that’s associated with– rigid stagnate, unthinking application of age-old rules… Vs. careful reflective thinking on matters that need intelligent, unbiased thought… Then, there is ‘under-thinking'; the leaders that swing too far to the other end of the decision-making thinking spectrum– they don’t think at all…  so often their decision is — ‘Just go with your gut’…

Sometimes when you make decisions with ‘habitual’ thinking, things can work out fine. But that doesn’t mean that the decision produces the best outcome. If you have done the something in the same way for years, it’s probably time to rethink your decision-making– to think differently, a little more… However, when making many decisions people often think either; too much or too little, and pundits have yet to determine the right balance between the two for any given decision. According to Jack Lannom; the term ‘meta-cognitive’ thinking meansthinking about your thinking’… and leaders who are not equipped with a ‘meta-cognitive’ thinking mind-set for examining their company’s basic and underlying structures that creates and drives effective change in their organization will probable never, in the primary sense, have the capability or capacity to solve present or future problems at the deepest level… Hence, an imperative for many companies is for everyone on the leadership team to practice ‘meta-cognitive’ thinking; that is, for each person to think about their thinking as individuals, and to think about the way your organization thinks…

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Internet Conflict– ‘Right to Be Forgotten’ Vs. ‘Right to Know': The Rorschach Test– See What You Want to See…

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Right to be Forgotten; the European Union Court of Justice (EU) ruled, in May 2014, that Europeans have the ‘right to be forgotten’ and Internet search engine firms, e.g.; Google… must remove links from the European versions of their searches, when an individual makes a  request to do so… According to the EU law; the ‘right to be forgotten’ is a legal right for individuals to request their personal information be removed from all Internet searches in European Union countries, and other countries are following with similar laws... For some people it’s a right to reinvent themselves, and to get second chance. For others it’s a chance to hide incriminating information about themselves…

However, many others, including U.S. say that the very foundation of the Internet is based on ‘permanency’ and ‘right to know': Once information is in the Internet people cannot just delete it and shred the past; because now it’s in to public domain, where governments has it, Facebook has it, Google has it… However, search engine like Google… are saying that it does not control data it only offers links to information that’s freely available on the Internet, and forcing it to remove that data amounts to censorship… So this issue has pitted privacy advocates against free speech campaigners, who say allowing people to ask search engines firms to remove information would lead to a white-washing of the past…

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The EU has been pushing heavily for a new law on data privacy– of which ‘right to be forgotten’ is a key component, and, they are looking to extend their ruling worldwide… It argues that old, inaccurate or even just irrelevant data should be taken out of search results, if the person involved requests it… for example; drunken pictures from university days, or revenge nude photos, or references to petty crimes committed many years ago… all of which remain a prominent part of a person’s Internet footprint… While others say that people could use this type law to hide and suppress information of public importance, such as; information about elected officials conduct, or dangerous  criminals, or sex offenders, or paedophiles…

In the U.S., it’s next to impossible to redact or shred a person past. It’s doable, but solutions are hard to come by and many experts say; that it’s highly improbable that U.S. will change to the EU model, any time soon: Forgive but not forget is the U.S. attitude, for example; if you sold five grams of weed and got busted for it ten years ago, or if you put up embarrassing selfie on Facebook in college… and you want to delete it, then that’s just tough– you must live with it…

‘EU’ Law Vs. ‘U.S.‘ Law: It’s prudent here to insert a brief description of the differences between U.S. law and EU law when it comes to privacy and control of one’s reputation. The legal powers of the U. S., which are not extending the benefits of the ‘right to be forgotten’ to U.S. citizens, believe that information should flow freely in order to best educate and protect its citizens and democracy from dangers of censorship and tyranny. They rely on tort law to protect individuals from harmful effects of blatant and malicious falsehoods, specifically laws protecting one from libel… And, if someone post something online that is false, presumably the U.S. legal system would offer recompense for the libeled individual. But, if something is true the U.S. government will probably refuse to take any action to negate the posting. That would be an infringement on ‘right of free speech’ and the right of the public to access true information…

In Europe, things operate similar but with more range. The European high court sees privacy as a right. They consider the individual as the arbiter of what should and should not be released about private matters including, but not limited to, those that take place in the home, secrets, thoughts, ideas… There is a right to privacy in the U.S. as well, but it does not hold the weight that it does in the EU… The difference is all the more clear when you add in the ‘right to be forgotten’… In EU, if a person makes a mistake or find something online that displeases them, they have the right to dispute that with search engine firms (e.g., Google…) and in turn, these firms, under this ruling, must review the case and remove the data should it find information to be irrelevant or unimportant to the general public. In the U.S., you can request that search firms remove false information but, if it’s true, they have no obligation to do so… According to Eric Schmidt at Google; simple way of understanding on what is happening here is that you have a collision between ‘right to be forgotten’ and ‘right to know’, and clearly there must be a balance… having looked at the ruling, which is binding; the balance struck by the EU is wrong…

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In the article The Solace of Oblivion by Jeffrey Toobin writes: The European Court ruled that search engine firms (e.g., Google…) must delete certain links that violate privacy… The consequences of the European Court of Justice’s (Court) decision are just beginning to be understood… Public reaction to the decision, especially in the U. S. and Great Britain, has been largely critical. An editorial in the New York Times declared; it could undermine press freedoms and freedom of speech… A recent report by a committee of England’s House of Lords called the decision; misguided in principle and unworkable in practice.

According to Jules Polonetsky; the decision will go down in history as one of the most significant mistakes that a court has ever made… It gives very little value to free expression. If a particular web-site is doing something illegal, then that should be stopped and search engines firms should not link to it. But for the Court to outsource to search firms, like Google, to make decisions about whether to publish, suppress a person information, says– that something is very wrong with the process… it’s essentially requires Internet search firms to adjudicate these issues and that shows a basic lack of understanding of reality…

The European Court’s ruling applies only to search engines, not to social-media sites, but the principles underlying the decision have also drawn attention and concern at Facebook, where posts are not public in the same way that search results are; where most posts are generally visible only to ‘friends’. But the standards for access to posts are slippery and often poorly understood by the people who use the service. In light of this, the chances that photos on Facebook could stray in embarrassing directions may be even greater than the risk of unwanted results appearing in a Google search… It’s clear, for the moment, that this decision has created a real, if manageable, issue for Internet search firms, for example; suppose the French establish their own definition of right to be forgotten, and the Danes establish still another, and countries around the world applying their own laws, traditions… then, the result is an Internet in crisis.

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In the article The Right to Be Forgotten by Jeffrey Rosen writes: In theory, the ‘right to be forgotten’ addresses an urgent problem in the digital age: it’s very hard to escape your past on the Internet now that every photo, status update, and tweet lives forever in the cloud. But Europe and U.S. have diametrically opposed approaches to the problem. In Europe, which is the intellectual roots of the ‘right to be forgotten’ concept is found in French law, which recognizes; ‘le droit à l’oubli’, or ‘the right of oblivion’– a right allowing convicted criminals who have served their time and presumably rehabilitated– to object to the publication of any facts about their conviction and incarceration.

In U.S. by contrast, publication of a person’s criminal record is protected by the First Amendment… European regulators believe that citizens face the difficulty of escaping the past now that Internet records everything and forgets nothing– a difficulty that used to be limited to only convicted criminals… According to Viviane Reding; the core provision of ‘right to be forgotten’ is simply; If an individual no longer wants his personal data to be processed or stored by a data controller, and if there is no legitimate reason for keeping it, then the data should be removed from the system.. But it’s also clear that the ‘right to be forgotten’ cannot amount to a right for the total erasure of history…

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In the article No Easy Answer to Enforce Europe’s Law by Steve Del Bianco writes: The EU ruling upsets a basic principle regarding the openness of the Internet, and has always been viewed as a platform to express opinions, access information… But, this ruling converts search firms from intermediaries into censors, forcing them to balance Europeans’ right to information against an individuals’ demands to suppress lawfully published information about them… The problem is the virtual impossibility of harmonizing the Court ruling with even the most basic concept of Internet freedom. Mass suppression of data through search blocking is wholly antithetical to the right to access information… Some Internet advocates are calling on the European Court and lawmakers to ‘void’ the ruling but until then Internet search firms are still saddled with immediate challenge of implementation…

Internet search engines firms are not, nor should they be, the ‘censors’ of the Internet, and they should not be put in the position of deciding what information is– adequate, relevant, no longer relevant… based solely on an individuals complaint… Balancing rights to freedom of expression and privacy is never easy, especially online, but the ‘right to be forgotten’ should not become some sort of ‘super right’ that trump all others… Privacy experts are taking a new look at whether a ‘right to be forgotten’ law aimed at Internet search engines firms can coexist with the constitutional protections of freedom of speech and the press… Some see ‘right to be forgotten’ as a very successful political slogan, but like many successful political slogans, it’s like a Rorschach test; people can see what they want to see, for example: On one hand, some people, perhaps without considering the consequences, ‘see’ the ‘right to be forgotten’ as the ‘right’ to protect privacy; whereas other people, supposedly defenders of freedom of expression and the ‘right to know’, ‘see’ it as a free speech issue…

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Struggle of Illegal Immigration– Parallels Between U.S. and Ancient Rome: Lesson Learned, Unintended Consequence

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Immigration is a hot issue today, many believe that illegal immigration is reaching such levels that it threatens national security, and perhaps even the national survival. Others believe that the country should give legal status to those who are already illegally in the country… According to kurtedwr; the U.S. has already done this once, in 1986; and the result was that millions more, seeing that there was hope for eventual legal status came illegally to the U.S. hoping for amnesty. We now have over three times more illegals in the U.S. than in 1986.  Some say that if we continue to do this eventually we will reach a point, if we haven’t already, where there are so many illegals in the country that– they will not learn or adopt the U.S.’s– culture, traditions, laws, ethics, language… and they will never become Americans…

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It happened before; just ask ancient Romans: Around the middle of 4th century AD, conditions outside boundaries of the Roman Empire became so bad that large numbers of people who were not citizens of the empire wanted entry for a better life… And just like in U.S. today, there were many ancient Romans, at that time, who believed that any kind of immigration (illegal or not) was good for the country and there were economic benefits that could be derived from allowing illegals to stay and  settle in the country… Sound familiar: Isn’t that today’s U.S. story line; illegals are doing work Americans won’t do and the economy will suffer without their low-cost labor? The ancient Romans subsequently changed laws to give illegals legal status. Once illegals had legal status, other illegals wanted to enter the empire to gain legal status also. (sound familiar). It’s estimated that there are between 12 and 20 million illegals in the U. S., and under various proposals that are being considered by U.S. government, almost all of illegals will be given opportunity to gain legal status and eventual citizenship…

According to Heritage Foundation; over the next 20 years perhaps as many as 50 million illegals could gain legal status, if some of the current thinking prevails… And these illegals, too, have relatives who will want to come to the U. S. and, just as the illegals before them, many will also enter illegally… And should this migration of illegals continue it will have a profound impact on very ‘core’ of U.S. culture, traditions, laws, politics… But if we step back in time; there are lessons that can be learned from past great movement of illegals, for example; they overwhelmed the ancient Roman Empire, smothered its culture… The U.S. is now at a critical point; either effective action is taken or the country faces much greater issues later, such as the ancient Romans did…

However, there are no easy solutions for illegal immigration, for example; many immigration advocates say that it’s impossible for the U.S. to deport the many millions of illegals in the country, so just let them stay… But others say, that since illegals are here to work and make money, which many of them then send the money earned in the U.S. to families in their country of origin… so then their logic goes, if existing laws against the employment of illegals were enforced, the magnet of employment would disappear. And without the prospect of work many or most of the illegals would deport themselves… The presence of millions of people who have no regard for the U.S. culture, traditions… who speak little English, whose loyalties lie elsewhere is not a recipe for a healthy country. The prospect of taking action to legalize millions of illegals, which will attract tens of millions more is recipe for national suicide… If it seems far-fetched, remember; ancient Rome thought it was safe to legalize great numbers of illegal immigrants, and it was one of several factors for ancient Rome’s down fall…

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In the article Illegal Immigration And Fall Of The Roman Empire by alpineski writes: The ancient Roman Empire demonstrated the veracity of the adage that– all empires fail for the same reason– in the end it costs more to maintain an empire than the empire can afford to pay… But is this adage shop-worn and of no real value in the modern world? And is disappearance of the ancient Roman Empire simply an obscure event from a long ago and irrelevant past? So, lets imagine a tourist traveling throughout the Roman Empire in the year 405 AD and they would have found it modestly prosperous and relatively peaceful. True, millions would have been living in abject poverty in an economy based on subsistence agriculture. The middle class would have been small and embattled with most of the wealth concentrated at the top of the social and economic pyramid, about 2%-3% of the population… Also, the tourist would have found that the most prominent and successful institution was the army, disciplined, well-trained and an altogether formidable fighting force… but then just fifty years later all this was gone…

One of the factors was illegal immigrants, they were equal to perhaps 10% of the native population… Not that illegals were rare and unusual, they had been seeping into the ancient Roman Empire for almost two hundred years, but what changed were the increasing large numbers… They crossed the Rhine River by the tens of thousands and kept coming… Historians say that the ancient Roman army was unable to stop them, and the native population did not seem to object, like we are seeing in the U.S. today… and there were indications that the illegals were even welcomed into the empire as workers… And, since the empire was sparsely populated it appeared that there was plenty of land to go around… So where does this leave U.S. and other western nations regarding illegal immigrants? I would say; it’s a bit of sticky wicket, I fear. However, modern western nations are stunningly wealthier now, and far more flexible than the brittle ancient Roman Empire; and yet, even here and now, there are limits…

During the past half century the costs of sustaining a developed nation has risen dramatically, while the ‘core’ of their productive economies, i.e., manufacturing… has transferred to the third world countries where labor costs are far less, and in a sense the U. S. and other western nations have been exporting their wealth to the third world and importing third world poverty… But more important, can national cohesion complicated by the importation of illegals, without genuine assimilation be maintained?  Will native populations of western nations and the U. S.– as they watch their standard of living decline, and as new wealth is being generated by the system, which is being mostly concentrated at the top of the social and economic pyramid– be counted on to support the government? Will the middle class remain loyal to governments who renege on their long-standing promises for– better jobs, more opportunity, better life– in order to pay benefits to illegal immigrants who pay virtually nothing?

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In the article Roman Empire: Gold Standard of Immigration by Cullen Murphy writes: There’s a widespread view that the Roman Empire was swept away mainly by a relentless tide of hostile outsiders; and we’ve all heard ugly references to the ‘barbarian hordes’ in today’s immigration debates. But truth is that ancient Rome was the world’s most successful multi-ethnic state and history’s longest lasting one, bar none… So it’s natural to wonder if ancient Romans might have something to teach the U.S. about the illegal immigration issue, and I’d argue that they do: One lesson is the notion of ‘taking control of the borders’ is overrated; borders were pliable then, and are even harder to define (or police) now. A second lesson is the importance of nurturing a national culture: It was the source of ancient Rome’s power, just as it’s the source of U. S’s…

Ancient Rome‘s ability to assimilate newcomers is so well-established that it’s easy to lose sight of it… But expansion of the Roman Empire to include tens of millions of non-Romans– and then absorption of the immigration of many more millions– was even a bigger phenomenon still… Military service integrated some illegals but ‘romanization’ occurred without the help of tools that U.S. takes for granted, such as; public schools, mass communications, even a single language (In the Roman Empire the elites spoke Latin and Greek, but the empire was polyglot.)… The historians observed what ancient Roman’s called ‘culture’ was in fact what kept the illegals in line…

The U.S. too, is an assimilation machine… Looking back, U.S. managed to accommodate the huge waves of immigration in 1850s, 1880s, first decade of the 1900s, and 1980s– despite skepticism at each of those moments that it ever could. Every age doubts that it can retain the absorptive capacity of ages past, just as every generation  fails to remember the human heartache, wrenching adjustment of past immigration. In the end, the example of ancient Rome suggests that the most effective long-term stance toward illegals lies less in building walls, and more in strengthening the foundation of society– bolstering not just tangibles, such as; education, healthcare… but also intangible, such as; equality, principles of access and opportunity, entrepreneurial spirit… If we take care of these, much else will take care of itself…

In the article Laws Governing Immigration Don’t Work; When Not Enforced by John F. McManus writes: U.S. immigration legislation and policies just are not getting the job done… Many laws are being ignored, others are working  contrary to their intent, and some that are not even laws (e.g., executive orders) have the effect of increasing large numbers of illegal border crossing. U.S. is country of immigrants and there is no doubt the rich history of immigration has contributed significantly to making the U.S. productive and strong… Nor can there be any assurance that past procedures were problem-free… But the penniless immigrants of years gone-by came into the U. S. legally. They got in line, secured qualified admittance, and eventually won citizenship… 

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Allowing today’s millions of illegals to bypass the previous process for entry into the U. S. denigrate the worth of properly gained citizenship achieved by millions. But that is not the only issue; many of today’s illegals have found jobs, worked hard, obeyed laws… but, with little concern or understanding of the U.S.’s very foundation; its culture, its traditions, its laws… There are more than enough laws on the books to manage the illegal immigration crisis. What’s needed is the determination to– use them properly, humanely…

According to Edward Gibbon who wrote; ‘The Decline and Fall of the Roman Empire’ said; emergence of a ‘welfare bread and circuses state’, and the great riches of ancient Rome became a big magnet for those looking for a better life… and the great numbers of illegals were a factor that ‘hollowed out’ the very core of ancient Roman Empire’s– culture, laws… and by the fifth century the empire was in free fall, and quickly disintegrating… A lesson to be learned from ancient Roman Empire’s illegal immigration issue is– in order for a country or empire to survive, prosper its population must understand and protect its ‘core’ principles– culture, loyalty,  ethics, traditions… 

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The Big Kludge; Clumsy, Goofy, Awkward… but, Good Enough: Tangled-Mess of ‘Kludgeocracy’ in Business, Government…

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Get with the ‘kludge'; Yes, kludge… Kludge is word of the decade: Need to sound smarter than smart? Kludge… Need to rip with flair? Kludge… According to Merriam-Webster Dictionary; kludge means; awkward, clumsy… it’s an inferior system, program that is crafted quickly to resolve a pressing problem… According to Oxford-English Dictionary; kludge means; collection of ill-assorted parts assembled to fulfill a particular purpose, which provides a temporarily and clumsy solution for a specific fault, problemA kludge is a work-around, quick-and-dirty solution that is clumsy, inelegant, difficult to extend, hard to maintain, and yet it can be an effective, quick solution to a problem… It’s a rough synonym for the term ‘jury-rig’, and has come to mean– ‘not smart’, ‘ ridiculous’… However, to many people ‘kludge’ is seen as innovative and is often referred to as a ‘MacGyver’ type solution (after highly inventive TV character of the 1980s), which allows a system to stay-up, running despite its clear need for a better solution. It’s clever trick intended to solve a difficult issue in a quick but not so elegant manner… and many times it works for the wrong reason…

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According to Eric Raymond; the term is indirectly derived from the German ‘klug’ meaning– clever… its general meaning and usage was possibly inspired by the Kluge Company’s ‘paper feeder’– a fiendishly complex assortment of cams, belts and linkages, and devilishly difficult to repair… but oh, so clever! According to J W Granholm; a kludge does not work for amateurs; there is a certain, indefinable, masochistic finesse that must go into true kludge building– an amateur may readily presume that– ‘that’s the way things are done’… But, a professional can easily spot it as a kludge… According to Arturo; probably the most famous visual representation of a ‘kludge’ is found in Goldberg machines, i.e.; Rube Goldberg’s invention that involves complex devices to solve a simple task…

But sometimes the process of ‘tinkering and kludging’ can be a good thing, for example; the terms; ‘change or perish‘ is a business truism, but so is its unhappy corollary; companies ‘change and perish’. The process of change can badly disrupt an organization… According to Eric Abrahamson; companies can alternate major change initiatives with carefully paced periods of smaller, organic change, using processes he calls ‘tinkering and kludging’ (kludging is tinkering on a large-scale), and he says the result is dynamic stability, which allows change without fatal pain… visualize it as a process of continual but relatively small reconfiguration of existing practices and business models rather than the creation of new ones. As they tinker and kludge, successful companies would be wise to follow four guidelines; don’t reward shameless debt; appoint a ‘chief memory officer’ who works with the company to avoid making the same old mistakes; ‘tinker and kludge’ internally before searching for solutions externally, and hire generalists who tend to be more adept at tinkering and kludging…

As might be expected, the concept of kludge has made the leap from science to public policy, and partly into economics… Today, much of U.S. public policy might be described as clumsy and wasteful, but temporarily effective… To see policy kludges in action, one need look no further than, for example; mind-numbing complexity of health-care system, or the Byzantine system of funding higher education, or the bewildering federal-state system of governing everything from welfare, to immigration, to environmental regulation… According to Paul Krugman; Obamacare is a big kludge; clumsy, ugly structure that more or less deals with a problem, but in an inefficient way…

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In the article Kludgeocracy: The American Way of Policy by Steven M. Teles writes: The issues that will dominate politics for foreseeable future is the complexity of government, rather than its sheer size. Greater attention will be placed on rickety, complicated and self-defeating complexity of public policy across multiple and seemingly unrelated areas of government activity… But, you cannot solve a problem until you can name it: There are names for many areas of politics, e.g.;right vs. left’, ‘big vs. small government’... But no name for what should be an equally important set of questions that cuts straight through the ideological divisions, namely– complexity vs. simplicity.  And, for lack of a better alternative the name given is ‘kludgeocracy’. The most insidious feature of kludgeocracy is the hidden, indirect, and frequently corrupt distribution of its costs. Those costs can be put into three categories– costs borne by individual citizens… costs borne by the government that must implement the complex policies…  costs to the character of the democracy… The price paid by citizens to comply with government complexity is the most obvious downside of kludgeocracy…

Moreover, kludgeocracy is a significant threat to the quality of the democracy. The complexity that makes so much of U.S. public policy vexing, wasteful is also what makes it so easy for organized interests to profit from the state’s largesse. The power of such interests varies in direct proportion to visibility of the issue in question… According to Mark Smith; corporations are most likely to get their way when the political issues are out of the public gaze… That is why business invests so much money in politics– to keep issues off the agenda... The cost of kludgeocracy is considerable, but addressing the problem requires that we understand why U.S. politics turns to kludgey solutions so regularly…

A condition as chronic as kludgeocracy inevitably results from many causes at once, but the key interlocking causes are, for example; the structure of government agencies, public ambivalent, contradicting  expectations of government… and, most disturbing, the emergence of a ‘kludge industry’ that supplies a constant stream of complicated, roundabout policy solutions… Kludgeocracy is self-generating; it feeds off the system’s appetite for complexity, in the name of markets and innovation, and driven by increasingly strict and often arbitrary limits on government. U. S. has created what public administrators call a ‘hollow state’, in which core functions of government are hired out to private contractors, operating under oversight of increasingly overwhelmed civil servants… The great agenda for the foreseeable future is coming to grips with– kludgeocracy…

In the article High Cost of Rube Goldberg Policy-making by Kevin Drum writes: Corporations regularly rail against the complexity of the tax code, but they’re crying crocodile tears… The U.S. ‘statutory’ corporate tax rate is one of the highest in the world, but the ‘actual’ tax rate that corporations pay is one of the lowest. Why? Corporations have spent decades lobbying for mind-boggling array of– loopholes, exemptions, change definitions… Likewise, Wall Street complains that the Dodd-Frank financial regulation bill is too complex, but they’ve spent the past couple of years trying to make it even more complex. Why? Because complexity is a friend… simple and blunt rules are hard to evade, but complex ones have lots of escape hatches for those clever enough to find them. And make no mistake; the geniuses on Wall Street and the tax accountants at Fortune 500 firms are very clever… So are their lawyers, who will spend the next decade getting agency rulings, and court decisions that lock in place all the loopholes that they discover…

According to Steven Teles; complexity affects policymaking, e. g. ; First, U.S. has a natural affinity for fairness. We want social policies to be fair, which means, (a) making sure not a single deserving person is excluded, (b) making sure that not a single undeserving person gets benefits they shouldn’t. We’re just not willing to accept 95% fairness anymore, and that leads us down a rabbit hole of ever-increasing complexity… Second, social policy-making has become so hard that it can only happen if it’s hidden in the fine print, so to speak… This means accepting a second or third-best option that doesn’t raise too many hackles, rather than a first-best option that might be both better and cheaper, but can never get through legislative process.

So what’s the answer? There are many suggestions, e.g.; policy-makers made to be embarrassed when associated with kludginess… The truth is that more transparency would be good for everyone: Good because it makes the costs of programs obvious, and when taxpayers understand how much programs cost, they’re less excited about expanding them. But it’s also good because it allows for the design of better and more cost-effective programs, and that makes government more efficient. And, a more efficient government with fewer corporate subsidies is one that taxpayers are more likely to support…

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What makes a program or policy qualify as ‘a kludge’? A program or policy qualifies as a kludge if the fundamental policy mechanism is substantially more complicated than the problem it is trying to solve… In general, it’s a ‘kludge’ when it builds upon rather than supersedes, the policies that came before it… According to Sheryl King; economists are famous for lifting concepts from scientific theory and applying them to issues in their field. In that spirit, I propose adding one more, namely; ‘kludge’… because it goes a long way to explaining sluggish economic growth and poor business productivity… There are at least two ways kludge can suppress private sector economic growth: When business opts for quick fix rather than complete overhaul, replacement of out-of-date processes… and, when it holds off investing in new and more productive capital equipment... Quick fixes enable a business to achieve a near-term boon to the bottom line and shareholder return, but at expense of sustained business performance. 

According to Steven Teles: I’m not entirely sure that anyone actually does have an incentive to reduce kludginess. I do think that if the costs of kludgeocracy were more visible, there would be more incentive for business and government to propose– anti-kludges. If the compliance costs of various public policies were clearer, the craziness of doing things indirectly might be clearer and politicians might actually worry about being blamed for them… According to Suzanne Mettler in her thesis; ‘Submerged State'; it’s a kludge in action when the political system buries the actual actions of government under a confusing web of laws… And the greater the number of laws, the more nooks and crannies for the ‘kludge industry’ to embed itself by pulling the fundamental knowledge needed for governing and putting it into the private sector, thus they become nearly indispensable… Hence, it’s not so much about big government, but more about the big ‘kludge’ government…  

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Managing the Customer Experience– No Jerk Rule: Deliver High Expectation and Inspire Brand Loyalty

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The customer experience is the sum of all experiences a customer has over the duration of their relationship with an organization, and it’s the single most important aspect in achieving success for companies across all industries… A successful customer experience program is based on the ‘right’ people doing the ‘right’ things at the ‘right’ time for customers over the long-term… and no jerks allowed– No Jerk Rule: Jerks (whether leaders or employees) can easily derail any attempt to implement an effective ‘customer experience’ program and thus do much harm to the overall strategy of the business… Each business has a unique customer experience profile, and each program must be tailored and designed to fit each business’ value propositions– there is no one size fits all According to Ewan Duncan; organizations that are skillful at managing and executing their customer experience program can reap enormous rewards,e.g.; higher customer loyalty, less churn, more revenue, greater employee satisfaction…

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A well-conceived customer experience program is consistent across all channels and is the basis for significant competitive advantages… which sets it apart from the competition in the eyes of customers, and that serves to inspire loyalty… According to Accenture survey; 85% of executives say that customer experience is a very important strategic priority; 88% indicate they are investing more in this area year over year… 75% of respondents say the increasing importance of the customer experience is resulting in major and sustained changes across their business. This importance is driven by customers and the fundamental changes in customers expectations, interactions with business… However, metrics of value and ‘return-on-customer experience’ investment remains elusive…

Temkin Group Report, ROI of Customer Experience (CX), 2014: To understand how customer experience corresponds to loyalty, this survey examined feedback from 10,000 consumers describing their experiences with and their loyalty to 268 companies. The analysis shows a strong correlation between customer experience and loyalty factors, such as; repurchasing, trying new offerings, forgiving mistakes, recommending the company to friends and colleagues… The survey compared consumers who gave companies an excellent customer experience rating to those who gave companies a very bad customer experience rating, and found that the percentage of customers who plan on repurchasing products is 18 percentage-points higher at organizations with excellent CX ratings. Additionally, the Net Promoter Scores (NPS) of companies with excellent CX ratings average 22 points higher than the scores of companies with poor CX…

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In the article Customer Experience Is Today’s Business Benchmark by Martin Zwilling writes: Customer experience is the cumulative impact of multiple touch-points over time, which result in a ‘real’ relationship feeling, or lack of it… The advent of social media and real-time interactive feedback via Internet allows every customer to build a relationship with a business rather than just touch-points. Yet we are all still learning what that really means, in terms of hard business practices… Maybe it time to focus more on the customer experience: There is evidence suggesting that companies with higher customer experience rating typically; grow faster, more loyal customers, more profitable… than their competitors. However, these programs can be a double-edged sword; by focusing on ‘wrong’ experiences a business can lose competitively very quickly. Have you checked your ‘customer experience’ lately?

In the article What Is Customer Experience? by Vala Afshar writes: To get the customer experience right, companies first need to get the definition right, and according to Esteban Kolsky; meaning of the customer experience is ever-changing; here are a few insights into how it’s being redefined: 1. Customers are not listening to what you have to say; customers already have information about your business, they no longer need to rely on what you say… 2. Customers create their own experience; companies must rethink the notion that they control the customer experience… reality is about building an infrastructure that allows the customers to do whatever they need to do, using any channel they choose to do it… 3. Customers interaction is complex and unpredictable; companies can no longer be silos… customers actions have changed from ‘well-defined’ to ‘anything-goes’… 4. Customers are in communities– that’s where the knowledge is; the community is replacing– knowledge systems, which have become a depository of outdated information… now, social media links the communities of knowledgeable people who are the new depository of current and relevant information…

In the article Customer Experience Metrics Every Successful Company Tracks by Amar Zagorica writes: Customer satisfaction is the most important metric your company must be aware of, everything else is secondary! Customers expect you to respond to their issues in a timely manner… Timeliness and speed have a direct correlation with satisfaction! Research shows 62% of customers select a company because of the knowledgeable employees… and, because customers have the ability to easily find information or get help they need… A well-conceived customer experience program is a key competitive issue… and it’s one of the critical factor for instilling customer loyalty. Companies that master the customer experience can capitalize on a powerful competitive issue, simply because customers are more likely to believe what they– experience or feel… rather than what they– read or hear. Consider: Happy customers tell 3 friends; but, Unhappy customers tell GOOGLE (the universe)…

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In the article Customer Experience Is The Best Offensive Strategy by Christine Crandell writes: The ‘real’ rock-bed of building enduring customer relationships lies in the perception customers hold of value. Value is increasingly not in the product but in the experiences that sellers provide. Yet, value is in ‘eye of beholder'; each customer defines what value is, and is not… and, the definition changes along the life cycle of the relationship… Value is the new credit/debit of the customer trust bank… A company’s ability to deliver on a customer-defined value is closely tied to a company culture; remember the saying ‘happy employees lead to happy customers’… According to Ken Klein; there is congruence between how you treat employees and how they treat customers; the employee to customer engagement is a key factor for company success… All employees must be empowered to simplify solutions and make decisions, on the spot, which will help customers achieve their goals– No Jerk Rule…

According to Report, Navigate the Future of Customer Experience in 2014: Customers are becoming increasingly dissatisfied because organizations are often delivering; (1) inconsistent cross-channel experiences, (2) reactive not proactive customer engagement, (3) one-size-fits-all customer process, (4) inefficient customer interactions… Let’s face it, in most cases, customer experience programs are all over the place; it’s time to get focus, deliver on a consistent customer experience program… Some supporting statistics, consider:

  • Customer experience will overtake price, product as the key brand differentiator…
  • 90% of customer experience decision makers say that a good experience is critical to their success; 63% think the importance of the customer experience is greater…
  • 62% of global consumers switched service providers due to poor customer service experiences, up 4% from prior year…
  • 63% of companies expect to spend significantly more or some what more on customer experience in 2014 than they did in 2013, up from 54% in 2012 and 46% in 2011…
  • 51% of companies plan to increase the staffing of their customer experience team in 2014, while only 3% expect a decrease…
  • 82% view customer experience as a competitive differentiator, and the most important attributes are; accuracy and quality of information provided and ease of interaction…
  • 73% of companies with the most positive CX impact understand the link between customer experience and business results; and only 65% of companies with the least positive CX impact don’t…
  • 8% of companies say they currently provide an ‘integrated’ customer experience; 58% say they are just now developing a strategy…

Companies must face the reality of the changing dynamics of the customer. Today, customers engagement is fundamentally different and the customer journey to purchase is more dynamic, more informed, more continuous… whereas, the traditional journey is built around a ‘linear path or funnel to purchase’… Superior customer experience programs can be the differentiator, and it pay significant dividends, e.g.; higher growth, greater profitability… According to Ross Beard; creating a highly differentiated customer experience can help turn dissatisfaction or indifference into delight. People like to be ‘WOW’, and have expectations exceeded… According to Bain & Company survey; only 8% of companies deliver a superior customer experience. On the flip-side, when the survey asked companies to rate themselves, 80% thought they delivered a ‘superior experience’ to the customers.

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Companies that deliver a truly outstanding customer experience, typically, divide customers into individual segments and design an ‘experience-focused value propositions’ for each one. They tailor and design customer experiences for different customers– not one size fits all… and an emphasis is put on cross-functional collaboration, rather than just one-dimensional… According to Adam Feigenbaum; keep the customer experience program consistent: Hire right; make sure the employees believe in the brand and what it stands for… Own the issues; make someone own the issue and the solution satisfies the customer… Empower the team; the entire team must be actively involved in resolving and solving customer issues… Don’t let it fester; identify the issue quickly, and fix it ASAP…

People want to deal with people not with brands, companies… Every engagement with a customer should be a personalized experience… which is an opportunity to build a strong relationship… According to Peter Kriss; most rationales that focus on customer experience tend to be driven by a ‘gut’ belief that it’s just ‘the right thing to do’… but, the problem with this approach is that often it simply becomes a battle of opinions… But in fact; it’s time to stop the philosophical debate about whether investing in the experience of your customers is the right business decision: It’s not a question of belief or opinion– the impact is a matter of profit and loss… According to Zig Ziglar; people don’t care how much you know until they know how much you care… a carefully orchestrated customer experience process is evidence that you care…

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Sugar Industry Business Model: Cronies + Tariffs + Big Sugar’s Sweet Spin = Flawed U.S. Trade Policies

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Sugar: Dirty little secrets that the sugar industry (Big Sugar) and the government would rather you not know… Sugar represents just 2% of the total value of U.S. crop production, but the industry accounts for 33% of ‘the crops industries’ total political campaign donations and 40% of ‘the crops industries’ total lobbying expenditures. There is nothing illegal about sugar producers lobbying Congress, supporting political candidates… but, there is a problem when government intervenes in the economy supporting special interests… According to Senator Mike Lee;  the problem is not that there is too much money in politics, it’s that there’s too much politics in the economy… It’s time for government to stop protecting special interests through unfair trade rules… According to Milton Friedman; no one can logically defend sugar trade quotas– they are indefensible… According to Will Rogers; if business thrives under a protective tariff, that doesn’t mean that it’s a good thing… it just means that the consumer pays more than they should; hence, a few get rich at the cost of the many…

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In 2013, U.S. consumed 12  million tons of refined sugar with the average price for raw sugar at 6 cents per pound higher than the  average world price. That means, based on 24 billion pounds of refined sugar usage U.S. paid an unnecessary $1.4 billion extra for sugar. That is equivalent to more than $310,000 per ‘sugar farm’ in the U. S. The  U.S. sugar program is a relic of the Great Depression with the Jones–Costigan Act in 1934. This act enabled the government to reduce imports of sugar by imposing tariffs. Americans pay a big surcharge for sugar because the federal government guarantees a minimum price for sugar. To maintain this minimum price, the government restricts low-priced imports by establishing a quota that limits the amount of sugar U.S. can import at relatively low tariff rates. Any imports above this quota are subject to prohibitively high tariffs. Based on 2013 world sugar prices, the average above-quota tariff rate was 88% for raw sugar, and 73% for refined sugar.

Since the turn of the millennium, Americans have paid an average of 79% more for raw sugar and  87% for refined sugar compared to the  average world price… In April, the price of raw sugar in the U. S. was 43% higher than average world price, and price of refined sugar was 39% higher… Although the ‘North American Free Trade Agreement’ (NAFTA) eliminated tariffs between the U. S., Mexico, and Canada, a loophole allows domestic sugar producers to request anti-dumping duties to protect them from international competition. Sugar beet and sugar cane farms account for about one-fifth of 1% of U.S. farms and sugar producers account for 1.3% of the value of total farm and livestock production. There are 2.2 million farms in U. S.  and of that total, there are just 3,913 sugar beet farms and 666 sugar cane farms. This relatively small sector of the economy is very politically engaged, and the special treatment that it gets from the government drives up the price of sugar, which jeopardizes overall export growth, and weakens the U.S. economy…

The U.S. Sugar Policy costs consumers and businesses up to $3.5 billion annually in the form of a hidden taxes; all to provide subsidies to already profitable U.S. sugar producers… According to Daniel Pearson; the sugar industry is rightfully considered to be the most protectionist segment of U.S. agriculture… According to Daniel J. Ikenson; sugar prices in the U. S. are on average 85% greater than the world average price, which adversely impacts all the U.S. industries that rely on sugar as an important ingredient in producing their output…

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In the article U.S. Sugar Policy: Bad for Consumers, Bad for Agriculture, Bad for U.S. by Bryan Riley writes: This Depression-era program, which was supposed to end in 1940 has outlived its intended life span, and It should be abolished… The U.S. government artificially inflates sugar prices by imposing quotas that cap the amount that food manufacturers and consumers can buy from producers in other countries, for example; when bakeries, candy companies… wants to import more sugar than is allowed under the government’s quota, it must pay a prohibitive tariff per pound for sugar. At current prices, that works out to be over 62%  tariff rate… But, when you examine the many arguments that the sugar industry uses to justify their quotas and you compare them with ‘the actual facts’– the results are, at best, misleading, for example:

  • Falsehood #1: Sugar program is a ‘no-cost’ policy. Fact: According to the U.S. Department of Agriculture, the price of raw sugar was 40% higher in the U. S. than in the rest of the world. Although the sugar program does not directly transfer funds from the federal government to sugar producers, it cannot accurately be called a ‘no-cost’ program, since it increases prices for everyone who buys sugar or sugar-containing products… As long as government has the ability to hand out favors to some industries and punish others, resources will be diverted away from productive private-sector activities to fund lobbying campaigns in Washington, D.C. This is true for all industries, not just sugar. However, sugar producers have invested heavily in lobbying activities, political donations relative to the size of their industry… This behavior can result in ‘crony capitalism’– a system in which business success depends on a close relationship with the government…
  • Falsehood #2: Sugar policy didn’t cost taxpayers a dime. Fact: U.S. sugar policy costs taxpayers millions of dimes per year. According to the U.S. International Trade Commission, the sugar program imposes a $49 million net cost on the economy. According to a study commissioned by the Sweetener Users Association; the program costs consumers $2.9 billion to $3.5 billion. According to a study by American Enterprise Institute; program costs consumers $2.4 billion per year with a net economic cost of $1 billion per year.
  • Falsehood #3: One-sided trade deals force U.S. to import sugar from 41 countries regardless of our needs. Fact: There is not a single person in the U. S. who is forced to import sugar from other countries. However, more than 313 million Americans are forced to pay inflated prices for sugar. Sugar industry lobbyists have repeatedly subverted U.S. trade policy and made it more difficult for trade negotiators to expand U.S. export opportunities…
  • Falsehood #4: U.S. sweetener industry has a positive annual impact of $21.1 billion on the U.S. economy, and adds 372,000 direct and indirect jobs in 42 states. Fact: According to a 2006 study by the U.S. Department of Commerce; for each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly three confectionery manufacturing jobs are lost… In general, trade barriers do not increase employment; they shift the composition of jobs away from competitive industries toward those favored by the government…

What should be done with sugar: According to the American Sugar Alliance; 71% of Americans prefer to buy homegrown sugar, even if foreign sugar is cheaper… So, consumers deserve the opportunity to prove whether this is true: The government should give Americans that choice by removing caps on sugar imports…

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In the U. S., once the government bestows political favors on one industry, others come to Washington to seek their own special treatment or to fend off special-interest requests from competing industries. The influx of special-interest-seeking businesses and lobbyists are draining billions of dollars from the U.S. economy… For example; U.S. sugar producers may have learned from tomato growers, who used the threat of anti-dumping duties to convince Mexico’s  tomato growers to ‘voluntarily’ increase the price they charge their U.S. customers. The Mexican tomato growers accepted the U.S. terms, which raised the reference prices substantially, in some cases more than double, and this accounts for the changes that have occurred in the tomato market since signing of the original agreement.

It’s relatively common policy for developed countries to restrict trade in many agricultural products, and many other industries to protect domestic producers… But how does a country decide when a protective tariff is appropriate– setting aside political cronyism, lobbyists..? If the government economists would calculate the costs and overall impact on the nation’s economy, and the general well-fare of the consumer… for each specific trade restriction, so that more informed decisions can be made, then that is be a good first step… for example; if the cost of the sugar import quota is costing the nation only $1 million per year, maybe than the  program is a cheap way to protect sugar farmers… But, if the cost is in the ‘billions of dollars’, maybe not…

According to Mark A. Groombridge; nowhere is there a larger gap between the U.S. government’s free-trade rhetoric and its protectionist practices, than in the sugar program. Through preferential loans and tariff-rate quotas, the U.S. government thwarts price competition to maintain an artificially high domestic price for sugar– a price that can be twice the world market price or higher… The U.S. sugar quotas pose a threat to multilateral and regional trade negotiations: U.S. trading partners routinely and rightly point to the sugar quota as being inconsistent with U.S. demands for more open markets abroad. The sugar program has become an obstacle to lowering foreign trade barriers for U.S. exports…

The U.S. sugar program is a classic case of concentrated benefits and dispersed costs: A very small number of sugar producers get enormous benefits, while the costs of those benefits are spread across the whole U.S. economy, including; consumers, confectioners, food producers…  According to economist Anne O. Krueger; fact that  protectionism  inflicts harm on ‘consumers’ is widely understood, but the impact of protectionism on ‘other producers’ and on the macro-economy as a whole is grossly under-estimated and is much greater than generally recognized… The ability of special interests to manipulate political decision-making compounds the problems and serves to highlight both the need for institutional change at the national level, and importance of a multilateral approach to free trade…

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