Great Divide, Grand Gap– Rich Vs. Poor– Inequality Far Worse Than You Think: Tale of Two Worlds…

Richest 1% of world adults own about 40% of global assets and richest 10% of adults account for about 85% of global wealth… Whereas, the  bottom 50% of world adults own barely 1% of global wealth. In report by Oxfam International; richest 1% owned 48% of global wealth, in 2013… and in 2014, 85 wealthiest people in world had a combined wealth equal to that of bottom 50% of the world’s population… or, about 3.5 billion people… and it’s estimated that  wealthiest 1% will own more than 50% of global wealth by the end of 2016…

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According to estimates by Branko Milanovic and World Bank; some other interesting statistics that highlight economic disparities between rich and poor include: 

  • Richest 1% of people in the world receive as much as the bottom 57%, or in other words, less than 50 million richest people receive as much as 2.7 billion poor…
  • Three richest persons possess more financial assets than poorest 10% of the world’s population, combined…
  • Three richest persons in the world have total assets that exceed the annual combined GDP of 47 countries….
  • 6% of the world’s population owns 52% of the global assets. The richest 2% own more than 51% of the global assets and richest 10% own 85% of the global assets…
  • 50% of world’s population own less than 1% of global assets…
  • 1,125 billionaires own US$4.4 trillion in assets…
  • Over 80% of the world’s population lives on less than $10 per day; over 50% of world population lives on less than US$2/day; over 20% of world population lives on less than US$1.25/day…

Also, according to Anup Shah; other facts and statistics include:

  • Poorest 40% of world’s population accounts for 5% of global income., and richest 20% accounts for 75% of world income...
  • According to UNICEF; 22,000 children die every day due to poverty– they die quietly in some of poorest villages on earth, far removed from the scrutiny and conscience of the world…
  • Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation…
  • Some 1.8 million child deaths each year as a result of diarrhea, 2.2 million children die each year because they are not immunize, 15 million children orphaned due to HIV/AIDS…

In the article Wealth Gap, Rich And Poor by Joaquim Moreira Salles writes: The wealth disparity between middle and upper-income is at record high. According to Pew Research Report; today, upper-income families are almost 7 times wealthier than middle-income families as compared to 3.4 times wealthier, in 1984. When compared to lower income families; upper-income family are 70 times wealthier. It has come to the point where only top 10% are seeing wealth grow, while bottom 90% get less and less of the pie each year. The driving force of this wealth chasm are the top 0.1%, who have seen their share of the nation’s wealth grow the most over the past decades, from 7% in 1979, to 22% today… and the top 0.1% are now worth more than the entire bottom 90% of the U.S. population…

The study also assesses what effect the 2008 financial crisis had on wealth distribution. Although the crisis wreaked havoc across all income levels, its effects have been much more enduring for those on the lower-end of economic spectrum… The magnitude of wealth inequality reflects broader trend towards increasing disparities across the developed world,e.g.; surveys show that most people drastically underestimate the ‘CEO-to-worker-pay’ gap; survey respondents guessed that average CEO made 30 times as much as the average unskilled worker… when in fact actual ‘CEO-to-worker pay’ ratio is closer to 354-to-one, in the U.S.

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In the article The Rich and the Rest by Christina Pazzanese writes: The growing gap between the ‘rich and the rest’ isn’t a matter of who can afford yacht or Manhattan penthouse rather, it’s the crippling nature of disparities as they touch nearly every aspect of people’s lives, e.g.; career prospects, educational opportunities, health risks, neighborhood safety… The disparities of today’s wealthy rival levels last seen in the Gilded Age of the late 19th century… One difference, however, is that the grotesque chasm between that era’s ‘robber barons’ and ‘tenement dwellers’ led to major social policy reforms, such as; labor rights, women’s suffrage, federal regulatory agencies to oversee trade, banking, food and drugs…

According to Hendren; the chances of moving up the economic ladder are the same as they were 25 years ago, but the rungs on the ladder have gotten wider… The difference between being on top vs. bottom of the income distribution is wider, so the consequences of being born in poor family, in dollar terms, are wider… Unless policymakers begin to chip away at underlying elements of inequality, the costs to nations will be profound. According to Katz; gridlock in Washington has diminished government effectiveness to address inequality and societal needs… government has become irrelevant and the world has become– ‘everybody-for-themselves’… it’s the better-educated and the wealthy who are able to protect themselves, and the less privileged are left to fend for themselves…

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In the article Rich and the Rest by The Economist writes: More than 90% of all income gains since recession have gone to the top 1%… A big reason is education or lack of it… Just as new technology demands more highly skilled workers… the improvement in areas of education have stalled and many workers are failing to match the skills needed in technology… However it’s not only about school: According to Larry Bartel; growing inequality has political roots and money plays an ever-increasing role in politics– so goes the argument– as the clout of super-wealthy grows– and although the claim of political preference is hard to prove, the circumstantial evidence is substantial…

The rise of ‘super-PACs’, i.e.; privately funded organizations set-up to influence election outcomes… have raised hundreds of millions of dollars and research suggests that 80% comes from fewer than 200 donors… But whatever the cause, there is ever-increasing stratification of society and it has profound consequences: A country that prides itself on its social mobility is already less mobile than most people think… and the disparity of wealth is even greater than most people think…

In the article Far Worse Than You Think by Nicholas Fitz writes: Most people have no idea how unequal society has become. In surveys, the average person believes that the richest 20% owns 59% of the wealth and the bottom 40% own 9%… The reality is strikingly different: The top 20% of households own more than 84% of wealth and the bottom 40% combine for a paltry 0.3%… According Norton and Kiatpongsan; in a study people were asked to estimate– the ‘CEO-to-worker pay’ ratio and general consensus was that the ratio was about 30-to-1; and ideally it should be about 7-to-1… But the reality is that the ‘CEO-to-worker pay’ ratio is closer to 354-to-1, in U.S. Fifty years ago it was 20-to-1.

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Why don’t governments in democratic societies do more to combat inequality? Scholars have grappled with this question for years… According to the ‘median voter theory’– a longstanding workhorse of political science; suggests that politicians who hope to get elected often campaign using rhetoric about mitigating inequality, in order to attract voters in the middle and lower ends of the spectrum, who feel left behind. Although the theory sound elegant it doesn’t quite mesh with reality…

Research reveals very little connection between inequality in any given country and its government’s effort to close the gap by taxing the rich to spend on the poor. There are good reasons: The poor vote less than the rich, hence reducing their electoral clout… Plus, they don’t vote exclusively on the basis of their economic self-interest but are often swayed by non-economic issues, e.g.; abortion, the environment, gun control… According to research; voters don’t demand more equality because they don’t fully grasp how deep economic inequality really is…

Chaos is ‘New Normal’ in Business– Managing Edge of Chaos: Survive, Grow in a Chaotic World…

Chaos is when something has gone terribly wrong, at least that the classical definition; its disorder,  disarray,  disorganization,  mayhem, bedlam, confusion, pandemonium, disruption, upheaval… but then there is the constructive or controlled form of chaos… and that is when things might look out of control but they are, in fact, moving forward to some desired outcome… Clearly chaos means different things to different people both in definition, as well in dynamics of a situation…

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Some leaders suggest that a messy desk is indicative of a chaotic  unorganized mind… Chaos in one simple definition, is the opposite of order or at least, doesn’t show any obvious signs of any order or structure. For some leader’s it’s simply an– issue, event, situation… which is not being managed… But not all chaos are necessarily bad… and not all chaos is necessarily about being manageable…

Sometimes leaders confuse out-of-the-box thinking with chaos and disorganization… whereas it could very well be a manifestation of creativity and opportunity to create change. Identifying difference between an opportunity to change and negative chaos is not always an easy thing to do… But leaders must always be vigilant about chaos in an organization… They cannot be afraid of chaos; they must prepare for it and deal with it; they must recognize it for what it really is– it’s an opportunity to improve…

In the article Organizational Chaos by Karen Martin writes: Chaos can be both ‘constructive’ and ‘destructive’ within an organization… For many organization chaos is constructive– it ‘energizes’ and drives change, it stimulates innovation, reduces complacency, spurs teams to achieve new heights… in fact chaos is by design– it an organization’s business model.. its how things get done, and it’s not even recognize as chaos… many organizations embraced chaos as a ‘good thing’, and even job descriptions might include; ‘tolerance for ambiguity’ as a necessary skill…

On other hand, there is destructive chaos which is the undesirable type of chaos– it’s self-inflicted and it ignites disorder and confusion in an organization… It’s chaos that robs organizations of the its energy,  that’s needed to innovate and respond to marketplace’s ever-increasing demands for– faster, better, cheaper…  Left unchecked, a ‘bad’ brand of chaos destroys everything that’s good in organizations; products, people, innovation…

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In the article Chaos, Combat, Disruption by ewblog writes: Chaos is the ‘new normal’ in business… and leaders are borrowing military terminology to define a business landscape akin to battle. It’s ‘VUCA’ (Volatile: Uncertain: Complex: Ambiguous.) world. Research suggests; that ‘less than two thirds’ of leaders are ‘highly’ or ‘very confident’ in their ability to manage the VUCA challenges. The research shows that the rate of leaders that are ‘unprepared’ to manage challenges are; ‘Volatility’ is about (40%), of ‘Uncertainty’ (32%), of ‘Complexity’ (36%), of ‘Ambiguity’ (31%)… At best only 18% identified their leaders as ‘very capable’ to manage a disruptive environment… Furthermore, organizations in top fifth of financial performers were three times more likely to have VUCA capable leaders, than those in the bottom 20%…

Also, fighting business battles need not be negative, there are many organizations that thrive in disruption. According to Bob Johansen; suggest putting a spin on the VUCA scenario… and proposing change in focus, e.g.; ‘Volatility is Vision’, ‘Uncertainty is Understand’, ‘Complexity is Clarity’, ‘Ambiguity is  Agility’… According to Keith Weed; two-and-half billion more people will be added to planet between now and 2050. The digital revolution and shift in consumer spending… all suggests that organization must reinvent the way they do business in this chaotic environment…

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In the article Some Leaders Thrive on Endless Chaos by Brent Misso writes: In some work environments its perpetual random motion– endless, mindless action, tail-chasing chaotic activities… while at the same time– leaders are constantly nitpicking, micro-managing, and that makes a chaotic event even worse… This type of environment easily leads to vicious cycle of the ‘fire drill’ mentality… there are constant fire drills… and if not real, then they are invented…

At its most extreme, such a firefighting mentality beats-up the work force to the point where employees simply wear-out, tune-out, and eventually drop-out. The world is full of leaders who are actual chaos ‘junkies’, and they spread bad habits to others wherever they go. True leadership is about having a clear, concise vision for what must be accomplished. The idea of organization existing in ‘controlled’ chaos is nonsense…

In the article New Normal Requires New Mindset by David Rhodes writes: Managing in a chaotic and uncertain environment is a true test executive leadership… Most leaders are acutely aware of the increased pressure that comes with a chaotic and highly disruptive business environment… It’s often said that we must learn from past mistakes so we don’t repeat them… But less said and equally valid, is that we must also learn from past successes. A few lessons learned:

  • Go on offensive: Invest in success. When times are tough that the best time to go on offensive… Instead of cutting back, accelerate development of relevant new growth initiatives…
  • Focus on customers:  Invest on customers. When times are tough focus on customers and take advantage of changing attitudes and behaviors…
  • Don’t go it alone: Invest in future. When times are tough develop and engage strategic relationships, partners, suppliers, even competitors…
  • Employ game-changing strategies. Invest in different. Embrace different business models and reinvent the business…
  • Be a leader: Leaders set clear expectations. Great leaders track progress rigorously against metrics and milestones… intervene when necessary, communicate any changes in direction. Leaders celebrate success and recognize team members who achieve the best results…
  • Invest in people: Manage attrition of less-performing employees to ensure career opportunities for most-talented… Innovative new ways for compensation, advancement… but also issues, such as; work-life balance, changing demographics…

To win in the ‘new normal’ of a chaotic business environment it calls for fresh thinking, smart adaptation, focus on relentless execution, solid performance… The new normal also calls for reinforcement of the cardinal virtues of– honesty, integrity, authenticity… According to  Roger McNamee; new normal is a time of solid opportunity, when leaders must know how to play the game… The business landscape has fundamentally changed… leaders must wrestle with chaotic forces, both within and outside of their control…

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According to James Schug; leaders must face the chaotic forces of the new normal that include; excessive business regulations, out of control EEOC enforcement, insane health insurance changes, global competitive markets, disruptive technology… However, great companies recognize great opportunities in a chaotic, volatile environment… Uncertainty, lack of clarity can be an impediment, but great organizations regularly deconstruct the chaos around them. Chaos is inevitable and managing it is essential, but if you don’t others will…

Les Déplorables– Bad Leaders Who Destroy Companies: Ugly Truth– Horrible CEOs Destroy Organizations…

There are many bad leaders who are destroying companies, destroying innovation, destroying value… many are incompetent and incapable of managing an organization; these are ‘les déplorables’ (the deplorables). The word ‘deplorable’ comes from French– ‘déplorer’, which means; ‘to give-up as hopeless’, or ‘something is so bad there is no hope of improvement’. According to Dr. John Papazafiropoulos; it’s alarming trend that’s killing many organizations; it’s the horribly performing ‘bad leaders’ who are receiving millions in compensation, while destroying the very organization they led…

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Reasonable people might ask: Why are incompetent CEOs/leaders being hired and allowed to destroy jobs and the future of many promising organizations? Why are Boards of Directors failing to do their job? Is it partly because many Members of Board of Directors have little knowledge, understanding of the organization, or industry, or markets, or competitive environment, or customers, or partners, or other stakeholders… that they are supposed to safeguard? The insane drive for ‘diversity’ and ‘political correctness’ is killing many great organizations… There must be change both; in the way CEOs/leaders are hired, evaluated… and in the way Members of Board of Directors are elected, maintained…

In the article Bad Leaders Destroy Companies by Amy Rees Anderson writes: Bad leaders are felt throughout an organization– when an organization lacks clarity, vision, purpose, commitment, consistent communication… then the organization is run by– rumors, politics, gamesmanship… Hence, employees are uncertain about company’s goals, objectives, and they have no idea where they fit-in… or what their level of responsibility toward making it happen…

The result of bad leadership is low morale, high turnover, and decreased ability to have any sustainable success… To become a great company it takes a great leader, and there is a huge difference between a boss and a leader… Companies cannot afford bad leaders in highly competitive environments– and not just  in terms of financial success; employees cannot flourish when they are faced with incompetent executives…  Leadership is foundation of all successful organizations and the people who are hired to lead must be thoroughly vetted and held accountable; and certainly not rewarded for failure…

In the article Two Kinds Of Leaders That Destroy Organizations by Noel M. Tichy writes: A leader is never ‘energy-neutral’; they are either,  giving people energy or they are sapping it from others… According to Richard H. Lenny; leaders can create energy or they sap energy out of employees or others within the organization… Energy sappers fall into two categories: They are ‘ignorant’ or ‘arrogant’… Let’s examine the key issues of energy sappers:

  • Leaders who are ignorant: The sad truth is too many leaders stop learning… According to Dr. Roland Barth; you routinely ask your children; What did you learn at school today? Hence it’s every bit as important to ask leaders; What did you learn at work today? If they don’t know they are sapping energy out of the organization, and that means their level of ignorance is growing…
  • Leaders who are arrogant: It may sound corny, but as the old saying goes– when you lack tact, no one buys your act… Of course, no leader would ever admit to being arrogant… and they will most likely emphatically deny their arrogance, or they may not even be unaware of it… but other sees it and experience it…

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In the article Leaders are Killing Meaningfulness of Work by Teresa Amabile, Steven Kramer write: The most fundamental requirement in any organization is– meaningful purpose, and the recognition of employees who do the work… Leaders at all levels routinely and unwittingly undermine the ‘meaningfulness’ of employees work through everyday words and actions. These include; dismissing the importance of employees’ work or ideas, or destroying a sense of ownership, or neglecting to communicate on changing priorities…

Leaders must continuously articulate the ‘purpose’ of an organization, and continuously acknowledged the achievements of all employees who work to create real ‘meaning’ in the organization… But there are traps that leaders must avoid for sustainable organization, and they include:

  • Mediocrity signals: Most organization aspires to greatness, and articulating a meaningful purpose for the organization is key to its success… But some leaders might be inadvertently signaling the opposite through their words and actions… And despite rhetoric about being innovative and cutting edge, some leaders are really more comfortable being ordinary…
  • Strategic ‘attention deficit disorder’: Many leaders all too often– ‘start and stop’ initiatives– these leaders might often appear to display kind of ‘attention deficit disorder’ (ADD)… when it comes to strategy and tactics. When leaders don’t appear to have their act together on exactly where organization should be heading, it’s very difficult for an organization to maintain a strong sense of purpose…
  • Corporate Keystone Kops: In the early decades of cinema, a popular series of silent-film comedies featured the ‘Keystone Kops’, these were fictional policemen so incompetent that they ran around in circles, fumbling one situation after another… These are same type antic that some leaders display– running around without purpose, without mission… Hence, there is apprehension about the organization ability to produce anything of value…
  • Misbegotten ‘big, hairy, audacious goals’: Some leaders make statements that are outrageous, grandiose, containing little relevance or meaning for workers in the trenches. The goals and objectives are so extreme as to be unattainable, and so vague as to seem empty.– the result is lack of meaning, and cynicism…

Leaders are flawed; some more than others, and the bad ones are; immoral, illegal, unethical… According to John Mariotti; leadership is like a ‘credibility’ bank account; good leaders make ‘deposits’ by doing the right things, at right times, and have right behavior… and rarely make ‘withdrawals’… Whereas bad leaders are habitual violators and they continuously ‘overdraw’ the ‘credibility’ account by doing the wrong things, at wrong times, and have wrong behavior,.. and rarely make ‘deposits’…

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These are leaders who don’t ‘walk the talk’– leaders who don’t do what they say, behave irresponsibility… They are blameless; when things go wrong blame others, but when things go right they take credit. They make outrageous promises; promises that undermine trust, respect… They are guilty of transgressions; abuse power for personal gain and violate basic principle of ethics, responsibility. Even worse these are: ‘Les Déplorables’ (The Deplorables)– they destroy organizations, they destroy careers, they destroy communities, they destroy economies…

Grand Business Decision– To Niche Or Not To Niche? A Niche is All About Being Narrow, Not Small…

Business is about targeting a market… it’s about getting the right product to right customers at right time with right message… and for many businesses it’s about identifying a market niche… However, not many people are quite sure what a ‘niche’ is… According to Val Nelson; it’s that sweet spot where a product or service best satisfies the specific expectations of a specific grouping of customers… It can be a subset of a larger market, or segment of a market, or the market itself… The market niche defines the product or service features aimed at satisfying a specific customer needs, generally consisting of; price, quality, features, demographic elements, such as; education, age, gender…

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The narrower the market focus, the crisper the message and the easier it is to target a market… The broader the target, the mushier the value proposition… and the value of a market becomes more abstract… According to Anna Mar; the balance between market size, acquisition cost and viability are rules of the game. The niche market approach focus on core issues without interference or ambiguity… It’s a narrow market focus (not necessarily a small market) and that provides a minimal viable product or service with barest and most essential touch point… User value, customer wonderment, sometimes even just pure fun is the connection to capture… Find that one customer and you’ve got a great start and a direction to find the next one…

In the article Think Large, Focus Small: Myth of the Niche by Arnold Waldstein writes: Remember when niche used to mean a market too small to matter? Not any longer: The flatter the connected world gets the more relevant and attractive narrow and focus is over broad and general… A niche market approach is not only a valid business strategy, but a potential antidote for a business’– attention deficit disorder (ADD)… According to Om Malik; 50% of Internet traffic sources are ‘niche’ keyword searches… The more specific the content, the more valid and useful the search results– it’s a basic SEO and SEM truth that plays well… And for a business model, the more contextual and relevant to a market grouping the greater the pay-back…

A sharp focus both deepens and broadens the market, i.e.;  a ‘finer net’ captures more of the higher quality users, rather than a larger sieve that is forever churning looking for meaningful connections… According to Seth Godin; a business becomes successful one customers at a time… and the more specific that customer connection, the more clarity there is in making that interaction successful… You get farther faster by focusing narrowly… It may seem obvious but whether you have an early product or service for which you haven’t discovered a right customer connection, or at a later stage ‘noodling’ over how to expand faster… a singular passion-point, focus on a single-need, for a customer connection; just works better…

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In the article Niche Business Is All About Narrow, Not Small by Marsha Lindsay writes: The ‘classic’ definition of a niche is– the targeting of a narrowly defined customer group that is seeking a distinctive mix of benefits… usually a small, low-volume, transnational market… and in the opinion of some experts, it’s unsustainable, unscalable… But in contrast, in ‘digital age’, the meaning is very different: According to The Economistthe very definition of a flourishing economy is one rich with niches… and a niche’s size no longer has limitations of magnitude as in the past… In fact, today niches come in many sizes– some are small, but many can be very large…

So rather than equating niche with ‘small’, think ‘narrow’… As in narrowly targeting a group whose self-interest/self-concept is so clear that business can offer something ultra-relevant and vastly different from alternatives… Hence relevance and differentiation can significantly increase growth… which makes-up for narrowness of the target… A focused offering resonates with a target, for which there are few alternatives– it creates predictable revenues, lifetime value, word-of-mouth advocacy… Hence, the old niche stereotype, as just a marginal business opportunity, is an important business model for both large and small enterprises…

In the article To Niche Or Not To Niche by Daniel Priestley writes: It’s a common business fear– getting pigeon-holed and missing out on other opportunities… There are two reasons against being pigeon-holed into a niche: 1.) fear of not attracting enough customers within that niche.. 2.) fear of having limited options outside that niche… However in the real world, focus on niche markets is the pathway to faster growth, greater profitable… Conversely businesses that present themselves as ‘jack-of-all trades’ end-up competing only on price… Hence according to some experts; the lesson is simple– niche then pivot, niche then pivot, niche then pivot…

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In the article Niche Strategies To Compete With Goliaths by Andreas von der Heyd writes: David vs. Goliath legend is alive! At the same time, however, the Goliaths of today´s fierce and highly dynamic business world (think Google, Wal-Mart, Apple, Coca-Cola, Procter & Gamble…) have become much more innovative, agile, and aware of the need to enter attractive niches… While a mass market is about selling to everyone… niche market is about focus on a specific segment of customers, e.g.; gender, age, ethnic groups, occupation, hobbies…  and benefits are; more profit margins, greater customer loyalty…

The Internet is all about niche markets, the Internet is the enabler of specialty, focus markets… and targeted business models… However, a successful focused business is highly vulnerable and it must be agile, flexible… and continuously innovative… The key to focus strategy is the ‘brand’… Building a ‘brand’ through the successful experience of every single customer, one customer at a time… Also these focus businesses must take advantage of gaps in their market, and fill the gaps, and expand the gaps, and create new gaps… while mostly stay true to their customers specific expectations…

Building strong networks and relationship beyond the niche boundaries is critical, while being consistent with customer expectations… it must be part of their DNA… These networks and relationships are anchors of in this business model… it means regular exchanges and collaborations  with other players in the grouping, e.g.; other businesses, universities, research centers… it means share knowledge, information, expertise, skills… learning from each other, and assisting each other…

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Managing in a niche business is a true entrepreneurial challenge… Nowhere else do leaders need to encompass two main and opposed characteristics: Thinking Big and Thinking  Different… Thinking Big means– create, communicate bold direction that inspires results… Think Different means– look around every corners for new, different ways to provide better value and service to customers…

Art of Neuro-Marketing– Primacy & Recency Effect: Messing with Customers’ Subconscious Mind…

The human brain is wired to best recall the first and last items in a series, and the middle items least– it’s called the primacy & recency effect…  Research suggest that when a person is shown a list of just about anything, such as; items, words, products… participants tend to remember only– ‘first few’ and ‘last few’, and are more likely to forget those in the middle of the list… According to Didi Zheleva; for business this means that when communicating, e.g., market messaging, customer engagement, speech, presentation… always summarize the main points at beginning and at end… since these are the things that people tend to most remember…

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Studies show that the human brain tends to store the ‘first’ item of a list in a person’s long-term memory, while a person’s short-term memory holds the ‘last’ item in a list… This process of primacy & recency is dubbed the ‘serial position effect’… When people recall information, they are gathering information from two separate stores in the brain, which is commonly known as short- and long-term memories. When mapped-out, the recency & primacy effects are high points on an inverted bell curve, and they are the critical factors in prioritizing and retaining information…

In the article Primacy & Recency Effects on Clicking Behavior by Jamie Murphy, Charles Hofacker, Richard Mizerski write: The location, location, location… it’s the mantra across all business; restaurateurs and retailers seek a prime location when building a facility, packaged goods suppliers seek prime shelf space in retail stores… advertisers want to be the first or last in a pod of TV advertisements… business strives for top listing in classified business section… Also, location of links on a web page can influence whether or not it gets clicked…

Studies suggest that the position of links on a web page does make a difference– in its frequency of use… The best results place the most desirable links toward the top of a web page or email… and the least desirable links toward the bottom of the web page or email… Also the most lucrative or important link are put first in the menu… but its also suggested to place an important link as last link in the menu…

In the article Position Effect in Advertising by Shelley Moore writes: Research suggests that ‘serial position effect’ (primacy & recency) has important implications for advertising and appears to work across media… A few examples:

  • TV Ad Placement: Research suggests that the recency effect might actually be stronger than the primacy effect in television. Research show that television viewers have better recall of ads at the end of a commercial break, rather than ads at the beginning…
  • Website Link Placement: Studies found that links at the top and bottom of a menu on a website get the most clicks. Results were the same when controlled for link wording… Hence it’s suggested that the most important links are placed at the top, and at the bottom… of a web page… Consider the behavior that many site visitors just skip through a page– from top to bottom– without reading anything in the middle…
  • Search Engine Ads: The top two Ad positions on the first search engine results page are best in search engine marketing… Top Ad ranking are key for both click-through and conversion rates…

In the article Product Rank To Increase Sales by Roger Dooley writes: In  sales situations, studies show that there is positive bias for the first product or service seen… Although this ‘first seen bias’ doesn’t overwhelm all other considerations, but it still can serve as a ‘neuro-nudge’ that could influence a customers in a final decision… Hence when a customer sees an item first they tend to remember it better, and this ease of recall can create a positive feeling about that item… But this ‘first seen’ issue or primacy effect is just a– nudge, not a big shove…

Further, the more a customer deliberates about making a decision the weaker the primacy effect becomes… However, there are other sales tactics that may work better, e.g.; showing a customer another more expensive product/service ‘first’ to produce a price anchor, then suggest another product or service that is similar but less expensive… Still in most cases, purchase decisions often come down to small differences and subconscious leanings– hence, lead with the best option first…

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In the article Essentials of Business Communication by Lee Hopkins writes: Most business messaging is– dull, uninteresting, irrelevant, big waste of listener’s time… The psychological reality is that unless an audience is interested in the subject matter of the message they are highly unlikely to pay any attention… Which means that if you force people to listen/read to an uninspiring message– it will actually turn them-off… Hence an opening statement (first words) in any business communication must include; a series of very powerful words that captures the audience’s attention, e.g.; a quote, a joke, a loud noise, a preposterous statement…

Equally, a closing statement (last words) must conclude with a powerful ending that leaves audience with something to remember… Business messaging is serious business and very few people have the skills to deliver an inspiring, relevant message that an audience will retain, and act upon… But practice and a little guidance from experts can improve skills… Lesson: The ‘opening’ and ‘closing’ statements in any business communication are the two most essential elements… and they must inspire by: 1. give the audiences reason to listen… 2. give the audience something to remember…

Hence before any business messaging: Ask the question– What should the audience– think, feel, or do when this is over? Once you understand the target audience expectation; create a roadmap and identify– ‘start’ and ‘end’ that provide a memorable bang… all of this blended into a  well crafted, interesting and inspiring messaging that makes a lasting impression. Scrap the conventional pleasantries, dull introductions, and launch into bold communications that establishes rapport and builds instant credibility…

But is there any research that support validity of the primacy and recency effect theory? Research conducted by Murdock, Glanzer and Cunitz to determine whether there is a relationship between the position of words in a list and amount of words freely recalled from that list… according to their research– they found that more words were remembered at the beginning (a mean number of 10) and at the end of the word list (a mean number of 9.3). The middle words were the least remembered (a mean number of 7.9)… Hence, take advantage of the primacy and recency effect, and make the most of the beginnings and endings!

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According to Jack Malcolm; the first moments of any meeting, sales call, presentation… are extremely critical and should not be left to chance. Three aspects of ‘first’ impressions are particularly important; looks, likeability, confidence… Looks are important. There are scores of studies that demonstrate the unfair fact that attractive people hold a persuasive edge… Likeability is a personal trait that people make inferences about very quickly… You’ve no doubt had the experience of warming up to, or being turned off by someone instantly, maybe without even knowing why…

Rapport is one of most important of Cialdini’s six persuasion principles; people are much more apt to listen to, and be persuaded by, someone they like… And, confidence is both convincing and contagious… people will get a quick impression of your confidence, your solution, your message. The best way to communicate confidence is be well prepared, and to ‘start-off’ strong… and if you have an ugly girlfriend/ boyfriend, don’t show any pictures…

Social Capital– Drives Business Success, Most Valued Form of Capital: Winning the Game of Connection, Engagement.

Central premise of ‘social capital’ is that social networks have value. Social capital refers to collective value of all ‘social networks’ [who you know] and the inclinations that arise from these networks to do things for each other [norms of reciprocity]… The term ‘social capital’ emphasizes not just warm and cuddly feelings but wide variety of quite specific benefits that flow from the– trust, reciprocity, information, cooperation associated with social networks… According to Robert Putnam; similar to the notions of physical and human capital, social capital is a currency in the form of; networks, norms, trust… that allows organizations to develop tolerance to deal with– conflicts, differing interests, developing new business initiatives… According to Baker; if you think of human capital as ‘what’ an organization knows (i.e., knowledge, skills, experience…) then access to social capital depends on ‘who’ it knows (i.e.; size, quality, diversity of an organization’s network)– and beyond that ‘who’ it doesn’t know…

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Social capital enables an organization to– create value, get things done, achieve goals… An organization cannot be successful, or even survive, without social capital… According to Bourdieu and Wacquant; social capital is the sum of resources, actual or virtual, that accrue to an organization by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition… According to Chris Cancialosi; business needs three kinds of capital: financial, human, social… and of the three ‘social capital’ is the most important… when you’ve developed a wealth of social capital, you can obtain other resources, e.g.; investors, partners, suppliers, customers, managers, workers… Social capital is an engagement that establishes networks, norms, social trust… that facilitates co-ordination, co-operation for mutual benefit…

In the article Investing in Social Capital by Ivan Misner writes: Most people have heard of financial capital, but many may not have heard of social capital. Social capital is, in fact, very similar to its monetary sibling… It too, is accumulated by organizations and used, or is available for use, in the production of wealth… Put more simply, it’s the accumulation of resources developed through social networks such as; ideas, knowledge, information, opportunities, contacts, referrals… According to Wayne Baker; studies show that lucky people increase chances of being in the right place at the right time by building a ‘spider web structure’ of relationships…

Success in business is social: All the ingredients of success that most people customarily think of as individual, such as; talent, intelligence, education, effort, luck… are intertwined with social networks… Hence it’s not surprising that social capital is earned or acquired through networking– building, maintaining solid relationships… Although developing social capital can be a daunting task, a balance of social engagement will have a profound impact on an organization’s ability to grow, prosper…

In the article Social Capital Matters In Business by Vanessa DiMauro writes: Social capital is ability to– retain customers, attract and keep staff, and win new business… And yet many organizations ignore the development of a social, networking footprint in growing the business… Many organizations lack social development activities, and are ‘doing’  just the minimal social outreach tocustomers, partners, suppliers, stakeholder… and ignore the rich value in social capital. Trading in social capital must be part of ‘doing’…

Social engagement is more than just a marketing campaigns or a portfolio of social media accounts. Rather it’s a representation of the organization’s identity on how it relates to the world… Organizations needs to stop thinking about social as– push content, or grub for followers, or searching for sensational images… Instead they need to go back to business basics; ask the hard questions and tap into the ways that social engagement can– begin and extend relationships to build social capital…

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In the article Social Capital by pwc writes: There is considerable debate and controversy over the– possibility, desirability, practicability of measuring social capital… yet without it, its potential remain unknown… There are many attempts at measuring social capital and they usually takes the form of a multi-dimensional analysis, which separates the various components and sets of indicators… A typical analysis is as follows:

  • Social Networks is associated with measures of– network size, diversity, density; this refers to the number and diversity of individuals or organizations that are connected in an organization’s network and closeness of the ties. It may also identify important gaps or ‘holes’ in networks and ‘bridging’ such holes can be cost-effective in building social capital…
  • Trust and Reciprocity are linked to three forms of ‘trust’, plus ‘reciprocity’… There is generalized trust’, which is the degree people trust strangers– the proverbial ‘man on the street’… and interpersonal trust’, which is trust among people who know each other, including employees working in particular teams, departments… and ‘institutional trust’, which is trust of authority structures, communities… and their perceptions of the organization… Then ‘reciprocity’ is respondents’ willingness to share resources or provide support… Reciprocity is the basic foundation for social capital…
  • Norms and Values is associated with whether employees or other stakeholders share some overlapping set of norms and values… If there is a high degree of diversity this will have implications for management strategies and tactics… It’s the general tendency or willingness to cooperate and act for common good…
  • Civic Engagement is about the degree and manner of participation in civic activities in support of the common good, e.g.; membership in professional and community organizations, associations… Civic participation, e.g.; volunteerism in community initiatives, corporate social investment initiatives…

Social capital is all about using the power of relationships and social networks to drive business growth and social transformation– and for recruiting and engaging highly talented teams, as well as; customers, partners, suppliers… Leaders/decision-makers needs to understand how to develop social capital… in order to compete in an age that is increasingly influenced by– social media, viral networks, tribalism, globalization… The successful organizations will harness a highly relational model of leadership based on social capital– mutual trust, affirmation, collaboration, partnership… rather than fixed hierarchies, rigid command structures, top-down change methods…

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An organization can have the best ‘talent’ but if leaders and teams are isolated, they are in peril due to the lack of social capital… Social capital is about — engaging and building relationships with the goal of accumulating the critical assets required for growth and sustainability… Business cannot compete on what everyone already knows, it must find other advantages– relationships, partnerships, engagements… According to Valdis Krebs; an advantage is understanding ‘context’ — how competitive issues are interpreted, combined, made sense of, converted to new products, services… Creating competitive context requires social capital ability to– find, utilize, and combine the skills, knowledge, experience of others… Building social capital is more akin to investing for long-term accumulation than short-term profits. It requires investment of resources, time, insight, without the expectation of an immediate return…

 

Subtle Shifts in Business, Leadership, Management, Organization, Strategy, Innovation– Bring Big Results…

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