Perfect: Perfect is the Enemy of Good  is an aphorism or proverb which is commonly attributed to Voltaire (great French writer 1694-1778). The moral is that perfectionism is contrary to satisfactory competence… Aristotle, Confucius and other classic philosophers propounded the principle of– golden mean, which counsels against extremism in general. The Pareto principle or 80-20 rule explains this numerically. For example, it commonly takes 20% of the full-time to complete 80% of a task while the last 20% takes 80% of the effort. Achieving absolute perfection may be impossible and so as increasing effort results in diminishing returns, further activity becomes increasingly inefficient… In other words, instead of pushing yourself to an impossible perfect, and therefore getting nowhere, accept good… According to frugalblog; as an overall philosophy being a perfectionist really doesn’t work... If I tell myself I need to be perfect from start-to-finish that will be enough reason to never start, so I ascribe to a– less than perfect philosophy– ninety percent is the new one hundred percent… According to Trent writes: perfection demands a lack of mistakes, and when you set yourself up expecting perfection, you’re doomed to fail from the start. Success comes from recognizing that mistakes happen, that you can’t beat yourself up over them, and that you need to step back and learn from them. The pursuit of perfect, while ignoring good enough, can be a big mistake…

In the article Perfect is Enemy of the Good – Find the Right Balance by Marty O’Neill writes: Voltaire’s Perfect is the Enemy of Good fits perfectly into the operational life of many business executives. Guy Kawasaki’s blog post– A Dozen Don’ts for Entrepreneurs also reminds us that perfection is an allusion. Ed Calabrese, a friend and colleague, had a saying; shoot the engineer and ship the product. So the balancing act we engage when we have to– release a product, publish a report, post a blog, wrap up a presentation is; what is the right balance? Folklore has it that an intern working for Henry Kissinger gave him a report and asked the Secretary of State to review the document. A week later, Kissinger gave it back and said– you can do better. Another week passed and the intern gave the report back to Kissinger with a comment indicating the report was much better. Kissinger gave the report back a week later with the comment– I still think you can do better. So the intern put his very best work into the report and a week later gave it to Kissinger saying this is the best I can do. Kissinger said– thanks, I’ll read it now. Somewhere between Guy Kawasaki’s– don’t worry, be crappy and Ed Calabrese’s– shoot the engineer and ship the product and Henry Kissinger’s painfully long review cycle is the answer. I’m leaning towards Guy and Ed…

In the article Perfect is the Enemy of the Good by J.D. Roth writes: The pursuit of perfection is an exercise in diminishing returns, for example; some initial research will teach you the basics; little more research will help you separate the wheat from the chaff; still more research will enable you to make an informed decision. Theoretically, if you had enough time, you might find the perfect option. But each unit of time you spend in search of higher quality offers less reward than the unit of time before it:

Quality is important: You should absolutely take time to do research… But remember that perfect is a moving target, one that’s almost impossible to hit. It’s usually better to shoot for good enough today than to aim for a perfect decision next week. Procrastination is one common consequence of pursuing perfection: You can come up with all sorts of reasons to put off decision-making… Get in the game: Just start. Starting plays a greater role in your success than any other factor. When you spend so much time looking for the perfect choice then you never actually do anything…

In the article Getting to Good Enough by Dustin Wax writes: There are times when perfection is called for, of course, but allow me to suggest to you that most of the time, good enough will do. There’s a point where it takes more and more energy to achieve smaller and smaller gains– where you’re putting in much effort to get a tiny 1% or 2% improvement… The sciences are based on the premise that you publish as soon as your work is good enough– and let the rest of the science world try to perfect it; and yet we struggle: We concede a lot when we aim for less than perfection. Here are a few ways to get over these blocks and get your work, whatever it is, out into the world:

• Planning: Begin your planning with an outcome in mind that’s good enough to get the job done. Then, set benchmarks that are ‘good enough’ to move on. At any step, of course, you can always go beyond good enough towards perfect– but focus first and foremost on building the necessary foundation.
• Confidence: Confidence can be a tricky thing; just saying be more confident probably won’t solve all your problems. Building self-confidence is really a life journey, not a quick fix. But, most important you must give yourself the permission not to be perfect and accept good enough. Don’t make your self-worth contingent on perfection…
• Make perfect mistakes: Mistakes are the stuff of personal growth, and making the right mistakes can help you build a firmer foundation for any project. Embrace mistakes as part of the process of getting to good enough. Embracing mistakes means more than  just accepting them, though– it means analyzing and learning from each mistake… Perfect doesn’t correct for mistakes– it ignores them…
• Putting your best foot forward: There’s a difference between good enough and half-assed… A lot of the advice out there for perfectionists says to settle for 80%, 60%, or less– their hearts are in the right place, but getting to good enough isn’t about settling it’s about achieving…

In the article Pitfalls of Perfectionism by Alex Lickerman writes: As long as I can remember, I’ve been burdened with a desire for perfection in all my creative endeavors. But, my dogged pursuit of this verisimilitude has often proven itself to be the greatest obstacle to my achieving it. We lose perspective on the quality of our creations the moment we create them. And the more we pore back over them in pursuit of a fresh perspective, the farther it moves away from us. Combine this with the need for perfection and the result is often paralysis. The irony, of course, is that while perfect may exist as a concept that impels us to keep trying to better our work, any judgment that we’ve achieved remains entirely subjective and therefore by definition– imperfect. This almost certainly explains why we can judge something perfect one minute and then hopelessly flawed the next without making a single change… More commonly, we don’t so much finish a project as abandon it, not knowing what else to do to salvage it from our own obsessive tinkering… And when we finally return to it later, we often find that the time away from it was the only thing that actually had the power to grant us an improved ability to judge its quality objectively. If we’re lucky we see, not how to make it perfect but how to make it work… Recognizing that inflection point– the point at which our continuing to rework our work reaches a law of diminishing returns– is one of the hardest skills to learn, but also one of the most necessary… What helps to release the compulsion to create perfection is the striving to put into proper perspective the importance of the act of creation itself. When I’m immersed in the creative process, nothing feels more important to me at that moment than the thing which I’m creating. And though that sense of importance is what drives my passion and discipline (which in turn is what makes creating it possible at all), it also represents the source of the painful sense of urgency for the final result be perfect. Forcing myself, then, to recognize that in the grand scheme of life no one thing is so important that failing to make it perfect will permanently impair my abilities, and that’s what frees me from the need for it to be perfect. Freed, then, from the need to attain the unattainable, I can instead focus on enjoying the challenge of simply doing my best. Because if we allow ourselves to remain at the mercy of our desire for perfection, not only will the perfect elude us, so will the good…

Don’t spin your wheels doing a perfect job, when a good job will do. There are diminishing returns for your diligence… According to Lee Knight; to attain a perfect thing, whatever that is, becomes infinitely more difficult as you near it… So, at some point, you have to cut your losses, and simply say–good enough. This is not a justification for shoddy workmanship or laziness, for that certainly would not be, per se, good enough. The point is more to know when to realize that any additional effort toward improvement would result in a negligible improvement, especially in comparison to the effort required. Do what’s important, maintain your high standards, but don’t let them get in your way… Some researchers divide perfectionists into three types, based on answers to standardized questionnaires: First, there are the self-oriented strivers who struggle to live up to their high standards and appear to be at risk of self-critical depression… Second, the outwardly focused zealots who expect perfection from others… Third, those desperate to live up to an ideal they’re convinced others expect of them… According to Mic Farris; customers want solutions, it’s very important to get them a good answer, something that explains most of what they need, and provide it to them quickly… Being productive is an incredibly important quality in business… In fact, being productive translates to being reliable and dependable to others, since they can always count on you to produce good stuff that meets their needs… According to Amber Singleton Riviere; perfection is not attainable and chasing it is pointless. Excellence, on the other hand, means not letting yourself off the hook, not cutting corner, not coping out… It’s being extraordinary, which, as Steve Harvey says; requires doing extra, and extra isn’t always easy… If you want to be a cut above your competition… being the go-to expert in your field… the name that stands out in the minds of your customers, then you have to strive for excellence. You have to know when you’re giving too much attention to things that don’t really matter (i.e., trying to be perfect) and when you need to give extra attention to those that do matter (i.e., being good enough)…

This Original Post Pursuit of Perfect– Don’t Ignore Good Enough, which is often Good Enough: Balance the Law of Diminishing Return Appeared First on WebSite BizShifts-Trends.

Business Valuation: Most business people know the value of their home, automobile… but have no idea on the value of their business. Most business management rely on simple formulas or multipliers that do not take into consideration many business variables, such as– industry trends, technology, revenues, profitability, receivables, equipment and much more… But, quite simply, business valuation is a process and a set of procedures used to determine what a business is ‘worth’– it’s a measure of the worth of the business… The premise of business valuation is that– we can make reasonable estimates of value and determine the worth of all types of assets, even intangibles… Some assets are easier to value than others and the details of the valuation varies from asset to asset; similarly the uncertainty associated with each value estimate is different for different assets, but the core principle remains the same… There are those who are disingenuous enough to argue that value is in the eyes of the beholder, and that any price can be justified if there are other people willing to pay the price. That is patently absurd: Perceptions may be all that matter when the asset is a painting, sculpture… but we do not and should not buy most assets for aesthetic or emotional reasons; we buy business-financial assets for the cash flows we expect to receive from them. Consequently, perceptions of value must be backed up by reality, which implies that the price paid for any asset should reflect the cash flow it’s expected to generate– various valuation models attempt to relate value and levels of uncertainty about the expected growth in cash flow. There are two extreme views of the valuation process: At one end are those who believe that valuation, done right, is a hard science, where there is little room for analyst views or human error. At the other are those who feel that valuation is more of an art, where savvy analysts can manipulate numbers to generate whatever result they want; but in reality, the truth lies somewhere in the middle…

Business Valuation Methods: Business Valuation has become an intrinsic part of the corporate landscape. The corporate landscape has witnessed dynamic changes in recent years as– mergers and acquisitions, corporate restructurings, and share repurchases are happening in record numbers, both in the U. S. and abroad. At the core of the dynamics of all these activities stands some notion of business valuation. The valuation methods are not only necessary for accounting purposes, but they also serve as roadmaps for– capital investors, venture capitalists, corporate acquirers… in order to know an estimated value of a company’s assets… Four standard business valuation approaches are:

• Asset accumulation: This approach is based on the premise that it’s generally possible to liquidate the property, plant and equipment (PP&E)… assets of a company and after paying off the company’s liabilities the net proceeds would accrue to the equity of the company. Valuation of assets based on liquidity does not yield better results, if the fair market value of assets is in excess of the value of its assets on a liquidated basis.
• Discounted cash flow method: This valuation method based on cash flow is  considered a strong tool because it concentrates on cash generation potential of a business. This valuation method uses the future cash flow of the company discounted by the firm’s weighted average cost-of-capital, plus a risk factor measured by Beta (measure of volatility or systematic risk); since risks are not always easy to determine precisely…
• Market Value: This valuation method is applicable for public companies only. The market value is determined by multiplying the share price of the company by the number of issued shares. This valuation reflects the price that the market, at a point in time, is prepared to pay for all shares, and that determines the value of the company…
• Price Earnings Multiple Valuation: The price-earnings ratio (P/E) is simply the price of a company’s share of common stock in the public market divided by its earnings-per-share. By multiplying this P/E multiple by the net income, the value for the business could be determined…

In the article Myths in Valuation by Aswath Damodaran writes: Myth–Valuation is a science that yields precise answers…

Reality 1: Valuations are always biased…

• Truth 1.1: All valuations are biased. The only questions are how much and in which direction.
• Truth 1.2: The direction and magnitude of the bias in valuation is directly proportional to who pays you and how much you are paid.

Reality 2: Equity valuations are always imprecise, but they are most valuable when they are most imprecise.

• Truth 2.1: There are no precise valuations.
• Truth 2.2: The payoff to valuation is greatest when valuation is least precise.

Reality 3: Complex valuations do not yield better estimates of value.

• Truth 3.1: One’s understanding of a valuation model is inversely proportional to the number of inputs required for the model.
• Truth 3.2: Simpler valuation models do much better than complex ones.

In the article Business Valuation: Three Approaches by ValuAdder writes: Quite simply, business valuation is a process, and a set of procedures used to determine what a business is worth. While this sounds easy enough, getting your business valuation done right takes preparation and thought. Business valuation results depend on assumptions: For one thing, there is no one way to establish what a business is worth. That’s because business value means different things to different people… For example; business management may believe that the business connection to the community it serves is worth a lot, and an investor may think that the business value is entirely defined by its historic income… Traditionally, there are three fundamental ways to  measure what a business is worth:

• Asset approach: The asset approach views the business as a set of assets and liabilities that are used as building blocks to construct the picture of business value. The asset approach is based on the so-called economic principle of substitution which addresses this question: What will it cost to create another business like this one that will produce the same economic benefits for its owners?
• Market approach: The market approach, as the name implies, relies on signs from the  actual market place to determine what a business is worth. Here, the so-called economic principle of competition applies: What are other businesses worth that is similar to your business?
• Income approach: The income approach takes a look at the core reason for running a business– making money. Here the so-called economic principle of expectation applies: If I invest time, money and effort into the business; what are the economic benefits and when will they be available?

In the article Valuation Myths by Lewis Schiff writes: Since valuation is part science and part art, it’s very easy to fall into misconceptions of the business valuation process… Two valuation experts recently identified common myths that could lead to poor management of intangible assets, and could also cause confusion:

• Myth 1: Valuation is a well-defined and well-understood term.
• Myth 2: Valuation of intangible asset is equal to price someone is willing to pay.
• Myth 3: Valuation is equal to the cost of creating an item.
• Myth 4: Each intangible should have only one official value.
• Myth 5: Balance sheet provides good information about the value of intangibles.
• Myth 6: Fair market value is a good construct for use with intangibles valuation.
• Myth 7: There should be only one accepted method for valuing intangibles.
• Myth 8: Current estimate of the future price must equal the eventual transaction price, in order to be considered accurate.
• Myth 9: Patents cannot be valued credibly because each one is unique.
• Myth 10: Value of company’s intangibles is the difference between its market value and the value of its tangible assets.

Determining the value of a business is a complicated and intricate process. Even valuation experts have referred to it as more of an art than a science. Valuing a business requires the determination of its future earnings potential, the risks inherent in those future earnings, an analysis of its mix of physical and intangible assets, and the general economic and industry conditions… A business valuation is not just for a businesses preparing for a sale: In fact, there are numerous business and legal situations that require a detailed valuation. First, a detailed valuation is needed when a seller is considering merger, sale, acquisition, or shareholder wishes to buy-out other shareholders… Second, government or judicial authorities often require a business valuation for legal matters such as; shareholder disputes, divorce proceedings, eminent domain takings; employee stock ownership plans (ESOPs), S-corporation election, or breach of contract disputes… Third, taxable events, such as; estate and gift planning or charitable giving also necessitate a valuation… Finally, a detailed valuation can help identify what’s needed– to increase the value of the business, attract new capital, project potential proceeds from an initial public offering (IPO)… With this many potential situations requiring a business valuation, it’s important to have an up-to-date estimate of the value of the business. However, unlike fine wine, valuations do not age well. Sales can go up-or-down, demand for products and services can go up-or-down, the economy can go up-or-down: The state of a business can change pretty quickly… and a valuation becomes out of date, quickly– perhaps even by the time it’s done… But, a valuation can be very useful when there is a specific reason for it, and a time frame within which to use it… Learn to understand the principles of valuation and what a valuation is trying to achieve, and then harness what the valuation provides to– identify strengths, weaknesses, opportunities, and threats in the business…

This Original Post Leverage– Business Valuation– Know It, Understand It, Apply It: It’s a Pre-Requisite for Intelligent Decision-Making Appeared First on WebSite BizShifts-Trends.

WIN-WIN ranks high on the list of over-used buzzwords, but many people have trouble understanding the counter intuitive notion that two sides can win in a negotiation… In theory, the win-win strategy is about changing conflict from adversarial– attack and defense– to cooperation. It’s a powerful shift of attitude that can alter the whole course of communication. Win-win, win-lose, lose-win, lose-lose are game theory terms that refer to the possible outcome of a game or dispute involving two sides and more importantly, how each side perceives their outcome relative to their standing before the game. For example, a ‘win’ results when the outcome of a negotiation is better than expected, a ‘loss’ when the outcome is worse than expected. Two people may receive the same outcome in measurable terms, for example; $10 for one side may be a loss, while for the other it’s a win. In other words, expectations determine one’s perception of any given result… According to Brad Spangler; situations where parties agree to act in both their own interest and in the interest of the other parties can be a win-win situation… The basis for any win-win situation is that compromise and cooperation must be at least as important as ego and competition. Everyone likes to ‘win’ but the question raised to create the win-win situation is: How can a situation be established where nobody loses? A win/win approach rests on strategies involving: going back to underlying needs; recognition of individual differences; openness to adapting ones position in the light of shared information and attitudes; attacking the problem, not the people… Even when trust between the parties is very limited, win-win can be effective, and if there’s some doubt about the other person keeping their end of the bargain you can make the agreement reciprocal. For example; I’ll do X for you, if you do Y for me: X supports their needs, Y supports yours. I’ll arrange for the demo, if you bring the people. I’ll help you draw up those figures for your reports, if you schedule a meeting with the project manager… Usually, co-operation can result in both people getting more of what they want. The win-win strategy is conflict-issue resolution for mutual gain.

In the article Habits of Highly Effective People–Habit 4: Think Win-Win by Stephen R. Covey and Joseph M. Mellichamp write: Win-win is misused very often and it mostly comes down to a win-lose proposition in a pretty package. Win-win is about adopting a new paradigm; the paradigm of ‘creation‘, instead of the paradigm of ‘competition’. In summary, there are seven different paradigms of interpersonal interaction:

• Win-Win: I win and you win. Solution that creates value for all parties involved. This is based on the premises of ‘abundance’.
• Win-Lose: I win, you lose. Highly competitive mindset, based on the premises of limited ‘rewards’.
• Lose-Win: I lose, you win. One party accepts a loss… Sounds strange? Ever caved in to an apparently pointless  argument, saying; Alright, if it’s that important to you, we’ll do it your way. That’s a typical lose-win situation.
• Lose-Lose: All parties are very competitive and need to win at all cost. This ultimately ends up in lose-lose situation.
• Win: Only focused on winning, regardless of what it brings to others. The others are not in the equation here.
• Win-Win or no agreement: All parties want to agree to a win-win solution, but if it’s not possible, let’s agree to disagree agreeably.
• Compromise: All parties win and lose ‘a little’.

The paradigm of ‘abundance’ is critical– it’s the basis for the win-win concept; it says that there’s enough in it for all parties and, it’s not about getting a bigger piece of the pie, it’s about making the pie bigger… However, if there are limited ‘rewards’, then accomplishing a win-win is difficult, if not impossible… Win-win is a paradigm, a mindset… You have to genuinely want to achieve a win-win solution and not just aim for it– and then just ‘settle’ for win-lose; if it proves too difficult… When it comes down to achieving a goal through a ‘relationship’, the win-win mindset calls for seeing it from the other party’s prospective, i.e., trying to understand what the other party wants to achieve, so that you can try to find a way to get their ‘wants’ fulfilled. In the end, if you want ‘win-win’ to succeed; you must make mutual agreements that ’define it’, have reward systems that ‘reward it’, and processes that ‘support it’…

In the article What Does Win-Win Negotiation Mean? by Robert Menard writes: Negotiation strategy always has a profound impact on business… There are four basic strategies: win-win, win-lose, lose-win, and lose-lose. Selecting the appropriate strategy depends upon how each of the parties values the ‘issue’ and the ‘relationship’. A visual-aid works well to explain this concept:

These four quadrants represent the four different negotiation strategies available. The choice of negotiation strategy depends on the value both parties place on the ‘issue’ and the ‘relationship’: Take win-lose, in lower left quadrant; it’s the strategy that’s most frequently practiced, and it’s used when the ‘issue’ matters more than the ‘relationship’… Take lose-win, in upper right quadrant; it’s the strategy that’s used when the ‘relationship’ is valued more than the ‘issue’… Take lose-lose, in lower right quadrant; it’s the strategy used when both the ‘issue’ and the ‘relationship’ have little value; and it might only occur in rare situations… Finally, take win-win, in top right quadrant; it’s the strategy used when both the ‘relationship’ and the ‘issue’ are very important, and when both parties are interested in a long-term commitment… Ideally, win-win should be the preferred strategy when dealing with major customers and suppliers… However, many people who talk about a win-win strategy actually hedge their actions  because– all that ‘really’ matters, to them, is that ‘they win’…

In the article Win-Win Really Means Win-Lose by Douglas E. Noll writes: In my opinion, win-win expresses a superficial niceness while papering over differences. Seeking a win-win outcome creates distrust and frustration… Win-win is one of four outcomes from a game called the ‘Prisoner’s Dilemma’; a game that theorists devised thirty years ago to examine strategies of competition and cooperation… The game is a favorite research topic for psychologists with hundreds of experiments conducted; as a result, win-win is used to describe an optimum conflict outcome. However, many experts say that the ‘win-win’ concept is dangerously simplistic… For example, in addition to unrealistic assumptions underlying the win-win orientation, the very nature of the term ‘win-win’ implies competition instead of cooperation: Winning means beating your opponent. The term win-win is consequently unconsciously translated as, I win more than you win– or, I don’t care if you win, so long as I win. Thus, win-win is a self-contradictory euphemism. People say they want a fair resolution, but what that really mean that the resolution has to be on their individual terms. When someone says he wants a win-win solution, contextually that does not make sense. Hence, the win-win idiom often creates mistrust… In the world where large corporate cultures and small teams are supposed to express shared values, win-win conflict resolution strategies are often applied… That is, it’s supposes– that we can come together and resolve our differences, such that everyone will come out winners. It’s a cultural discourse, not a neutral one. This is the discourse of nice guy liberalism, the passive-aggressive discourse of politeness, the patronizing discourse of trying to get what you want while trying to tell someone else that they are getting what they should want. Some people play this discourse better than others. Indeed, agreeing to disagree may be the optimal outcome, even the most productive one: The best negotiation should not be forced to end with win-win… Generalizing across all conflict contexts; win-win is not a genuine conflict resolution, but rather a mechanism for persuading others that they can have what they want, without really giving anything away. It’s clever, but not very productive for long-term conflict resolution. Thus, win-win is neither a process nor an outcome… Thus, be aware of the fallacy of win-win: Conflict or negotiation is far more complex than game theory, and it’s not reducible…

Ever heard someone say that they ‘gave away the farm‘? Despite our best intentions, we sometimes negotiate too much value away to arrive at an agreement; even when we go into negotiations with high motivation, grandiose, and exuberant spirit of cooperation. Today, many hear that ‘win-win’ negotiations are all the rage… Yet it’s all too common that most negotiators fail to understand that this term represents achieving a win-win negotiated ‘settlement’, instead of a win… According to Lewis Schiff; a survey of business executives found that they overwhelmingly disagreed with the idea that win-win solutions are ‘best’, and it was suggested that the notion of win-win is widely regarded as a dangerous trap; that having a win-win perspective almost guarantees that you’ll be the only one offering concessions in order to reach agreement. Almost all guides to negotiating recommend the same three-step alternative to win-win: First, write down your wished-for goals. Second, study what the opposition wants. Third, write down the conditions at which you will walk away… According to Michael Donaldson; these three steps are called– wish, want, walk… However, the only full-proof ‘win-win’ strategy is simply; treat customers the way you would want to be treated– with integrity along with providing good quality products… and then, you will be well on your way to making every customer feel like a winner, and your company will also be a winner, too… There are three things that you must keep in mind:

• The customer is not always right.
• There are some customers you can never please no matter what you do.
• When faced with an un-winnable situation, your duty is to mitigate the loss.

This Original Post Idealized– WIN-WIN Strategy– It’s Less about Process, More about Tactics, Most about Results: The Prisoner’s Dilemma Appeared First on WebSite BizShifts-Trends.

Business models describe the rationale of how an organization creates, delivers, and captures value (e.g., economic, social, cultural, or other forms of value). Simply put, the business model describes– how a business positions itself within the value chain of its industry, and how it intends to sustain itself… The business model converts innovation to economic value, and spells-out how a company makes money by specifying how it’s positioned in the value chain… Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise– it reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, and make a profit… Ultimately the success or failure of a company depends first and foremost on how well its business model design matches customers’ priorities… According to Joan Magretta; a good business model answers Peter Drucker’s age-old questions: Who is the customer? And what does the customer value? It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate price? The creation of a business model is much like writing a new story, which is a variation on the generic value chain underlying all businesses. This chain has two parts: First, associated with making something; second, associated with selling something. A business models need to pass two critical tests: the ‘narrative’ test (the story doesn’t make sense) or the ‘numbers’ test (the profit & loss doesn’t add up). However, a business model is not the same as strategy; it describes a system but they do not factor in competition… According to Michael Porter: Dealing with competition is a strategy’s job and doing better than your rivals, which means being different… Ultimately, both a good business model and effective strategy are required for business success…

In the article What Exactly is a Business Model? by Vivek Wadhwa writes: Many people in business talk about business models. But, if you quizzed a random sample of these people, you’d find that they really don’t know what a business model is… The reality is that a business model is like the old saying about teenage sex: everyone talks about it all the time; everyone boasts about how well he or she is doing it; everyone thinks everyone else is doing it; almost no one really is; and the few who are fumbling their way through it incompetently. For almost any traditional business, the business model is so obvious that you don’t have to talk about it: Stores sell goods. Restaurants sell meals. Hotels sell lodging. Airlines and taxis sell transportation. Think of the business model as how you make money. How you get money out of your customer’s pocket and into your bank account. The new businesses, mainly Internet businesses, need to explain how they make money. Some businesses still get away with generating traffic, so-called eyeballs, but not money. The underlying assumption in these cases is that the traffic means a likelihood of being able to generate money– somehow, some day. And if you want to be really trendy, use the phrase ‘business model’…

In the article Kill Your Business Model Before It Kills You by Ron Ashkenas writes: Why do business leaders wait too long to modify or abandon their business models? The U.S. Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; even a sophisticated G.E. waited too long to reorient its lighting business away from incandescent bulbs. From these cases, and others over the years, it seems to me that there are two keys for getting ahead of the business model curve, both of which apply to managers at all levels: First, remember that no business model lasts forever. The most dangerous trap that any manager can fall into is complacency. Peter Drucker reportedly once said; the biggest curse for any business was twenty years of success… Markets, environments, and technology can change so quickly that no amount of profit today guarantees success tomorrow. Years ago, during the ‘dot-com’ boom, Jack Welch required each of his businesses to go through an exercise that he called ‘Destroy Your Business.com’ in which he asked them how ‘dot.com’ competitors could possibly put them out of business. In other words, long-term success is more likely when we welcome the anxiety of competition, instead of avoiding it. The second key is to continually and actively be on the lookout for new business opportunities that can potentially replace the current model. If you only invest in refining today’s business model you’ll get locked into it. Testing, incubating, and investing in alternative models hedges against that possibility. Sure there will be failures, but with enough persistence and creativity, some viable alternatives will emerge. Nobody wants to be in the position of trying to defend a business model that has little runway left. So instead of assuming that it can’t happen to your business, take the lead in looking for alternatives– long before the competition leaves you in the dust…

In the article Your Business Model is Obsolete by Geoff Colvin writes: Innovation is the hottest word in business, but most of the discussion centers on products and services. The more profound challenge for most companies now is imagining a new business model, a new answer to the fundamental question: How do we make money? All business people face the challenge, sooner or later– even if business model has worked for decades, even if it’s working okay right now, odds are that it soon won’t be… Not since the Industrial Revolution have we seen a longer or broader list of companies whose business models are suddenly obsolete. Start with virtually all companies in the media business, or any company that relies on owning copyrights or selling advertising. Then look at how major retailers– Best Buy, Target, Wal-Mart… are rethinking their models in response to show-rooming (i.e., browsing in-store and buying online from eBay, Amazon…) The whole education industry needs a new model. So do banking, the post office, computer makers, big-pharma, music, and telecoms. They all need new business models, and almost all are having a hard time finding them: Business model innovation is a competency that doesn’t exist in most companies, since it never had to… For example, the newspaper business model worked great for 200 years; twenty generations of management didn’t have to change it. Why should we expect that today’s generation would know how it’s done? It’s the same in most companies. Even in today’s environment, your new business model will not last nearly as long as the old ones… The new normal is Amazon: It launched with an innovative model as an online bookstore. Then, it also became a marketplace for other booksellers. Then, it started offering other products (e.g., clothing, computers…) requiring far different distribution infrastructures; then, it began selling digital books, music, TV shows, and movies online; created its own branded devices (e.g., Kindle and Kindle Fire); added web services for companies; and is now investing hundreds of millions of dollars in original programming, and in warehouses for same-day delivery of groceries and other merchandise… The model is changing continually. Peter Drucker noted that ‘sloughing off yesterday’ is almost impossibly difficult, yet every organization must get used to doing, it regularly. The largest obstacles will be weak imaginations, threatened interests, culture… Business model innovation is the new essential competency: It’s hard, and it will separate tomorrow’s winners from the losers.

In the article How Sustainability is Reinventing the Business Model  by Eric Lowitt writes: Do you remember when business was not only uncomplicated, but dare I say, easy? You found customers with unmet needs, created a solution to those needs, and sold the product or service at a profit… Essentially you created a business model; identify customers, create a solution customers want, source the needed materials to put the solution together, and get it to the customers– that mapped out a path to growth… There are trailblazing companies that are rewriting conventional business thinking to overcome the challenge of sustainability. These companies view sustainability not as altruism, not as ‘do less bad’, but as an arrow in their competitive strategy quivers. They are marrying profitability with sustainability by seeking– partnerships with strange bedfellows, financing from unique sources, and ideas from the crowd. In short, these trailblazers are reinventing their business models. Companies used to set goals they were capable of achieving on their own, that is; be number one or number two; go global…To achieve these goals, companies have entered new markets, invested heavily in developing countries, and adapted to the realities of the Internet. As long as they applied their core capabilities correctly and swiftly, they controlled their own growth trajectory. But, not anymore: Trailblazers think not only bigger, but also broader when setting the paths for growth. Sustainability is the catalyst that is leading trailblazing companies to reinvent their business models…

We are witnessing a fundamental paradigm shift in business today; business dynamics have evolved beyond many of current business models… According to Carol Kinsey Goman; today’s business leaders are experiencing shock as their old business model are breaking down, and many business leaders remain emotionally attached to theories that have long since been disproved… We are only just beginning to understand what it means to move from a purely analytical ‘objective’ perspective to one that includes; subjective, intangible and emotional aspects of business… In 1982, John Naisbitt wrote in his classic book ‘Megatrends’ about the collapse of the ‘information float’. He defined information float as the amount of time information spends in any media channel– the amount of time between transmission and reception. Today, technologies such as; social media, smart phones, high-speed data mining, ubiquitously networked electronic devices… have precipitated the collapse of the customer feedback float– the amount of time it takes a vendor to understand whether their product suits the market’s interests. This collapse of the customer feedback float becomes part of the new psychology behind the new business models… The old business model was– market research leads to a defined problem that leads to a defined solution that leads to big scope development… Whereas, the new business model says; take a step back from any pre-defined ideas about a product and think about possible consumer pains, undiscovered needs… Allowing your perspective to shift from a big-plan-specific vision to a fluid-discovery-process… Seeing business growth as a series of discrete discoveries, instead of an over-reaching plan, that wires your brain for flexibility. This, in turn, will enhance creativity and ability to innovate… It’s a new way of thinking; a clearer, braver way to think… According to Clayton Christensen; one of the most compelling cases yet for the maxim: You can build a better mousetrap, but that doesn’t mean they will necessarily use it… Christensen’s argument goes something like this; innovations that disrupt markets nearly always start with a new, or newly applied, technology that offers a significant improvement over previous ones. But, great technology alone is not enough for success. To truly shake things up in a market, innovations also needs– new business models and value networks– new supply chains, channels to market… and, sometimes it can take a long time for new business models and value networks to evolve… However, it’s time for business models to get back to being actual business models: If you really want to grow your business, then base your business model on innovation and new value creation; most important–value what your customers really wants and are willing to pay…

This Original Post Reinvent Your Business Model: Think Customer, Aim Big, Move Fast– Kill the Old Business Model Before It Kills You Appeared First on WebSite BizShifts-Trends.

Offsets are ‘terms in a sale’ that leverages the sale to obtain compensatory benefits for the buyer, generally in many international trade arrangements… Offsets are an integral part of trade agreements between companies (i.e., suppliers) and governments (i.e., buyers); whereby suppliers must agree to buy products or provide other forms of commitment to the buying countries, in order to win the contract. Offsets are mechanisms to compensate typically, governments for outflow of their countries economic resource… Their use is becoming increasingly important with more than 120 countries having international trade offsets policies… Even though the definition of ‘offsets’ is often disputed the main concept is simple: A country (buyer) that wishes to purchase and import, say, $100 Million worth of military arms from another country or company… and presumably the only economic value gained in return, for the purchase, is the putative national security-value of the imported arms. Therefore, to increase the ‘economic exchange value’; the importing country (buyer) stipulates that the exporting country-company (seller) contractually must take a percentage (offsets) of the $100 Million purchase, and set-up a ‘flow-back’ to the buyer, e.g.; provide for co-production facilities in the buyers country, or commit to a variety of other possible activities that would secure the ‘flow-back’ percentage, of the $100 Million, to the importing country (buyer). This ‘flow-back’ or ‘offset’ is part of the trade contract… The importing country’s advertised benefit are; they obtain the necessary arms, plus the country’s public funds that are spent on the purchase remain in the country for use in other domestic activities, such as; stimulating the country’s economic development… Countries use offsets for a variety of reasons, e.g.; ease the burden of large purchases on their economy, increase-preserve employment, obtain desired technology, promote industrial sectors… It’s interesting to note: Developed countries with established defense industries use offsets to channel work or technology to their domestic defense companies. Countries with newly industrialized economies are utilizing both military and commercial related offsets that involve the transfer of technology and know-how… The developing countries with less industrialized economies generally pursue indirect offsets to help create profitable commercial businesses and build infrastructure. Overall, offsets continue to be an important and necessary factor in a climate of increased international competition…

In the article Market Trends and Analysis of Offsets by Asif Khan writes: Offsets are industrial compensation practices that are required as a condition of purchase. The seller is required to compensate the buyer for perceived losses to the local economy. This practice has been part of international trade for more than fifty years… Offsets are also used in other industries, such as; power generation, telecommunications, infrastructure projects… For example, Pepsi signed an agreement with the Ukraine to expand its bottling plants and, in return, marketed approximately US$1 Billion worth of shipments of goods over an eight-year period… There are many who favor the practice of offsets, and there are many who oppose this practice. Some refer to offsets as kickbacks and as being counter to the free market approach, while others, especially some people in the defense industry, view offsets as a reasonable component of market practices and as a business development tool without which there would be no sales: The World Trade Organization (WTO) permits only civilian offsets (civil-civil) for developing countries only… Offsets are now an accepted practice in the international business arena, and this is especially true in the defense industry. Many countries see offsets as a means of enhancing their local economies, and politically justifying spending on defense items and acquiring the latest technologies… Marketers should be aware of offset policies and practices of their foreign customers and governments to better prepare for the competitive bidding process. Defense firms should be aware of the trends in offsets and the demands of the respective markets, such as; local partnerships and production… Three approaches are prominent when considering offsets policies: 1) policy adaptation requiring a mandatory offset component, 2) flexible case-by-case approach based on mutual benefits, and 3) best endeavor approach based on a partnership. Some countries start with one strategy, then after having some experience they might change the approach… Defense contracting firms have two options; engage in offsets or walk away from the deal... The defense industry views offsets as counter-balance for trade distortions imposed by government interventions… Also, as a tool for risk mitigation, access to capital, markets, technologies, and enhanced local workforce skills… In response to a survey of U.S. defense firms conducted by the U.S. Commerce Department; 59% of respondents agreed with the concept that offsets are essential to win contracts, and based on the past transactions, offsets have proved to be a key decision criteria in international defense sales… Offsets exist in formal and informal forms: Some countries have adopted mandatory offsets, while others have adopted flexible offsets policies that focus on, e.g., long-term partnerships, dual-use technology, regional approaches… Countries with skilled workforces, public-private enterprises, and developed international business relationships are better positioned to absorb the transfer of technologies than countries without these attributes. Based on the last fifteen years of U.S. export data, the overall trend shows that there has been a steady increase in the demand for offsets…

How Do Offsets Work? International offsets activities are directly related to the size of the international exports trading businesses: According to Stockholm International Peace Research Institute(SIPRI); the world’s 100 largest arms dealers, excluding China, sold weapons and military services worth US$411.1 Billion dollars in 2010… U.S. firms dominated the Top 100, with sales by 44 US-based companies accounting for over 60% of the market, or US$246.6 Billion… Assume that the offsets on these export agreements might average about 90%, and then the U.S. exports of US$246.6 Billion would result in about US$222 Billion of future offset obligations, as the export contracts are fulfilled… Here is an example of a typical ‘offsets’ proposal: Consider a hypothetical case of ‘NationP’ (buyer) buying 300 tanks from defense company ‘CompanyS’ (seller). Assume that the total contract is US$400 Million and NationP (buyer) requests 120% of offsets. Hence, the defense CompanyS (seller) is obliged to fulfill these offsets, if they want to win the contract. Then, NationP and ConpanyS agree on a list of specific offsets items, i.e., deals, programs… The offsets agreement includes both direct and indirect offsets. NationP also assigns a credit value for each typology of offsets offered by CompanyS. The credit value for the offsets obligations is not the ‘actual value’ but it’s the ‘actual value by a multiplier’, which expresses the degree of interest of NationP in the proposed offsets. In other words, something that is deemed very valuable by NationP will have a high multiplier, which expresses the importance and the value to NationP for that type of offset. The multiplier (e.g., 2, 5, 7…) translates NationP‘s ‘attached value’ into the ‘credit value’, and that eventually accounts for the fulfillment of the agreed sum of US$480 (120% offsets). Most offsets are divided into ‘direct’ and ‘indirect’: Here is a hypothetical proposal between CompanyS and NationP using both ‘direct’ and ‘indirect’ offsets:

Direct Offsets:

• Co-production: NationP chooses one or more local companies to manufacture some components of the tanks, such as turrets and some of the internal components. The actual value of the components is US$70 Million. NationP assigns a multiplier of 3, since this develops capabilities of its military industrial base and creates jobs in NationP. The total credit value for the fulfillment of the overall offset obligation is US$70 Million x 3 = US$210 Million.

Indirect Offsets:

• Foreign Direct Investments: CompanyS makes investments in 5 (defense or non-defense) companies in NationP. The total value of investments is US$14.5 Million, and the multiplier is 4, a high multiplier, since NationP suffers from a chronic lack of ‘Foreign Direct Investments’. This makes an additional credit value for CompanyS of US$58 Million.
• Technology Transfer: CompanyS provides water desalination technologies to one NationP company. This technology is particularly appreciated by NationP. Its actual value is US$20 Million, but the credit value is 7 times the actual value, which equals US$140 Million.
• Export Assistance and Marketing: CompanyS provides commercial assistance to market products and services of a NationP’s company in a difficult market… The assistance is offered for 8 years, at the value of US$3 Million per year. NationP considers this assistance important to create new revenue streams and jobs for its company, and sets multiplier of 3. Credit Value US$72 Million. CompanyS may not be  expert on marketing and export assistance, so it may hire a subcontractor for the job. Such a subcontractor is also known as an ‘offset fulfiller’.

In these agreements, NationP controls-manages not only the supply of the deliverables, but also the implementation of the offsets according to the offset agreement, included or related to the main supply contract. This control is within the Minister of Defense and/or Ministry of Economy or Finance, or Ministry of Industry and Trade. Often arms importing nations establish special agencies for the supervision of their defense offsets…

Welcome to the murky world of ‘offsets’… The practice came of age in the 1950s, when Dwight Eisenhower forced West Germany to buy U.S.-made defense gear to compensate for the costs of stationing troops in Europe. Since then it has grown steadily and is now accepted practice in 120 countries… According to the Global Offset and Countertrade Association; the industry could double in size over the next few years. Yet its very structure serves to mask the build-up of unrecognized financial liabilities of companies… also, critics argue that it fosters corruption, especially in poorer parts of the world… According to ‘Avascent’, consultants; estimates that defense and aerospace contractors have accrued offsets obligations, i.e., investments they have promised but not yet made– that amount to about $250 billion today, and could increase to almost $450 billion by 2016… However, the industry’s own estimates are lower, but all agree that the trajectory is upward… In a survey of 200 international business leaders; respondents were nearly unanimous on the importance of international business to their organizations, and equally convinced of the value of strong ‘offsets plans’ for the success of their business development efforts… However, the character of offsets– seen as either obligation or opportunity– was more contentious… The pressure to do more and better on offsets is clear… Meanwhile, many investors that invest in  companies that trade internationally are unaware of the role and risks of offsets– despite the importance of international growth… In addition, many governments using offsets; lack transparency, effective decision-making, little communication… leaving stakeholders to rely on informal networks to navigate the role and risks of offsets in their countries… Remarkably, offsets are now said to be the main criterion in international trade contract evaluation… offsets may be little-noticed side deals that are negotiated in the shadows, but when it comes to weighing up bids they are at the front of decision-makers’ minds…

This Original Post Shadow World of Economic–Offsets– An Anomaly in Business Practice: Cost to Compete for International Trade Agreements Appeared First on WebSite BizShifts-Trends.

Mind Mapping: Mind mapping is the most effective, ‘brain friendly’ way for you to turn your unorganized, fleeting ideas and thoughts into a structured, visual ‘map’. A mind map resembles the visual aspects of a flow chart and the organization structure of an outline… Mind mapping is a creative and logical means of note-taking and note-making that visually ‘maps-out’ your ideas. All mind-maps have some things in common: They have a natural organizational structure that radiates from the center and use lines, symbols, words, color and images according to simple, brain-friendly concepts. Mind mapping converts a long list of monotonous information into a colorful, memorable and highly organized diagram that works in line with your brain’s natural way of doing things… One simple way to understand a mind-map is by comparing it to a map of a city. The city center represents the main idea; main roads leading from the center represent the key thoughts in your thinking process; the secondary roads or branches represent your secondary thoughts, and so on. Special images or shapes can represent landmarks of interest or particularly relevant ideas. The mind-map is the external mirror of your own radiant or natural thinking facilitated by a powerful graphic process, which provides the universal key to unlock the dynamic potential of the brain… The technique of ‘concept mapping’ was developed by Joseph Novak at Cornell… Concept maps have their origin in the learning movement called constructivism. In particular, constructivists hold that prior knowledge is used as a framework to learn new knowledge. In essence, how we think influences how and what we learn. According to Grayson Walker; concept maps identify the way we think, the way we see relationships between knowledge…

Mind Mapping and Strategic Planning: There are many different definitions of strategic planning, but the most common always includes the phrase– ‘big picture thinking’… And, the ideal tool for strategic planning– viewing the big picture– is mind mapping; there is simply no better way to conceptualize, refine, compile, organize and share strategic-level idea… The possibilities for developing and visualizing business strategies are limitless. Start with a theme – long-term planning, medium term goals, or even something specific like ‘increase market share by 25% in 180 days’… Then let the ideas start flowing. Keep the primary ideas connected to the central idea, then within subtopics let additional, specific thoughts radiate outward. Don’t over-think – let the ideas flow as long as there’s energy in the room to continue. At some point in the strategic planning process take a step back and look at your mind map. If something stands out as really valuable, make that the center topic of a new map and start the process all over again… keep going until the creative energy is diminished. The end result will be more useful and infinitely more elegant than straightforward idea generation. Relationships will be visible, associations are clear, in short; the big picture will be right there in front of you… The term ‘mind map’ was first popularized by Tony Buzan– who argued that while ‘traditional outlines’ force readers to scan left to right and top to bottom, readers actually tend to scan the entire page in a non-linear fashion. When compared with the concept map the structure of a mind map is a similar radial, but is simplified by having one central key word… Mind maps are used for– personal, educational, business situations… and some applications include; note taking, problem solving, brainstorming,  framework design, relationships, team building, collaborations…

In the article Mind Map Your Strategic Business Plan! by Fred E. Miller writes: When working on a business plan, one of the challenges is to include and expand upon, as many inside and outside factors that have, or could have, an impact on your success. Putting all these together, showing how they connect, inter-connect, and not leaving out anything is a major challenge… One of the best tools for getting started on your strategic plan is by using– mind mapping. The simple definition of– mind mapping is that it’s non-linear brainstorming… It’s a visual technique that works the way our brains work by bringing together the left linear and right creative, sides of the brain. Traditionally, planning is done in a linear format, which means that you are, essentially, trying to organize thoughts before you develop them. Your brain doesn’t think this way. Mind mapping works the way your brain works. Very briefly the steps are this:

• Start with the paper in the landscape mode.
• Place your main subject, e.g., ‘strategic plan’, in the middle.
• Radiating from the center out, place your subtopics.
• Use keywords, pictures, and symbols to trigger more ideas. Our brain does this naturally!
• Use colors to show themes and associations.
• Reorganize, edit and prioritize your map.

Revisit and revise the map often– very often– as business conditions are very fluid. The strategic plan should be able to change and reflect this. Mind mapping is one of the best ways to develop the most ideas and solutions to everyday challenges and opportunities, and definitely a great tool to get started on a ‘strategic business plan’. There are several reasons developing a strategic plan with this tool can be especially effective:

• Everything, meaning all elements of your plan, can literally and figuratively be ‘on the same page’, thereby giving all stakeholders the ‘big picture’.
• Seeing how all the pieces fit together can be paramount to implementing and succeeding with your plan.

Visually seeing everything will trigger far more, than when you are just looking at a linear, black and white outline of a business plan. Seeing everything helps eliminate being blind-sided when conditions change. A business, and everything that affects it is organic; meaning things are not static, but are constantly changing. An effective strategic plan must take this continuous change into account, and constantly be tweaked to reflect those changes. Regularly looking at a mind map, which is easily understood and easily modified, just makes sense. In today’s radically changing economy; a business plan developed six months ago may not contain the correct contingencies and if not revisited often– could be mostly worthless. For example, changes in financing, payment plans, product lines, personnel, marketing… must be factored into the plan and regularly revisited, and when necessary, modified. Sometimes these modifications are not just simple ‘tweaks’, but major paradigm shifts… Mind mapping and other forms of visual communication helps people ‘get it’, quicker and more effectively…

In the article Mind Mapping Makes Marketing More Meaningful by Cliff Allen writes: Success in any area depends on having a clear, sound plan and then acting on that plan. Mind mapping is a process of starting with a central concept and graphically adding links to greater and greater details. Most mind maps are drawn around a central concept, but mind maps are drawn in lots of ways, such as; a traditional organization chart. Basically, a mind map is visual way to show a hierarchy… However, it turns out that with graphical mind maps you can more easily see– both, the high level view plus the details and their relationships– much better than with a linear outline. Of course, some times the linear prioritized nature of an outline is more effective… but in marketing so many programs affect other programs that the multi-dimensional approach of mind maps works very well. Mind mapping is more than a way to draw charts, it’s used to capture ideas and concepts as they are discovered, and show their relationships. The actual mind map drawing is just a way to visually express thoughts and make them more meaningful. For example, in some organizations managers and team leaders use mind mapping for creating a common way of communicating the status of– projects, plans, performance… Mind mapping is especially useful in marketing where:

• Marketing strategy is based on how multiple groups of customers think and feel about products.
• Marketing has become increasingly complex as the number of communications and sales channels has increased.

These challenges have made it difficult to connect a set of marketing strategies with day-to-day marketing programs. At the same time, potential customers are being influenced by these multiple marketing channels. This means that marketers need to take advantage of the marketing leverage that an integrated marketing program can provide. It’s too easy to become focused on a few tactical marketing activities and miss other opportunities so as to influence potential customers. One technique to keep a strategic view of a company’s marketing it to create a graphical mind map that shows: How marketing strategy guides all tactical marketing programs? How all marketing programs reinforce each other? The immediate benefit of using a strategic marketing mind map is that every manager knows how their team fits into the overall strategy– and what they need to do to support that marketing strategy. In other words, everyone understands how the marketing strategy is related to their individual marketing tactics…

Mind mapping is a strategic tool for catalyzing creative and expansive conversations while keeping the conversations grounded in the reality of the situation. By literally mapping out the details of your– technology, marketplace, strategy… you and your team have the opportunity to step back– see things better, see things more clearly, see the big picture, see things together, see things differently… A good strategic map and the process of bringing people together in constructive dialog can help your team grapple with the complex and difficult issues… Navigating the future without a good map can be difficult and dangerous, i.e., difficult to see where you are, and if you are on the right track to reach your goal… A good map can help reveal your strategic reality and thus position you to create the future you want. A good map can generate understanding and insight, agreement, action… The mind mapping concept is very flexible, and it can be used in a wide range of settings, including; creative thinking, writing, strategic planning, group brainstorming, life management, goal setting, training, education, business process mapping, event planning, research, SWOT analysis… and, the biggest benefits that people cite are; clarity of thinking, managing information overload, improved productivity and being better organized... According to Alicia McWilliams; the mind mapping process is actually an advanced method of illustrating a vast variety of specific words; unusual tasks, concepts and ideas, which are effectively connected to and radically arranged around one chief idea… Mind mapping represents a powerful and vivid method of comprehension which provides a general key towards unlocking the skills which are often hidden within the framework of the human mind. Mind mapping is a technique that can be practiced in all facet of one’s life, where enhanced learning and a more creative method of thinking would tend to improve understanding and performance…

This Original Post Mind Mapping– Create a Visual Map That Sees Things Clearly: Capture–Concepts, Ideas, Plans, Strategy… Appeared First on WebSite BizShifts-Trends.

Winners–Losers: Passion and perseverance may be more important to success (i.e., winners), than mere talent. In a world of instant gratification, ‘grit’ may yield the biggest payoff of all. Grit is defined as ‘perseverance and passion for long-term goals’, and it may  be at least as good a gauge of future success as talent itself… According to Angela Duckworth; individuals that are deemed winners (i.e., more successful), typically possess traits that are above normal ‘ability’ but more important, they also possess– ‘zeal and persistence’ of motive and effort; or, in other words, high in ‘grit’. Grit is conceptualized as a stable trait that does not require immediate positive feedback. Individuals high in ‘grit’ are able to maintain their determination and motivation over long periods despite experiences with failure and adversity. Their passion and commitment towards the long-term objective is the overriding factor that provides the stamina required to ‘stay the course’ amid challenges and set-backs. Essentially, the ‘grittier’ person is focused on winning the marathon, not the sprint… Winning is important– that’s why we compete– When we play, we play to win… According to Ned Hardy; the difference between winners and losers are:

• Winner is always part of the answer; Loser is always part of the problem.
• Winner always has a program; Loser always has an excuse.
• Winner says; Let me do it for you; Loser says; That is not my job.
• Winner sees an answer for every problem; Loser sees a problem for every answer.
• Winner says; It may be difficult but it is possible; Loser says, It may be possible but it is too difficult.
• Winner makes commitments; A Loser makes promises.
• Winners have dreams; Losers have schemes.
• Winners say; I must do something; Losers say; Something must be done.
• Winners are a part of the team; Losers are apart from the team.
• Winners see the gain; Losers see the pain.
• Winners see possibilities; Losers see problems.
• Winners believe in win-win; Losers believe for them to win someone has to lose.
• Winners see the potential; Losers see the past.
• Winners are like a thermostat; Losers are like thermometers.
• Winners choose what they say; Losers say what they choose.
• Winners use hard arguments but soft words; Losers use soft arguments but hard words.
• Winners stand firm on values but compromise on petty things; Losers stand firm on petty things but compromise on values.
• Winners follow the philosophy of empathy: Don’t do to others what you would not want them to do to you; Losers follow the philosophy: Do it to others before they do it to you.
• Winners make it happen; Losers let it happen.
• Winners plan and prepare to win. The key word is preparation.

In the article Winning Is a Losing Concept by Wim Rampen writes: Winning in sports is easy… that is, it’s an easy concept… Winning in business is not… The concept of winning requires someone else to lose… Not a problem in sports, it’s a game. Losing is not a concept that works well in business though. Even negotiation works best if the outcome is beneficial for both parties to the table… Winning in business should be about creating nothing but winners, because even if both you and your competitors grow, this means that you are growing the total ‘pie’ (i.e., market)… And growth of the market means customers are winning as well… Winning in business is not about outperforming the competition. Winning in business is about co-creating superior value with all stakeholders, and for all stakeholders. It’s about building an ecosystem that is so unique, it becomes a market, or category, in itself. Being a winner in business is all about finding your spot in the ecosystem, where you can best help others be winners too…

In the article Winning–Losing: Out-Played or Out-Talented by Wayne GoldSmith writes: In high performance sports you have a relatively simple equation to evaluate performance – you either win or lose. When you lose, it is natural to look for the reasons ‘why’.  A critical aspect in understanding the ‘losing process’ is to find the answer to the following question: Were you outplayed or out-talented? What does it mean to be out-played? Being outplayed means– your opponent planned and prepared better than you did. Being out-talented means– you were beaten by someone who possessed a superior talent… What’s the difference? The difference between being ‘out-talented and out-played’ is that being out-played is totally your own fault and you had complete control and responsibility over your own preparation. The most important principle in any competition is that you must out-prepare… excuses do not count… blame does not improve performance. It’s pointless blaming losing on having ‘less talent’ than your opposition, unless you know with absolute certainty that you have prepared better in every other aspect than the competition…

In the book ‘Top Dog: The Science of Winning and Losing’ by Po Bronson and Ashley Merryman write: We examined the science of winning and losing, and why a lucky few are top dogs and the rest of us aren’t. When the stakes are high, when it’s all on the line, some people rise to the occasion, others don’t… Forget about the power of positive thinking. When it comes to competing you need focus, intensity, and readiness to face expected obstacles and adversity. A bit of insecurity and self-doubt motivates you to try harder. Instead, positive thinking makes you mellow and takes success for granted without being aware of the needed effort to actually succeed… Many studies have confirmed that positive thinking is not associated with superior performance: What matters is not ‘positive vs. negative thinking’, its ‘additive vs. subtractive thinking’… Additive thinking is reviewing your performance and uncovering opportunities for improvement. Subtractive thinking is regretting you did not do this or that without thinking of the necessary skill improvement needed to move forward… Teamwork is way overrated, and people underestimate how much time is wasted in teamwork… A conflict free team means no one is bringing anything to the table that might engender controversy; and from a performance standpoint, that’s bad… How one interprets stress is a key… Stress can also be interpreted as a challenge associated with a gain-oriented mode (i.e., seeking opportunities, risk taking, maximizing gains…); playing not to lose vs. playing to win…

In the article Winners and Losers by Gary Lockwood writes:  We frequently hear people being labeled as winners or losers. We seem to instinctively know the difference. In this article, we explore the essence of character that distinguishes the winners from the losers. She’s a winner! He’s a real loser. We frequently hear people labeled as winners or losers. We seem to instinctively know the difference. Many years ago, I read a poem that discusses the difference between winners and losers. I don’t know who wrote it, but I tip my hat to her/him, because the poem captures the essence of character that distinguishes winners from losers. I’ll share it with you now– with my thoughts:

                BE A WINNER! Right here in the title is an acknowledgment of what most people want: To be a winner, and to feel like a winner. With all the talk of win-win thinking, we still want to be a winner and to enjoy the positive emotions that accompany being a winner.

Winners make commitments. Losers make promises: While some people do treat their promises as commitments, many make empty promises knowing that they may not actually perform. The meaning of this stanza is clear: When winners make a commitment, they see it through to completion. You can count on a winner to come through.

Winners go through a problem. Losers go around it, never get past it: This little-known secret of winners is powerful. When encountering a problem, don’t just work around it this one time. Solve the problem then keep going to solve the source of the problem. Fix it for good, not just for now.

Winners say: Let’s find out. Losers say: Nobody knows: An insatiable curiosity allows winners to explore the source of opportunities as well as the source of problems. This makes it more likely that the winner will develop even more opportunities while solving the source of recurring problems. It also turns out that genuine curiosity about other people is one of the secrets to increasing sales, improving customer service and strengthening relationships.

Winners always have a plan. Losers always have an excuse: Have you noticed that successful people seem to know where they’re going and what they want? It’s no coincidence that winners have a plan. The process of thinking through the issue of what’s important, allows the winners to keep a clear vision of the future and outline a path to get there. They routinely examine their mission by asking: Where am I going with this? How will I accomplish my goals?

Winners say: There’s a better way. Losers say: It’s the way it’s always been done: Continuous  improvement is one of the hallmarks of successful people. Their motto is: If it’s worth doing, it’s worth doing better. Losers just keep on doing the same old things yet they expect different results.

Winners are always involved in the answer. Losers are always part of the problem: Winners are not whiners. Instead of complaining about a problem (or just sitting there being part of the problem), winners jump in looking for a solution. No blame, no pointing fingers, no belly-aching. Just fix it and move on.

Winners know there is still much to learn. Losers want to be considered an expert before knowing how little is known: We’ve all encountered people who want to be ‘the expert’, even though their expertise is out-of-date, incomplete, or overestimated. Winners understand that knowledge has a short shelf-life. Winners also appreciate that, to be valuable to clients, they must constantly explore the limits of their knowledge.

Winners learn from their mistakes. Losers learn only not to make mistakes by not trying anything different:  Winners are opportunistic about learning from daily experiences. All of us have hundreds of experiences each day that could be valuable learning opportunities. Losers ignore them and surf the shallow surface of their knowledge. Winners understand that learning in today’s fast-paced and ever-changing environment can’t be left to chance. Successful people make a conscious effort to actively seek new ideas, innovation and growth.

There you have it. To me, the poem addresses the fundamental qualities of being a winner. It captures the spirit of open-mindedness, strength, and compassion that makes winners and winning attractive… Be a winner!

This Original Post Winners–Losers: It’s All About Having Real Grit, Superior Passion vs. Just Let It Happen– Don’t Get Bitter, Get Better Appeared First on WebSite BizShifts-Trends.

Leadership: What is it? What an obvious question! It may be interesting to note; that there is absolutely no consensus, among the experts, on the definition of ‘leadership’– despite how much it has been studied and written about. According to Warren Bennis, in his book ‘Leaders (1997)’ writes; academic analysis has given us more than 850 definitions of leadership. I think it’s fair to say that defining leadership will be studied and debated for a long time to come, and it’s likely that we will never all agree on the ‘best’ definition… However, most attempts to define leadership emphasize different aspects of leadership or leadership characteristics or reflect the originator’s leadership values. For example, dictionaries write; leadership is the ability to lead… Wikipedia writes; leadership is a process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task… According to Akhil Shahani; leadership is the process by which a person influences others to accomplish an objective… All these and many other definitions are interesting because they contain two essential elements of leadership, i.e.; the ‘people elements’ and the ‘task elements’ (related to objectives), and every successful leader must work with both of these elements. Also, most leadership definitions involve a ‘common task’ or ‘objective’ that suggest the end goal is already known, and clearly defined… However, in reality, leadership doesn’t always have the luxury of such clarity… Some experts think of leaders as providing direction (‘dream’ or ‘vision’), which may then be crystallized into common goals and objectives... According to Peter Maxwell; leadership is influence– nothing more, nothing less… Then, Thomas Carlyle talks about; the ‘great man’ theory of leadership, which is based on the belief that leaders are born and not made… but Herbert Spencer countered the ‘great man’ theory of leadership and says; leaders are result of the society in which they live… Then, according to Peter G. Northous; leadership is a process whereby an individual influences a group of individuals to achieve a common goal… which may be the best definition of the lot…

In the article What Is A Leader by F. John Reh writes: A leader is a person who has vision, drive and commitment to achieve that vision, and the skills to make it happen. Leaders ‘dream’ dreams. They refuse to let anyone or anything get in the way of achieving those dreams. They are realistic, but unrelenting. They are polite, but insistent. The constantly and consistently drive forward toward their goal. You can be a leader– and you will be– when the cause matters enough to you… the ‘Bass Theory’ of leadership states; there are three basic ways to explain how people become leaders:

• Some personality traits may lead people naturally into leadership roles. This is the ‘Trait Theory’.
• A crisis or important event may cause a person to rise to the occasion, which brings out extraordinary leadership qualities in an ordinary person. This is the ‘Great Events Theory’.
• People can choose to become leaders. People can learn leadership skills. This is the ‘Transformational or Process Leadership Theory’. It’s the most widely accepted theory      today…

In the article The 21 Irrefutable Laws of Leadership–John Maxwell by Phil Campbell writes: Although most people are not born leaders, we all have the capacity to improve our leadership abilities. If we continually invest in our leadership development, letting our ‘assets’ compound, the inevitable result is growth over time. Maxwell is a champion of continual growth and his ‘21 Irrefutable Laws of Leadership’ is collection of what he identified as absolute qualities of effective leadership. By breaking down the individual qualities (laws), Maxwell encourages readers to assess their own leadership strengths and weaknesses. Here is a brief overview of John Maxwell’s ‘Irrefutable Laws of Leadership’ and how they can help you become a more effective and influential leader.

1. Law of the Lid: Leadership is like a ’lid’ or a ceiling on an organisation– it will not rise beyond the level your leadership allows. That’s why when a corporation or team needs to be fixed, they fire the leader.
2. Law of Influence: Leadership is simply about influencing people. Nothing more, nothing less. The true test of a leader is to ask him to create positive change in an organisation. If you cannot create change, you cannot lead. Being a leader is not about being first, or being an entrepreneur, or being the most knowledgeable, or being a manager. Being a leader is not just holding a leadership position. (It’s not the position that makes a leader, but the leader who makes a position.) The very essence of all power to influence lies in getting the other person to participate. (He who thinks he leads but has no followers is only taking a walk.)
3. Law of Process: Leadership is learned over time. And, it can be learned. People skills, emotional strength, vision, momentum, and timing are all areas that can and should be learned. Leaders are always learners.
4. Law of Navigation: Anyone can steer the ship, but it takes a leader to chart the course. Vision is defined as the ability to see the whole trip before leaving the dock. A leader will also see obstacles before others do. A leader sees more, sees farther, and sees before others. A navigator (leader) listens – he finds out about grassroots level reactions. Navigators balance optimism with realism. Preparation is the key to good navigation. It’s not the size of the project, it’s the size of the leader that counts.
5. Law of E.F. Hutton: Hutton was America’s most influential stock market analyst. When he spoke, everyone listened. When ‘real’ leaders speak, people automatically listen. Conversely, you can identify the real leaders by looking for those who people listen to… Factors involved in being accepted as a new real leader include character, building key relationships, information, intuition, experience, past success and ability.
6. Law of Solid Ground: Trust is the foundation for all effective leadership. When it comes to leadership, there are no shortcuts. Building trust requires competence, connection and character.
7. Law of Respect: People naturally follow people stronger than themselves. Even natural leaders tend to fall in behind those who they sense have a higher ‘leadership quotient’ than themselves.
8. Law of Intuition: Leaders evaluate everything with leadership bias. Leaders see trends, resources and problems, and can read people.
9. Law of Magnetism: Leaders attract people like themselves. Who you are is who you attract. (Mmm… I thought ‘like poles’ were meant to repel!) Handy hint: ‘Staff’ your weaknesses. If you only attract followers, your organisation will be weak. Work to attract leaders rather than followers, if you want to build a truly strong organisation.
10. Law of Connection: You must touch the heart before you ask people to follow. Communicate on the level of emotion first to make a personal connection.
11. Law of the Inner Circle: A leader’s potential is determined by those closest to him. The leader finds greatness in the group, and helps the members find it in themselves.
12. Law of Empowerment: Only secure leaders give power to others. Mark Twain said; great things can happen when you don’t care who gets the credit. Another point to ponder… Great leaders gain authority by giving it away.
13. Law of Reproduction: It takes a leader to raise up a leader. Followers can’t do it, and neither can institutional programs– It takes one to know one, to show one, to grow one. The potential of an organisation depends on the growth of its leadership.
14. Law of Buy-In: People buy-in to the leader first, then the vision. If they don’t like the leader but like the vision, they get a new leader. If they don’t like the leader or the vision, they get a new leader. If they don’t like the vision but like the leader, they get a new vision.
15. Law of Victory: Leaders find a way for the team to win. You can’t win ‘without’ good athletes, but you ‘can’ lose with them. Unity of vision, diversity of skills plus a leader is needed for a win.
16. Law of Momentum: You can’t steer a ship that isn’t moving forward. It takes a leader to create forward motion.
17. Law of Priorities: Activity is not necessarily accomplishment. We need to learn the difference. A leader is the one who climbs the tallest tree, surveys the entire situation, and yells ‘wrong jungle’! If you are a leader, you must learn the three ‘Rs’;  a.) What’s Required?  b.) What gives the greatest Return? c.) What brings the greatest Reward?
18. Law of Sacrifice: A leader must give-up to go-up. Successful leaders must maintain an attitude of sacrifice to turn around an organisation. One sacrifice seldom brings success. When you become a leader, you lose the right to think about yourself.
19. Law of Timing: When to lead is as important as what to do and where to go. Only the right action at the right time will bring success.
20. Law of Explosive Growth: To add growth, lead followers. To multiply growth, lead leaders. It’s my job to build the people who are going to build the company.
21. Law of Legacy: A leader’s lasting value is measured by succession. Leadership is the one thing you can’t delegate. You either exercise it – or abdicate it.

Leadership is not just a title; it’s not just a few moments of standing in front of the crowd. Leadership is the iceberg deep below the water. It can be cold and lonely at times, and it’s often mislabeled, mistaken, and overlooked until after the fact. Great leaders don’t have to carry big titles or have letters after their name. Great leaders have the depth of character and willingness to do what’s necessary before and after everyone is watching… According to Gabe; don’t ever underestimate the power of your personal influence on a team. You might not consider yourself a leader, but the fact is that we all lead in one way or another. We either lead poorly or effectively: The choice is ours.  Leadership will always be the difference maker for your ideas, for your business… According to John Maxwell; everything rises and falls on leadership, but knowing how to lead is only half the battle. Understanding leadership and actually leading are two different activities… the key to transforming yourself from someone who understands leadership to a person who successfully leads in the real world is ‘character’. Your character qualities activate and empower your leadership ability, or they can stand in the way of your success! Several key attributes to being a good leader, include:

• Charisma: First Impression Can Seal the Deal.
• Courage: One Person With Courage Is a Majority.
• Problem Solving: You Can’t Let Your Problems Be a Problem.
• Teach-ability: To Keep Leading, Keep Learning.
• Vision: You can Seize Only What You Can See.

This Original Post The Changing Nature of Leadership– The Irrefutable Laws of Leadership: Shifting Perspectives on Leadership. Appeared First on WebSite BizShifts-Trends.

Micropayment is an online financial system that processes very small sum of money; some say less than one U.S. dollar, others say less than five U.S. dollars… but, exact definition depends on the business case and target group. According to experts, key micropayment drivers, include; monetization of digital content, small online purchases, and emergence of new business models… However, one slightly cynical provider has commented– that the true meaning of micropayment is any transaction whose value is currently too small to be worth bothering with– about one U.S. dollar…

One important issue that has prevented the successful emergence of micropayment systems is the need to keep processing costs very low for individual transactions. This is difficult when processing transactions that are very small sums of money; even if the fee is just a few cents. According to ‘Peppercoin and Ipsos-Insight’; more than 10 million consumers said that they had purchased digital content for less than $2 in the past year… While digital music is the item most likely purchased, other items, such as; articles, games, ringtones… are also frequently purchased. However, the micropayment is still messy-fragmented– bit like early days of the Internet itself– and it still lacks a universal solution, i.e.; low-cost, high-speed, secure, flexible… One trend recognized by many people– that play games on smartphones is a shift among developers to micropayment as an alternative to traditional subscription-based payment, that is; providing the basic game for free, but requiring some features to be paid for with micro-currency, which is ultimately fed by real-life payments. For example, you might download a racing game at cost, but accessing better cars and extra tracks costs in-game money, which are purchased one-click at a time, without a credit card. With this model, the player can scarcely resist the upgrade purchases: Developers now have monetized the game. According to ‘Frost & Sullivan’; growth of micropayment is driven by usage of mobile payment solutions… and, cloud-based mobile payment  is also expected to contribute to the expansion of micropayment. Although, traditionally, micropayment is the processing of very sums of money, e.g., less than $1.0… and, since micropayment is without any industry ‘standards’; some companies are redefining micropayment to suit their systems, for example; ‘PayPal’ defines micropayment as payment that are less than $12.00, and they charge a lower fee for these transactions. Also, Facebook has ventured into the micropayment realm, using PayPal’s micropayment service for Facebook Credits. Facebook Credits are a form of virtual currency that consumers pay up-front for. The credits can be spent in apps on Facebook. Apple also uses a form of micropayment for purchase of its songs. But, Apple’s model is slightly different from the intended use of micropayment: Apple aggregates a user’s song purchases to one credit card transaction and allows users to prepay by putting credit on their account, and that seems to be the prevailing micropayment scheme…

In the article Google Rebooting Content Micropayment Initiative by Robert Andrews writes: Consumers may not buy all kinds of web content, but Google is now courting publishers who want to charge for rebooted version of its micropayment  system. Google is now going ahead with a fuller version of its content micropayment platform under the Google Wallet moniker. According to Pali Bhat; Google Wallet will support content payments typically ranging between $0.25 and $0.99, with content obfuscated after an opening preview and a 30-minute ‘instant refund’ for unhappy users. This development marks the arrival of a big beast in to a micropayment facilitation space populated by several smaller vendors like ZnakIt, but also bigger providers like PayPal, whose own digital content platform has been gathering pace. Google’s system works like similar rivals, for example, Cleeng, redacting article text in what Google is calling a ‘rich preview’ and ‘rich obfuscated content’. In the same way, images that must be paid for can also be pixelated.

Payment must be made before readers can see the whole article. The Google Wallet overlay enables swift (dare I say ‘frictionless’?) payment for users who already have card registered in Google Wallet account: It’s all rather quick. But, will any of it work? According to Google: Users love free content, and so we expect that advertising will remain most effective monetization model for most content on the web. However, we know that there is more great content that creators could bring to the web if they had an effective way to sell individual articles that users can find with search. Google has been making good advances with Google Wallet for digital goods this year, introducing in-app payments and recurring subscriptions, plus payments for games…

In the article Death of Micropayment by Elizabeth Millard writes: Will the concept of micropayment fade into the footnotes of e-commerce history, or will this business model find new success? Despite the number of failed companies in this sector, advocates of the micropayment model still believe it can work. During the boom, they say, the concept was ahead of its time… Today, among the micropayment firms are working hard to spiff up the industry’s image, challenges remain. However, according to Clay Shirky; it’s possible that the micropayment business model is too flawed to work. Everybody who imagines doing micropayment is basically thinking about forcing users to pay a little here and a little there… Literally, they’re nickel and diming them. He noted that the idea of this model is intriguing enough to stay alive, despite past failures and current problems. To become profitable, a site must elicit large volumes of transactions, which is very difficult, even for established e-businesses. Even online porn industry, which has tried on several occasions to adopt a micropayment strategy akin to the 25-cent peep-show booths in the offline world: They can’t make it work online… And, those guys are the e-commerce geniuses, so if they can’t do it, who can? However, despite rough road of the past and current potholes, micropayment companies still believe sunny days lie ahead. According to Kurt Huang; I think future is very bright… The music industry is doing us a great favor in validating the price point, and indeed, micropayment companies are carefully watching the pay-per-song battles currently being waged heatedly among Apple’s iTunes Music Store and its competitors. It is possible that similar conflicts will arise in the video game, publishing, movie… industries. Going forward, the market is poised to leverage the technology, more so than back when the technology was first introduced. Before, the timing wasn’t right, but it is now…

In the article Micropayment Promising or Penny-Ante Steve Smith writes: Online micropayment is an idea that just won’t die…nor will it quite come to life. Attractive as it may sound to consumers and some publishers, the idea of spending $2.0 – $3.0 here or there for a song, an article, or a day of access to a site remains in a zombie-like state. Despite increased interest in the model and no shortage of firms with payment solutions users just aren’t buying in… Ultimately, it comes down to consumer behavior, and there are no signs that has substantially changed. Sure, millions of people are buying 99-cent songs at iTunes, but according to Apple, most are buying them in larger album packages rather than nickel-and-dime purchases. People do not buy content same way they do candy. Some of the micropayment solutions themselves admit that the early customers are not loading more money into their accounts than they expect to spend on initial buys, which suggests that a significant barrier for this model remains. Without a big enough network of partnered content sites, consumers don’t buy into the network and spend across multiple partners. And without this kind of consumer support, no one company can break through to be ubiquitous in the market and attract the major content publishers… No doubt the large companies are being sensible by sitting back and waiting for the category to shake out, but unless a major content venue steps-up to let itself and its customers experiment with these micropayment networks, the category may not shake-out so much, and stay zombie-fied waiting for the right voodoo.

Trust in business is a necessary condition for consumer to buy anything. That’s why companies need to ensure that all their processes, and especially their payment systems are trustworthy and secure. Increased security will attract more customers and improve business overall. However, high levels of security bring high costs. Companies must weigh benefits and costs associated with different levels of security. For example, the amount of money a company may pay for security could be more than the amount lost to fraud. Also, the cost of clearing and settling a payment is approximately 20-cents, which is prohibitive for any purchase of one dollar or less… that is a key-difficult hurdle for micropayment to overcome… According to Adam Thierer; there continues to be a debate about what counts as a micropayment, but the fact that so many more people are paying just a couple of bucks or less for content in mobile-app stores suggests that its only going to be easier for people to pay even smaller sums for content in coming years… We’re not nearly as reluctant today to surf away when something says 99-cents on our screen, and increasingly we’re hitting the ‘buy’ button… The really interesting question is to what extent we can expect micropayment to grow and become more widely utilized for other types of content. Some people in the ‘news’ business are hopeful that micropayment can help monetize news content… However, most are skeptical that micropayment is going to ‘save the news’, since funding ‘news’ is really expensive and micropayment alone will not cover the cost… But, perhaps there are other options, for example; micropayment could become a part of an array of new business payment models that media could tap into in an effort to reinvent themselves, and thrive going forward. For example, subscriptions, advertising, micropayment… working together could all be part of the answer. However, we are still tinkering with the micropayment model, and many people have grown at least a tad bit more optimistic that micropayment can at least be considered part of the conversation, again…

This Original Post Micropayment Model for Monetizing Small-Microtransactions: Behavioral Shifts are Reigniting the Micropayment Option Appeared First on WebSite BizShifts-Trends.

Spin-offs: Merger-mania and bigger-is-better management mentality largely ruled the business world, but there are exceptions: Spin-offs. These provide an alternate path to prosperity, if the organization can weather the storms of such a radical change. Among the keys for spin-off success are supportive management and flexible employees… Not all spin-offs work, but they do create more transparency-clarity about the parent company, and the spin-off entity, itself… and that benefits all stakeholders… Breaking up may be hard to do, but sometimes it’s necessary.

In the corporate world, bigger is not always better… splitting-off parts (i.e, division, subsidiary..) of companies and establish them as separate independent companies is becoming a popular strategy for improving overall company value and growth… The basic rationale behind spin-offs is simply; the company parts are greater in value than the whole company… However, there are real and strategic reasons for implementing a corporate spin-off strategy, for example; focus on core activities, deconsolidate, unlock shareholder value, grow faster, grow in new dimensions, greater value as separate entity, incompatible with overall branding strategy, regulatory reason, structure for merger, tax advantages… Spin-offs are common corporate maneuvers and according to an analysis of ‘Bloomberg Spin-Off Index’ (the Index is made-up of stocks that were spun-off from top U.S. companies within the past three years)– spin-offs outperformed the S&P 500 by 233% from 2003 through 2012, and the Index has gained 39.7% this year, topping the S&P 500′s gain of 11.1%. According to ‘Spin-Off Advisors’; there have been nine spin-offs completed, so far in 2013, putting it on pace to be the busiest year for such deals in a while… A strong year for spin-offs would reverse a rocky stretch for these type deals… as companies, instead, focused on cost cutting as a way to improve returns. Last year’s total of 37 spin-offs was down from 47 in 2011; though up from just 20 in each 2010 and 2009… Spun-off companies tend to be more focus and management has greater incentive to perform well, than when the company was a divisions of larger entities… Typically, spin-offs are better capitalized and have more freedom to reinvest in the business. Although tax rules have permitted spin-offs since mid-1950s, spin-offs deals did not occur with much frequency or within major corporations until the 1980s, when the trend was ushered in by spin-offs of seven regional Bell companies by AT&T in 1982-1983. According to David Sadtler; the number and value of corporate spin-offs has escalated since 1980s, for example; spin-offs accounted for less than 10% of U.S. divestitures in the 1980s, and then accounted for almost 50% by the late 1990s; this trend is continues to grow, even in current market environment. According to Warren Batts; many spin-offs are run a lot better as independent companies than as wards of huge corporations… you attract far better managers to spin-offs than divisions of large companies… What makes spin-offs worth exploring is that those that succeed provide some of the most spectacular payoffs-paybacks around…

In the article Spin-offs, a Chance to Jettison Liabilities by Steven M. Davidoff writes:  A spin-off is a product of Wall Street math that says one plus one can equal three. Yet as shareholders may find out, it can also be all about subtraction, as a company ditches an unwanted business… The business argument for a spin-off is typically that a separation of the assets allows both the parent company and the newly independent spin-off company to be better run, freeing management to take bolder steps with the new company. And since Wall Street is a place where magic works, the market will recognize this, giving each of the separated companies a higher valuation; and there is evidence of this effect. Studies of spin-offs have found that they produce short-term gains, although in many cases these gains evaporate over the long-term… Spin-offs, not surprisingly, are big business these days on Wall Street. Last year, there were 85 spin-offs worldwide worth $109 billion, according to Dealogic, down just a bit from 93 spin-offs worth $128 billion in 2011. However, spin-offs have a dark side, as they can serve as a convenient dumping ground, where liabilities can be freely attached to the company being spun-off: This is often management’s best opportunity to burnish its own company at another’s expense– it’s hard to resist… A spin-off may be a good move for some companies and its management; saving them the trouble of having to turn around the business. However, the real question is– whether it’s just a way for a company to take out the trash and leave yet another wounded spin-off to struggle in the market. This may satisfy the Wall Street magicians, but how does it actually create value?

In the article Simple Anomaly That’s Been Crushing The Market For Decades by Eric Falkenstein writes: The straightforward strategy of buying companies that have recently been spun-off from their parent has generated very good results.  Here’s the performance of the ‘Bloomberg Spin-Off Index’ (BNSPIN Index) since 2003. As you can see, it’s pretty good, 15% annualized return vs. 6% for the S&P500 over that period. Volatility was higher but not extremely so (20% vs. 15%), while the beta was pretty close to 1.0.

Is this a crazy recent phenomenon? ‘No’. In 2003 ‘McConnell and Ovtchinikov’ looked at 311 spin-offs undertaken by 267 parent companies between January 1965 and December 2000. And, on average, subsidiaries outperformed their benchmark companies by over 20% over the first three years following the spin-offs, with most of the excess returns within the first 12 months of trading. They found the parent company outperformed as well, but not by a robust amount… I don’t think there’s a rational explanation for this. I remember at Moody when they just spun-off from Dunn & Bradstreet (D&B), it was really liberating. For years D&B had used the considerable Moody’s cash flow to fund their dumb ideas to extend D&B, which really ran the executive board, while Moody’s made all the money. It was classic waste of shareholder money, and when the spin-off finally happened in 2000, Moody (MCO) stopped burning its cash and investors reaped the windfall (32% return, annualized, from 2000-present). It’s amazing how much money is wasted via such politics, but it’s a classic case of bad incentives and difficult monitoring… It makes one wonder about the value potential in Citi (C). If someone could force it to spin-off itself into pieces, most everyone with defensible interests will be pleased. Letting $120 billion company under perform is really painful to behold. The only people such behemoths serve now are a select group of executives, politicians, but not shareholders, consumers, or 99.99% of Citi employees…

In the article Art of the Spin-off  by ‘The Economist’ writes: In the entertainment world spin-offs are the offspring of hit shows. You take popular characters and give them their own programs or mature franchises and give them a new twist… In business, spin-offs are the offspring of established companies– take a division and turn it into a free-standing firm… According to Forbes; U.S. companies completed more than 80 spin-offs and valued at least $500m each between 2002 and 2012. The parent companies (or ‘spinners’) have delivered a return of 35%, compared with 22% for the S&P 500. The ‘spun’ have delivered a return of 70%. Returns for firms in the ‘Bloomberg Spin-Off Index’ were 47% over the past 12 months compared with 16% for the S&P 500… However, managing spin-offs is tricky, for example; companies can appear to be tossing out ‘trash’ and keeping ‘cash’… and, they can damage long-standing relations with employees, investors, and suppliers… Both spinners and spun are odd hybrids; parent company with long a history and a new spin-off company– that share close ties with each other… But, veterans of the various splits are justly proud: Managers boast that they were engaged in strategic corporate regeneration, not just rebranding… In many ways creating new companies out of existing ones is harder than creating new companies out of nothing…

Spin-offs are complicated transactions that require a great deal of advance planning. In many cases, an announcement that a parent company is considering a spin-off actually starts a ‘dual-track’ process, i.e., while a company considers and plans for the spin-off, it also remains open from third parties to acquire the business… Spin-offs come in two forms: voluntary and involuntary. Where voluntary spin-offs, typically, are subsidiaries that are not core business, and not necessarily essential to the parent company, whereas, involuntary spin-offs generally result from a federal or state regulatory agencies’ action… According to David Sadtler; release of latent company value is the ultimate motivation for spin-offs, and spin-offs, generally, result in increased value because they remove factors that impede the growth of value… In a study, ‘Robert Comment and Gregg Jarrell’ examined many companies involved in spin-offs over a three-year period and discovered that companies that spun-off subsidiaries performed about 7% better than companies that diversified. However, other studies present a different view of spin-off effects. A ‘Clarus Research Performance Database’ study of spin-offs by the world’s 500 largest companies between 1996-1998 indicated; companies involved in spin-offs tended to under perform the market by 17% after announcement; suggesting that spinning a subsidiary off will not necessarily lead to an increase in value; in and of itself… however, companies that did increase value– they implemented restructuring and refocusing initiatives; in addition to spin-offs… Spin-offs are transformative, which means both companies (i.e., spinner and spun) must carefully assess their post-deal strategy, as well as, their financial and governance positioning… Numerous academic studies suggest that many spin-offs show significant value appreciation, both on absolute and relative basis. However, once removed from the parent company, the newly independent spin-offs frequently undergo significant internal-external changes, requiring much planning-adjustment during the crucial periods of uncertainty… Breaking up may be hard to do, but sometimes it’s necessary.

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