Archive for the ‘Business’ Category
The craving for connectivity…
July 21st, 2009 | 
Author: 
Scott McKain
I was sitting in my local Starbucks, staring at my laptop wondering how to begin this blog. Then, as I looked around me, I noticed my fellow customers – students studying, Moms taking a little break, professionals such as myself getting a little work done outside the office on a wireless high-speed Internet connection and couples on their way to or from a day of golf – and it struck me.
Right now, I am a customer at a coffee shop. So, I came here to get a cup of coffee, right? Well, yes and no. I certainly have the coffee I purchased sitting next to me – however, what I REALLY wanted was that…and much more.
Are you certain that your organization is offering what your customers crave?
Sure, the Starbucks example has been used way too often – but you have to admit that they DO understand that what their customers crave isn’t merely a cup of coffee, no matter how complicated or sophisticated the formula. And, that is the great lesson that all organizations need to understand.
Customers want to have a connection with the organizations and the people with whom they do business.
The deeper the connection — the deeper the loyalty. The more tenuous the connection, the more the customer is looking for someplace else to do business.
You may have a remarkable product or service, however, if you cannot provide a compelling reason for a customer to do business with you, then you do not deserve a dime of the customer’s money. What’s compelling about doing business with you and your organization? If you cannot answer that – and answer with a degree of passion — you probably don’t have a connection with your customer.
The important point is that your organization can establish greater connections with your customers, provide them what they really want and grow your business – all without expending significant amounts of money. This is more of an exercise in commitment and execution than budget. It’s having the right philosophy about what your business really is all about!
Your goal for the future needs to be to focus upon how LOYAL your customers are to you! And customers become loyal to distinct organizations that create an Ultimate Customer Experience! (TM)
Scott McKain is a popular business thought leader and speaker who uses innovative theories and conceptual framework to highlight the importance of customer service. More information on Scott’s speaking availability can be found at Speakers.com.
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May TIC Data: Still Buying U.S. Assets, but Just the Liquid Ones
Rachel Ziemba
These days, the TIC data released monthly by the U.S. Treasury, detailing capital flows to and from the U.S., often seems anti-climactic given sharp moves in the FX and treasuries markets. Yet despite the lag, the data released yesterday, which details May purchases, tells a few stories.
Most importantly, it illustrates the fact that in the face of capital inflows to overheating emerging market economies, the central banks of these countries kept buying U.S. dollar assets in May. Q2 was the first quarter of significant reserve accumulation of the last year. Preliminary estimates from RGE Monitor suggest that reserve accumulation was around $180 billion in the quarter (adjusted for valuation); the first significant increase since mid 2008. As in 2008, China accounts for the bulk of the accumulation (around $140 billion).
Despite supra-national reserve currency rhetoric, and given Beijing’s reluctance to have its currency appreciate, there was little choice but to buy dollars. China added $38 billion in U.S. short and long-term treasuries for a net increase of $26 billion in U.S. short and long-term assets. The discrepancy can be explained by China’s reduction in its U.S. dollar deposits and its continued reduction in agency bond holdings.
Foreign investors, however, shunned long-term U.S. assets. The major foreign buyers of U.S. assets went back to the short-end of the curve, buying T-bills and adding other short-term claims. Total purchases of T-bills by foreign official investors amounted to $53.1 billion.
This shift could help explain why long-term treasury yields rose in May. With concerns looming about the U.S. fiscal position and the dollar’s value, perhaps the move to the short-end of the curve is of little surprise. It also suggests that the U.S. government is again becoming more reliant on bills for financing, as it did toward the end of 2008. This may not be sustainable in the longer-term.
While a decrease in the U.S. current account deficit means that the U.S. might be less reliant on foreign finance as a whole in 2009, the U.S. has become even more reliant on Chinese financing. China has been the largest reported holder of U.S. treasuries for some months now, and as of May China accounts for 20% of total outstanding foreign holdings of U.S. short and long-term U.S. treasuries, nearly equaling the combined holdings of Russia and Japan.
Since last fall, China dramatically scaled up its purchases of the shortest-term, most liquid U.S. assets. Between July 2008 and May 2009, the country purchased $196 billion of treasuries with maturities of less than one year. In part this might reflect a shift during last fall within China’s U.S. dollar portfolio (it also vastly decreased its holdings of US agency bonds, while slightly adding long-term treasuries). But as the chart below shows, China’s purchases of long-term U.S. assets fell sharply over the last year, and continue to fall:
12 month rolling sums of Chinese purchases of U.S. assets
So why short-term assets? Investing in the most liquid assets could keep funds freer for other purchases, including dollar denominated loans to resource countries. In theory, with shorter maturities, China could allow these assets to expire and not re-purchase them. However, in an environment where Chinese growth is re-accelerating, Q2 is unlikely to be the last in which China receives hot money inflows. As a result, expect further dollar purchases. It is little wonder why Chinese officials were worried about dollar holdings this spring, given how many U.S. assets they were buying.
Beyond China
Like China, Brazil also added short-term claims in May, with $12 billion in short-term claims offsetting net sales of $9 billion in treasury bonds. Short-term treasury holdings rose by almost $10 billion. Brazil has also wanted to diversify its reserve holdings.
Gulf oil exporters likewise added to short-term holdings in May, probably because their local liquidity needs exceeded their concerns about the dollar’s valuation. Given lower oil prices, the region’s sovereign wealth funds have fewer new funds at their disposal. That may be changing slightly, but increases in domestic spending and reductions in oil output limit new available funds. Meanwhile, with a shift from the dollar peg off the table as a policy option, reserve diversification is limited, as the need for dollar liquidity and dollar financing remains high.
Based on the reported data, the GCC has a reported dollar portfolio of about $400 billion–including $140 billion in U.S. equities, which hasn’t budged much in the last two years. Between June 2008 and May 2009, GCC holdings of long-term treasuries increased by about $30 billion, to almost $200 billion total, despite a slight decrease in May. Though, holdings of Agency bonds fell by about $10 billion, in the last year.
The GCC total dollar portfolio is likely to be significantly bigger–over half of the estimated $2 trillion managed by public and private sector GCC investors. The discrepancy can be explained by the GCC’s tendency to buy through intermediaries. It seems likely, however, that the use of local intermediaries has increased, as the flows of U.S. dollar assets from the GCC have been higher in the last year. But again, the currency pegs may constrain the GCC to dollar purchases.
Japan, Russia and Canada, had notable net sales of U.S. assets in May. Japan’s shrinking current account surplus could reduce its purchases of U.S. assets.
Canada’s sales may reflect a shift away from government bonds to equities outside of the U.S., in the midst of the rally.
Russia’s net sales, mostly of short-term assets, are a bit more puzzling. Russia has been reducing its U.S. dollar assets for some time, but given the inflows Russia received, one would have expected dollar purchases. In fact Russia’s central bank data on its FX interventions suggests that it bought $18 billion in U.S. dollars in the month of May. One possible explanation is that Russia could be adding to offshore dollar deposits–which would not be captured in U.S. data.
Rachel Ziemba is a lead analyst for China, Oil Exporting Economies and Geostrategic Risks at RGE Monitor. More information on her speaking availability can be found at Speakers.com.
Taming the Technostress
Eileen McDargh
Last week, my big desktop PC crashed, my laptop got the “blue screen: of death”. The refrigerator croaked, and the toaster oven went the heaven. My I-phone decided to stop receiving e-mail and the dashboard in my car kept erroneously sending warning messages.
It wasn’t even a full moon!
As marvelous as all our technology is, chronic malfunctions and crashes and the constant demand to keep up might account for the fact that at least one in four of us will admit to physically assaulting a device. There’s even a ratio for judging the attack because the chances of failure are in direct proportion to the urgency of the task they are needed for. Hence the scream heard from my assistant as she tried to get out my summer newsletter before autumn.
It doesn’t get better. The 2009 March/April issue of Psychotherapy Networker says that such chronic, unalleviated stress compromises our cognitive and emotional functions as well as undermining our immune system. Nor does it when a workplace (often unknowingly) contrives urgency by leashing employees with PDAs, laptops, pagers, and anything else for instant access and response.
Well intentioned. And ultimately a timewaster and a driver of increased health care costs.
What happens is that we continually try to multitask, toggling back and forth, answering the ping of instant messages, and wind up feeling constantly “on”. Instead of concentrating on one task, we unconsciously scan for the next message or task, thus spending often 50% more time on one job before taking on another.
Ways to conquer the beast:
1. Manage your energy not your time. You don’t run marathons every day yet we try and do the equivalent at our work. Studies of energy suggest a 90-minute rhythm. This means stopping and doing something to recovers your energy expenditure. (Coffee and chocolate don’t count. Nor does smoking). Take a 4-minute relaxation break. Walk outside, deep breathe, trying biofeedback. Go outside. Drink water. And when it’s time—go home without work.
2. Program your computer to delete messages after 30 days. If no one has screamed by then, how important could it be?
3. Send out the equivalent of a “do not disturb” sign, telling folks you will respond from 3-4pm daily. If it’s an emergency – call you.
4. Turn off rings, pings, dings, and anything that sings.
5. Distinguish between uninterrupted work time and answer time.
6. Work with your team to determine the important and urgent from the unimportant.
7. Cut to cord. If you continue to remain connected all the time—you have only yourself to blame with the constant barrage of requests.
8. At the end of the day, reset to zero. You did what you could. It’s done. Over. Finito. Do NOT plan tomorrow today. Your brain will start working on it and there goes the sleep. Shut the door of your office. Turn off the computer. Reset to zero. Tomorrow is a new day.
9. Do NOT take the PDA to bed with you. Give it a rest. Give all of us a rest.
Without boundaries, Tyrannosaurus Techno will win again.
Eileen McDargh is widely regarded as a top business thought leader and leadership consultant. More information about her speaking availability can be found at Speakers.com.
Wall Street Journal Briefing: Preparing for the Recovery
Vijay Govindarajan
Vijay Govindarajan
June 24, 2009
I recently spoke with MIT Sloan Management Review senior editor Martha E. Mangelsdorf on the topic of innovation, the recession, and preparing for the future.
Excerpts appear in this Wall Street Journal Executive Briefing.
Here are a few takeaways:
- As a response to the economic crisis, many companies focus almost exclusively on the present, focusing on cutting costs and neglecting the future.
- Expansion always follows recession—and the expansion lasts longer and is more robust than the recession.
- A recession fundamentally changes the competitive landscape in most industries. There are new winners and new losers.
- The best time to prepare for expansion is during a recession, because during a recession, assets are cheaper and talent is cheaper and more available.
- In normal times, I say spend about 50% of company resources on the core business and about 50% on adjacency and breakout innovation—perhaps 35% on adjacency innovation and maybe 15% on breakout innovation. But during times like this, the percentages shift. I would shift to spending more like 70% on the core business and perhaps 25% on adjacency innovations—and maybe 5% on really breakout innovation. Why? Because companies cannot afford to make a serious mistake during this recession.
- There’s a big difference between planning for the future and preparing for it. Preparing for the future simply involves asking what the broad trends are. If people in your organization can at least have a shared perspective on some of the big, nonlinear shifts that may happen. Prepare for 2025 in 2009.
Professor Govindarajan is widely regarded as one of the world’s leading experts on strategy and innovation. More information about his speaking availability can be found at Speakers.com.
Collaboration and the Law
Inc. magazine has published Part Two of their early look at my upcoming book, “The Laws of Disruption.” (See ”When Collaboration and the Law Collide” )
This article touches on the increasingly tricky problems of managing relationships with users for services that rely entirely–or nearly so–on user content for their value. Facebook, MySpace, and LinkedIn are obvious examples, but increasingly every business is taking advantage of social networking to enhance their brand and customer relationships. Terms of Service agreements that dictate a one-sided relationship won’t work in such situations, as the recent revolt at Facebook suggests.
The full text of this article is available via Larry’s Blog
Larry is an excellent public speaker. To check his availability for you next event inquire at Speaker.com
