Creating value from values

the-value-of-valuesWhat does the term ‘creating value from values’ mean?

It is in fact a powerful concept for companies to use. Ultimately, it is a strategy for developing the future market while also strengthening economies, the marketplace, communities, and corporate money.

Recently I wrote a blog post on ‘Do we live in a current economy where we have no customer lifetime value? ‘

Have you ever stopped to consider that the word values contains the word value?

We talk about them as two separate and often very different words. Often strategy, finance, operations, people talk about value in economic value or added value, and human resources, communication, and marketing people talk about values in the terms used across business values and brand values. Yet value sits inside values; a powerful combination of human and financial factors.

Do we treat them separately, discuss them separately, and give them to different departments to deal with separately?

Surely, delivering values needs to be adding wealth creation by adding value. Building brand values, builds brand value. Building emotional values builds economic value. If people believe in what they do, are committed to delivering, and in a way that satisfies their customers, then the community in which they work and as a business will benefit as a whole?

If you believe values create value you need to question the following:

1. What’s important to us as a business?

2. What do we value?

3. What our customers, our staff, and their suppliers say about us?

4. Do we deliver on time, every time?

5. Do we make sure that we follow quality control?

6. Are we passionate about what we do?

7. Do we announce good news stories?

8. What do we dislike about what we do?

The above questions are values that can deliver value when everyone in the organisation is working to live up to their values; in simple terms, the things that are important  to us, the things ‘we’ care about, what makes are job and purpose worthwhile.

It is imperative that the values are developed across the company to be effective and from the board down, otherwise the ‘we’ will be meaningless and risk being treated with disdain by the majority.

Even more important is to turn the values into behaviours that represent value creation.

A shared value creation will involve new and heightened forms of collaboration. While some shared value opportunities are possible for a company to seize on its own, others will benefit from insights, skills, and resources that cut across profit/nonprofit and private/public boundaries. Here, companies will be less successful if they attempt to tackle societal problems on their own, especially those involving cluster development.

Successful collaboration will be data driven, clearly linked to defined outcomes, well connected to the goals of all stakeholders, and tracked with clear metrics.

With the impact of Social Media, do we actually plan for crisis management?

crisis managementcrisis management
 
noun:  the process by which a business or other organization deals with a sudden emergency situation​

 

 

A crisis is the ultimate unplanned activity and the ultimate test for managers. In a time of crisis, conventional management practices are inadequate and ways of responding usually insufficient.

Fewer circumstances test a company’s reputation or competency as severely as a crisis.

Whether the impact is immediate or sustained over months and years, a crisis affects stakeholders within and outside of a company. Customers cancel orders. Employees raise questions. Directors are questioned. Shareholders get very nervous. Competitors sense opportunity. Governments and regulators come knocking. Interest groups smell blood. Lawyers are not far behind.

As the ultimate unplanned activity, a crisis does not lend itself to conventional “command and control” management practices. In fact, some of the techniques for managing a crisis may fly in the face of conventional notions of planning, testing and execution. Preparation and sound judgment are critical for survival.

One of the most vital skills a company can possess is the ability to determine if, when and at what level of importance a crisis has struck:

  • Is this a crisis, or is it simply a continuing business problem coming to the surface?
  • Is it confined to a local area, or does it have the potential to become a situation of national or international importance?
  • Has someone verified the incident or crisis?
  • What are the legal implications?
  • What level of resources will be required to manage it?
  • So what’s to be done?

Ten rules for crisis management

1. Respect the role of the media.

2. Communicate effectively

3. Take responsibility.

4. Centralise information.

5. Establish a crisis team.

6. Plan for the worst; hope for the best.

7. Communicate with employees.

8. Third parties.

9. Use research to determine responses.

10. Create a website

The Chinese have an expression for crisis: wei ji, which is a combination of two words: danger and opportunity. While no company would willingly submit itself to the dangers inherent in a crisis, the company that weathers a crisis well understands that opportunity can come out of adversity.

A well-managed crisis response, coupled with an effective recovery program, will leave stakeholders with a favourable impression and renewed confidence in the affected company.

What is a SWOT analysis?

swot-analysisThere has been much discussion recently over what is a SWOT analysis and if there really is a need for some much work internally and externally, particularly in small businesses.

The answer to the question is simple: a SWOT analysis is an imperative as it is a tool used for situation (business or personal) analysis.

SWOT is an acronym which stands for:

  • Strengths: factors that give an edge for the company over its competitors.
  • Weaknesses: factors that can be harmful if used against the firm by its competitors.
  • Opportunities: favorable situations which can bring a competitive advantage.
  • Threats: unfavorable situations which can negatively affect the business.

Strengths and weaknesses are internal to the company and can be directly managed by it, while the opportunities and threats are external and the company can only anticipate and react to them.

When examining the potential for a new business or product, a SWOT analysis can help determine the likely risks and rewards. SWOT, which stands for Strengths, Weaknesses, Opportunities and Threats, is an analytical framework that can help your company face its greatest challenges and find its most promising new markets.

The purpose of a SWOT analysis

In a business context, the SWOT analysis enables organisations to identify both internal and external influences. Outside of business, other organizations have found much use in the method’s guiding principles. Community health and development, education, and other groups have used the analysis. SWOT’s primary objective is to help organizations develop a full awareness of all the factors, positive and negative, that may affect strategic planning and decision-making. This goal can be applied to almost any aspect of industry.

Though SWOT is meant to act primarily as an assessment technique, its lengthy record of success makes it an invaluable tool in project management.

When to use SWOT

SWOT is meant to be used during the proposal stage of strategic planning. It acts as a precursor to any sort of company action, which makes it appropriate for the following moments:

  • Exploring avenues for new initiatives
  • Making decisions about execution strategies for a new policy
  • Identifying possible areas for change in a program
  • Refining and redirecting efforts

The SWOT analysis is an excellent tool for organising information, presenting solutions, identifying roadblocks and emphasising opportunities.

Performing a SWOT analysis is a great way to improve business operations and decision-making, it allows you to identify the key areas where your company is performing at a high level, as well as areas that need work.

Some small business owners make the mistake of thinking about these sorts of things informally, but by taking the time to put together a formalised SWOT analysis, you can come up with ways to better capitalise on your company’s strengths and improve or eliminate weaknesses.

Businesses should not consider the SWOT analysis a cure-all however. Like any self-analysis tool, it can be used incorrectly if we allow our ego or insecurities to drive the content. It is imperative to be as honest with yourself [as possible] and be prepared to provide input that truly reflects your competencies, accomplishments and abilities.

By knowing these things about your company you can work toward an action plan of self-improvement or minimally ensure you select jobs, organisations and leaders that are an appropriate fit for you to improve your chances for success.

Managing fast growth companies

fast growingWherever you are on your journey to market leadership, successful start-ups and companies around the world are experiencing and are having to change to adopt to managing a fast and accelerated growth, growth from a small start-up with a handful of employees into companies with hundreds of employees distributed around the globe.

With such cyclical rapid growth and change, how do companies ensure that they maintain the level of quality, innovation and business sustainability for growth?

As companies scale their teams to keep up with aggressive growth goals, a new challenge arises: companies are increasingly forced to promote technical developers, engineers and other specialist individual contributors into managerial roles in order to manage the influx of additional team members. Someone has to manage these expectations?

This presents what may be the single biggest employee management challenge facing growth companies today, as specialists with none or little management experience or training are now introduced into leadership roles – but without the skills. And usually, with no structured training or guidance provided to them, and no concern for the importance of “soft skills” or best practices to help them quickly become effective in such new manager roles.

As your business grows, investors and other stakeholders will want assurance that you understand the key risks facing your business and that you have these under control.

Here are some points you need to evaluate and assess for growth:

1. Set clear expectations

Different companies stress different types of management duties. A new manager can be responsible for setting priorities that drive toward company goals, giving feedback, helping employees stay motivated, knowing company policy, addressing performance issues, reporting results, and much more. Make it clear what they are responsible for so they can prioritise their time.

2. Train right away, and check in regularly

Make sure to establish a consistent training program right away so that it is an expected part of the role. It may seem like training takes too much time away from other important tasks, but a great training program will save time in the long run. Training courses or workshops should be offered to all new managers, and regular check-ins should happen to ensure managers are getting what they need to grow and improve. It also helps to schedule recurring one month, three month and six month check-ins. New managers do not always know what they do not know, so they need the ongoing dialogue.

3. Pair new managers with seasoned managers

Training only goes so far and the value of mentors cannot be understated. New questions arise constantly for new managers. Make sure your new manager has a dedicated mentor, who can help them navigate the ins and outs of their role. Learning from example is a tried and true practice and even if the mentor is someone from a different department, having that resource is crucial.

4. Know their limits

Great managers know their product and operations, but they aren’t a ‘know-it-all.’ Setting up new managers for success requires knowing their strengths and pain points. Educate your managers on the resources available to them. This will enable new managers to flex the muscle of their good judgment but also know when it may be time to bring someone else into the fold.

5. Culture of management

As we’ve seen in recent headlines, corporate culture can make or break a company. Emphasising the corporate culture as a guidepost for management style will keep problems at bay. Managers should embody a consistent set of values that extend right up the chain of command.

Companies need to put both the processes and technology in place to make it possible for people to become great managers. Startups move incredibly quickly and managers need to do their own work on top of managing others. If building good management skills is not a priority, and tools for building skills are not accessible, people will not necessarily commit. Investing in new manager training is even more important in fast-moving growth companies. Management training may seem like a nice to have, but strong management is one of the essential ingredients for scaling quickly and staying competitive.

Finally, your long-term vision and mission is actually a series of medium-term objectives. When your company grows too fast, it is easy to skip these medium-term objectives because you are seemingly forced to change goals.

Many fast-growth business leaders change their goal too often, never quite completing a plan before starting the next one. So it is important to set a medium-term goal and deliver it.

How rational are Occupy protests? Are they right?

OccupyWhat began as an open call from Adbusters to show up with a tent grew from dozens to hundreds, to thousands, to tens of thousands spurred on by social media. Far from rejecting the extended sit-in, area businesses plied demonstrators with food and support. Those who could not make it to New York started their own hometown Occupy protests in solidarity, hundreds of them, across the country and around the world.

Occupy Wall Street protests have spread around the world, with a common slogan of “We are the 99%.” But there is a great deal of confusion and misperception about this movement.

In New York City, energy flowed into campaigns against police stop-and-frisk practices and to help victims of 2012’s Hurricane Sandy. Occupy experience put organisers in touch with community members normally scornful of ‘weirdos’ but resolved to fight corporate power. One experienced organizer, fresh from Occupy in Missouri, went on to help launch the Take Back St. Louis initiative, subtitled “Reclaiming our Tax Dollars for a Sustainable Future.”

The group gathered more than 22,000 signatures of registered voters, more than enough to put on to an April 2014 ballot a measure to “stop the city from giving tax breaks and other incentives to corporations that mine coal, gas and oil, and any corporation doing $1m of business with a mining company”; to “create a sustainable energy plan in the city that would invest public money in and open up land for renewable energy and sustainability initiatives like weatherisation programmes, urban farms and solar arrays”. In other words, to create sustainable jobs – against the retrograde claim that measures to halt global warming are ‘job-killers’.

As for the executives in corner offices and boardrooms around Wall Street and Canary Wharf, in state houses and Washington, are they relieved that the rabble were swept away? Do they believe that partial financial reforms will insulate them against risings to come? Beyond growing attention to public relations (probably a growth centre for future employment), are they mindful, as they make policy, that those who once awoke to fill the streets and parks may awaken again? Do they suspect, late at night, that youngsters in sleeping bags might turn out to be the modern equivalent of peasants with pitchforks?

Where have all the chanters gone; the gospel-minded Christians and the denouncers of ‘banksters’ and tyrants; the homeless and the indebted and unemployed who filled our urban squares in 2011-12, crying out such slogans as “We are the 99 percent” and “The people want the end of the regime”? Where are the leaderless revolutionaries who turned cities around the world upside down?

The simple answer is: they were dispersed. When the sometimes public parks were swept clear of troublemakers, many dispersed into a scatter of left-wing campaigns. Other activists now escort visitors around bare, fenced-off Zuccotti Park near Wall Street. In London, free bus tours with guides in top hats carry the curious around the City and Canary Wharf (“Make your very own ‘credit default swap’ and find out how to create money out of thin air!”).

Political rationality, if not fear, may well make elites more responsive. Rumblings on the Right are not the only noises emanating from Europe. The sparks that set Occupy on fire fell on inflammable tinder, and this is how history goes: one spark, then another, ignites a whole landscape. The Occupy ‘graduates’ hope that their time will come again. They might turn out to be wrong – until, one day, they’re right.

Do the Royals have influence over media and film?

At least 39 bills have been subject to Royal approval, with the senior royals using their power to consent or block new laws in areas such as higher education, paternity pay, and child maintenance.

Andrew George, Liberal Democrat MP for St Ives, which includes land owned by the Duchy of Cornwall, said the findings showed the Royals “are playing an active role in the democratic process”.

It shows the royals are playing an active role in the democratic process and we need greater transparency in parliament so we can be fully appraised of whether these powers of influence and veto are really appropriate. At any stage this issue could come up and surprise us and we could find parliament is less powerful than we thought it was.’

The power of veto has been used by Prince Charles on more than 12 government bills since 2005 on issues covering gambling to the Olympics.

So do the Royals have influence over media and film too?

Everyone remembers ‘The King’s Speech’

‘The King’s Speech’, a film about King George VI, sparked swooning adulation since opening at British cinemas. Towards the end, it hits all three fantasies at once: a humble speech therapist is forced to reveal that the king is his patient and friend, after his wife finds Queen Elizabeth at their dining table in a hat, pouring tea.

The film’s success was rooted as an interesting, little-known true story. Many younger Britons have only sketchy notions of George VI, perhaps knowing he reigned during the second world war and fathered the present monarch, Elizabeth II. The film shows a shy prince overcoming a bad stammer with the help of an unorthodox Australian therapist, Lionel Logue (who did exist), in time to ascend the throne after the abdication of his brother, Edward VIII. It breathes rare life into his wife, Elizabeth, later revered in the role of Queen Mother, a rather doll-like figure loved for smiling, waving, saying little in public and living to 101.

E!’s new original scripted series, The Royals, is ostensibly based on the lives of the British royal family. But the current Prince and Duchess of Cambridge, better known simply as William and Kate, are not making headlines every weekend for their heavy partying. Actually, they barely make headlines at all, and even the coverage in the UK is pretty subdued, largely limited to basic announcements about places where they made appearances and what Kate Middleton wears. Even Prince Harry, who’s better known for being a “crazy,” rebellious royal, is practically comatose compared to the characters on E!. But is anything from The Royals based on facts or influenced? Well, there are some elements that try to be somewhat close to the lives of the real royals

So what about media advertising, the power of association is widely known. Brands which have no direct link to something positive can benefit from an association to something the consumer loves or respects. The easiest way to do this is by simple repetition. The alliterative mantra ‘Queen and Country’ makes people believe there is something intrinsically patriotic about blindly supporting them, rather than daring to imagine a nation which stand on its own two feet and looks after itself.

To think that the Royals do not make arrangements with the press is I am sure not just a coincidence. The level of access some photographers, even apparently rogue ones, get is staggering. This is one of the richest families in the world with one of the world’s biggest powers protecting them. Being famous celebrities brings a form of power that is easy to underestimate until you see it close up. I will also feel that the Royals also have influence over media and film too.

Is Cyberbullying really necessary?

CyberBullyingCyberbullying is bullying that takes place using electronic technology. Electronic technology includes devices and equipment such as cell phones, computers, and tablets as well as communication tools including social media sites, text messages, chat, and websites.

Examples of cyberbullying include mean text messages or emails, rumours sent by email or posted on social networking sites, and embarrassing pictures, videos, websites, or fake profiles.

Cell phones and computers themselves are not to blame for cyberbullying. Social media sites can be used for positive activities, like connecting kids with friends and family, helping students with school, and for entertainment. But these tools can also be used to hurt other people. Whether done in person or through technology, the effects of bullying are similar.

Kids who are cyberbullied are more likely to:

i.          Use alcohol and drugs

ii.          Skip school

iii.          Experience in-person bullying

iv.          Be unwilling to attend school

v.          Receive poor grades

vi.          Have lower self-esteem

vii.          Have more health problems

A new film called ‘Unfriended’ which details a group of online chat room friends find themselves haunted by a mysterious, supernatural force using the account of their dead friend.

Everything happens from the perspective of a teenage girl looking at her laptop and jumping from Skype to YouTube to Facebook and so on. It’s a gimmick that works better than it has any right to, and would feel fresher if “Modern Family” hadn’t wrung a lot of comedy out of it earlier this year.

Information regarding the dead girl’s traumatic past is subtly revealed in a chat window, as someone waffles about what she wants to say, typing and retyping the words until she finds a suitably cryptic explanation. The film trailor can be found here.

The protagonists of the film, who are participating in a group video chat on Skype, are haunted around the Web by a presumed-dead girl named Laura Barnes. Laura committed suicide under mysterious circumstances exactly one year before the day “Unfriended” is set, after she was mercilessly cyberbullied over an embarrassing video posted online.

In the UK, a reported 22% of children and young people claim to have been the target of cyberbullying making this one of the most important new areas of behaviour to understand and to equip schools, care-givers, and young people with the ability to respond.

There are organisations like ‘The Cybersmile Foundation’ which is a multi award-winning anti cyberbullying non-profit organisation. Committed to tackling all forms of digital abuse and bullying online, they work to promote diversity and inclusion by building a safer, more positive digital community.

Their mission is a simple one; we believe that everyone should be able to enjoy being part of the new connected online world. Regular and productive use of the Internet has become essential to a healthy social and personal development.

Through education and the promotion of positive digital citizenship organisations like The Cybersmile Foundation can reduce incidents of cyberbullying and through other professional help support victims and their families to regain control of their lives.

Unfortunately, cyberbullying and digital abuse is increasing, holding many back from enjoying the benefits that this connected community can provide. Our current online environment lacks the balance and social rules of engagement that have been cultivated over generations, governing the behavior and relationships in the communities where we live, play and work – the physical world.

Policing, monitoring and internet restrictions can only go so far, although useful additions to any internet safety policy, they are not adequate substitutes for a thorough understanding of cyberbullying and its related issues such as netiquette and emotional intelligence.

But what if that force were just other young, stupid people? Or what if it were a smart but ordinary human hacker, exploiting security holes in always-connected software those people depend on?

Its abundantly clear that disrupting with people and their lives online can have serious psychological consequences… not just in the now but for a very long time!

A founder’s problem to being CEO and succession planning

CEOEvery would-be entrepreneur wants to be a Bill Gates or Steve Jobs each of whom founded a large company and led it for many years. However, successful CEO-founders are a very rare breed in-deed.

When you look at start-up to IPO it is interesting to see that most founders give up management control long before companies go public.

Choosing money: A founder who gives up more equity to attract investors builds a more valuable company than one who parts with less—and ends up with a more valuable piece, too!

Harvard did a recent study that showed that by the time ventures were three years old, 50% of founders were no longer the CEO; in year four, only 40% were still in the corner office; and fewer than 25% led their companies’ initial public offerings. Other researchers have later found similar trends in various industries and in other time periods. We remember the handful of founder-CEOs in corporate America, but they’re the exceptions to the rule.

Further in the study it also showed that founders do not let go easily. Four out of five entrepreneurs,  are forced to step down from the CEO’s post. Most are shocked when investors insist that they relinquish control, and they’re pushed out of office in ways they don’t like and well before they want to abdicate. The change in leadership can be particularly damaging when employees loyal to the founder oppose it. In fact, how founders tackle their first leadership transition often makes or breaks young enterprises.

Leadership transitions in a business of any size can be influenced by and affect stakeholders. How each stakeholder perceives the process-and their role within it-will have an impact on outcomes. Perhaps the two stakeholders who often play the most central roles in this process are the incumbent, or controlling, CEO and his or her successor.

The transition from one CEO to another is a critical moment in a company’s history. A smooth transition is essential to maintain the confidence of investors, business partners, customer and employees, and provides the incoming CEO with a solid platform from which to move the company forward. A properly designed and executed succession plan is at the center of any successful transition.

CEO vacancies can be planned or unplanned; in either scenario, by the time a succession plan is needed it is far too late to start building one. Because of this, it is the responsibility of the board to make succession planning a priority, even in the face of more immediate and tangible issues. In addition to being necessary for risk mitigation, succession planning brings with it several beneficial by products:

Succession planning is usually directed by the governance or compensation committees, or occasionally a special ad hoc committee. The current CEO’s involvement varies (depending on whether the succession is planned or unexpected) with primary responsibility being the development of internal candidates. The Lead Director often acts as the single point of contact between the board and the sitting CEO on succession matters.

Some tips for the pre-planning are listed below:

i.          Create a written succession plan.

ii.          Conduct regular, in-depth reviews.

iii.          Compare the resulting list of capabilities against the firm’s senior talent pipeline.

iv.          Narrow the field to two or three finalists.

v.          Implementing The Plan

vi.          Assess the finalist candidates.

vii.          Finally, the board deliberates and makes its final decision.

Some tips across the successful transition:

1.      Begin intensive knowledge sharing.

2.      Communicate with stakeholders.

3.      Develop a written transition plan.

4.      Share the transition plan.

5.      Strengthen relationships with the board.

Overjoyed businessman with big bundle of dollarsManaging the CEO succession process is a board’s ultimate responsibility. A regularly reviewed and closely followed succession plan is essential to successfully exercise that responsibility. The costs of short-changing this process are easy to see when companies are caught off-guard by events; the payoff is reflected in the company’s momentum as it moves from one leader to the next. In addition, ongoing succession planning helps the board to be better informed and aligns the development of the senior management team with the strategic needs of the company. Beyond its usefulness in risk mitigation, CEO succession planning contributes to the successful governance and management of the firm long before a successor is needed.

Finally, choosing between money and power allows entrepreneurs to come to grips with what success means to them. Founders who want to manage empires will not believe they are successes if they lose control, even if they end up rich. Conversely, founders who understand that their goal is to amass wealth will not view themselves as failures when they step down from the top job. Once they realise why they are turning entrepreneur, founders must, as the old Chinese proverb says, ‘decide on three things at the start: the rules of the game, the stakes, and the quitting time.’

Do we live in a current economy where we have no customer life time value?

customer-lifetime-value (1)With the ever-changing and fast-speed of the internet and technology, every company and product is interested in selling products and services, but are we missing something?

Research shows that in industry, students have been barraged by an ongoing stream of news and facts, stretched over years, if not decades across what motivates customers to buy. Its ‘customerising’, gearing a company up to focus exclusively on your customers that matters, you need to build a customer-driven company, the results speak for themselves a company that focuses on its customer’s needs will embrace customer loyalty, increased performance and a healthy bottom line.

In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. The prediction model can have varying levels of sophistication and accuracy, ranging from a crude heuristic to the use of complex predictive analytics techniques.

CLV has a central strategic importance for a company, and more and more managers are discovering that their most important asset is not the company’s inventory but its customers… that matters!

The Pareto Principle states that, for many events, roughly 80% of the effects come from 20% of the causes. When applied to e-commerce, this means that 80% of your revenue can be attributed to 20% of your customers. While the exact percentages may not be 80/20, it is still the case that some customers are worth a lot more than others, and identifying your “All-Star” customers can be extremely valuable to your business.

Taking CLV into account can shift how you think about customer acquisition. Rather than thinking about how you can acquire a lot of customers and how cheaply you can do so, CLV helps you think about how to optimize your acquisition spending for maximum value and not minimum cost.

Some seasoned entrepreneurs may say “break even” or some other number is the most important metric, but I believe “lifetime value” is perhaps the most significant measure to benchmark. I also know it is one of the most overlooked and least understood metrics in business, even though it is one of the easiest to figure out.

Customer journeyWhy is this particular number so important? Mainly because it will give you an idea of how much repeat business you can expect from a particular customer, which in turn will help you decide how much you’re willing to spend to “buy” that customer for your business.

Once you know how often a customer buys and how much he or she spends, you will better understand how to divide your resources in terms of customer retention programs and other services you’ll need to keep your customers, and importantly – keep them happy!

Once you have some idea of the lifetime value of your customer, you have two options in deciding how much to spend to acquire him or her:

1. Allowable acquisition cost: This is the amount you’re willing to spend per customer per campaign — as long as the cost is less than the profit you make on your first sale. This is a shorter-term strategy that makes the most sense when cash flow is a concern.

2. Investment acquisition cost: This is the cost you’re willing to spend per customer knowing that you’ll take a loss on an first or even later purchase. But you have the cash flow and other resources to absorb your initial marketing investment with this longer-term strategy.

The point is that you’ll never know how to develop an optimal marketing budget unless you know what the return on your investment needs to be. This knowledge is vital because it will help you make marketing decisions based on the reality of your own numbers and not the promises of some new media program.

Knowing lifetime value also lets you see how, or if, you can discount. It will help you avoid the potentially disastrous effects of discounting when your business needs cash flow to survive. In addition, you will find innovative ways to build value upfront and create offers that drive enough volume to support and eventually increase your overall lifetime value number.

So take some time to work the numbers in the very simple lifetime value equation, especially if you’re still in the planning stages for your business. Remember to build in some variation and see if your current plans support the numbers you come up with. If so, that’s great. If not, that’s also great because you’ve determined on paper what you need to change to make your numbers work.

Investing to earn the loyalty of your customers often requires trade-offs—you must decide which of the many investments you could potentially make will result in the greatest return. A clear understanding of your company’s loyalty economics will help you make those decisions. It will give you a quantitative basis for investments in long-term customer assets and provide a defense against the short-term, sub-optimal, “quarterly earnings” mind-set that often tempts leaders to generate “bad profits.”

It is possible to calculate loyalty economics with great precision, if you have the resources and the tools to do so. If not, you can also make rough estimates that can help guide decision-making. This page describes a relatively simple way to get reasonable, rough estimates of the potential value that can be created by improving your company’s Net Promoter score and earning the loyalty of more of your customers

Share of wallet and number of products purchased: calculate how the annual purchases of your promoters, passives and detractors vary. This will help you estimate revenue differences. If you have actual revenue per customer, you’ll be able to estimate more precisely, of course.

In the end, it’s the lifetime value numbers that will determine the ultimate success of your company.

Human extinction – what are the effects of living to 200 – is it possible?

Tech-Head-with-Tech-glasses_500A Japanese woman, recognised as the oldest person in the world, died early in the morning of Wednesday April 1, 2015, at the age of 117.

Experts put Japanese longevity down to the nation’s comprehensive healthcare system, the support of the community, encouragement to stay physically active until they are quite elderly, a sense of being part of a family and a healthy diet that has traditionally been heavy in fish, rice, vegetables and

Additional research has suggested that people who were in middle-age during the years of food shortages during the Second World War have subsequently enjoyed better long-term health than people who never had to go without.

But Yasuyuki Gondo, an associate professor at Osaka University who specialises in geriatric psychology, says there is much more to longevity than merely a good diet and advanced medical care

Aubrey David Nicholas Jasper de Grey is an English author and theoretician in the field of gerontology and the Chief Science Officer of the SENS Research Foundation. He is editor-in-chief of the academic journal Rejuvenation Research, author of The Mitochondrial Free Radical Theory of Aging (1999) and co-author of Ending Aging (2007). He is known for his view that medical technology may enable human beings alive today to live to lifespans far more than any existing authenticated cases.

De Grey’s research focuses on whether regenerative medicine can thwart the aging process. He works on the development of what he calls “Strategies for Engineered Negligible Senescence” (SENS), a collection of proposed techniques to rejuvenate the human body and stop aging. To this end, he has identified seven types of molecular and cellular damage caused by essential metabolic processes. SENS is a proposed panel of therapies designed to repair this damage.

So what would be the ratifications is a human could live to age 200?

life expectancy graphSo far as scientists know, the last hundred years have been the most radical period of life extension in all of human history. At the turn of the twentieth century, life expectancy for Americans was just over 49 years; by 2010, that number had risen to 78.5 years, mostly because improved sanitation and basic medicine. But life extension doesn’t always increase our well-being, especially when all that’s being extended is decrepitude. There’s a reason that Ponce de Leon went searching for the fountain of youth. If it were the fountain of prolonged dementia and arthritis he may not have bothered.​

Humans as early as next year, following a key discovery that saw the ageing process reversed in mice. The study, involving Harvard University and the University of NSW, discovered a way of restoring the efficiency of cells, completely reversing the ageing process in muscles.

Two-year-old mice were given a compound over a week, moving back the key indicators of ageing to that of a six-month-old mouse. Researchers said this was the equivalent of making a 60-year-old person feel like a 20-year-old.

It’s hoped the research, published in Cell, will be expanded to humans as early as next year, with scientists set to look at how the theory of age reversal can be used to treat diseases such as cancer, dementia and diabetes.

The research focused on an area of cells, called mitochondria, which produce energy. Over time, the communication between this area and the cell nucleus degrades, leading to the ageing process.

Researchers injected a chemical called nicotinamide adenine dinucleotide, or NAD, which reduces in the body as we age. The addition of this compound led to the radical reversal in the ageing of the mice.

Over the past twenty years, biologists have begun to set their sights on the aging process itself, in part by paying close attention to species like the Lobster, which, despite living as long as fifty years, doesn’t seem to age much at all. Though some of this research has shown promise, it’s not as though we’re on the brink of developing a magical youth potion. Because aging is so biologically complex, encompassing hundreds of different processes, it’s unlikely that any one technique will add decades of youth to our lives. Rather, the best we can hope for is a slow, incremental lengthening of our “youth-span,” the alert and active period of our lives.

Some ethicists have pointed out that death is one of the major forces for equality in the world, and that welfare disparities will be worsened if some people can afford to postpone old age, or avoid it altogether, while others are unable to.

There is research available and concerns when scientists develop any kind of medicine or any kind of technology—the concern that these things are going to widen welfare gaps. The story of industrialisation is that the people who could afford the cars and machines and factories in Western countries were able to produce a lot more and generate a lot more wealth than people in poorer agrarian economies. That’s a serious issue. It’s probably true that if people in the first world were, through some sort of medical intervention, able to live to be 200 years old and people in Bangladesh were still dying at a relatively young age, that would tend to widen the distance in personal wealth.

So how will employers, government and financial service organisations deal with an aging population?

Older people also report, to pollsters and psychologists, a greater sense of well-being than the young and middle-aged do. By the latter phases of life, material and romantic desires have been attained or given up on; passions have cooled; and for most, a rich store of memories has been compiled. Among the core contentions of the well-being research of the Princeton University psychologist Daniel Kahneman is that “in the end, memories are all you keep”—what’s in the mind matters more than what you own. Regardless of net worth, the old are well off in this sense.

Should large numbers of people enjoy longer lives in decent health, the overall well-being of the human family may rise substantially. In As You Like It, Jacques declares, “Man in his time plays many parts, his acts being seven ages.” The first five embody promise and power—infant, schoolboy, lover, soldier, and success. The late phases are entirely negative—pantaloon, a period as the butt of jokes for looking old and becoming impotent; then second childishness, a descent into senile dependency. As life expectancy and health span increase, the seven ages may demand revision, with the late phases of life seen as a positive experience of culmination and contentment.

Further along may be a rethinking of life as better structured around friendship than around family, the basic unit of human society since the mists of prehistory. In the brief life of previous centuries, all a man or woman could hope to do was to bear and raise children; enervation followed. Today, life is longer, but an education-based economy requires greater investments in children—contemporary parents are still assisting offspring well into a child’s 20s. As before, when the child-rearing finally is done, decline commences.

But if health span extends, the nuclear family might be seen as less central. For most people, bearing and raising children would no longer be the all-consuming life event. After child-rearing, a phase of decades of friendships could await—potentially more fulfilling than the emotionally charged but fast-burning bonds of youth. A change such as this might have greater ramifications for society than changes in work schedules or health-care economics.

Regardless of where increasing life expectancy leads, the direction will be into the unknown—for society and for the natural world. Felipe Sierra, the researcher at the National Institute on Aging, puts it this way: “The human ethical belief that death should be postponed as long as possible does not exist in nature—from which we are now, in any case, diverging.