Guest-blog: Patrick Bailey – Diversification vs. focus-driven

Patrick Bailey

Adversity of any magnitude should make us stronger and fill us with life’s wisdom, however, strength in any form is born from adversity – I wrote ‘Freedom after the Sharks’ from adversity and set up a business in the double-dip of 2008 and 2009, many people have done the same and it is almost a universal theme in the lives of many of the world’s most eminent minds.

As Michelle Obama once said:
‘You should never view your challenges as a disadvantage. Instead, it’s important for you to understand that your experience facing and overcoming adversity is actually one of your biggest advantages.’

Determination, resilience, and persistence are the enabler for people to push past their adversities and prevail.
Overcoming adversity is one of our main challenges in life.
When we resolve to confront and overcome it, we become expert at dealing with it and consequently triumph over our day-to-day struggles.

Have you ever felt that your world is starting to fall apart because of how life tends to bombard you with seemingly impossible challenges?
Have you ever felt helpless and would rather spend your days feeling like a solitary zombie while the rest of the world doesn’t even care that you’re this close to almost losing your sanity?
Well, you’re not alone and the good news is, there are ways to properly deal with and overcome these obstacles.

Reality has a way of reminding us that no matter how hard you try and how good you treat people, you will always have those days, those times when you think the world is against you. During these moments, you often have the urge to either shut down or finally give up and think of the most foolish remedies available to you – both can have long-term damaging effects on you, emotionally and physically.

Today I have the pleasure of introducing another Guest Blogger, Patrick Bailey, who is a professional writer mainly in the fields of mental health, addiction, and living in recovery.

He attempts to stay on top of the latest news in the addiction and the mental health world and enjoys writing about these topics to break the stigma associated with them. His website is: www.patrickbaileys.com

Patrick is going to discuss with us today “Diversification vs. Focus-Driven”

When the Tough gets going, remember this motto: ‘Hibernation is not Survival’

There’s a prevailing rule in a bear market, and that is to play dead when the stock prices are plunging.

After all, the market almost always corrects itself. Stocks operate on a cycle — sometimes up, sometimes down — except, of course, in cases when the economy is undergoing a recession.

Hibernation is different from inactivity, however. You just park your money in treasury bills or certificates of deposits for the moment.

But is hibernation a good tactic for your business during an economic slowdown?

Diversification vs. Focus-Driven

This has been the subject of debate.

Startups that manage to grow will often hit a fork in the road where they can no longer grow with their current set up.

Now, they have to make a choice: diversify their portfolio or bolster their product while they take a more focus-driven approach.

Instead of diversifying, they just ensure that their processes and workflow are more efficient, they automate to limit disruption and enhance the customer experience to guarantee client loyalty.

However, while you may see your bottom-line increase, it could just be temporary. That’s because you are not adding products or service value to your business.

Diversification doesn’t immediately produce results either. There’s no guarantee it will ever deliver the outcome you anticipate.

When the economy is in transition, you will find many competitors fighting over the scraps. This is a high-stakes game that could spell success or the end of your business. However, the alternative is no less disastrous.

The other option is not doing anything. When you pin the future of your company entirely on the hope that the economy will get better, you have the wrong strategy.

If you do decide to diversify, here are some quick tips to cut your risks:

  1. Don’t veer away too much from your core competency. Diversification doesn’t always mean being different. That’s oversimplifying its definition. Knowing your core competence will give you insight into how other capabilities tie together. Your main goal should be to create a new product or service that is still tied to your core competency in order to bring in new customers.
  2. Don’t forget your loyal customers. In fact, you need to align your strategies by boosting the value of your core business. You then retain the same customers and offer them another product that matches another — but still related — need.
  3. Put money into your marketing efforts. Ads and promotions are typically the first things to be sacrificed by companies that are scrimping on the budget. However, you need to make people aware that you have a new product. Even in an economic slowdown, people still buy. That’s consumer resiliency. You need to funnel these customers to your company by showing them that you are the answer to their most nagging questions.
  4. Timing is everything. Still aligning your diversification with your core competencies, you need to know when to change tack and when to sit it out. Before deciding to diversify, you need to bolster your core business to make sure you don’t lose focus. When the revenues have plateaued, then it’s time to shore up your business and add value by creating another product or service.
  5. Watch out for your cash flow. Revisit your inventory and your credit policies. When the times are tough, you may need to borrow in order to infuse new capital into your endeavors. However, no bank will offer you a lifeline when you have a shot credit and lousy financial prospects.

The Best Defense is a Good Offense

There’s a saying in sports and even in war: The best defense is a good offense.

This strategy will allow you to take back control of the situation. Rather than wait for the next hammer to fall, you change your approach and bring the fight to the enemy.

This is a scary part, especially when the economic landscape is very fluid. However, there are numerous success stories of businesses that found some opportunities when they decided to go on the offensive rather than wait the economy out.

Of course, there’s no guarantee that this result in a better outcome, but it’s a lot better than playing dead while you wait for the economy to turn.

Here are some quick tips on how to go on offense from defense:

  1. Diversify. If you are putting all your eggs in one basket, chances are you will lose money if most of them crack. Businesses that rely only on one product will be badly hit during a slowdown.
  2. Think outside the box. It doesn’t even matter if you are earning less with your new business than you were with the old one. Expanding your network is the only way to learn and earn. Step out of your comfort zone and attend some industry trade shows.
  3. Reinforce relationships. This is a good way to let your clients know that you can be trusted even when the times are bleak. Don’t cut corners on the quality of your work, and don’t use the economy as an excuse for missing deliveries. In the same vein, get in touch with your suppliers to reassure them that work will continue (although the volume likely will be down).
  4. Cut fat. Sometimes the only way to take flight is if your business isn’t as heavy. This is a good opportunity to revisit your operations and trim the fat. You will find that your employees won’t be inflexible when you institute changes. They know that the market is very challenging, and they will be more apt to help.
  5. Form an advisory board. It seems paradoxical to suggest this when the item above tells you to cut fat. But if done correctly, the board can become a rich repository of ideas with which you can follow-through as you go about diversifying your products and services.
  6. Automation and analytics. Automating your workflow can boost your efficiency. Big data analytics are already being used by companies in order to improve customer experience. Analytics will give you insight into the minds and behaviors of your clients. This, in turn, will help you come up with a product that truly addresses their needs.
  7. Ask for help. If you are a member of any industry associations, this is the right time to touch base. The government also has some assistance to offer — in terms of technology transfer or financial assistance — to help you keep your head above water.

Lastly, you need to understand that there’s life beyond your business. Too often, you see CEOs with failed marriages and broken families because they prioritized their careers at the expense of spouses and children.

You hear of executives becoming addicted to the drug fentanyl, heroin, or alcohol to help them cope. They equate the failure of the business to their value as an individual.

However, there are more important things in life than being a successful CEO.

Life is all about challenges. Life will push you down if you refuse to push back. It doesn’t matter how many times you stumble. What’s important is how many times you get back up.

Take advantage of the economic slowdown to take stock of what’s important to you.
Bond with the kids, rekindle the romance with your spouse, visit your parents and siblings.
You just might realize that it doesn’t matter if you see yourself as a failure; you will be a hero in your kids’ eyes.

You can contact Patrick Bailey:

Email: bailey patrick780 @gmail.com (remove spaces)
Blog: http://patrickbaileys.com
Twitter: https://twitter.com/Pat_Bailey80
LinkedIn: www.linkedin.com/in/patrick-bailey-writer

Do we really have first world challenges?

I was recent in a trivia debate with a good friend discussing who invented the pie chart, honestly I looked completed at the ceiling when he said Florence Nightingale, I challenged him to the real answer which was William Playfair (22 September 1759 – 11 February 1823) – he was a Scottish engineer and political economist, the founder of graphical methods of statistics. He invented several types of diagrams: in 1786 the line, area and bar chart of economic data, and in 1801 the pie chart and circle graph, used to show part-whole relations.

We both discussed the challenges of that era, 1759 in Scotland was described as a period called the Enlightenment, a Golden Age in the arts, sciences, industry and commerce, so what was so different to the present day?

In 1759 we had the battle of Quebec, Guinness was first formed and James Watt invented the steam engine, today we have unsettlement and war in the middle east and an app and robot for practically any function and desire in life, were people so unhappy in the 1759 era believing they have 1st World Challenges and change?

According to urbandictionary.com, “first world problems” are defined as “[p]roblems from living in a wealthy, industrialised nation that third world persons would probably roll their eyes at.” There is even an entire website dedicated to highlighting the petty complaints and struggles faced by people in the first world.

This video named First World Challenge, gives some insight to the pettiness and struggles faced by people in the first world:

The people I hear using this phrase are usually relatively socially conscious. I think the intentions behind this term are probably genuine and rooted in the desire to check their privilege. Still, this term is half-baked in its intentions, and I think we can do better in this realm of social consciousness.

We need to examine the rhetoric involved in conversations surrounding privilege, the distribution of wealth, industrialised societies, and the global South. Specifically, I want to take this opportunity to consider the sorts of things that the phrase “first world problems” implies. As feminist and writer Laurie Penny recently wrote in her article, “Gender Neutral Language is Coming Here’s Why It Matters,” the terminology we use has a lot of power over the way we perceive the world around us.

It is a known fact that the way of life in our developed regions is having negative impacts on the environment. Although we are witnessing increasing levels of consciousness regarding consumption, we are still far off a sustainable mode of conduct. One person consuming on our current level might not have a wide impact on our nature. But billions of people make negative impacts of scale. You shopping a chocolate latte in a disposable cup might not be bad, but millions of cups make up for a complete landfill. Seemingly harmless choices multiplied by sheer quantity and automation potentially leads to tremendous negative results. Or to put it into another great German saying: ‘Small animals, too, create manure.’

But, changes are on the way, right? We are shopping the highest number of sustainable products than ever before and the invention of new efficient technologies is seemingly rising. Unfortunately, our efforts for more resource-efficiency don’t always work out. Fuel-savings in home heating technologies, for instance, has increased the size of homes people have built for themselves. This in turn has lowered the effect of fuel-savings, as less energy usage on more volume today equals more energy usage on less volume from before. In the end, we are still consuming the same amount of fuel. This principle is called the “rebound effect” and has had tremendous negative effects on our environment. It leaves us with a bitter truth: we might think that we are changing to a more sustainable lifestyle, while in fact we are consuming and thus wasting more than before.

To make matters worse, we are exporting our societal and ecological issues elsewhere. As most products are not made in Europe, North America or Australia, problems are accumulating in countries of the global south, where most production takes place. For us, this turned out to be the perfect mix. We crave cheap consumer products, but we are also asking for clean air, well-paying jobs and good regulation. By exporting most of the negative effects, we can easily live under the impression that we are consuming more sustainably, while others bear the burden. This leaves the global north with a huge challenge: we are unable to see our negative effects because we are very effective at hiding the real price of our actions, either through seemingly sustainable practices or through exporting our external costs.

There is one area, however, where we are able to see that our levels of consumption have backlashes: a rising number of diseases of affluence. Although it is quite clear, that a person living in poverty is more prone to diseases – especially to infectious diseases – our abundant lifestyle has had negative effects on our own health, too. In the global north non-communicable diseases, like obesity, asthma or cancer are on the rise. But it is the less obvious and less visible diseases that are most detrimental. Take mental illnesses as an example. In Germany, there is estimated to be between half a million to 1 million people with severe mental illnesses. Mental illness is a collective term for many different forms of mental health disorders, such as anxiety, depression or drug addiction.

These illnesses are called severe if they are persistent and constrain a person in their everyday-life. The cause of the constant rise of mental diseases since the 1950s in the global north is not totally clear, but it seems to be connected to isolation and personal overload. Our liberation from conservative systems, our ability to choose for ourselves who we want to be, puts us into a dangerous situation. We are constantly confronted with too many choices and inflated demands. Suddenly, seven different types of chocolate ice cream might be six too many. What is clear, though, is that people with mental illnesses have more troubles finding a job, often leaving them without an income and even more isolated. They are amongst others more prone to poverty and for failed marriages. With too few people talking about this huge societal issue – but with rising numbers of people with mental illnesses, the problem will become more pressing and there will be a search for more and better integration.

Income per household in the global north is rising constantly. This in turn improves our material quality of life. But this improvement is by far not accessible to everyone. The most marginalized (and seldom addressed) groups in Germany are still lacking access to some of the most basic societal services: hundreds of thousands of women over the age of 65 for instance live on less than 400 Euro a month – and the number is growing. These women are being punished today for having raised children in the past and putting family before their career. This problem will grow even further in the upcoming years and extend to all new retirees – female and male. By 2030, it is estimated that every second retiree will be living in poverty. On the other side of the trench, the German super-rich elite is on the rise – slowly but steadily. Looking at the rising Gini coefficient for wealth in Germany, it becomes apparent that less and less people own more and more of German assets.

Our society is growing more an more unequal. If this trend of inequality continues, we might get into serious trouble. Our society is built on a fragile equilibrium. Imagine the overall energy (time, effort, resources, etc) that is needed in order for our societal system to work. We are constantly busy maintaining the current state of our infrastructure and the social order we rely upon. All the gardeners, janitors, repairmen, doctors, lawyers, politicians and chocolate ice-cream makers spend most of their time just keeping the system running. Day in and day out they go to work to pull all the little levers so that you can drink your chocolate chai latte with soy milk “to go” every morning. This balance is, as improbable as it sometimes may seem, quite frail. We have to constantly fix and improve the status quo so that our society can prosper. The higher the developmental status of our societal systems, the higher its fragility becomes. Inequality might pose the biggest challenge for this societal equilibrium.

Using the third world as a means of noticing how lucky we are implies that value is in material things. It shifts focus from the fact that our own culture of consumption makes us not as good at counting our blessings as we should be. We are often so preoccupied with wanting more stuff and stressing over petty material things because our culture and our economy are so deeply intertwined with consumption. For a healthy economy, it is critical that we go on feeling this way. In citing “first world problems,” we focus instead on our relative luck over those living in some arbitrary “third world,” as defined in material terms. We are reinforcing the idea that there is inherent value in material stuff. To me, it sounds like we are suffering a case of idolatry

This video, I think puts life into prospective:

To be a White Whiner your complaint must convey, simultaneously, that you are both fortunate and irritated. Nothing gets people whining more than flying to an exotic location so they do not lose their holiday time at the end of the year. A study was carried out among 2,000 adults aged between the ages of 18 and 65, with alleged 1st World Challenges and the results are listed below:
• Earphones becoming tangled in your bag, Weetabix not fitting into a round breakfast bowl and weak tea have been named on the list of common British first world problems.
• Problems range from the trivial – the shop running out of semi-skimmed milk or remote control batteries running out – to the downright ridiculous.
• Some of the more absurd worries include: “Heel getting stuck in the decking of a boat or yacht” or “a neighbour using the same Laura Ashley wallpaper”.
• A spokesman for survey website, OnePoll, which carried out the study, said: “Sometimes we forget just how good we’ve got it.
• “While we enjoy a lifestyle much more fortunate than some parts of the world, we still find time to moan about those more trivial problems during everyday life.
• “Of course it’s frustrating that our earphones get tangled, or that some shops only sell cheap wine when you want to splash out a bit.
• “But when these moments occur, we should take a second and reflect on what aspects of our life aren’t so problematic”.

Meanwhile, we are also failing to acknowledge that it is the same system that brings us an unbalanced level of material wealth, which creates much of the poverty and exploitation for those living in poor countries. This is where we ought to put our focus. Having too much stuff to consume in our commercial culture is not psychologically healthy for anyone.

When we complain about how putting frozen water into our water makes it too cold, we should check ourselves. It’s important to feel gratitude and to not sweat the small stuff in our lives, to be happy with what we have and to appreciate when our basic needs are consistently met. Yet we should not do so at the expense of other people.

What we are actually doing when we exclaim ‘first world problems’ is projecting our white guilt onto people in the third world. Even defining first world problems as things “third worlders would probably roll their eyes at” is a projection. We are assuming this based on our own sense of guilt and Western ways of thinking. This is rather presumptuous because in actuality we have no idea how people residing in the third world would react to hearing our first world problems.

Finally, I feel we need to question the very ways we define what is poor and what is third world. We need to stop equating “first” with industrial output and consumption. We must realise that these labels don’t fit. There are many poor people in the industrialised, first world and there are wealthy, intelligent, wise, talented, and complex individuals living the third world.

A great quote by Lee Kuan Yew which rings reality to some of the alleged 1st World Challenges, he once said:

“What I fear is complacency. When things always become better, people tend to want more for less work.”