Is “The Right Thing To Do?” the right thing to do?

Posted on December 12, 2012 by David Tebbutt

Last December we embarked on this blog with little idea where the journey would take us. We just felt that a lot of people of good will were out there with good ideas about how to make our world better. All we had to do was find them. Or, better yet, for them to find us.

And, through a mix of word of mouth and downright cajoling, they delivered their thoughts, based on their life experiences, for us to share with a wider audience. And, for that, we are truly grateful to every one of them. Here they are:

As you probably know, this site is non-commercial. Everything is voluntary and the most anyone gets is the opportunity to see their words published and to give themselves a slight exposure to a wider audience. Some benefit from this more than others. No names, no pack drill.

I’d just like to say “Thank you” to every contributor and reader and wish you all seasonal greetings and a happy new year. We’re going to take a bit of a break now. I’ll leave you with a list of the contributions and perhaps you’ll enjoy reading some of those you missed.

Why things will get better - from a Matt Ridley TED talk
Entrepreneur Extraordinaire, Felix Dennis, on Good Fortune
Never mind GDP, what about Gross National Happiness? - from a Chip Conley TED talk
Reconnecting kids with the school curriculum - Ray Maguire
Has the Khan Academy found the right way to educate? - from a Salman Khan TED talk
Why green makes business sense - Ben Goldsmith
Is sustainable growth a myth? - Clive Longbottom
Rag and bone men of the information world - Euan Semple
The power of community Mark Chillingworth
Where’s the ‘social’ in ‘accountancy’? - Martin Banks
Mind the gap - Hussein Dickie
Inhumane HR behaviour - Tracey Poulton
Listen! (To the right people) - David Tebbutt on Cognitive Edge work
Get on the trust trajectory - Rob Wirszycz
Baby, bathwater, beware … - Anne Marie McEwan
Is green the new gold? - Tarquin Henderson
Hunters got us into this mess – will farmers get us out? - Dr. Bill Nichols
Fairtrade, Organic or Me-Me? - Andy Redfern
How sticky are your labels? - David Tebbutt
Reputation is deeds, not words - Tari Lang
Passion + talent = magic - From Sir Ken Robinson’s work
Authenticity vs perception - Dr. Bill Nichols
Could the fly save humanity? - Jason J. Drew
Ignorance and prejudice - Ibukun Adebayo
Superstorm Sandy: what would you have done? - David Tebbutt
Doing the right thing – even when no one is watching - Neil Crofts
Stubbornness – The Nailhouse Principle - Drew Buddie

So, what do you reckon? Is “The Right Thing To Do?” the right thing to do? Do you know anyone who would like to share their learnings from real life for the greater good?

Please point them at me trttd@tebbo.com. Thank you. (PS It could be you too!)

Superstorm Sandy: what would you have done?

Posted on October 31, 2012 by David Tebbutt

No-one knows the timescale but it’s highly likely the human race is doomed. It could be from the sun – doesn’t matter whether it gets hotter or colder, either way we’ll be snookered. It could be from our own actions – short term, like nuclear war or long term like our attacks on the environment that supports us. The question for all of us is whether we should act en masse and at great expense to head off the human-induced changes or take a more fatalistic view. What will be, will be.

This week’s massive storm in New York City has done a brilliant job of focusing attention on what can happen when an extreme weather event hits. And remember that, by the time it reached New York City, hurricane Sandy had diminished to a ‘tropical storm’. Yet, the surge of sea water was still fourteen feet high. No doubt this was partly due to the funnelling effect of the estuaries and rivers that lead to New York City. But the reasons don’t matter greatly, the City clearly could not cope with such a rise.

Environmental specialists had been warning New Yorkers for many years that sea levels are rising and that storm surges can exacerbate such rises. They warned of the sea level being four foot higher by mid-century and, indeed, measures have been taken by a few organisations to make sure that water ingress is prevented to their properties at that level.

This made not a blind bit of difference this week. And, by the time the sea levels rise, it will make even less difference. The mildest storm could result in something similar to this week’s events.

Let’s look at money. Dr Klaus Jacob predicted that the flooding of the subway tunnels under the Harlem and East Rivers would cause them to be unusable for nearly a month, or longer, at an economic loss of about $55bn. Compare this with the estimated cost of three storm barriers to protect the City – $10bn. The trouble is that the people bearing the cost of the latest storm are different people to those who need to spend the lower cost of prevention of future storms. (Except, of course, they are all citizens of the New York area.)

“What’s all this got to do with me?”, I hear you ask. Well, plenty. Just as the New York storm appeared to come ‘out of the blue’, so other climatic events could hit you out of the blue. The question for you is, “how much effort should go into preventing, adapting to or clearing up after such an event in your area?”

Do you do effectively nothing except talk about it a lot? Do you work on prevention which means reducing the harm we’re doing to the environment? Do you work on adaptation, which means accepting things will happen and creating evacuation plans and the like? Or do you work on clearing up the mess after each event?

What do you think is the right thing to do? And why?

Could the fly save humanity?

Posted on October 3, 2012 by Jason j. Drew

We take for granted the fact that we should recycle our glass, newspapers, tin and more recently plastic and water. Businesses and services have sprung up to enable us to achieve this. But this is only the tip of the iceberg. Creating and discarding nutrients in the form of sewage, manure and abattoir blood has a far higher environmental impact. When we start to recycle these we will be truly on the path to some sustainability for our planet. As the old Yorkshire saying goes – where there is muck there is money. Let me explain.

Nearly one third of the fish we take from our seas – some fifty million tonnes a year is used in our industrial agricultural and pet food industries. Yet at the same time we dispose of hundreds of millions of tonnes of nutrient-rich waste.

It is not just our human food waste – from supermarkets and food processing businesses – discarding unsightly but perfectly good apples and oranges or out of date but edible foods. It goes much further – it takes as much land, diesel, water and our precious seas to make the bits of a chicken that we eat as the bits we throw away. This waste is as full of valuable nutrients as the bits we eat. Our manure – both animal and human – is also a key source of valuable nutrients. Most animals only take in a small percentage of the nutrients that pass through them – in nature this is recycled.

An animal would drop its manure on the field or die in the bush and nature would recycle the waste nutrients using insects. A fly would lay its eggs on the waste nutrient source, the eggs would hatch into larvae and birds and fish would eat many of those larvae or flies – recycling the nutrients – as well as cleaning up the bio-hazard. It is a case of horses for courses or rather flies for waste. Each species of fly and its larvae are naturally adapted to different types of waste.

A few years ago, I realised that this natural process could form the heart of a new business. I decided to industrialise fly farming. We take waste nutrients from slaughterhouses – blood and guts – and feed this to the eggs laid by our fly breeding stock. These eggs hatch into larvae and grow at an enormous rate once you take away the environmental factors that stop this happening in nature.

One kilo of fly eggs turns into 380 Kilos of larvae in 72 hours. Larvae are what free range chickens in fields and fish in streams eat as part of their natural diet – ask any fisherman! This natural source of protein has been increasingly replaced in our industrial farming operations with the more readily available fishmeal. The chemical composition of fishmeal is almost exactly the same as that of fly larvae – which is why it was chosen as a substitute.

So we’ve copied nature and led the process of making protein from waste nutrients profitably, sustainably and on a large scale. We are already in production and we believe that we can produce Magmeal at scale for around $900 per tonne which compares favourably with fishmeal – which is currently around $1350 per tonne, and likely to rise unless the oceans can be better managed.

The world urgently needs new and sustainable sources of protein. Fly larvae fed on existing waste nutrient sources is one of these. Perhaps the adage is true – where there is muck there is money – and sustainability!

Hunters got us into this mess – will farmers get us out?

Posted on July 12, 2012 by Dr. Bill Nichols

It used to be boring. But five recessionary years have confirmed ‘retention’ as marketing fashion’s ‘new black’. It’s all that stuff everybody vaguely knew but most didn’t practice: loyalty, lifetime value, relationships. And, take note, it’s no fad. Just long overdue.

In traditional marketing, acquisition – making the next sale – is king. Understandably. It emphasises the next win, the thrill of the chase. It adopts the language of the ‘hunter’ (as top business developers are called in consultancy): you target the punter and you ‘knock him over’. It offers glamour and rich reward. And, in a final and most egregious flourish, it is the essence of the disaster that has engulfed banking. If you combine PhD-complex products, human ‘hunter’ instinct and cultures incentivised only to hit the next sale or deal, then why is anyone surprised by Barclays et al?

Poor old retention, meanwhile, is hard, continuous work. Long-term and longer yawn. Such ‘farming’ simply doesn’t have the same sex appeal as hunting. It won’t justify a bottle of Bolly! As an early boss summarised: “so long as we win more than we’re losing, who cares?”

Answer: well almost every business. For example, stemming a typical annual 25-33% churn means survival in tough times and will pump the bottom line in good. Leveraging the recommendation value of loyal client-advocates often underpins 50% of new business in a professional services or considered purchase environment. Focusing on your ‘share of wallet’ (say of a customer’s eating out preferences) may not only yield growth but also innovation for the long-term.

How does it work? Well don’t panic. This isn’t an ad for an expensive CRM software implementation. True, that might help when it comes to downstream execution. But first focus on how you create the retention asset: customer goodwill.
Think of customers’ ‘goodwill’ as a series of bank accounts. Keep them nicely in the black and you can ride out problems and build opportunities. Run them on ‘empty’, or into the red, and the smallest incident may mean you lose the customer.

Research finds six major ways to credit your customers’ goodwill accounts. As you might anticipate, people expect to be satisfied with service and utility. And many are committed to brands and relationships.

But evidence suggests that the most valuable is satisfaction based on pleasure. Your product ticks all boxes (utilitarian satisfaction) but do customers enjoy their experiences? Your waiter’s timing is impeccable but does he ever make customers smile? Your project reviews are perfectly organised and beautifully presented but does anyone have fun? And, note, this pleasure (or hedonic) satisfaction unerpins a very potent customer behaviour i.e. public advocacy or willingness to endorse your product in an article or on stage.

Next comes fairness (much loved of course by Brits). Please note this isn’t about some philosophical absolute. It is, rather, about perceptions. If a customer believes that you deal fairly in all aspects from pricing to after-sales service, it creates an unstated ‘my word is my bond’ relationship. Fairness is especially a strong defensive currency. It creates resistance to switching (‘yes, ABC is cheaper but I trust XYZ’) and it supports exclusive preference (‘I know we could easily walk to Beta or Gamma Restaurant but I’m at home at Alphas’). Note to any new potential entrants to UK banking: build even the most basic reputation for fairness and just watch the customers pour out of the old discredited high street players…

And finally: well it may be the ‘new black’ but your opportunity is that most people really don’t know how to wear it well. Retention isn’t about ‘targetting’ with a loyalty card or knocking them over with a special loyal-customer bonus. That’s hunter language…. Effective retention is about engaging, working together, creating mutual opportunities… It’s simply the right thing to do. Isn’t it?

Mind the gap

Posted on April 18, 2012 by Hussein Dickie

Large income disparities are very destabilising for any economy. In the UK this is a very real problem. This graph shows the Gini Index for the UK to 2009. (With kind permission of the Institute of Fiscal Studies which owns the copyright.)

A coefficient of 1 would mean one person receives all income, while 0 gives everyone an equal share. Among all developed countries the UK has the largest growth in income inequality. By contrast, Scandinavian countries, France and Germany have actually managed narrow ‘the gap’.

Most people were appalled by the excessive salaries and bonuses that bankers paid to themselves and found the practice immoral and bad business ethics. The government told us that it only concerned a few bankers and we should accept this to stay competitive in the global market.

Monetary Financial Institutions are of concern because they should fulfil key socio-economic functions, i.e. providing liquidity to consumers and small businesses. However they have become a self-serving industry more occupied with gambling and speculation for their own profit interests and quite disconnected from the needs of the rest of us.

But, let’s face it, if you could create money from nothing and 65% of your income came from interest, wouldn’t you want to create and lend as much as possible? This, combined with a compensation policy that encourages this behavior, is one of the major drivers for the widening of ‘the gap’.

In the five years 2004 to 2008 the money supply (M4) in the UK almost doubled in five years. £1.3 trillion was created by our MFI’s and lent, with interest, to consumers, businesses and the Government. The relevant part of the Gini index – below – shows that wealth at this time accumulated increasingly to the rich. ‘The gap’ widened.

The chart below divides the taxpaying population into 10 deciles, each containing roughly 3 million people; the poorest to the left and the richest to the right. As you can see, the richest ten percent got 37 percent of total compensation while the poorest ten percent actually lost 1.3 percent of theirs.

About 1.3 million people work in the banking industry (4.2 percent of total employees in the economy). Of them, 702,000 are represented in the top decile. In other words, 23 percent of the richest 10 percent are bankers.

The next chart compares the growth in banking compensation with the rest of the economy. Up to 2008, banks ran at 11 percent compared with 4.3 percent for the rest of the economy. After that the banks booked £30 billion in losses and remuneration dropped by 8%. But, as you can see (green line), it was only a short interlude, then remuneration continued at the rate they had become accustomed to.

Part of the banks’ 11 percent growth rate could be explained by the increasing number of employees but this would only explain about 2-2.5 percent. And it doesn’t explain why compensation grew again after 2009 when employment actually declined sharply and has still not reached the level of 2008.

The red caps in the next chart show the amount bankers received over and above the ‘rest of the economy’ growth rate of 4.3%. This amounts to an average £6.4 billion per year.

To set this into perspective; The poorest 3 million in this country receive only about £10 billion out of the total compensation pot, those little red caps would make a huge difference to their standard of living. Or, if the government received this extra cash, it could reduce the deficit by a massive four to five percent per year.

Yes, fiscal measures can help distribute wealth more fairly but, really, we need to redesign our banking system; one that stops private banks creating money from nothing, stops them taking risks on the back of taxpayers and compensates employees for the right reasons. Such systemic changes will stabilise our economy, end those boom and bust cycles that victimise mainly the poor, and liquidity will start flowing to where it actually produces something real.

Many lessons in history teach us that the path we are on at the moment will lead to revolt and socio-economic instability and, eventually, the collapse of society and depression. Could the recent riots be a portent?

Where’s the ‘social’ in ‘accountancy’?

Posted on April 4, 2012 by Martin Banks

At the root of what I would call ‘social accountancy’ is how money has become divorced from its reason for existence. It is now a ‘thing’ in its own right, seeming to be building a life of its own.

One reason for this is the way it is accounted for, particularly in terms of the short-term, bean-counting model currently called accountancy. A change in that model to one that included and accommodated what money achieved when being used, might be more beneficial.

This idea started years ago when people used to call Concorde a ‘White Elephant’. Yet I would argue it cost hardly anything because building it, then using it, kept thousands employed directly, who all paid tax, and then many others employed indirectly, who also paid tax. The money kept moving, and hundreds of thousands, if not millions, enjoyed a reasonable life… arguably not bad for a White Elephant.

And lessons were learned – not least being the huge technological spin-offs that have led to other businesses growing, where people are employed and….pay tax. An obvious example here is DARPA, the US Government’s Defense Advanced Research Projects Agency whose work led directly to the development of the internet. And look how many new businesses have sprung from that.

A more topical example is the planned Government investment of £9.8m in Nissan’s much lauded new car venture, which is expected to yield ’2,000 new jobs’. If we were to assume a collective average wage of £26,000 and a 20% income tax take, that equals £10,400,000 a year in income tax: a complete Return on Investment in less than one year. Many businesses would kill for that.

Going back to Concorde: From the signing of the contract the two governments invested heavily as staff were employed and contractors signed up. The staff were paid, and in those days income tax rates were higher than today. So let’s say some 30% (on average) of that salary bill came straight back to the Government in income tax. In practice it was probably more.

But now extend the idea. One example: any education the new staff needed required not just trainers but an organisation to support them. The trainers, the support staff and even the builders paid income tax. Add the shopkeepers, energy suppliers, transport providers (even if that is just shoe leather), farmers and food processors, and a panoply of others – all making a living, all paying income tax.

One person’s disposable income became the next person’s salary and a source of income tax.

Yet modern accountancy models oblige businesses to, for example, close down here and move off-shore because the manufacturing costs – to just that business – are lower. In fact the money system (such as the stock market) even ‘praises’ them for doing so.

But neither the company nor the stock market has to account for the people put out of work – no longer paying tax, and requiring support from the benefits system. That is a model where money wins for its own sake – not for the sake of the people whom it once served.

And such actions also give other countries an income tax bonanza which maybe the UK should be getting.

The by-products in terms of wider economic growth, more contented and fulfilled people and intangibles such as reduced load on law and order services, the health service and a wide range of other services cannot be fathomed because we have no process that can account for them as part of the ‘whole’.

Is our present trajectory completely mad? What do you think?

Why green makes business sense

Posted on February 9, 2012 by Ben Goldsmith

Our energy sector, unlike almost every other aspect of life, has barely changed in the past hundred years. Across that same time span, our talent for wasting energy, water and raw materials has reached monumental proportions. I’m sure you know of buildings that run air conditioning and heating units at the same time. And I don’t even need to remind you of our mountains of potentially valuable waste.

Climate change has been eclipsed in the public mind by our recent financial woes but these things are connected. How many trillions of dollars are moved from democrats to despots in exchange for fossil fuels?

Depressed? Don’t be. While politicians dither, businesses and other private organisations don’t. After some experimentation with ‘greenwash’, often led by the well-meaning Corporate Social Responsibility department, green has moved to the boardroom. Companies have woken up to the fact that a more efficient use of resources and a reduction of waste saves them money and prepares them for future regulatory demands and inevitable increases in commodity prices.

Look at DuPont. Its energy efficiency efforts delivered a net saving on its energy spend of more than $3 bn in ten years. And Walmart is a company that always does things for sound financial reasons. Its stated environmental aims are: to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment. (Taken from its ‘sustainability’ web page http://walmartstores.com/Sustainability/.)

I believe that the next wave of business successes will comprise green technology entrepreneurs, green service providers, renewable energy developers and project financiers. I also think that the smart people are quietly getting on with their ‘green’ projects, thus placing themselves well ahead of the game when we emerge from the present turmoil.

Never mind GDP, what about Gross National Happiness?

Posted on January 19, 2012 by David Tebbutt

A long time ago in the tiny kingdom of Bhutan, the king had the bright idea of trying to measure success by assessing national happiness. It didn’t totally invalidate GDP, but it did rather put it in its place.

Since then countries and businesses have adopted variations on Bhutan’s approach, broadly detailed in this document. No-one’s suggesting that this is a perfect model for the rest of the world – the fact it divides ‘Time use’ into Work and Sleep would be alien to most Westerners – “What about Leisure?”, I hear you cry.

Nevertheless, the idea seems to be a good one. That there’s more to life than GDP for a country, or turnover and profit for a business. In fact, if you take the long view, a happier workforce can deliver more shareholder value.

Chip Conley, a San Francisco hotelier, was inspired by the Bhutanese, by Abraham Maslow (he of the pyramid of needs fame) and by Vivian, one of his employees, to change the key metrics of his business. As he forcefully reminds us in the video, Robert Kennedy once said, “GNP measures everything, in short, except that which makes life worthwhile.”

Conley argues the need for leaders who know what to count.

Here’s his TED presentation on YouTube, a good way to spend the next 17 minutes of your life. Tell us if you disagree.

Hat tip to reader Frank O’Mahony for recommending this video. Cheers Frank.

Entrepreneur Extraordinaire, Felix Dennis, on Good Fortune

Posted on January 12, 2012 by David Tebbutt

Felix Dennis is an extraordinary man. He packs more into the average year than most of us manage in a lifetime. He’s a successful publisher, an author, an accomplished poet, a performer, a farmer and the creator of a new ‘Heart of England’ forest, currently 1,874 acres and growing, both up and out.

Picture credit: Bob Briant

Felix has kindly allowed us to republish his poem on business which first appeared in his ‘A Glass Half Full‘ book of poems (2002) and then again in ‘How to Get Rich‘ (2006). They were published by Hutchinson and Ebury Press, respectively.

How To Get Rich

Good fortune? The fact is
The more that you practise,
The harder you sweat,
The luckier you get.

Ideas? We’ve had ’em
Since Eve deceived Adam,
But take it from me
Execution’s the key.

The money? Just pester
A likely investor.
To get what you need
You toady to greed.

The talent? Go sign it!
But first, wine and dine it.
It’s tedious work
With a talented jerk.

Good timing? To win it
You gotta be in it.
Just never be late
To quit or cut bait.

Expansion? It’s vanity!
Profit is sanity.
Overhead begs
To walk on two legs.

The first step? Just do it
And bluff your way through it.
Remember to duck!
God speed…

and good luck!

You can learn more about Felix and his activities at felixdennis.com

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