Our latest survey followed up a recent blog entitled, ‘Behavioural Science: Who Decides What We Buy’ which looked at the complex marketing choices facing businesses looking at the best ways to market their products and innovations. The survey continued with the central theme of the blog…is it now completely acceptable for companies to use sophisticated targeted marketing to manipulate consumer behaviour rather than to reflect consumer demand?
As usual, the responses from our panel were insightful and revealing. We asked six questions to discover their attitudes toward targeted advertising and marketing.
Survey respondents were very clear when asked for views on the first statement: New products require significant time and investment, therefore, it is ‘fair game’ for companies to undertake targeted marketing in order to sell to consumers.
Seventy-four per cent agreed with this statement with only 7.4% disagreeing. A result which supports the notion that target marketing, especially in the digital age, is now widely accepted as an important aspect of commerce. One survey panel member said: “Generating sales and profits is vital for a company to make future investment in product innovations.”
The respondents were asked to answer as consumers for the next question: When products have been targeted at you specifically, for example, through traditional direct mail and/or social media, typically what has been your reaction?
The question split the panel down the middle with 37% feeling happy to have been introduced to a new product/innovation while 33% took a different viewpoint, expressing concern that their preferences have been so closely monitored in order to sell to them. Eleven per cent were baffled as to why they had been selected to receive information about a product; perhaps a reflection that not all targeted marketing is as precise as it could be. “I’m happy when the product or service is genuinely useful. Grumpy when way off, for example, free eye checks for the over sixty-fives, when I’m in my fifties,” said one respondent.
Customer satisfaction after purchasing through targeted advertising was tackled: How do you feel after you have been persuaded through advertising to buy a product you had not been considering before you saw the ad?
Overwhelming, the panel (59%) said they were happy to have bought something that they really needed. Seven per cent felt the opposite, a further 7% were regretful for making an impulse purchase while the remaining 7% said they were happy to have been adventurous in making the purchase. In conclusion, most of the panel (66%) expressed positive feelings about being introduced to products via online marketing.
The panel was also asked about the overall effect of marketing: Is the claim that marketing significantly influences consumer spending habits exaggerated?
Fifty-six per cent think that the claim is not exaggerated and that consumers are easily tempted into buying. Thirty-seven per cent disagreed saying that buying decisions are complex, dependent on many factors, not just clever marketing.
Another respondent commented, “Marketing has significant influence and it is overly simplistic to cast consumers as dummies but we’re all busy and have limited headspace for decision-making.”
Although targeted marketing is now a key factor in selling products, it can also be considered intrusive. The panel was asked: Can persistent targeted marketing (eg frequent ads being shown on social media) put consumers off brands/products?
Fifty-six per cent of the panel said yes, and that today’s consumers are adept at researching and buying what they want without the need for hard-sell tactics. Only 15% disagreed stating that people ignore what they are not interested in and buy what they really want.
Finally, the panel was asked: Does sophisticated research and marketing stimulate innovation?
Forty-one per cent agreed that it does with only 7% disagreeing. A large percentage (30%) did not know. Perhaps an indication that this subject has not been widely researched yet. Considering this question, a respondent said, “Sophisticated research and marketing can often create products and services that consumers have never dreamed of.”
In conclusion, the consensus from our survey panel was that targeted marketing is here to stay and is a very valuable tool for all types of companies. It’s fair to say that businesses love it as it affords quick and easy access to potential buyers. As consumers, however, our panel was understandably wary about marketing that isn’t targeted well enough and the possibility of being bombarded with repetitive and often irrelevant advertising. This is when consumers begin to loathe the feeling of manipulation through advertising.
However, when marketing departments take the time to hit the right targets our panel agreed that most people would be happy to be introduced to and to buy something that they really need.
The experience, network and friends I have gained through the Engineers in Business Fellowship have had an enormous impact on my career and personal development since I graduated from INSEAD in 2001, supported by a Sainsbury Management Fellows scholarship. But perhaps the most valuable aspect of this continuing relationship for me has been the opportunity to work with the Royal Academy of Engineering’s Engineering Leadership Scholarship (ELS) scheme.
Over the past 17 years, I have worked alongside other SMFs, Academy fellows and ELS alumni to help select new ELS awardees from each year’s engineering undergraduate applicants, and to help train and mentor each new cohort. These are some of the world’s brightest young engineers, intent on using engineering skills to tackle society’s toughest problems, and looking for support for their personal development plans that will see many of them become future engineering leaders.
I hope sharing some of my experience of the ELS scheme will tempt you to get in touch to find out how you can help the Royal Academy of Engineering develop this next generation.
About the Engineering Leadership Scholarship scheme
The ELS programme is an annual award scheme for undergraduates in engineering and related disciplines who have the potential to become engineering leaders, and in turn to act as role models for future engineers. All successful applicants receive £5,000 to be used over three years towards personal development activities. Award recipients also receive training and mentoring to help them fulfil their potential to move into engineering leadership positions in industry soon after graduation.
The trigger for me getting involved in the ELS programme came at an SMF Annual Dinner 17 years ago, from a chance conversation with Dr Peter Revell, then Undergraduate Programme Manager at the Royal Academy of Engineering. I discovered that the relationship between Sainsbury Management Fellowship and the Royal Academy of Engineering was broad and synergistic, with reciprocal involvement across the selection, training and mentoring activities of each organisation.
Not only was my interest piqued, I also felt that getting involved in the ELS programme could allowed me to start ‘paying forwards’ the generosity of the SMF scheme from which my own career and personal development has benefitted.
Helping on selection day
My involvement in the ELS scheme has grown over the years, and began with supporting the interview and selection event. Held in March each year, this annual event brings together selected engineering undergraduates from top-ranked higher education institutions all over the country to take part in an intense, fun-packed day of group exercises and networking, with individual interviews taking place in between these activities.
Although not a formal part of the selection process, the group exercises help candidates to relax and socialise, and conversations during breaks and lunch with other applicants, ELS alumni, SMFs and RAE fellows provide a flavour of the energy, diversity, and common purpose of this high calibre engineering community. At interview, candidates get to share their perspective on the role of engineering in society, their background, ambitions and career plans, as they try to secure one of the £5,000 scholarships awarded each year.
I first began my involvement with the interview and selection process gently, initially sitting alongside a Royal Academy of Engineering fellow who would lead the interview. More recently I have led interviews alongside other SMFs and ELS alumni who are now also involved in the selection process. Around seventy interviews take place throughout the day, typically with 10 interview panels assessing seven candidates in a series of half-hour interviews. The supporting interviewer sits with one lead interviewer in the morning and another in the afternoon, which helps provide another perspective and ensure consistency across each of the interview panels. After the interviews are complete, the selection process concludes with a structured review of candidate interview performance against the ELS award’s selection criteria, in which all interviewers share their findings. Supporting interviewers can summarise their assessment of a candidate’s strengths and weaknesses, often providing an important second opinion that helps balance or qualify the assessment of the person leading the interview.
The ELS training weekend – Saturday all day & Sunday Half Day: October 5 & 6 2019
I also take part in the annual ELS training event held at Aston University each year. These weekend events are in theory more relaxed than the selection days, though are larger events since all three current cohorts attend, and in practice share much of the same atmosphere, energy and pace. For the new awardees it’s an opportunity to meet others in their group, compare personal development plans, and learn about the impact of the award for several ELS alumni who have begun their engineering careers.
Participants arrive on Friday evening or Saturday morning, with the most recent cohort arriving first for a formal welcome and scene-setting talk. The weekend’s schedule is punctuated throughout with coffee and lunch breaks where all three cohorts mingle and meet with their fellow award holders, and with SMFs and RAE fellows.
Saturday kicks off with a series of break-out sessions with each cohort having its own tailored programme of group-based interactive activities covering a range of topics from personal development planning, communication, team working, negotiation, marketing, and MBA-style business games and role-playing activities. SMFs play a key role in preparing, running and supporting these exercises.
Before breaking for dinner, two to three recent graduates of the scheme give short presentations to the whole group about their current roles, and how they have used their financial award. Aside from the enthusiasm, confidence and charisma of the speakers, what is most striking in these alumni presentations is the breadth and quality of experience that the ELS scholarship has enabled – whether on a summer spent developing an energy access project in Africa, a study tour to visit high tech manufacturing businesses in China or an internship with a startup in Silicon Valley. This forum helps current award holders recalibrate their own personal development plans, and go on to test their ideas with other award holders who may be a year or two ahead of them, either through face to face discussion during the weekend or subsequently via LinkedIn and email contacts shared at the event.
Sunday morning sees each cohort group back at ‘work’ in another set of interactive group sessions followed by a career planning Q&A session with ELS alumni and SMFs before heading off shortly after lunch.
The level of volunteer time commitment required for the ELS scheme is entirely flexible. I started by supporting interview panels and then extended my involvement by supporting, and then delivering activities within the training weekend. I have mentored a number of ELS awardees and through my company Libertine FPE we have on one occasion provided an internship.
Although there is certainly value in having individual SMFs support any one aspect of the ELS scheme, I’ve found that participation in both the selection and training events has some synergistic benefit, with the training weekend highlighting the impact of scheme and the calibre of current and past award holders, and the selection event providing a first introduction to future award holders.
So, what do I perceive to be the benefits of the ELS scheme, and getting involved? The media often highlights the UK’s skills gap, but the ELS programme demonstrates that UK universities are producing some very high calibre graduates. Apart from the opportunity to share my MBA and career experience with ELS award holders (possibly future SMF scheme applicants – many ask about the right time to study for an MBA) – mixing with the brightest talent also brings new insights about my own career and engineering business.
It’s also helped me to understand the processes and influences through which undergraduates decide on their engineering path, their career aspirations, what impact they want to have on society and their decisions about taking a job with a blue-chip engineering firm or a start-up business.
Taking part in the ELS training weekend also provides time for reflection. I am very conscious that in my choice of career at Libertine, I have deliberately chosen to focus on building a company that could help address the global challenges of our generation at the intersection of population growth, resource consumption, energy and climate change.
It’s a finely balanced one because the world is facing unprecedented and urgent climate and resource crises that loom larger each day. Pessimistic media headlines can add to the impression that politics will be too slow to react, that national action will be too limited to be effective and that the challenge is likely to be insurmountable. The Royal Academy of Engineering ELS events are the perfect antidote to this sort of fatalism. Mixing with 300 or so of these stellar new engineers, all energised by the idea of bringing engineering solutions to bear these big challenges, and realising that this is not unique, that all over the world millions of scientists and engineers are graduating each year to join the fray, I get a renewed sense of shared purpose and technology optimism.
How you can help
James Raby has played an important role in supporting ELS selection process and delivering several of the group sessions in the ELS training events over many years. James has also helped build awareness of the ELS scheme and the essential supporting role of SMFs. His tragic death last year leaves a gap that must be filled.
My hope is that a handful of SMF volunteers can get involved in the Engineering Leadership Scholarship programme, helping the RAE to develop the next generation of engineering leaders. The most urgent priority is to provide continuity of SMF support to help define and deliver the October 2019 training weekend, and ensure that this is a success.
In future, I hope that SMFs will continue to play an important role in the ongoing development and delivery of the ELA scheme. It has been a great experience for me. If you would like to know more and join a meeting with the RAE in August to help plan the October 2019 training weekend, please email email@example.com.
The sharing economy is an idea that is very much present in the zeitgeist, but many of us don’t really have a comprehensive understanding of exactly what it is and where it came from. Whatever your level of understanding, the sharing economy is going nowhere, so taking a little look at it and its potential triumphs and pitfalls can’t hurt.
What Is the Sharing Economy?
The acceleration of digital technology kicked off by the birth of the internet’s universal accessibility has birthed many a new concept. The growth of the sharing economy is one of those concepts. Sometimes referred to as collaborative economy, this economic model is defined by the sharing of personal assets and services between individuals using the internet. It allows people to share their own resources, whether material or skills-based, either in kind or in exchange for money or incentives.
The assets that you offer can be anything from your time to your car or even your home; for use by another person for a limited time period. A famous example of a platform that depends on this model is Airbnb, the site/service that allows you to rent your home/property for temporary use. This economic model spans many sectors including technology, communication, lodging, agriculture, labour and finance. It is hugely popular for several reasons, one of the utmost being its flexibility. The exchange of services can be agreed upon under any terms; one may ask for financial payment in return, but social and environmental based exchanges are also popular.
The sharing economy is essentially the closest thing we now have to the old tradition of bartering. There is a lot of confusion about what exchanges this economy refers to, as there are a lot of new economic models out there with which to get it confused. Here is a quick summary on just some of the economic models that the shared economy is not…
Gig Economy. Single projects or jobs for which a worker is employed. There is no skill or asset sharing here, it is a worker being employed in exchange for money in order to carry out a specific job.
Freelance Economy. Similar to the gig economy, except that jobs or projects tend to be more involved, in-depth and longer in length (sometimes lasting months or even years).
Peer Economy. Or P2P for short. This is where two individuals directly interact to buy or sell goods and services.
Crowd Economy. This refers to money making models such as crowdfunding or crowdsourcing; this generally results in an online community of people who participate with each other through a platform in order to achieve a single goal.
Now let’s look at some of the arguments for and against the sharing economy…
PRO: Recycle, Reuse, Repurpose
It is a great way to avoid waste. If you have an item or resource that you are not using quite as much as you used to, this model offers a great way for you to loan their use to others. You can not only make money out of something that you are not currently using, but you can also offer another person access to what they need for a reasonable, non-commercial price. Most importantly though, it prevents possessions and assets from going to waste.
CON: Scam Threats
One of the issues with this system is that buyers are more open to fraud and trickery, as there is no real protection against this kind of situation occurring. All you have to go on, with regards to the person you are dealing with, is their promise and the apparent character they present. Protection against this is slowly getting better, but the speed at which technology advances can make this kind of issue hard to regulate.
In a world where getting a job is increasingly difficult, many doors seem to be closed, and innovation appears to be very expensive, this economy gifts pretty much anyone with the opportunity to turn a dime, or simply be more productive. It means that individuals can set their own terms, their own hours and have the flexibility to make their lives work for them. It invites communication between individuals, which creates community, diversity, interesting ideas and ultimately brings people together. The presence of this economy offers liberation for those who are prepared to get into it.
CON: Lack of Benefits and Lost Revenue
Individuals who earn their full living in this economy do not have access to the benefits that those working for a company do. The benefits might include sick leave, pension schemes, maternity/paternity leave and bonuses. It can also impact on the success of other businesses. A famous example of this is the impact that Uber has had on the traditional taxi hailing services.
Unemployment is always an issue, but this economy goes some way to making a positive dent. Not only are there more jobs available because of the rise of companies such as eBay and Amazon (in many cases, these are jobs that can be performed from home), but the sharing economy offers a platform from which to advertise on a global scale. If you make ornaments, for example, you can access an entire global market, which is a huge change from the artisan and small business landscape of only a decade ago.
As the laws around claiming financial gain from online platforms are not that tight yet, governments report a loss in tax revenue. Just like any economic model, there are arguments as to its success, fairness and validity on both sides. But one thing is for sure, like it or not, the sharing economy is here to stay! Where do you stand?
Who decides what we buy? It’s a chicken and egg debate.
Innovation, improvement and creation of products and services are produced, on the face of it, for the benefit of the consumer. We assume that, in general, these products and services are created to cater to a supply and demand situation, or to solve a problem. However, one of the biggest influences on what is put on the market is based on the findings of various strands of behavioural science. Although this approach was initially designed to find out what demographic groups want, the competitive nature of so many markets has many people wondering if this technique is now commonly being used to manipulate consumer behaviour rather than reflecting consumer demand.
So, you see, chicken and egg; do the products and companies serve the consumer, or do the consumers serve the products and companies? Marketing, business, consumer demand, profit, trend-setting… there are many issues and phrases banded around with this issue. The fact is, within business profit is the main goal. As we have seen, many huge businesses, household names such as Woolworths, HMV and the House of Fraser, have fallen foul to the highly competitive consumer market. It could be argued that sometimes customer manipulation is what is required for a business to stay afloat; sometimes consumer satisfaction is not the top priority. Is this acceptable? Let’s delve into the pros and cons of behavioural science a little to help towards a conclusion.
What is behavioural science?
The term ‘behavioural science’ is very broad. It takes ideas, theories and techniques from several fields including, among others, social neuroscience, cognitive science and psychology. These are combined under the umbrella of behavioural science in order to understand the behavioural patterns, buying habits and social dynamics of individuals and larger groups. The results of these studies help to form an understanding of the needs and wants of consumers, and how best to react and ultimately capitalise on them.
How can data gathering be used?
Gathering behavioural data is easy these days. Back in the fifties and sixties, when companies began to gather consumer data in earnest in order to predict where markets were going, their techniques were far more rudimentary. Sales figures, questionnaires, customer feedback… these were the kind of techniques being used. Back then most companies were doing their best to react to the market requirements, what people really needed. However, through the years, as data collection has become more sophisticated, and more intricate consumer patterns have been uncovered, it is not too much of a stretch to steer the market in a direction that benefits the company.
Now, with AI, Google analytics and such, the detection of buying patterns is extremely sophisticated. The data collected includes everything from what people buy, what they look at, how long they spend looking at it, what colours peak their interests, what words they most commonly search for, what sells the best at what time of year and in what location; there is really no behaviour that cannot be detected and tracked.
So, you see, data gathering can be used however a company sees fit. They can either react to your needs and problems, or they can place whatever they have to sell in exactly the right setting in order to look after themselves first. So, the answer to the question ‘how can data gathering be used?’ is, essentially, however you like. The result is down to the ethos, morality and ethics of the business in question.
Targeted marketing; breaking down the market into segments (generally demographically determined) and concentrating marketing at the segments that are most likely to gain the company the best results. That makes sense, right? Companies and influencers go where an easy sell is most likely, of course, they do. If, for example, you sell sportswear, you might want to advertise outside a gym or leisure centre. If you sell kitchen appliances, you might want to buy advertising slots around TV cooking programmes. And now companies are employing highly sophisticated and personalised tracking of consumer likes and buying patterns on social media and online shopping and appealing to them individually. However, this kind of specifically targeted marketing, although present in virtually every industry, walks a fine line between serving the customer and serving the company. In an ideal world, it should do both. But at what point is a company pushing its product onto a demographic that doesn’t need what they are selling, but is determined that they should get on board with it anyway?
Is it healthy to target specific demographics? Considering that advertising must behave differently for each target market in order to get the results it requires, does this perhaps fuel societal and cultural divides?
Innovation vs manipulation
It is tough to innovate. Innovation requires skill, imagination and experience, on a personal skill level. These are tricky enough to find as it is. However, the biggest challenge is time and money. Most of us would like to think of ourselves as innovative; creating solutions to current and potential problems, pushing boundaries and, in a broad sense, making the world a better place to live. That said, this is a much more expensive and resource heavy endeavour than simply flogging something that you know will work, because of behavioural science and its results, for an easy sale. In many cases, to create the opportunity to innovate, capital must be gained by betting on a safe product or service. In this case, it could be said that a little consumer manipulation is the price that must be paid for truly innovative developments and discoveries.
In this fast-changing world of information and technology, the grey areas are numerous. Often, we don’t have time to sit and reflect on our ethos or aims, or on how fair we are being to everyone, due to a fear of missing the boat, a customer, a trend, or a technological advance. But take a few minutes now… who decides what you buy? And indeed, if you are the seller in this situation, are you an innovator, a manipulator, or a bit of both?
company is only as good as the people in it but how, in an ever-changing and
developing recruitment environment, do you get the most talented and most
fitting candidates to walk through your door?
companies have become frustrated by an apparent ‘lack of talent’. The truth is that there is an abundance of
aptitude and flair in virtually every sector. What many forget is that the company-employee
relationship is two-way and that, as an organisation, you must be as attractive
to applicants as they need to be to your business.
you are struggling to hire your dream team, then settle in and peruse our tips,
to see if there are areas in your recruitment strategy that could do with a
tweak or a rethink.
of the most difficult things to do in business is to put yourself in the shoes
of others. You may be racking your brain as to why you are not attracting
applicants. Profile and reputation are more important than ever, as many elements
of your business are visible, your reputation and history are easily accessible
to potential employees. Social media and
the culture of branding across all aspects of life mean that the ‘online
shopfront’ of your business must be on point. So, how do you look from the
outside? What does your company look like to those who don’t already work
kind of applicant are you hoping to attract? What demographic? What experience?
What attributes and values? Now you must
think about whether your brand appeals to the target recruits. How visible is your brand in the marketplace?
Does the business look like a big enough player in your industry; is the
business innovative/cutting edge or have an ethical stance – or whatever values
your target employees expect?
What Do New
crave fresh, energetic, relevant and hungry graduates. Hiring these vibrant,
ambitious new professionals give companies real energy and new perspectives on
problem-solving. However, graduates are not only looking for good salaries. In fact, studies show somewhat of a decrease
in this being the most important factor when seeking long-term employment. When
you are scouting for young talent, consider the following:
Progression Opportunities: More than half of graduates now state that the potential for career progression is the number one thing they look for in a job. So, your offer should include a clear structure for progression and professional development opportunities.
Culture: A positive and exciting work environment is now an essential ingredient for a desirable job. In 2017, over 60% of workers under 30 said that they would trade a higher salary for a positive social and professional climate around their job. Is your company doing enough towards employee happiness and wellbeing? Not only is this more attractive to applicants, but high workplace wellbeing has been linked to optimum productivity.
Flexibility: How flexible is your working structure? Many millennials have been known to favour less money for good flexibility. With it now being so easy to work remotely, people are also looking for the option to operate from home for some of the time. Can you implement this in your workforce?
is perhaps the biggest problem facing companies looking for the best recruits;
how do you get the message out there? How do you reach the people you want on
your team and how do you extract the best from your applicants? Well, there are
some traditional recruitment methods that have become forgotten in recent
years, yet still work extremely well. There is also a torrent of new ways to get the
freshest talent to knock on your door.
Newspaper Advertisements: Now, it could certainly be argued that this is outdated. However, research around the world suggests that this is still a very successful way to reach candidates. For many, the job pages in the papers (both online and paper publication) are the ‘go-to’ starting point for job searches. So, don’t turn your nose up at this method just yet.
Temp Agencies:This is a sound way to get ‘no-strings-attached’ potential staff through the door. Temp agencies are often teeming with skilled fresh graduates just making a living whilst they wait for the right job to come along. By getting a temp in, you have no obligation to ask them back if they aren’t up to scratch. If, on the other hand, they are wonderful then you, and they, might feel that a perfect match has been found!
Internal Hiring: Never overlook the brilliant people who already work in your organisation. Not only is internal hiring/promotion the simplest way to fill roles (as they already know, and are part of, the infrastructure of the workplace), but it is also the safest way to hire; no risks taken on sub-par skills or questionable personalities.
Social Media:Yes, it does seem obvious. And yes, social media does have a somewhat controversial reputation, but you would be remiss not to use it to your advantage. We are all glued to our devices, there’s no getting away from it, so social media recruitment posts and advertising will broaden your pool of applicants. Another bonus of this method is that, in the grand scheme of job advertising, using social media channels is relatively low cost.
ATS (Applicant Tracking Systems): These systems are becoming increasingly popular with businesses of all sizes. ATS essentially deals with all your recruitment needs, cutting down on administrative load, and creates a database of talent that not only corresponds to your current needs, but also keeps candidates on file for future opportunities. There is an ATS to fit any business, check out some of the best software options here.
Open Ended Job Advertisements: This is an interesting development. The standard job description is changing in nature. It has become not uncommon to leave off job titles and parts of job specifications. The idea is that a more diverse range of professionals will apply for the posts, basing their application more on the content of the prospective job as opposed to the title.
Updated Interview Techniques and Job Auditions:‘Where do you see yourself in five years?’ is an interview question that is soon to be left in the past. Interview techniques are changing; there are a number of ways to get a better read on your candidate with a few tweaks in your technique, check out a few here. We are also seeing a rise in the ‘job audition’; getting candidates to spend a few hours in the job for which they are applying to see if they really do match up to their CV. This is a much more practical and telling way of assessing a potential addition to your team.
So, there we have it. How many of these tips and techniques will you be trying out for your business? The addition of just a handful of these ideas will help you to populate your business with a talented and driven workforce that is just as positive about working for you as you are to have them on your team.
New ideas are thrilling. So many of us are great at starting things; the genesis of an idea, the moment the lightning strikes, that flash of inspiration is pure joy. Taking your first steps into a start-up business are some of the most exciting steps. You are moving at break-neck speed to set up your platform for success.
But, as with all the greatest success stories, eventually, a wall is hit. Nothing worth having ever comes easy, and when it comes to start-up businesses, that struggle often comes in the form of early stagnation. The vision is in your head, the picture of the palace you are going to build is set firmly in your mind’s eye; now you have to go through the potential mundanity of building it brick by brick.
The unfortunate fact is, the majority of new businesses fail within their first year of trading. These failed start-ups are usually victims of common mistakes and misconceptions. Here we have some tips on how to ensure that your early-stage company becomes the success it deserves to be.
Track Your Metrics
On the face of it, this seems like an obvious thing to mention. However, new businesses, especially when low on cashflow, tend to focus mainly on profits and revenue. These are hugely important of course, but there are other data that you should be paying close attention to in order to get a rounded view of performance. Keeping an eye on the following will also ensure that you catch potential pitfalls before they happen…
Customer Acquisition Cost: How much does each new customer cost you? This can be easily assessed by dividing your total marketing and sales costs by the number of customers you have had within a specified time period. How do those figures look against your projections and business plan?
Customer Retention: Retained customers are vital for reputation and cashflow. How good are you at retaining business? Is there anything you could be doing to improve customer experience?
Return on Advertising Spending: Is the revenue you gain as a direct result of advertising sufficient for your investment? Advertising is not cheap and is always a gamble. Divide total sales by advertising spend in order to see what kind of return this investment generates.
Profit Margin: Profit is everything in the end. You must keep a very close eye on the bottom line.
Traction and Momentum
Getting things moving is widely regarded as one of the hardest things to do; getting noticed, getting talked about and getting a great reputation out there. It is a grind, but you have to keep the faith; keep pushing forward. You might have to take it one customer at a time, but, as Mother Teresa once said, “the ocean is made up of drops.” Keep pedalling and the breakthrough will come.
Momentum and passion are tough things to keep hold of on your own. Make sure you have other people around you who are happy for you to bounce ideas off them, and who will inspire fresh ideas and enthusiasm. When you are grafting away on your own, it is vital to have input from people who understand the difficulties of the process.
As your business develops, so will your workload. You need to recognise when this workload is too much for you on your own. There is no use in running yourself into the ground before your venture has even left it! To avoid this, take a look at the workings of your business and break them down into separate roles. This could be delegated to interns, or even employees if you are in a position to afford them.
Invest Effort in Talent
When a fresh venture is your baby it is really hard to take parts of it out of your hands and into the hands of others. But this transition must be made in good time. It is essential to invest real time and planning into hiring the right people. Do not wait until it is too late and get into a situation where you have to hire fast; this way you will most likely end up with employees that are the wrong fit for your company. Make hiring the right talent a priority well ahead of when they are required so that you can put the focus, but not stress, into the task.
Under Promise and Over Deliver
This is a good rule of business in general. This rule not only helps you to gain a great reputation but also takes a little pressure off. An example of this is always promising a later completion date on some work than you intend to deliver so that when you do deliver, earlier than quoted, the customer is happy. This also buys you time if the demands of a start-up slow down a project or task for some reason.
Don’t work in secret. Many new companies fail because they are too timid, self-deprecating or fear apparent over-confidence in their product or service. With social media being in its heyday, self-promotion is easier than ever, go for it! Also, if you are planning a publicity event or advertising campaign, don’t be afraid to ask for things. Perhaps you can get a free venue for your launch if you promise to promote the venue. The worst thing they can say is ‘no’!
The bottom line is ‘make some noise’. You might have invented the greatest thing known to man, but all you will hear is crickets if the only living thing that knows about it is your cat!
Don’t Overwork Yourself
This is so easy to do. You have to relax a little; tension has never benefitted anyone or anything. We are told from a young age that the harder you work, the bigger and better the results. This just isn’t the case. It is an attitude that will grind away at you over time, extinguishing the flame that once was your initial idea. Many studies over the past decade have proven that sleep, rest and a healthy work/life balance are essential to wellbeing and success. Take breaks, delegate, keep to sensible working hours, eat properly and keep fit.
In conclusion, perhaps the most important thing to do to keep your business on track is to look after yourself first. Keep that positive vision in your head by keeping yourself healthy, happy and inspired.
Starting a new MBA course can be a daunting prospect. Most courses appreciate this and begin with an orientation week so that students can find their feet and prepare to get the most out of their course. Writing for the Financial Times, former MBA student Mehul Ruparelia recalls her first week:
“After the first weekend, we had orientation week, also popularly known as disorientation week. This was a week organised and run by alumni from the outgoing class, full of parties, team-building activities, organised sports, treasure hunts, presentations and more parties. The aim of orientation week was to let people get to know each other and to become more familiar with the campus and the surroundings. Orientation week culminated in a talent night where groups got to showcase their collective and individual talents in front of other students, faculty and alumni.”
Evaluation and preparation
Your first week of an MBA course is your chance to evaluate what your strengths and weaknesses are, and what you hope to achieve through study. The course itself, regardless of which institution you attend, is often described as a ‘sprint’, requiring an enormous amount of work. This first week is a chance to really reflect on what you need to improve in order to succeed.
You cannot achieve a goal without knowing what it is. That means your first week should also include time spent identifying what your life goals are, and what you require in order to reach them. Where should the focus of your study be? Who do you need to meet in order to learn what you need to know? These are the questions you need to be asking yourself because it will be difficult to take a step back and be objective once the course really gets up and running.
Meeting and networking
In the first week of your MBA, you are likely to meet many of the students you will be learning alongside, most of whom come from varied backgrounds and have different levels of experience. Many MBA students find that their fellow classmates are almost as interesting and useful as the course itself, so it is important to use the first week to try and get to know them. Think about what you are offering, too. What are you bringing to the table? Dig deep.
Don’t hold back
The first week on many MBA courses is about pushing boundaries. Students who learn to break the mould are much more likely to succeed in the world of business, which is why courses often include leadership courses and seminars alongside imaginative team-building exercises. There might be some trepidation at first, particularly with regard to the more physical challenges, but it is a great idea to ignore any jitters and fully take part in all the activities that interest you. It will also make it easier to learn other students’ names, something that will come in handy over the course.
Your first week on an MBA course will set the tone for the rest of your time studying. It’s vital to get things off on the right foot.
An SMF MBA Scholarship Awardee says… In 2017, Kofoworola Agbaje (MEng, Imperial College London) was awarded a £30,000 SMF Scholarship to study for an MBA at Wharton business school. Asked about her first impression of business school, she said: “I’m surrounded by amazing people and amazing opportunities. I have classmates that have climbed the highest peaks in the world, visited over 60 countries, speak five languages, worked in the FBI, started multiple businesses, sold their start-ups etc. The course is very extensive, a lot more work than I expected but the classes are very interactive and I get to learn from both my professors and other students. There is so much to do and a lot of activities to get involved in, I have joined seven student-run clubs and every day feels like a stretch experience. I’m loving the experience and taking it one step at a time.”
A hard-nosed businessman struts into the heart of the city for work. He works long hours away from his family, his job is everything! Working lunches, high targets, oppressive corporate bosses and hard-won deals; none of this bothers him because he is bulletproof! No tough work environment can penetrate his hard exterior; he is successful therefore he is happy.
This is a stereotype many of us will recognise. This image is not only outdated, but it was always a work of fiction. Because of such images, we have struggled to talk about mental health. They are part of the reason women have had to fight so hard for success and inclusion in the global workplace, and men have not been encouraged to express struggle or emotion. A work regime like the one described above may soon be a thing of the past, as companies are now recognising the importance of good mental health and wellbeing in the workplace.
How Does the Workplace Affect Mental Health?
Mental health issues brought on by the workplace are extremely common. The impact, of course, cannot solely be measured by its financial impact. However, this statistic illustrates the extent of the issue quite well: Research shows that last year (2017), 70 million work days were lost to poor mental health. The cost of this to employers in the UK was around £2.5 billion. If that is not an incentive for companies to invest in good mental health practices, we don’t know what is.
“Work is at the very core of contemporary life for most people, providing financial security, personal identity, and an opportunity to make a meaningful contribution to community life.” Source: Nations for Mental Health, 2015.
How can our work life not affect our mental health? It’s the place where we spend most of our time; it’s not a part of our life that is easy to ‘write off’ if it is working against our mental health. When a workplace has no provision or recognition for mental health issues, the culture and atmosphere of the business can become toxic; entirely results driven, and not employee satisfaction driven. The most successful companies in the mental health arena have one simple thing in common; they have specific resources and rules in place to deal with mental health. They have made it a priority. These provisions often include:
Means-Tested Flexibility. Some companies have started to offer flexible hours and responsibilities to those whose work-life balance requirements are more specific. For example, single parents or carers.
In-House Mental Health Services. Many companies have councillors and other mental health professionals on hand to deal with cases of poor mental health.
Open Door Policy. This is an old idiom but often does not mean what it says. A genuine ‘open door policy’ invites employees to feel comfortable about coming to employers with problems.
Even if, as an employee, you never find a use for these provisions, their presence reassures staff that their wellbeing is being considered.
The Shift in Attitude
During the last few years, companies have awoken to the importance of prioritising mental health in their businesses. Studies, such as the ACAS Mental Health in the Workplace report show that good employee wellbeing boosts productivity and profit. Happier people are nicer to each other, meaning a more positive workplace, and staff who tend to go the extra mile to make valuable contributions to their organisations.
How to Implement Mental Health Provisions in Your Workplace
Implementing these practices is not a small task, it is something that your business will have to commit to and spend significant time on. The process has many intricacies, but when stripped back, it can be illustrated as a four-stage procedure:
Analysing the workplace mental health needs: You will need to take a look at what issues your employees typically face. Are there any common problems? Do these problems stem directly from their work environment?
Developing a policy: You will need to decide on a vision; what do you want your mental health stance to look like? What are your values? You will also need to define your objectives, what you want to achieve, in order to liaise with and convince your stakeholders.
Strategies to implement policy: Once you know what you want to achieve you simply have to work out what to do in order to achieve it! Will there be changes in workplace rules? Will you invest in a social element for your workplace? Which mental health professionals should you get on board?
Implementation and evaluation: This step will be constant. You should regularly be evaluating the effectiveness of what you have put into place and be open to change if needed.
Too often, graduates from higher education and business schools are not taught to acquire soft skills before going into the workplace. Their focus is typically on training and education, alongside job preparation and technical skills. However, without the appropriate soft skills, their work is an uphill challenge that comes with a steep learning curve. In this post, we take a look at the soft skills graduates need to begin learning, and why.
Writing for Salesforce, Stuart Leung explains the problem: “Despite the supposed ‘disconnect’ of the digital age, humanity is still a very social species, and unless we as individuals understand how to communicate, cooperate, and coordinate with others, we are at a significant disadvantage – especially in the workplace. In fact, according to Mark Murphy (author of Hire for Attitude), 46% of new hires fail in the first 18 months, and of those new hires, 89% fail for reasons associated with attitude.”
Clearly, employers are going to be looking for candidates with soft skills like communication, especially if it curbs an alarming 46% fail rate. Attitude problems are perhaps harder to predict in a new graduate, but a good communicator is likely not going to suffer from these as severely. Conversely, companies that have a glut of effective communicators are far less likely to lose key employees.
Learning the intangible
Rosemary Haefner of CareerBuilder (@haefner_r) says: “Saying that you’re a team player is not enough; you have to show it. Provide an example of how you worked on a team to accomplish a particular goal. Provide an example of a high-pressure situation that you handled with ease.”
Teamwork is just one of several soft skills that employers are looking for. They’re also after responsibility, leadership, problem-solving skills, decisiveness and adaptability. The truth is that many of the desired qualities in candidates are intangibles, unknown before introducing an employee to the working environment. And the problem with these intangible skills is that they are notoriously difficult to teach. Attributes like decisiveness, cultural awareness and emotional intelligence are hard to acquire; they are often innate talents, rather than learned ones.
In most instances, it is a challenge to develop soft skills through study alone – it is something that progresses over time, with experiences of both success and failure. The Director of HR at the Lawn Tennis Association, Vicky Williams, argues: “Most things can be taught, other than passion – people are either born being passionate or they’re not. That’s an innate skill. But if you take teamwork as a leadership competency, while somebody cannot go from completely unskilled to being A-starred, their leadership journey equips them to be better than when they started out.”
There is no question that employers value soft skills. In surveys, qualities like “team player” and “good communicator” are always high on the list. However, soft skills are terribly difficult to teach directly. The best thing employers can do is create an environment that facilitates the learning of soft skills, and giving their employees a firm grounding in what competency in these skills should look like.
According to Bloomberg, the Financial Times and a handful of other newspapers, peer-to-peer lending could be headed for a collapse. What began as a new, innovative way of lending capital may have become a ticking time bomb.
The Chief Executive of Bibby Financial Services, David Postings, notes that the signs are negative: “We are seeing signs of overheating in the small and medium-sized business lending market. Credit terms are stretched and pricing is down. It has all the hallmarks of what happened to personal credit pre-2007. There will be a crash sooner or later. Peer-to-peer is unproven through a credit cycle. The platforms are not at risk but the people who put the cash in could lose everything. If you put your money in a bank the shareholders take the hit – they are the ones taking the risk.”
At its core, this form of lending is a more individual form of finance. It allows interested investors to loan money to inventors, business owners and entrepreneurs, based on a pitch. Interest on the loan is set by the investor, but an attractive project or opportunity will likely receive several different loan offers, forcing potential investors to compete with each other.
As Postings has argued, interest rates may already have become too low, hinting a crash may be imminent.
For several years, however, peer-to-peer lending has gone from strength to strength. In 2015, the market peaked at $12 billion in loans. In the majority of cases, these were unsecured loans. Another problem is that investors in many instances knew little about the businesses they were loaning money to, and no understanding of the risks they were facing. There is also the question of the time and knowledge it takes to read the information provided by a company, and the ability to exert shareholder control. Listed equities are governed by extensive disclosure rules and rights that protect minority investors. Peer lending does not offer these kinds of controls.
It is common for banks to face criticism that they are reckless with their risks, or even abusive to customers. However, banks have the benefit of experience. They’ve seen many financial cycles, as well as weathered frauds and catastrophes. Although a big enough crash could bring them down, they’re generally diversified enough to prevent it. Peer to peer does not offer this kind of security.
There are several peer-to-peer lending platforms. The UK’s leading platform is Zopa, which has facilitated the lending of almost £3 billion since 2005. According to their website, 60,000 investors have lent an average of £13,000 to businesses and startups.
The Case of Rebus
Rebus was a company that primarily dealt with clients who had been mis-sold financial products. Through Crowdcube, a peer-to-peer lending platform, Rebus was able to raise over £800,000 from small investors. Over a hundred people had lent money to Rebus, with amounts ranging from £5,000 to £135,000, with the promise of gains between 6.4 and 10.6 times their investment.
Julia Groves, of the UKCFA noted: “We should be in no doubt that there will be failures like Rebus [but]…the question is whether people understand the risks they are taking.”
The case of Rebus should be a reminder that all investments can fail, all investments can result in losses. The key difference between small-time lenders that use peer-to-peer platforms and larger scale investors is a diversity of portfolio. It is vitally important for prudent investors to manage risk by spreading investments – something that amateurs will not be aware of, or be able to afford. It has made peer-to-peer appear more and more like gambling, rather than as a needed source of finance to spur innovation and small businesses.
It’s likely that peer-to-peer lending in its current form does not have long left before a crash. However, the concept of lending to small businesses will continue. Large financial institutions are starting to see the benefit, and they can protect themselves much more effectively than small-time lenders.
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