Work, business & professional services

Virtual meetings

According to some pundits, in the future we will be travelling to work virtually, attending meetings in virtual worlds in order to save the planet. Really? I rather thought we had been here once already. Do you remember all the fuss and predictions about teleworkers and video-conferencing replacing offices and people happily working from home? That was 20 years ago and we now crawl to work in even heavier traffic and many of those who do work from home can’t wait to get out to the nearest cafe to connect physically with others.In the US, companies like Intel have opened virtual offices and virtual meeting rooms where employee avatars meet to discuss projects and hold conversations. Other companies like BP, Hewlett-Packard and Raytheon are following suit taking the idea of connecting with customers in virtual worlds (like Second Life) even further by using such metaverses as ways to train staff and connect with analysts. In theory this is a good idea. Physical travel is expensive and exhausting and communicating in 3D has a host of benefits compared to 2D conversations and meetings that take place over the telephone or by videoconference. For example, if you miss an important meeting you can just download it to your computer or iPod to catch-up later. As you’d expect most of the proponents of this concept are tech companies and software companies and some people, like Craig Samuel, VP of IT at Unisys predict that ‘unlike the technology hype of the past, adoption of this will be quite fast’. Really, Craig?Personally I predict that this idea is a fad and will move about as fast as a Segway.The problem is that most people prefer physical interaction, especially when it comes to important things like clinching a deal. Meeting face-to-face is nearly always better than not because you get the whole picture. You pick up on subtle clues like clothing and mannerisms. People also tend to pay attention when someone has actually bothered to show up. Various studies also suggest that people that are good looking tend to succeed faster than those who are not, even when both have equal intelligence or skills. So if virtual meetings are the future, I’d also predict that we will all show up as someone else.

Prediction Markets

Prediction markets is a new concept that is currently being tested by a wide range of largely US-based firms including Google, Microsoft, Yahoo and Hewlett Packard (HP). The concept is similar to that of the wisdom-of-crowds in which many people will generally be smarter than any one individual. For example, between 1996 and 1999 HP ran a series of internal prediction markets where employees were asked to predict future workstation sales. In six out of eight cases the group prediction was more accurate than the official estimate. Google currently runs 130-plus prediction markets with over 1000 participants on everything from new office opening dates to key milestones and launch dates for new products. Other uses of the prediction markets include quarterly economic forecasts, interest rates and even currency movements.If this sounds a bit like gambling then it is, the only difference is that individuals aren’t playing with real money. Moreover, prediction is a group activity, the idea being that knowledge is aggregated from a wide variety of sources, sometimes including customers and the general public. Downsides? Well the idea is still being tested so it’s too early to say. However, one issue that has arisen regards whom companies should share the answers with. For example, if you ask 1000 employees about a launch date and 90% say you’ll miss it do you share that information either with the wider workforce, possibly impacting morale and motivation? Moreover, could this knowledge be defined as insider information and should you expect a call from investors and the Securities Exchange Commission (SEC)?

A business revolution delayed

Do you remember the forecasts about the ‘imminent’ adoption of Radio Frequency Identification Device (RFID) tags a few years ago? For example, Wal-Mart was insisting that all of its top 100 suppliers would use RFID by 2005 to help streamline its supply chain. IDTechEx said that more than a billion RFID tags would be in use by 2006. Their last figure issues suggested that it would be closer to 500 million and now the figure is to be downgraded again to 350 million. So what went wrong? The answer is a mixture of optimism and hype. The fact is that many new technologies either fail to live up to early expectations or else widespread adoption takes much longer than hoped. In the case of RFID the key problem was that while the tags worked fine on cardboard boxes they didn’t work so well on metal or containers of liquids. Nevertheless, RFID tags are still coming. Wal-Mart, Best Buy and Target have all asked suppliers to start using RFIDs and they are also starting to show up in some unusual places outside of supply chain logistics. Examples include toll collection, door-access systems, contactless card payments, hospital equipment, library books and even pet-tracking. So what’s the moral of RFID mania? To my mind, most forecasts are wrong and most new innovations take longer than initially expected to gain traction and become widely accepted. Moreover, the more disruptive the innovation, the more it will initially be resisted due to a combination of vested interests, misunderstandings and hysteria.

Customers start to hang up on foreign call centres

A recent report by Contactbabel, a UK contact centre consultancy, says that 75% of people in the UK feel negatively about organizations that route service calls abroad and one in seven people dislike the idea of off-shoring so much that they have stopped dealing with companies that do it. The attraction of off-shoring call centres is primarily cost-savings and Contactbabel says that a typical bank would save GBP� 9.2 million each year simply by replacing 1000 UK agents with the same number of personnel in India. However, if just 0.3% of customers removed their business from the bank in protest, revenues would be reduced by a similar amount. So what’s next? One new trend that is taking off in the US is ‘homeshoring’- employing customer service representatives that work from home. The attraction to employers is cost-savings once again while the benefits to ‘homeshorers’ is a non-existent commute and flexible hours. According to the experts, companies using this home-based customer service model have staff turnover rates in the 10%-30% range whereas standard call centre have churn rates of 60%-100%.

Trends impacting global business

A report produced by Social Technologies, a US-based foresight consulting firm, has identified 20 top lifestyle trends affecting global business and forecasts their future trajectories. Unlike many trend lists that focus on what’s happening in rich countries like the US, this list includes trends affecting consumers globally. The trends, briefly, are:
1. Cultural flows – the spread of ideas is now global and instantaneous.
2. Time pressure – people feel that they have less and less time.
3. Cultural multipolarity – new centres of cultural production are emerging.
4. Asia rising – from GDP to patents to 'buzz'.
5. Media spread – media access is becoming faster, cheaper and more widespread.
6. Social freedom – individuals have vastly more options than previously.
7. Transparency – driven by Internet technologies and social pressure.
8. Monetization – increasing substitution between money and labour or time.
9. Rising mobility – people are moving faster and more frequently.
10. Migration – intensifying and affecting everything from food to values.
11. Networked world – information and people are increasingly networked.
12. Consumerism – a consumption-based model is becoming the global norm.
13. Changing families –family size and structure is changing.
14. Women’s power – women continue to gain socio-economic and political power.
15. Electrification – its affect is widely overlooked but profound.
16. Ageing – populations are not only ageing but ageing faster than ever before.
17. Ethical consumption – price, quality and convenience meet ethics and values.
18. Population growth – there are more of us than ever before.
19. Middle-class growth – new middle classes are driving consumerism.
20. Urbanization – another driver of consumerism globally.

Doing well by doing good

Investment and venture capital tend to run in cycles and the latest mini boom in Silicon Valley is energy, or more accurately, ‘clean tech’. Investment is nowhere near the US $34 billion that flowed into the area in 2000 but there is certainly a buzz that is spilling over into parts of the Silicon Valley eco-system like law, accountancy, recruitment and public relations. Why the boom? One answer is obvious.The other is that much of the science and technology used to build computers and other high-tech hardware is directly applicable to energy-related areas such as solar, wind-power, energy storage, hydrogen-powered vehicles and ethanol.
The other ingredient that seems to be fuelling the boom is that when it comes to employment many enthusiastic people see energy start-ups as a way to save the planet and make a decent living at the same time. In other words, it’s an urgent problem that needs fixing and anyone that can contribute something will literally make the world a better place to live.

When customer relationships go bad

Conventional wisdom says that customers that spend a lot of money with a company over a long period of time are loyal. But in many cases this apparent loyalty is nothing of the sort. It is simply that customers have been bound into service contracts they cannot easily escape from or else there is no credible competitor to which customers can switch. This is the argument put forward by Gail McGovern and Youngme Moon in a recent Harvard Business Review article.Admittedly few companies behave like this deliberately but many slowly slip into this trap because confusing customers can be profitable. Examples of such behaviour include mobile phone companies tying up customers with overly complex contracts; banks confusing customers with small print about minimum balances, interest rates, overdraft penalties and fees; and even gym companies and their fixed annual membership contracts. However, one of my favourite examples of companies making money from customer angst is one of the world’s favourite airlines who (allegedly) forces passengers to use a premium rate phone line after the airline has lost their bags. In the US, for example, it’s been estimated that bank customers paid US$53 billion in overdraft fees last year despite the fact that the Consumer Federation of America has said that allowing overdrafts without notice constitutes unfair business practice. No wonder ING Direct, which has no-fee accounts, no minimum balances and doesn’t have tiered interest rates, is now the fourth largest thrift bank in the US. So what’s the moral here? First, companies that rely heavily on service contracts should think very carefully about whether they guarantee a high level of quality and service or whether they are long-term contracts designed to stop customers from deserting when a product or service fails to live up to their expectations. If it’s the latter then beware, because customers are increasingly networked and will communicate their unhappiness with others at lightning speed. That’s assuming that they don’t hit you with a class action lawsuit first.