Connect the Dots: The Convenience Revolution Has Arrived

St. Louis’ own globally renowned customer service expert and New York Times best-selling author Shep Hyken and I just returned from a one-week corporate and people engagement visit to Nigeria, Africa’s largest economy.

Hyken was a hit because he successfully connected with the wide demographic of the public, including young, newly minted university graduates, the business leaders from health care to government and even politicians.

His message throughout the engagement was commitment – how to deliver a customer service experience that disrupts the competition and creates fierce loyalty. That’s the focus of his recently published book The Convenience Revolution.

His message to the thousands of people he met on this, his second visit to Africa’s most populous nation, was to use customer service as a competitive advantage. So how can you disrupt your competition and maybe even an entire industry? The answer: Be convenient!

Hyken stressed that whether you’re trying to out-service a competitor or disrupt an entire industry, creating less friction and being more convenient for your customers should be your strategy. When you raise the convenience bar, you create the next level of amazing customer experience. And when you do, your customers will reward you with their money, their loyalty and their referrals. That’s the advantage of joining the “convenience revolution.”

Hyken used the example of “convenience stress.” There’s a reason convenience stores are called that – they’re convenient! Customers who shop at such stores know the selection is smaller and the prices are often higher, yet they still come in droves because of the ease of purchase.

How about the minibar in your hotel room? That’s convenient, too, but it comes at a cost. After all, the same $5 Coca-Cola in the hotel’s minifridge can be bought down the hall from a vending machine for just $1.25. Yet even with that can of Coke being four times more expensive than one available a short walk away, hotels are restocking minibars every day.

“What is the one takeaway from your new book?” I ask Hyken, and he says, “Our customers are smarter than ever. They know what good service is. They know what convenient service is. Companies like Amazon have taught them, and now they expect it from every company they do business with. It’s simple: Customers will choose to do more business with the people and companies that are easiest – as in most convenient – to do business with.”

Hyken’s new contribution to the customer service literature is perhaps his best – ever. I suggest you pick it up and engage your organization in a conversation. I’m confident the results will be evident quickly.

Dr. Benjamin Ola. Akande is the senior advisor to the chancellor and director of the Africa Initiative at Washington University in St. Louis, as well as former president of Westminster College in Fulton, Missouri. He has a Ph.D. in economics and previously served as dean of the George Herbert Walker School of Business & Technology at Webster University.

Connect the Dots: No Promises

The mercury’s rising, birds are singing, flowers are blooming – yet it seems each hour of each day, the media smother us with details of a seemingly dysfunctional world, one marked less by hope and optimism and more by confusion, controversy and chaos.

Nationally, the first quarter of 2018 alone involved the Parkland, Florida, school shooting. Tales of sexual harassment and abuse in Hollywood and in Washington, D.C., bombarded us. Almost daily turmoil and turnover embroiled the White House staff, while special counsel Robert S. Mueller III continued to investigate potential Russian tampering in U.S. elections. Add to all of that the ongoing battle over immigration regulations, a missile scare in Hawaii, budding trade wars, a roller-coaster stock market and ongoing planetary environmental concerns.

With almost daily violence on our own area streets, of course, the local front scarcely remains immune to bad news, which also has included gubernatorial constroversies, the sale of Express Scripts, Bayer’s acquisition of Monsanto and St. Louis’ drop from the top 20 largest U.S. cities – all in all, enough to make one crawl back into bed and hide under the covers.

Of course, we can’t do that. Life goes on, and frustrated and depressed though we may be by current events, we must carry on.

The fact that so much has happened in so short a time supports the belief that we live in a world of no guarantees. At an event a few years ago, the late management and leadership guru Warren Bennis addressed the challenges people face in such a world. Bennis shared six points he once found on a company’s bulletin board, which speak to today’s U.S. corporate culture:

• We can’t promise you how long we’ll be in business.
• We can’t promise you that we won’t be bought by another company.
• We can’t promise that there will be room for promotion.
• We can’t promise that your job will exist until you reach retirement.
• We can’t promise that the money will be available for your pension.
• We can’t expect your undying loyalty and we are not sure we want it.

Bennis’ overarching point? In the current dynamic, corporations no longer make the kinds of promises they once did. So how do workers develop the psychological fortitude, leadership and managerial skills needed to navigate this perilous landscape?

Some may find Bennis’ perspective yet another sign of today’s societal decay. I myself find it refreshing and realistic, though. True, employees (especially millennials) may face a very complicated business environment of no promises. But recognizing no guarantees while retaining realistic expectations marks the first step in dealing with chaos and change. With change as the only constant, we can plan accordingly and remain open to new ideas and new directions. As the late, great Stephen Hawking told us, “Intelligence is the ability to adapt to change.”

Adapting to change in a chaotic world that offers no guarantees will require not only intelligence but also patience, persistence and creativity – qualities on which our society was built. And I’m confident such qualities remain our path to better days ahead.

I take joy in seeing young people expressing their anti-gun views openly, loudly and nationally. I marvel at the strength of the #MeToo movement and the courage of women to speak up for their rights. I marvel at the technological achievements our country consistently delivers, perhaps best symbolized by SpaceX CEO Elon Musk’s red Tesla rocketing into space.

Finally, I look forward to the warmth Mother Nature and our own good natures likely have in store for us. As local weather shows, there are no promises or guarantees – but there’s always hope.

Dr. Benjamin Ola. Akande is the senior advisor to the chancellor at Washington University in St. Louis and former president of Westminster College in Fulton, Missouri. He has a Ph.D. in economics and previously served as dean of the George Herbert Walker School of Business & Technology at Webster University.

Connect the Dots: The Joyride’s Finally Slowing

Appeared in the Ladue News by Benjamin Ola Akande, March 22, 2018

The resurgence of the stock market has much to do with confidence in it – confidence that continued to grow following Donald Trump’s victory in the U.S. presidential election in November 2016.

But truth be told, the strategy that laid the groundwork for this remarkable ride actually originated with former chairman of the Federal Reserve, Ben Bernanke, a scholar of the Great Depression who unleashed a dramatic assault to address the 2008 Great Recession.

That assault began with the Fed cutting short-term interest rates to historical lows of 0.15 percent in January 2009. The essence of the strategy involved keeping short-term interest rates as close to 0 percent as possible to enable the U.S. economy to recover. And so it was for the next six years. In addition, the Fed bought long-term bonds and mortgage-backed securities over a 10-year period, peaking at a value of $4.4 billion in January 2018.

Perhaps the strategy can be nicknamed “the Bernanke” because it involved a relatively new monetary position, specifically designed to entice investors to stop buying bonds and to start purchasing equities and investing in real estate. It worked – as household wealth increased, leading to more consumer spending – and it also paved the way for the economic recovery we all are enjoying today.

The stock market awoke as the value of equities owned by the average American increased upward of 45 percent between 2011 and 2013. The net worth for households increased by $10 trillion in just 2013, so imagine the consequential impact on the S&P 500, which increased by more than 200 percent between 2009 and November 2016. But then the “Trump bump” happened, with the stock market increasing an additional 100 percent, now totaling 300 percent in the aftermath of the election.

Yes, the market has benefited from a higher level of confidence perhaps attributable to the election and Trump’s presidency. However, the price/earnings (P/E) ratio just before the election already exceeded historical averages by 49 percent. And now the Fed is expected to curtail the availability of easy money that fueled these good times. Given this sensitive balancing act, I myself suspect the Fed will get the job done without plunging the economy into another recession.

Not everyone on Wall Street agrees, though, which explains why we saw the Dow Jones industrial average fall 1,597 points in a single day. This panic-type selling originated from a fear that the Fed, under the leadership of its new chairman, would reverse the long streak of tepid inflation and that low interest rates will abruptly end.

The panic quickly subsided, though, and the market’s losses have been halved, although daily volatility remains. Rising yields mean higher borrowing costs for companies, and that may push the Fed to raise interest rates more rapidly, which would adversely affect stock prices. Some economists contend the stock market rise resembles a mountain climber scaling a steep slope – at some point, the “mountain climber” slows and maybe even descends a bit to regroup and regain strength, before continuing to climb.

Of course, as important as the stock market remains as an indicator of how the economy is doing, it alone doesn’t indicate economic prosperity and continued growth. Consider, for instance, these factors:

• The U.S. gross domestic product has been expanding at an annual pace of more than 3 percent after inflation for three straight quarters.
• Average hourly earnings rose to $26.74 in January, a 2.9 percent increase over the past year.
• The labor market participation rate has been around 63 percent for the past four months.

Given those positive trends, I would advise long-term investors not to panic. Market corrections of 10 percent or more frequently occur. This isn’t the time to undo your entire investment strategy.

Dr. Benjamin Ola. Akande is the president of BOA Consulting and former president of Westminster College in Fulton, Missouri. He has a Ph.D. in economics and previously served as dean of the George Herbert Walker School of Business & Technology at Webster University.

Connecting the Dots: Uncertain New Year

Appeared in Ladue News on 1/25/2018

Industrialist J. Paul Getty, once identified as the richest living American, has been quoted as saying, “Without the element of uncertainty, the bringing off of even the greatest business triumph would be dull, routine and ultimately unsatisfying.”

If Getty still lived today, facing the uncertainty we expect in the financial markets in the coming months, I imagine he’d feel quite satisfied.

Fueling unpredictability in 2018, of course, are the recent passage of the federal 2017 tax cuts. Those cuts – the most sweeping update of the U.S. tax code in more than 30 years – clearly constitutes a fiscal stimulus. Its sponsors predict it will stimulate investment, encourage companies to bring back overseas funds and create thousands of new jobs. However, if that fails – instead, corporations may initially opt to use their tax savings only to buy back shares and increase dividends – then the legislation could add massive amounts to the federal debt, which might necessitate cutbacks in federal programs and lead to negative economic impact.

Businesses appear to be the big winners in the area of such cuts, with their rates dropping from 35 to 21 percent and the corporate alternative minimum tax having ben repealed. The budgetary cost of the cuts, amounting to almost 1 percent of gross domestic product, will be felt between now and 2022. There’s a lot at stake – and there’s also a lot of hope that this will work as envisioned.

Individuals may also benefit, at first, from the new tax brackets, which have been lowered to 10, 12, 22, 24, 32, 35 and 37 percent. The new arrangement also doubles the child tax credit to $2,000 and gives a $500 credit for nonminor child dependents.

But uncertainty exists here, too, as the law caps state and local tax deductions, and it essentially repeals the individual mandate of the Patient Protection and Affordable Care Act of 2010, colloquially known as Obamacare.

Questions abound. Will individuals spend their tax savings, further stimulating the economy? Will more taxpayers take the standard deduction rather than itemizing, which could impact charitable donations to the nonprofit sector? Will legislators ever find common ground on a comprehensive health care strategy that gives all of us certainty and affordability?

Adding to the uncertainty are short-term rate increases expected from the Federal Reserve. Since 2009, U.S. markets have been helped by a massive Fed intervention; interest rates have been pushed down to record lows, while asset purchases have depressed bond yields. The Fed has indicated it may raise rates three times in 2018, after three increases in 2017. Even if the Fed moves slowly, higher interest rates often lead to an end to credit cycles, as indebted companies and consumers default in greater numbers.

One other situation to watch in 2018 involves the increased scrutiny over privacy and control of our personal data. The FANG tech stocks – Facebook, Amazon, Netflix and Google (now Alphabet) – will continue to face growing pressures and restrictions such as those found in a new privacy law in Europe, the General Data Protection Regulation. The changing dynamics of net neutrality also pose uncertainty for consumers worldwide.

In sum, the U.S. economy has been undergoing what amounts to a sugar rush during the past several years. Economic history suggests that will end soon. Whether or not the tax cuts, Fed actions and other factors yet unknown will sustain the good times ranks as the defining uncertainty of 2018. Still, as author Stephen Covey tells us, “If there’s one thing that’s certain in business, it’s uncertainty.”

Connect the Dots: Our Untapped Opportunity

As the region’s leaders scramble to put the finishing touches on our proposal to lure Amazon’s second headquarters with its promised 50,000 jobs to St. Louis, one wonders if what we plan to offer mirrors what every other metro area will propose: corporate tax rebates, ready infrastructure and plenty of other concessions. Yet we could truly set our region apart by embracing one of the strongest competitive advantages available today – diversity and inclusiveness.

Researchers have found that uniting people with different ideas and perspectives can boost creativity and enable institutions to transform themselves, while accelerating change and progress. Ronald Burt, a sociologist at the University of Chicago, suggests that organizations with more diverse sources of information consistently generate better ideas. Sara Ellison of the Massachusetts Institute of Technology has shown that mixed-gender and mixed-race teams produce more creative solutions than less diverse teams. Even internal surveys at Google have found that diverse teams often innovate the most.

Diversity brings different experiences, questions prevailing assumptions and leads to new approaches to resolving long-standing challenges. Such a proven strategy would appeal to a global company like Amazon, whose own website calls it “a company of builders who bring varying backgrounds, ideas and points of view to decisions and inventing on behalf of our customers.” More important, diversity could catalyze our local businesses and corporations to realize greater future growth and success.

What will it take for businesses to pursue diversity and inclusiveness with the same vigor and commitment they chase market share and profit? Simply put, we need to acknowledge diversity as a business imperative and a financially responsible move. We need to recognize a return on diversity, or ROD, equivalent to the infamous bottom-line ROI – return on investment.

In practice, because of the difficulty of attributing increased performance directly to diversity, we focus on qualitative measures like employee engagement, feedback from customers, well-rounded decision-making, improved communication and greater transparency – all, admittedly, vital to achieving a high-performing culture and profitability.

ROD involves not just achieving equal ratios of minorities to nonminorities or women to men. Rather, it seeks to achieve balance through the richness of blended elements – culture, experience, age, perspective, gender and race – to ensure an organization can move from success to significance.

At the same time, diversity without inclusiveness has no meaning. Inclusiveness means being part of the delivery and execution of an organization’s mission. Organizations may recruit the best, most accomplished minds, but those hires cannot merely serve as showcases for the organization. We must encourage the fresh voices and broader thinking they bring – quite simply, a move that makes dollars and sense.

To achieve the long-term success we seek in this region, we need the kind of creativity, persistence and commitment that only a truly diverse community can provide. That achievement needs to start with the companies already in St. Louis. Making diversity and inclusiveness a corporate imperative will make our region attractive and competitive.

Dr. Benjamin Ola. Akande is the president of BOA Consulting and former president of Westminster College in Fulton, Missouri. He has a Ph.D. in economics and previously served as dean of the George Herbert Walker School of Business & Technology at Webster University.