Updated:: who actually benefits from buying “risk protection”?


I attended an interesting seminar last evening [June 2011], arranged by the Institute of Directors and sponsored by Zurich. Interestingly these organisations also provided (by some margin) the most interesting speakers. The Seminar was entitled “The Reality of Managing Risk”.

“Easy” conclusions: the industry prefers to profit from peddling “faux certainty” (in the form of risk modelling) than acknowledge and prepare its customers and shareholders for the REALITY of uncertainty; Managing, even influencing, risk is a minefield – but is made worse when, conventional RM purports to know and be able to “manage” more than it, in reality, can! Insurance industry leaders of the prevailing culture have established that THEY are better served by achieving short-term goals in relation to price, GWP, growth and market share, than by pursuing long term strategies based upon underwriting risk for profit, rewarding a responsible approach to “business resilience” and building stable – sustainable –  transparent – relationships. Read more of this post

Positioning your professional service firm:: offering the right value is key


If you are as smart as you think you are then you will understand that clients don’t just need more and better service, they demand it. The tools to provide it are widely available so, if you really care about them (and the income they provide you…in that order), then you will apply this simple logic your business!

Alternatively, don’t respond to your clients’ needs, carry on competing (without differentiating) on price and leave an existing competitor, or new entrant, to show you where you have gone wrong.

As choices go this shouldn’t be too difficult…but, apparently, it is. Duh!

It’s true that when value is increased you will gain a potential increase in fee-earning ability. However, it needs to be the appropriate value as not all your clients will be interested in what you have on offer. They will only be motivated to buy from you at a premium to the extent the value on offer gives them some return. So it’s important for you to offer value based on your clients requirements

The Inevitable Next Economy


The Human Productivity Chart

Courtesy of Dan Robles (Ingenesist

Human civilization has progressed through many stages.  Each stage arose from the “integration” of the tools developed in the prior stage.  Believe it or not, the next economic paradigm will arise from the integration of the tools being developed in the current stage of human development. Let me explain:

Hunter -gatherer:

We started as hunter-gathers who travelled from place to place to follow animal migrations and seasonal flora.  People would collect fallen branches and burn them for heat or cooking.  Then people started to sharpen rocks that could be used to hunt food better than a dull rock. They sharpened rocks to chop down trees for warmth and shelter.  Soon they sharpened rocks to till soil.

The agrarians

The arrival of the agrarian age came when the arrow, the axe, and the plough were integrated; that is, the output of one became the input of another – allowing people to conserve energy and increasing productivity. The emergence of communities led to the division of labour as people specialized their skills. People soon developed tools and techniques for forging metals, building structures, and harnessing of forces such as wind, sun, water, and domesticated animals.

City-states

The arrival of City-States arose when division of labour, harnessing forces, and transportation became integrated.  Spare time became available to experiment in ideas such as governance, laws, civil services, and currency. Travel allowed for trade of goods, services, and the spread of knowledge across great distances.

Read more of this post

Competitive Advantage: Are You Focused on What is Important?


IF you take the time to listen carefully to customers you will hear how you can serve them, their customers and your stakeholders  better: give customer value.

Alternatively, if all you hear are “complaints” and you just keep looking inward at how you can squeeze every last ounce of earnings from each “unit”, you are destined to keep on selling. Competing, on price…in a race to the bottom: take customer value.

A great business starts by making its business culture the source of service &/or product innovation and these gains and can maintain competitive advantage.

Gaining and maintaining competitive advantage requires that your business be focused on the proper things; that is simple, but not always easy. There are really only two areas of business focus in order to establish competitive advantage: first, you must be competitive in your industry and secondly your business must differentiate itself from the competition.

via The COO’s Bulldog®.

Dawning of the day of the contrarian: consumerism lies bleeding


The signs of a gathering momentum were there to be seen (for those prepared to look) even pre-crash and I am surprised that the pace had not, significantly, accelerated since 2008. I have long argued with the “price is king” lobby within my own industry that the flight to quality was inevitableimage (the pic on the left is taken from a presentation I did in 2005/6) and would spell an inglorious end for those whose “understanding” of delivering customer value extended to some glossy marketing literature, the “hard sell” with cover, service, satisfaction and reputation compromised to achieve a cheap price.

Not only have these firms come to believe their own marketing but, in the process they have contributed greatly to the decline of the industry that spawned them. Quite apart from the reputational damage, that an industry dealing in products that are a grudge purchase, can ill-afford there is a recognised fall in Professionalism (hence Aldermanbury Declaration) and the “dumbing down” of a generation of employees and customers. Read more of this post