Knowledge Fulcrum

After watching this video I’ve been fascinated by Behavioral Economics.  Is it really possible to increase your revenues by 42% by merely changing how you offer your products to your customer?  Watch the segment on the Economist Offer – if you do the math his research showed a 42% increase in revenues by adding a meaningless option to the pricing strategy.   I’d love to hear about your own experiences with this concept.

In Ithaca We Trust.  If this is not a clear message of how confident we are, I don’t know what is.   Ithaca Hours is a local currency system that promotes local economic strength and community self-reliance in ways to support economic and social justice, ecology, community participation and human aspirations in and around Ithaca, New York.

Ithaca Hours helps to keep money local, thus building the Ithaca economy. It also builds community pride and connections. Over 900 participants publicly accept Ithaca HOURS for goods and services. Additionally, some local employers and employees have agreed to pay or receive partial wages in Ithaca Hours, further continuing their goal of keeping money local.

I met another person who many of you may know — Simon Sinek — who also has his own currency.  Simon issues Tokens of Inspiration to people who inspire him or others. I keep my token in my pocket to remind me that there are better ways to measure success than how much money we have in our wallets.  What keeps crossing my mind is that fact that, now more than ever, get the opportunity to build a society the way we want…all it takes is creativity combined with thought.  I imagine that we will see a lot more people exchanging new types of currency in the future.

In a recent Nielsen study, “member communities” like Linked in are now used more (67%) than email (65%).  The social network landscape is changing quickly.

In my former survey research business, we were fighting the fact that American households were cutting off their phones in droves.  At last count, 17% of households have no land-line telephone.  Technology is re-shaping our world right in front of our eyes.

How is your organization using new tools to better connect your employees, and customers to increase collaboration — and ultimately performance?  I’ve heard a number of entrepreneurs complain that applications like Facebook are a time sink and have limited access by employees from their network.

I would propose that social networks and other cutting edge applications are merely tools that, if used in the right way, can help your organization better compete by providing your people with better access to information.

Social Networks – using applications within your company can help increase visibility among your staff around critical functions such as product expertise, specialized knowledge or special interests.  Using these applications increases collaboration and communication — particularly if your organization has locations across multiple geographic areas.  In addition, if you have virtual staff - this is the perfect application to keep everyone connected.

Wiki- using wikis is a great way to share standards and knowledge across the organization.  By building wiki platforms around problem identification and problem solving, you will increase your organization’s ability to adapt to the ever changing business environment.

Podcast – when you place training programs online, you insure that when a staffer is trained on a procedure or standard that everyone gets the same information, delivered in the same manner.  This results in more consistency.

Organizations can either resist the changes that are happening around us or embrace the new technology and find the best way to use it for every one’s benefit.  Please share your examples of how you’ve used web 2.0 technology in your business successfully.

Someone's Making Money!

Papa Murphy’s – a Vancouver, WA based chain of take-and-bake pizza stores, posted a 17% increase in revenues for 2008 and also announced that they will be opening 100 new stores over the next five years.   Good for them!  They are clearly delivering value to the market place (no pun intended) by saving people time and money on their meals.

We are experiencing the most dramatic shift in consumer behavior since the Great Depression.  Savings are up and consumer debt is declining for the first time in the history of debt.  And, with this shift will also come a shift in consumer beliefs, attitudes and perceptions.  When consumers consume, they are exchanging their money for a combination of time and energy.  This is a calculation that happens in their minds, and consumers are constantly balancing the trade-off between how much something costs and the time and energy it gives them. 

Here’s a simple example: If you were planning a trip between Portland, Oregon and Washington, DC how would you get there?  The majority of you would fly.  Why?  Because flying represents the most efficient means (time, energy for the money) of travel.  You could drive, bike or walk.  But when you place any amount of value on your time and energy, that makes those options pointless.  Below is a chart I made that estimates the amount of time, how much exertion, and what it would cost for each of the modes of travel. 

You would need a compelling reason to travel by any other means than airplane.  This example just illustrates the fact that consumers constantly balance these three things when making decisions about what they buy.  As behaviors changes, so does the need for organizations to adapt.  If your business no longer adds value in the eyes of the customer, then you had better start to find a way to change.  People will keep spending their money, but are likely to place more value on what their time and energy are worth.