Quite often at Clare Associates we find ourselves picking up the pieces of previous attempts to solve business problems, especially with the company website. Usually these problems can be traced back to the decisions taken when this website was first developed.
The first type of business has money to spend, but no time. They say to their expensive web designer “We need a website. Here’s lots of money, go and make it happen.” The expensive web designer goes away and creates a fantastic looking website. It’s got everything – fancy effects, beautiful photography, even the buttons have that lovely rounded feel. For some reason, expensive web designers often come from an art and design background rather than an IT background, so they do what they know best.
The second type of business has rather more time than the first. They’ve done a little research and they don’t think they can afford an expensive web designer. But they can afford that son of a friend who knows how to “do websites” and who won’t be very expensive. And in any case, he’ll have the time to keep improving the site, adding more content and generally keeping it up to date.
To be honest, neither of these approaches is likely to get the business the website it needs. The first, expensive, website will look good, but it is going to be difficult to keep it up to date with new products and news about the company. It might not show up in search engines as well as it should. The second, cheap, website will be cheap, but it might look clunky and old-fashioned. And the company may still depend on this son of a friend to make occasional updates.
There is a third way. Continue reading
Here’s a good business cliche, the sort that David Brent would use:
“Your people are your most important business resource.”
But if you look at how many businesses are run, you might assume that people are only a useful business resource because they are cheaper than robots. Work for a big company, and you might occasionally be asked to take part in an employee satisfaction survey which, after much paperwork and editing of spreadsheets will lead to insights such as “10% of junior employees don’t trust their boss, up from 8% two years ago”. Work for a smaller company, and you might see an old-fashioned suggestion box neglected in a corner of the office or factory (with a three-year-old piece of paper folded up inside asking for a better kettle for the kitchen).
Isn’t that a waste?
Don’t you think that maybe, just maybe, your people think about what they are doing and how they could do it better? Even better, maybe your people think about what you are doing and how you could do it better. Best of all, maybe your people think about what your organisation is doing and how it could do it better. Continue reading
If you read cartoons like Dilbert, one common theme you’ll come across is that of the poor downtrodden worker who knows more about his job than his boss. In Dilbert’s case, he’s a hardworking and brilliant engineer. His ‘pointy-haired boss’ is pretty clueless about Dilbert’s work and, well pretty much everything really. Above the pointy-haired boss are a number of vice presidents and executives who are better paid than the pointy-haired boss but seem equally clueless.
I wonder how many medium and large businesses have structures like this. Well, one of the things that being an external auditor for many years taught me is that the answer is probably “too many”. Too many firms have a level of management in between the people at the top who get to make the really big, really important decisions and the people who actually do the work or run the departments. Continue reading
In my last Clare Associates blog post, I looked at aggregate demand curves and aggregate supply curves. We know that for a given product, demand is higher if the price is lower and supply is higher if the price is higher, and how in a competitive market, the market price will tend to the intersection of the two curves.
Now if we know that demand is higher if the price is lower, the next question to ask is this:
How much will demand increase in response to a price decrease?
The answer is all about elasticity.
For many years now, I’ve spent a fair amount of time in local school sixth forms (helping to run this). One thing that surprises me about schools today is how few of them teach economics. While it’s true that you don’t need an economics degree to run a business, some of the theory will help you.
Supply and demand is one of those things that even people without an economics background can grasp quite easily, and if they think about for a bit, can probably work out. But if you understand supply and demand in the way that economists do, you’ll be able to understand slightly more advanced concepts like elasticity, which will be directly relevant to your business. More on elasticity in ‘Important Economics Concepts Every Businessman Should Know, Number 3: Elasticity’…
Important Economics Concepts Every Businessman Should Know, Number 2: Supply and Demand Continue reading
This is the third in a series of articles on Opportunity Cost and why it matters in business.
Opportunity cost is one of the most important concepts in all of economics. If you understand it, you can start to see the world in a slightly different way. It’s also one of the most relevant economic concepts to simple business decisions. Continue reading