Here’s a test. Look closely at what you are reading right now, these very words. Do not move your eyes away from these words. Focus. Focus. Focus.
Oh, go on then, take a look at the sidebar, take a peek at what else is on the page.
And….back to the text……
Now, let’s start again. Because that is what your brain is having to do. All of a sudden your reading flow has been interrupted and you need to get back into the swing of things. And here is another interruption to disturb your brain some more – a picture to look at. We all know about online distractions from our daily work – such as email alerts or the desire to see what our friends are saying on Facebook. And we all know that these distractions take us away from being productive.
People who only deal with email once or twice a day are significantly more productive than those people who constantly check their emails. Several studies confirm this. Similarly, people who only log on to Facebook once a day and who have a routine are both more productive and feel better about themselves.
However, new research shows that it is not just major distractions, such as checking your email or logging onto Facebook that are a problem. It turns out that distractions that take as little as 2.8 seconds can have a significant impact on us. The study found that an average of 4.4 seconds of distraction is enough to significantly reduce your accuracy on subsequent tasks.
What this means is that the plethora of web distractions, such as “web page furniture” is not only wasting our time and making us all less productive, it also suggests that what we do at work is becoming less accurate as a result. That also hits our productivity as we have to go over and repeat our work in order to correct the mistakes.
One way out of this conundrum is to use something like Evernote Clearly which allows you to view web pages, distraction-free. Perhaps we need to re-think the way websites are designed. Perhaps web pages that look rather like a page of a book, free of distractions, are actually better for us than pages full of potential distractions.
It also means we could increase productivity with better designs for offices, phones that do not ring for more than 2.8 seconds and so on. It is time to look at the whole way we work – we are not being anywhere near as productive as we could be, because our modern way of working provides us with a constant array of distractions for more than a few seconds.
Today Graham pulls no punches as he outlines the need for businesses to have a proper strategy for utilising new technology fully or face the plight of those that didn’t adapt quickly enough, such as Kodak or Polaroid.
Let’s face facts: the digital world is fundamental to all businesses. Even if you sell offline or operate mainly in the “real world”, the digital world has an impact on your business. Whether it is for communications, such as email, or as a starting point for buyers researching your business, the Internet is central to customers.
The problem is that most businesses themselves use the Internet as a “nice-to-have” and not as central to their business. When I speak to Chief Executives and point out this difference they nod their heads in agreement. But then they say it is “impossible” to change their business to focus on the Internet because it would involve too much change.
Now, though, they are in for a shock. The highly respected consultancy firm Forrester has said that unless businesses make this change they will “face an extinction event” within the next decade.
They are saying this because their latest research shows that only 21% of companies have a clear vision for the future use of digital within their business. That’s in spite of 90% of firms agreeing that digital will revolutionise their sector within the next 12 months….! And they are not the only consultants sounding the warning bell – just three months ago Capgemini published their own research suggesting that businesses simply have to make the Internet central to their company, regardless of their sector or industry.
According to Forrester, businesses are now just “bolting on” the Internet to their existing business structures. But what is required, they say, is a complete “re-set” – a fundamental shift in the way businesses are structured and run. Business leaders I meet are totally unprepared to do this because of the seismic shift required. Yet the warning from Forrester is stark: do it or die.
When you look at successful businesses online they are mostly businesses which focus their firm on the Internet – Google, Facebook, Amazon for instance. But it is not just technology-based companies like these online startups which have embraced digital as central to their business. Back in 2012 Starbucks transformed itself into a digital centric company.
Business leaders, used to a non-digital world, find it hard to make the transformation necessary. So, what is the solution? The first step must surely be to conduct an immediate review of the kinds of people setting strategy and plans for your company. The data from Forrester and Capgemini both point to the need to use the services of those “digital natives” in central roles in your company. The future of your business could well depend upon giving the strategic reins to your grandchildren.
What have I missed about auto enrolment?
Yesterday I suggested that auto enrolment was not really about pensions, that’s because despite it being about setting up a pension, the real emphasis is much more about communications with staff and with Government agencies. The new system is rather like PAYE, though nothing quite as simple. I have come up with 11, that’s eleven, key issues where auto enrolment will challenge your business or charity.
Contracts of employment will need to be altered reflecting the new pension arrangements; this may be a difficult discussion depending upon your type of business and workforce. Do you need to get the help of HR or even legal advice to do this properly?
Pay reviews and salary sacrifice
Some employers may use this as an opportunity to consider “salary sacrifice” or “salary exchange” this is a bizarre scenario where having a reduced gross income with the reduction paid into a pension, saves both employer and employee national insurance contributions and PAYE, yet invariably the net pay is a bit more, with more money going into a pension. Odd but true.
Payroll integration, live and up to date
Your payroll software will need to be able to integrate the new scheme, if you are a small firm and outsource this to your book keeper or Accountant; they need to be up to speed and have software that does the job.
Schemes will be managed online and the Pension Regulator may demand data going back 6 years in a format that they can readily use). This therefore has implications for your IT systems and security and in particular how you hold and backup your data about staff.
Garbage in, garbage out?
Communication with staff is also a big deal. You need to be able to evidence that you have provided all of the relevant information to your staff, email is the most obvious and cheapest delivery option, but we all know that not everyone uses email or has provided you with an up to date email address, so do you need everyone in the business to have a company email address, and what happens when they leave? Do you maintain records properly?
As a pension is an investment, there are issues about possible Money Laundering and politically exposed people. As an employer do you have evidence that you have done thorough identity and residency checks? Can you prove this? This will also identify any illegal immigrants or visa’s that have expired.
Staying silent and impartial
You might see auto enrolment as a valuable part of your staff package, however some see it as another tax and a whole lot of bureaucracy. You are not permitted to give advice about pensions or entice or discourage staff from joining the scheme. This isn’t just frowned on, it carries hefty financial penalties if revealed.
Non compliance with the rules is a dangerous approach. You may believe that you know your staff, but perhaps you should reflect on what could go wrong for you if a member of staff falls out with you, or is just plain awkward anyway (these people do exist in 2014) so make sure you have complied and that you can demonstrate that you have done so. It is pointless to ask for a bullet proof vest after the event.
You may not be aware that some people have very large pension scheme benefits. The Lifetime Allowance has reduced and will reduce again in April. Some people have protected their larger allowances, but should they accidentally enrol into a new pension, this would scupper their plans. This could trigger enormous tax penalties (55% of £1m for example) and you won’t be terribly popular with the employee that is presented with such a bill because you didn’t communicate well enough.
The cynic in me might suggest that this is another way to join-up the Government agencies, which is fine if you are doing everything properly (unless you have concerns about information flow) but of course will catch out more people that have undeclared earnings anywhere.
Impacting your budgeting
Finally, don’t rely on your costs being 3% of your payroll. It is likely that contributions levels will be raised above 8%, in Australia (where they have had compulsory pensions since 1992) employers now contribute 9.25%. You ought to allow funds for the scheme and your systems to be reviewed and of course you might be wise to provide seminars or meetings for your staff to ensure that they understand their pension.
So, auto enrolment is about pensions… well yes, but it is also about rather more besides.
Dominic Thomas: Solomons IFA
In your pocket
I am delighted to announce that we are working on a helpful piece of kit that will fit into your pocket, or rather on your smart phone or tablet.We are working on a new app, for our clients and their friends. I’m quite excited about it and hope that it’s a great aid to our clients. The new app is being constructed and we are working on the title page. I wonder if you would like to have a preview? You will be able to use the app an iphone and ipad or any android device. Its rich with lots of features, financial calculators, budgeting stuff and of course means that you can contact us easily. We are constantly seeking to utilise proven technology where possible and if it makes sense.
We have another innovation as well that I shall be speaking to clients about, but only for those that use the internet for banking and would like a clever, secure way to view banking, credit cards and investments all in one place safely.
If this is of interest to you please get in touch.
Dominic Thomas: Solomons IFA
What opportunities does the snow offer?
It has been a cold weekend here in London. My team managed to plan around the snowfall successfully. Adapting to things we have little control over is one of my mantras and you will have gathered from a couple of posts last week, that my challenge is often to continually adapt, improve and grow. I have sympathy for those forced to use roads that have become blocked or treacherous. The public transport system has many challenges when it snows and whilst these are great frustrations to many, one has to consider that here in Britain we really don’t have enough “adverse weather conditions” to make the significant investment to cope a little better with the 2% of working time that is threatened. Frankly the resources could be used more effectively elsewhere. However, the snow does provide an opportunity to reflect on working patterns and the way we live our day-to-day lives.
Technology – touch screen is so last year
Perhaps you have been contemplating the alternatives to commuting to an office each day, by use of some clever technology that doesn’t (mainly) rely on good weather. Certainly when life becomes more difficult, we tend to reach for alternatives. Technology can offer some solutions, however the main disadvantage of technology is that it constantly evolves. If you have a smart-phone, an ipad or tablet…well, you will be familiar with a touch screen and recognise that perhaps you don’t always need a mouse and keyboard. Sadly this is now rather old hat. Touch screen is so last year. Make way for motion detection. Those with a games console from the last few years will understand this a little better. Have a look at the video below. This is the next thing that your home or office technology will demand. The knock on effects are yet to be understood, but I imagine web designers will need to be considering the impact as will anyone involved in using a computer to engage or interact, which will be most of us, but particularly those running a business.
Limited by a lack of imagination?
Now clearly you cannot motion every task – certainly the act of shovelling snow is unlikely to be directed from your computer with the wave of a hand…but then again, perhaps I’m not being imaginative enough – we are about to get an influx of remote control devices, primarily used for CCTV purposes – perhaps we could have a fleet of remote control helicopters to grit our roads and streets too. The NASA Rover explored Mars, yet we have a road network of potholes. I’m sure someone can put these devices together. The successful businesses of the future (and therefore investments) are those that identify problems and provide solutions using technology to its full advantage.
Adapt or perish
We have seen the demise of HMV and Jessops in the last few days. OK, administrators may prolong the agony, but these are companies that are deeply flawed for 2013 with their current business model. Before we all wag a finger and say “well you could see that one coming”… well ok then.. but the real lesson is that plans need to be reviewed because the world changes. So what can we learn from HMV and others like them?
Certain of what you do?
Change is constant. If you run a business and you do not adapt to the marketplace (or create a new market) your days are certainly numbered. Technology as we all know has changed what is possible. It has happened to retailing, but it will (and does already) happen in most aspects of life. Technology leverages effort and the rewards for getting this right can be enormous. Getting technology wrong or failing to understand its implications can lead to ruin, just ask Kodak, Polaroid, Jessops, HMV… sense a theme? yet it isn’t just the obvious. Many are now viewing and trying goods on the high street, but then buying them online. Admittedly this is easier when products are identical, but of course the web does also help compare. Where I believe businesses like HMV and Kodak went wrong was not only to fail to identify the change quickly enough, but also to fail to understand what they do. Eh? Kodak make film, cameras, inks right… yes, but no. Kodak captured or recorded images, memories, moments – precisely how they did so was always going to alter. HMV sold records… well tapes, CDs…hold on calendars, DVDs, videos etc etc. What HMV actually sell is entertainment – sound and image, precisely how is almost a red herring.
The technology leverage
I cannot think of an example, where technology cannot alter the delivery of what is done. Certainly in my own field of financial services – technology has made a massive difference. When I started, policy documents were like ancient scrolls, eventually making way for typed documents yet today many are electronic documents. Still the same essential thing… but not if you are a copperplate writer. Financial planning is not about providing financial products. Anyone want one? no, of course not. Financial planning is about solving the problem of maintaining or improving your lifestyle. So whilst there are changes in IFA land, many “advisers” still sell products thinking that this is the solution… you know the story… I want to retire at 65… oh, here’s a pension plan for you then. The truth is that pension plans are just savings plans with tax relief. They might be very good at building a pot of money, but then again, this is only one way of many options available. That’s why I believe that what I do is different. I focus on helping clients to think about their lifestyle and offer thoughts and questions about it and how it might alter if certain things happen, some obvious and some highly personal and unique. I’m sure that one day a computer will be able to perform most of my work for the mass market, but I very much doubt that it will pick up the body language, tone and expressions in a way that is meaningful. In other words the essence of being a person not a robot. Mind you, I’m sure some would prefer that robots did. I doubt that you are one of them.