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6 Things Successful People Never Do

It’s the end of yet another year and a prime time for all of us to take stock of who we are, where we’ve been and where we want to go. Many of us start each year with big ideas, plans and hopes and then end each year with analysis and reflection. Some of us will look back over the year with joy about what we’ve accomplished. We’ll remember all the big wins we had and the many new connections we made. We’ll think fondly about how well we performed on our jobs and then pat ourselves on the back for achieving the personal and career goals we set. But this is only what the fulfilled people will do.

Far more of you will end this year with disappointment – maybe even regret – about all the things you wanted to accomplish but didn’t. You might experience disappointment or regret for not advancing the ball on your career goals. You could find that you feel bored in your current job and crave a career change. You might feel undervalued or underappreciated by your current boss. You might even experience deep sadness about what to do next and wonder if you have what it takes to ever truly experience career success.

If you are tired of making resolutions that go nowhere; tired of reaching for the stars to only land in the dirt; and tired of running in place, take heed. You can have a much happier life and take your career to the next level by subscribing to the same six principles that most successful people subscribe to.

1. They never let other people define their success.

Before you can own your career and get it off the sidelines, you need to define what career success means for you. Career success starts and ends with realizing that what you want to accomplish matters more than what others want you to accomplish. And what you want to experience matters more than what others want you to experience. So long as you allow the expectations and opinions of others to dictate your career choices, you will suffer or struggle with internal conflict.

When you let other people put their expectations on you and define what success should look like for your life, you risk becoming miserable. You can’t experience success if you are being pulled around trying to align yourself with standards and career expectations that other people set.

To experience meaningful career success, you must have the courage to go after what you want even when it might disappoint other people. To be successful, you first have to get real honest with yourself. Decide what you truly want to do with your personal life and professional career and make it your priority.

2. They don’t let the gap between where they are and where they want to be discourage them.

You’ll never get anywhere other than where you are right now if you don’t first get started. Don’t let the gap between where you are today and where you want to be tomorrow cause you to feel deflated. Don’t let the distance between where your career is today and where you want it to be tomorrow discourage or paralyze you. And don’t let your own mind and negative thoughts stop you either.

Successful people know they can create a better life. They know they can have a better career, and you should know this too. You can own your power to create happiness and fulfillment for yourself. Yes – you have it within you, but first you have to ignore the doubters, leave all the haters behind and take control of your own mind.

The difference between success and failure is often grit. And when you get up and put one foot in front of the other – even if you can only take baby steps – you are showing that you have the determination, persistence and grit necessary to change your whole life.

The real questions are:

  1. Do you want what you want bad enough to take that first step?
  2. Are you willing to go after that new job or new career even if it might disappoint someone else?
  3. Do you want that big win bad enough to change your thinking and even your behavior?

3. They don’t give yesterday’s failures more power than tomorrow’s successes.

You might have made some big messes in your life and in your career. You might have dropped the ball on some big projects. You might have struggled – and even lost – with all variety of legal, mental, family, relationship or career challenges. If so, you will have some heavy lifting in front of you, but you absolutely can repair your reputation, rebuild relationships and restore your career.

Successful people do the work necessary to make amends where necessary and then make peace within themselves so they can create a different and better tomorrow. Don’t let your past indiscretions, missteps or failures consume any more of your life than you’ve already given. Reflect on your failures, learn from them and then keep it moving or you risk allowing past regrets to overwhelm your ability to ever really achieve anything different and better for yourself.

It doesn’t matter. What you failed at yesterday doesn’t matter. What you never achieved, gave away – and even what you accomplished yesterday – doesn’t really matter. Realize that everyone struggles, but only the people who stand up and start (even if it means starting over) have any chance of success.

4. They don’t try to coast on past successes for too long.

What you did to get where you are may not be enough to get you where you want to go next. If your goal is to keep advancing your career, you can’t rest on your laurels and ride yesterday’s gravy train. You have to do something different today to get something different tomorrow.

Successful people know they are only as good as their last win, their last success or their last accomplishment. What you accomplished yesterday is great, but if you stop with that, you risk becoming irrelevant without having anything new to celebrate or new goals to embrace.

Yes, you should celebrate your efforts. Relish in the big successes, and the small ones as well, but not for so long that you forget how to grind. Don’t stop for so long that you lose your motivation. Don’t stop for so long that you can’t find inspiration. Successful people stay hungry, and they understand that their best and worst battles in life will actually be found within themselves.

5. They don’t let fear stop them from saying yes when they need to.

Is your fear of risk, failure or rejection causing you to pass up opportunities to expand your network, develop new relationships and advance your career? Are you passing on opportunities for growth and change because you don’t want to be made to feel uncomfortable? Is fear paralyzing your ability to advance your career?

There are mainly three different types of fears that hold people back from experiencing greater levels of success – the fear of failure, the fear of success and the fear of rejection. These fears cause many people to say no far too often when they should be saying yes, and they cause people to resist taking the kind of career risks that can open doors to new and amazing opportunities.

In order to achieve the career success you want, you have to say yes more often and take more career risks. Career risks might include things like:

  • Voluntarily accepting a demotion in pay or title because the lower position would put you on the better career path for you to break through with a much more suited position.
  • Seeking out and accepting assignments way outside your job description or comfort zone because they provide opportunities for learning new skills or serving on different teams that could help to expand your network.
  • Investing your own money into your entrepreneurial venture because no one else has yet to appreciate your talents enough to invest in you.
  • Relocating for a new job because you know you’ve totally outgrown your current role, but the next step for you only exists in a different city, state or country.

6. They don’t waste time searching for happiness.

Happiness isn’t something you find, it’s something you create. Successful people know this. They also know that, in order to create happiness, they have to control their thinking, remain focused and disciplined, ask for what they want and persevere through the ups and downs of life.

Successful people make decisions about who they are and align their behavior and lifestyle with those decisions. Successful people set goals about their careers and then become laser focused on goal achievement. Successful people prioritize their needs and are willing to move outside their comfort zone to satisfy those needs.

The truly successful people demonstrate the mental fortitude necessary to sustain meaningful success. They recognize that money and career success aren’t the whole of it. Successful people know they must also experience inner peace and joy as well. For these people, it starts and ends with aligning their purpose, passion and principles with their decisions, behavior and career choices.

Source: Forbes – Entrepreneurs
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Real Opportunity or Real Distraction? The Truth About Real Estate Investing

“Where should I invest my money?” is one of the most common questions I hear.   

People often look for magical investment opportunities. 

Some people believe a diversified portfolio over the long haul is the way to go. No effort, automatic payments each month and they quote long term averages in the stock market. This has been synonymous with investing, yet 95% of people are not economically independent at age 65 according to the US Department of Labor.  

Others think that real estate is the best investment because it provides tax advantages, potential cash flow, leverage by borrowing from the bank, equity, and a way to build sweat equity if you personally fix it up. 

What’s not to like?  

The problem is, most people are more speculators and part-timers in real estate, rather than investors that treat it like a business. This creates a disadvantage when going up against Real Estate Investment Funds (REIT’s) or people that invest in real estate for a living and have a team to support them. 

One of the first investments I made was real estate. At the age of 19, I purchased a townhouse, rented out a few rooms to my college friends, and lent money to family and friends that were doing real estate. 

I was excited to make money, and I did. But I also learned a lot of lessons from the school of hard knocks.  

I ended up with just over 100 doors where I owned 20-100%. I did a hard money lending fund as well as bridge financing for real estate deals before they secured long term financing. 

At first I felt like a genius. I was making great returns on my first deals! This had more to do with luck and timing over skill and economics. I went into it, perhaps, with the same thought processes many others do. 

I heard so many investment gurus saying that there was an abundance of wealth held up in real estate. That the wealthiest people in the world made their fortune either in real estate or stored their fortune in it. I was sold on it being “the thing”, and that I would be foolish not to get involved in something so seemingly simple, yet lucrative. 

But in this excitement no one ever really explained to me the downsides and I rarely heard them say what type of real estate they were ever referring to. 

What is your opportunity cost? 

Will it take time away from your business, your family, your hobbies? What about additional stress which has the potential to cause harm to your personal health?  

It is common for people to see it as an opportunity without taking into consideration the parts and pieces that are a distraction. Lots of hopeful people discover it is easier to buy real estate than it is to cash flow it or sell it at a profit.

So often, gurus sell it as passive income, but if you treat it passively, expect income and opportunity to pass you by. If you aren’t willing to invest the time to gain knowledge, become a better investor, and treat your real estate portfolio as a business, you are likely to lose out on the “great wealth” that graces so much of the hype in real estate. 

You’ll lose time, money and energy; which is the cost of doing something outside of your expertise and passion, when your main focus is solely on making money.  

Making money is critical, but it may not be enough for you to deal with deferred maintenance, property managers, renters that may not take care of your property, the process of securing financing, and a myriad of time consuming items that come with owning this active investment, that is sold as a passive miracle.   

If you choose to invest in real estate, consider these things up front to secure better results.  

Risk Is In The Investor

Risk is in the investor, not the investment. 

It’s very important to set yourself up with proper strategy and direction in the beginning (like all good investments) to keep yourself from the major pitfalls that can come to beginners. Real estate is like any other skill or business and it requires time and patience to learn the in’s and out’s of it, whether through experience or proactive education.  

If you are going to invest in real estate, it may be to own a building you house your business in, or residential or commercial rental properties. These real estate investments will require completely different skills. 

Don’t over diversify; focus first. Choose your lane. Will it be syndication? Fractionalized ownership? Fix and flips, long-term buys or development?

Once you have chosen your area of focus, immerse yourself in developing your skill set and building relationships that lead to deal flow. 

Who can you learn from? 

What can you study?

Who can support you in due diligence?

Who already has the connections that can save you both time and money?  

One of the most difficult parts of investing comes down to being selective and saying no to deals. Look for ways to make money on the buy, cash flow from day one or discover a distressed person or situation that you can offer a solution to.  

Buyer Beware: The Market

Interest rates have been so low, for so long and it has created inflated prices.

In today’s world, people buy homes on the payment they can afford more so than the actual purchase price. With low rates, minimal down payment requirements, and extended terms that allow interest only or 30 year loans, prices have substantially increased. It’s similar to college tuition continuing to increase based upon the amount of student loans available.  

Buying Smart

Knowing why a deal exist is crucial to making a smart buy on real estate.

Sometimes people buy what they think is a great deal, and go on to find out after the purchase that there are a lot of issues with the house. It’s not very livable or workable, and the investment ends up going towards maintenance, and other needed repairs, additions and updates. 

But sometimes there are good deals based on the type of real estate instead of the condition it is in, just as there are other types that don’t perform as well. For example, luxury homes usually get annihilated, especially when they are 2nd homes and 3rd homes during recessionary times.

Another can be extraordinarily hot markets where more investors are buying than homeowners, which drives the price up. Others get caught in speculation thinking that they will buy and in a few years sell due to appreciation. This approach can be quite risky because you are depending on the price going up in the future, but it may be other speculators running up the price more so than value or economics.

I saw this when I bought a property in Las Vegas in 2005. In this location, there were mostly investors driving the market and you could drive through new neighborhoods where every third home was for rent for ⅓ of what a mortgage payment would be. Eventually, home prices decreased quickly and investors were left holding a home they couldn’t rent for a positive cash flow.  

If you are going to buy, know your exit strategies: seller financing, fractionalized ownership, auction, corporate retreat rental, AirBNB, plus others.

Again, treat it as a business.

Real estate can be a good investment IF you’re a good investor. 

Is investing in real estate something you are going to pay attention to, willing to invest time in, and ultimately treat as a business? Are you going to build a skill set, invest in your education and develop a team? Do you have the right attorneys around you to structure deals properly? Do you have the right asset protection in place? Do you have great brokers, bankers, and technology to find and finance the deal? Have you properly considered the downsides and come up with any contingency plans? How can you make money on the buy? Can you find a situation where you know it’s already a great deal where you can buy and immediately turn a profit?  

Investor DNA

Ultimately it’s about your investor DNA. What type of investor are you? Do you have the drivers and competency to invest in real estate? Is real estate a good investment for you? 

In the end, it is important to know your life’s vision and to stay focused. This is where success happens. If real estate is an integral part of that life journey you are on as an entrepreneur and you feel that it is in line with your goals, while bringing out the best in you, then so be it. But remember, that the real estate business is just that- a business. When we treat it like a hobby or a side job, then we run a high risk of losing time and resources on it. 

Focus on your vision, so you can live the life you love along the way.

Source: Forbes – Entrepreneurs
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How To Choose A Small Business 401(k) Plan

In a time of record-low unemployment, small business leaders can’t hope to compete for talent without the right retirement benefits. The right small business 401(k) brings talented workers to the door, but it doesn’t nickel-and-dime the company to death with fees.

An Accenture study found 68% of workers worldwide with pension or retirement benefits consider those benefits a critical factor in their choice of job. Only slightly fewer, at 62%, said they were critical to their decision to stick with a job. 

Most small businesses simply can’t afford to set workers up with pensions, but they can provide defined-contribution 401(k) plans. With so many providers on the market, though, how can they be sure they’re picking the right one?

What Makes a Great Small Business 401(k)?

At first blush, small business 401(k) plans might all look alike. But the best ones have a few key features:

1. Low investment fees

Neither small business leaders themselves, nor their workers, can afford to have their retirement contributions siphoned off by high fees. An important consideration when comparing is what investment options they offer. 

According to Guideline, the average small business 401(k) plan provider charges more than 1% of the assets managed annually. Make the most of your employees’ retirement — and how much they’ll actually take home when they hit retirement — by looking into providers with low-fee investment options. They’ll get the most bang for their buck with low-fee passive index funds.

2. Integrations with popular payroll platforms

Small business leaders barely have time to process payroll, much less port the information from their payroll platform into their 401(k) plan. To save time now and into the future, select a plan that integrates with your existing payroll platform, as well as any alternatives you’re considering. 

Look for plans that offer a wide variety of tools to connect. Even if you don’t use a certain type of integration now, you may want to utilize it in the future, so you’ll want a plan that makes adding it a seamless process. Companies like RPG Consultants connect to integrations like Heartland, JetPay, Paylocity, Paypro, and PC Payroll, making your life just a little bit easier.

3. Safe Harbor experience

Unless a small business 401(k) plan can meet certain standards, it’s subject to nondiscrimination testing, which is intended to prevent plans from favoring highly compensated workers. Plans that meet those standards are known as “Safe Harbor” plans, and they’re the most popular type of small business 401(k) used today. 

To offer a Safe Harbor 401(k) plan, the employer has to make contributions on behalf of employees who vest immediately. Those contributions generally break into three categories:

  • Non-elective contributions: Even if workers don’t contribute themselves, the employer contributes 3% or more of each employees’ compensation to its employees’ 401(k) accounts.
  • Standard matching: The employer fully matches 401(k) contributions, up to 3% of its employees’ compensation. After that, it matches half of an additional 2% of their compensation. 
  • Advanced matching: The employer matches 100% or more of each employees’ plan contributions, not to exceed 6% of their total compensation.

Safe Harbor is an IRS designation, meaning it’s not a specific feature offered by certain providers. Choose a small business 401(k) provider with plenty of experience setting up Safe Harbor plans for companies with 100 or fewer employees.

4. Personalized guidance for employees

Personalization is the latest frontier in small business 401(k) plans. Because most small businesses can’t afford one-on-one sessions with a financial advisor for their team members, it’s important to choose a 401(k) provider that offers some sort of tailored advice. 

Some offer advice based on personal details like where employees live, where they want to retire, how much money they make, and what other accounts they may have. Other options, like Charles Schwab, give you access to registered financial advisors to offer independent advice to plan participants. You know your employees best, so figure out what they value and choose a plan that will provide them guidance in whatever method they prefer.

5. Usability for all

A small business 401(k) might have all the features and investment opportunities in the world. If it’s not user-friendly, though, employees are unlikely to use it — and even less likely to adjust their contributions when their circumstances change.

Usability was so important to TEN7 that it switched from ADP for this reason. In a recent blog post, one employee of the web design agency commented that “it looks like a Windows application from 1999.”

Employees should be able to see at a glance what their contributions are and quickly make changes. Small business owners shouldn’t be left guessing as to whether or not they’re compliant, and rollovers from other retirement providers should be simple.

Picking a small business 401(k) provider is no small choice. Growing companies need a competitive plan in order to attract employees, and workers need to retire some day. With the right balance of fees and functionality, everyone wins.

Source: Forbes – Entrepreneurs
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RPA (Robotic Process Automation): What’s In Store For 2020?

It’s been a banner year for the RPA (Robotic Process Automation) software market. The fundings have definitely been eye-catching. In April, UiPath announced a Series D round for $568 million, led by Coatue, for a valuation of $7 billion. 

Then last month there was Automation Anywhere, which raised $290 million in a Series B round led by Salesforce Ventures for a valuation of $6.8 billion. 

So why all the interest? Simply put, RPA has been shown to generate quick and high levels of ROI (Return On Investment) for customers. The software essentially automates worker activities that are often tedious and repetitive.

And with all the money sloshing around in the RPA space, we should expect quite a bit of action next year.  “Vendors with a combination of cash and vision will succeed,” said Ryan Duguid, who is the chief of evangelism and advanced technology at Nintex. “They’ll flesh out their stacks by combining RPA, traditional BPM, workflow, and cloud services, layering in process documentation, process discovery and analytics, and looking to enable a ‘virtuous cycle’ of process improvement.”

His company has already been working on this expansion strategy. Nintex acquired EnableSoft (for drag-and-drop functions) and Promapp (a process mapping and documentation platform).

Keep in mind that RPA has been concentrated in certain industries, like finance. But it seems like a pretty good bet that the technology will see expansion across more sectors. “As RPA adoption approaches near-ubiquity, we’ll see an uptick in public sector adoption over the next year, ultimately improving citizens’ access to critical public services, like Social Security,” said Prince Kohli, who is the CTO of Automation Anywhere. “The RPA benefits of speed, reduced costs and productivity are especially relevant to this sector.”

Jon Theuerkauf, the Chief Customer Officer at Blue Prism, agrees with this.  “We’ll see RPA extend its reach across mainstream industries such as the medical, pharma and telecom spaces given the high volumes of sensitive data,” he said. “Ultimately, a true connected-RPA cloud-based platform will look like the re-creation of a human being and possess a skill-set that allows the platform to collaborate with employees on key day-to-day tasks.”

But in terms of the core RPA technology, expect to see dynamism in the new year as well. Here are some areas to consider:

  • Attended Automation: “Attended bots are programmed to provide employees with the guidance and assistance they require, in real time directly from their desktops, and automate anything which is repetitive and doesn’t require their special skills,” said Barry Cooper, who is the enterprise group president at NICE. “Enterprises are realizing that attended automation will have a positive impact on their employee’s adoption of automation and ultimately on the service they provide to their customers.”
  • Process Mining:  “This technology helps to break down complex problems that could potentially be supported and streamlined with RPA,” said Dr. Gero Decker, who is the CEO of Signavio. “This technology also makes RPA more predictive, as it feeds and informs models for more accurate, actionable and effective automation.”
  • Open Source Software: “Companies will embrace open-source, cloud-native RPA, with its significantly lower ramp-up cost and ease of implementation, and see value in hyper-tailored RPA tools specific to their company’s needs,” said Antti Karjalainen, who is the founder and CEO of Robocorp. “These tools will also start enabling more business-critical RPA applications to emerge.”

Although, the biggest technology trend will likely be AI (Artificial Intelligence). “Executives will prioritize opportunities to automate more aggressively, linking AI projects to KPIs—such as revenue growth, cost reduction and enhanced customer experience,” said Bill Hobbib, who is the SVP of Marketing at DataRobot. “Executives also will place greater emphasis on change management and encourage greater involvement from business users—rather than just data scientists or specialist teams—to increase their AI capabilities across more lines of business and processes.”

All great, right? Absolutely. But as with any technology, there are nagging issues too.

For example, there are over 70 vendors on the market–and many will have a tough time standing out.  “Technology and solutions are getting increasingly similar, so if a smaller company has a true differentiator, or a solution that bridges a gap, they will be prime for acquisition,” said Ray LeBlanc, who is the product strategy manager at Verint.  “These smaller companies are also more dependent upon partnerships, and we will likely see M&A activity by SI’s and other large service providers and BPOs.”

There will also likely be some “reality checks” with RPA, as the hype is at fever pitch. “Next year, the market will wise up and realize that not everything that claims to be RPA is actually RPA,” said Francis Carden, who is the vice president of digital automation and robotics at PEGA. “In truth RPA is just one component of a broader intelligent automation platform that must be combined with other automation technologies.”

Finally, as RPA continues to grow, the industry will come under increasing scrutiny. This seems inevitable.

“RPA will be on the global stage,” said Guy Kirkwood, who is the Chief Evangelist at UiPath. “Extra-governmental organizations, like the United Nations and the World Economic Forum, will discuss RPA in the context of jobs, wages and global economics.”

Tom (@ttaulli) is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction.

Source: Forbes – Entrepreneurs
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3 Steps to Prevent Employee Turnover

Late last year, The Washington Post proclaimed, “workers are ghosting their employers like bad dates.” The article revealed that recruiters at global staffing firm Robert Half had noticed a 10-20% rise in ghosting over the preceding year. 

Amidst the increase in ghosting, job-hopping remains commonplace. It’s becoming more and more challenging to retain top talent. A staggering 81% of employees would consider leaving their job for the right offer. The average number of years workers spend at Silicon Valley’s tech titans is especially fleeting. Workers at Uber, Apple, and Google leave after 1.23, 1.85, and 1.90 years, respectively, according to research from Paysa

Fortunately, there are proactive steps that employers can take to avoid workers giving two weeks’ notice or, worse yet, falling off the face of the earth. 

1. Prioritize opportunities for professional development  

Workers are yearning for opportunities to grow and advance. Millennials are especially apt to prioritize professional development opportunities. According to research by Gallup, up to 87% of Millennials consider professional development important. It’s not about going through the motions—workers want to be supported as they aspire to climb the ranks and progress in their career. 

Yet professional development opportunities are hard to come by. According to research by SHRM, only 30% of workers are satisfied with their current professional development opportunities. To be sure, workers aren’t just blowing smoke in craving professional development opportunities. Research indicates that 70% of today’s high performers lack crucial attributes essential to their future career success. 

Forward-thinking companies intent on reducing employee churn are embracing a learning culture.  An organization’s learning culture is one of the most important drivers of business impact. Consider, for example, American Express. As recounted by SHRM, American Express measures the impact of learning interventions on individual and organizational change. Additionally, it leverages employee pulse survey results to better understand the impact of various learning interventions and strategies. Recognizing the impact of a learning culture, American Express has even crafted a dedicated role focused on learning. David Clark, the company’s senior vice president and chief learning officer reflects, “When employees are consistently learning, they are happy.”

The leaders of tomorrow will prioritize embracing a learning culture and professional development opportunities. In doing so, they’ll move waters in terms of preventing employee turnover. 

2. Eliminate monotonous work  

According to a 2018 study spearheaded by Korn Ferry, boredom and the desire for new challenges is the number one driver of employee churn. A staggering 33% of individuals cite boredom as the primary impetus behind their decision to leave. 

While there are numerous drivers associated with boredom, monotonous work packs an especially potent punch. Workers are spending hours on end performing monotonous low-impact work. In fact, according to a new study by Asana, workers spend, on average, four hours and 38 minutes each week on pure duplication of work. In addition to time spent on duplicative work, workers are constantly throttled by bottlenecks in their workflows. 

In our technology-powered world, it’s hard to believe that workers are squandering so much of their valuable time on low-impact activities. Investing in tools that automate workflows—in particular, those that are powered by artificial intelligence—can go a long way in heightening engagement and reducing employee churn. 

3. Leverage artificial intelligence 

Peter Drucker is often attributed to the quote, “If you can’t measure it, you can’t improve it.” Forward-thinking companies recognize the importance of measuring the various factors and initiatives that influence employee retention. Professors Brooks Holtom of Georgetown University and David Allen of Texas Christian University recently developed an index to measure turnover propensity. According to Holtom and Allen’s research, there are two primary drivers behind employee turnover: turnover shocks and low job embeddedness. Turnover shocks are incited by events such as marriage or a change of leadership that cause workers to re-evaluate whether or not they should remain at the company. Job embeddedness, on the other hand, relates to how strongly connected workers feel to the workplace. Job embeddedness tends to plateau when workers lack deep social ties in the workplace. 

The single most effective way to reduce employee turnover is to embrace artificial intelligence. By leveraging artificial intelligence, companies can determine which specific factors drive turnover and predict which employees are most likely to leave. By monitoring salary increases, life events, performance ratings, participation in professional development opportunities, and thousands of other data points, employees can uncover the true drivers inciting employee turnover. Armed with artificial intelligence, no stone should be left unturned. Even such factors as length of work commute can influence turnover.

Source: Forbes – Entrepreneurs
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The moral hazard of celebrating incrementalism

I’m not in Madrid this week at COP25 – a.k.a. “Conference of Parties,” the annual gathering at which world leaders discuss a coordinated approach to climate goals in meetings hosted by the United Nations Framework Convention on Climate Change (UNFCCC).

Instead, I’ve spent the last two weeks reading articles and newsletters capturing slivers of conversation, commitments and actions. After all, COPs are remembered by the stories they tell as much as the accords they ratify.

During this COP, two loud, dissonant narratives are springing from the headlines

The first: things are worse than we thought, and we aren’t headed in the right direction yet. A United Nations report shows that the world hit a new high in greenhouse gas emissions in 2018, despite pledges from world leaders to slash emissions, putting the earth on track to hit 3.2 degrees Celsius warming in the 21st century (dangerously past the Paris Agreement global goal to keep increases below 2 degrees C). 

Emissions from fossil fuels will hit a record high in 2019. Energy sector emissions are likely to close the decade around 17 percent higher than they were in 2009. The U.N. Secretary-General warned that climate change is close to “the point of no return” and that “we need to reduce emissions by 7.6 percent each year” to have a chance of a safe climate future.

The second: businesses are stepping up and taking ambitious action to address the climate crisis. For example:

  • RE100, the corporate initiative led by The Climate Group, announced more than 200 companies are committing to 100 percent renewable electricity, a number that grew by one-third in 2019 alone. Among the new signatures are Gap, 3M and Ralph Lauren

  • Kingspan committed to achieving net-zero emissions in manufacturing and halving emissions in its supply chain by 2030.

  • Cargill committed to reducing supply chain emissions by 30 percent by 2030. 

  • Tech company Logitech committed to a 1.5 degrees C climate pledge and 100 percent clean energy goal. 

  • The Science Based Targets Initiative released its first assessment (PDF) of its progress, announcing 686 companies publicly have joined the initiative; of these, 285 had their targets validated by third-party experts.  

  • More business leaders joined the #WeAreStillIn U.S. subnational delegation, including 3M, Facebook, HP Inc., Ikea, Mars, Target, CocaCola and Unilever. 

The private sector presence at the conference is apparent in person, too. As reported by the newsletter Heated, “If you wander into the U.N. climate talks happening right now in Madrid, you’ll be forgiven for thinking you’ve happened upon a corporate trade show.” Accounts also report the venue is surrounded by corporate climate advertisements. 

The flurry of business involvement isn’t an isolated instance. Whenever there is a global news hook about climate change, commitments roll in from companies that want to do their part — this is a practice that dates back to at least the birth of the UNFCCC at the Rio Earth Summit in 1992. But if those targets had the intended effect, why are emissions still rising?

The moral hazard of celebrating incrementalism 

I reached out to Bill Weihl, former sustainability director at Facebook and green energy czar at Google, to talk about this disconnect. 

“Having companies adopt commitments is about individual action, not about changing the system,” Weihl said in a phone conversation. 

That’s not to diminish corporate commitments; we should celebrate climate leadership everywhere. But, Weihl pointed out, if we don’t talk about what needs to happen, it’s not going to. 

“I think there’s enormous moral hazard to celebrate the incremental without pointing out how inadequate it is,” he said. “It makes it easy for people to stop there.”

While individual commitments are becoming more widespread and actions are beginning to make a difference (for example, direct fossil fuel emissions in the United States are expected to fall in 2019, after a rise last year), they are not moving the needle at the speed or scale necessary to meet the magnitude of the problem. 

Individual company climate commitments cannot go far enough fast enough 

Many are aware that individual action alone will never will be enough to address systemic sustainability challenges. If consumers feel they’re complicit in the climate crisis because they drive to work, for example, it shifts the burden away from the powers shaping a society without adequate public transportation or housing options, and no one takes ownership of fixing the problem. 

It is a phenomenon known as diffusion of responsibility; if everyone is responsible, no one is. 

So it stands to reason that companies must be key actors in addressing climate change. After all, just 100 companies are responsible for more than 70 percent of the world’s emissions. If they had to, that group could effectively tackle the climate crisis. 

But here’s the thing: They don’t have to. Companies are also affected by the diffusion of responsibility phenomenon. If a handful of companies do what it takes to be zero carbon — or even carbon-negative — that isn’t enough to counter all the other companies doing little to nothing. 

“Having companies adopt commitments, that is about individual action, not about changing the system,” Weihl said. “More commitments won’t change that anywhere near fast enough.”

The solution: strong, science-based climate policy that levels the playing field

The only way to get to strong policy, Weihl said, is if companies are powerful, consistent advocates for climate action everywhere they operate. 

While we have seen companies push for clean energy policies that support achieving internal energy targets (such as utility deregulation, net metering policy or green tariffs), very few have stepped up to counter the influence of other industry lobbyists, especially fossil fuels. Notable exceptions, Weihl said, are Etsy, Adobe, Patagonia and Salesforce. 

Speaking out on climate and clean energy policies can be seen as dangerous for a company. After all, we’re in a hyperpartisan environment, and companies profiting from dirty energy won’t let ambitious policy pass without a fight. Few companies want to be embroiled in a brouhaha unnecessarily. 

But if anything will sway American politicians, it’s the business community. 

“I understand the risk they see in speaking up, but their silence is a form of complicity, given the extreme influence the other side is bringing to bear on these issues,” Weihl said.

The takeaway: Companies should do what they can to support the innovations that make transitioning to clean energy possible and economical. At the same time, companies that care about climate should think about spending just as much time pushing politicians to pass meaningful, science-based legislation that makes addressing climate change precompetitive. After all, when companies speak, politicians listen.

And to NGOs, the media and activists: Help change the cost-benefit analysis for companies. Make speaking out on climate more advantageous than staying silent.

Author: Continue reading The moral hazard of celebrating incrementalism

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Episode 200: Biomimicry maven talks Project Positive, Walmart exec chats up Project Gigaton

Week in Review

Commentary of some of this week’s stories begins at 7:37.

  1. Why human health must be at the center of climate action
  2. Will the private sector be held liable for climate change?
  3. As the climate crisis grows, Big Oil finds itself over a barrel


Share your voice (21:09)

In the last GreenBiz 350 podcast of December (Dec. 20) and the first podcast of January (Jan. 10), we will feature the voices of the GreenBiz community, responding to the following two questions: What was the most important lesson you learned professionally in 2019? and/or What’s your biggest professional ambition for 2020? If you’d like to submit your thoughts for either, please alert us at [email protected], and we’ll send you the recording and submission guidelines. 

Taking stock of Walmart’s Project Gigaton (22:27)

More than 1,000 suppliers have signed on to Project Gigaton, Walmart’s program to motivate its value chain to remove 1 billion metric tons of emissions from their operations by 2030. So far, it has managed reductions of 93 million metric tons. Zach Freeze, senior director of strategic initiatives for Walmart’s sustainability team, chats about the innovations driving progress among suppliers and why interest in the packaging component of the program is growing. 

Dow’s quest to reduce plastic waste (34:07)

One of the biggest plastics producers in the world is serious about reducing plastic waste, and it’s investing in partnerships to get the job done. Tune in for featured excerpts from the latest Purpose and People column by leadership coach Shannon Houde, featuring Dow global sustainability director Haley Lowry.

Janine Benyus wants you to think positive (38:33)

Can the principles of biomimicry design be applied to buildings? That’s the holy grail of Project Positive, a group of “change agents” researching ways their facilities can create positive benefits for the land and local ecosystems they touch. Biomimicry thought leader Janine Benyus chats about the mission.

*Music in this episode by Lee Rosevere: “Southside,” “Keeping Stuff Together,” “More on That Later,” Credit Roll” and “As I Was Saying”

What’s new at GreenBiz?

How does ESG measure up? Mainstream investors are asking for more data on corporate climate risks and opportunities — and they’re being forced to wade through the sea of metrics and standards used for reporting. Join this interactive webcast at 1 p.m. EST Dec. 17, about how to harmonize disclosure in a way that will speak to the investment community.

Do we have a newsletter for you! We produce five weekly newsletters: GreenBuzz by Executive Editor Joel Makower (Monday), Transport Weekly by Senior Writer and Analyst Katie Fehrenbacher (Tuesday), VERGE Weekly by Executive Director Shana Rappaport and Editorial Director Heather Clancy (Wednesday), Energy Weekly by Senior Energy Analyst Sarah Golden (Thursday) and Circular Weekly by Director and Senior Analyst Lauren Phipps (Friday). You must subscribe to each newsletter in order to receive it. Please visit this page to choose the newsletters you want to receive.

Check out our Center Stage podcast, which features the best of live interviews on sustainable business and clean technology, conducted on stage at GreenBiz and VERGE conferences.

The GreenBiz Intelligence Panel is the survey body we poll regularly throughout the year on key trends and developments in sustainability. To become part of the panel, click here. Enrolling is free and should take two minutes.

Stay connected

To make sure you don’t miss the newest episodes of GreenBiz 350, subscribe on iTunes. Have a question or suggestion for a future segment? E-mail us at [email protected].

Author: Continue reading Episode 200: Biomimicry maven talks Project Positive, Walmart exec chats up Project Gigaton

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Climate change poses an existential risk to ocean industries. Here’s how they can respond.

Never before has the urgency of climate action for ocean health been more pronounced. In September, the Intergovernmental Panel on Climate Change (IPCC) published its first Special Report on the Ocean and Cryosphere in a Changing Climate, finding that climate-induced declines in ocean health will cost the annual global economy $428 billion by 2050 and $1.98 trillion by 2100.

Now, building on this analysis, a new paper commissioned by the High Level Panel for a Sustainable Ocean Economy unpacks what these economic losses are at the country and regional level across three of the ocean-based industries — coral reef tourism, wild fisheries and mariculture (the cultivation of marine life for food).

The results are sobering. Changes to the ocean’s temperature, chemistry, flow and food webs have broad implications for our global economy. While some countries are set to maintain or improve catch and profits, billions of others around the world who rely on healthy oceans will see decreases in fish, food and prosperity. West Africa could see fish stocks decline by up to 85 percent due to migration to cooler waters. The North and South Atlantic, North and South Pacific and Indian Ocean basins will see fish stocks decline by up to 30 percent by 2100 as fish migrate to Polar Arctic and Southern Ocean basins.

Coral reef tourism, worth $35.8 billion globally every year, could experience revenue losses of over 90 percent based on the current trajectory of warming.

However, if we act now, we have a path to reinforce the resilience of these ocean ecosystems and the industries that rely on them.

First and foremost, we must urgently reduce global greenhouse gas emissions from both land and ocean sources. A recent analysis commissioned by the High Level Panel for a Sustainable Ocean Economy found that ocean-based climate action could deliver up to 21 percent of the emissions reductions needed by 2050 to limit global temperature rise to 1.5 degrees C — demonstrating that the ocean can be a powerful part of the climate solution.

But for the impacts which are now unavoidable, decision-makers must change the way they manage their marine resources.

1. Cooperate across boundaries for wild capture fisheries

Wild capture fisheries produce about 79.3 million metric tons of fish, representing 46.4 percent of global seafood production and $130 billion in economic value. The industry employs 30.6 million people and operates 4.6 million fishing vessels. And for coastal communities and small island nations, small-scale fisheries are the backbone of their economies and their main source of protein.

As suitable habitats shift and change, marine species will move across jurisdictional boundaries. That will make it impossible to base management on historical benchmarks. As the climate changes, the fisheries sector will need to work to understand risks and anticipate changes and to make decisions aimed at improving ecosystem health. Regional, national and international cooperative agreements will be necessary to ensure they are well-managed, and that the benefits are fairly distributed, during and after the transition.

In fact, our research finds under all climate scenarios that climate-adaptive fisheries management results in greater cumulative profits than business-as-usual management for 99 percent of countries. For many countries, catches also can be increased under certain scenarios. A constantly changing ocean requires management strategies and decisions to factor flexible, adaptive and precautionary approaches. As waters warm and acidify, fish stocks will migrate poleward, resulting in potential regional and international conflicts over shifting resources and exacerbated inequalities.

Historically, well-managed fisheries have been among the most resilient to climate change. Wider implementation of best practices in fisheries management will mitigate many of the negative impacts of climate change.

2. Expand marine aquaculture

Mariculture, or marine aquaculture, produces over 38.6 million metric tons of seafood worth $67.4 billion every year. This sector has great potential as a source of nutritional seafood in the future, not least in areas where fish stocks are forecast to decline.

Although climate change is expected to reduce the productivity of mariculture, the magnitude of this reduction is small relative to the sheer potential for production. For many countries, developing or expanding sustainable mariculture could help offset the negative efforts of climate change on their local fish stocks.

3. Diversify and protect reef-based economies

Ocean tourism has the potential to alleviate poverty, especially in coastal fishing and farming communities where poverty incidences are high. It can boost local and national economic development and improve local welfare. But even if tougher climate action is taken to cut greenhouse gas emissions, and climate change stabilizes, coral cover is still expected to reduce by up to 28% resulting in global economic losses of up to 66 percent.

Diversifying tourism activities and investments will help maintain diverse ecosystem functions, while simultaneously capturing the tourism potential of various ecosystems. Ecotourism — tourism activities that support nature conservation and education — should be prioritized to prevent exacerbating the degradation of the environmental resource base that the tourism industry depends on.

Protecting mangroves, salt marshes and seagrasses — which serve as nursery areas for coral reef fish species and trap sediment — also will serve to enhance reef health and productivity. Furthermore, reducing local threats on these interconnected habitats (such as sedimentation, nutrient pollution and overfishing) will improve the ability of coastal ecosystems to cope with warming and acidification.

Linking fisheries, aquaculture and tourism to local food and livelihood security also will improve the portfolio of policies that can be applied to reduce climate change’s impacts on local and national economies. Activities in the marine environment also can be strategically sited to reduce negative interactions and maintain healthy reefs.

An equitable way forward

The steps taken to adapt these three sectors for coming climate impacts must consider the equity implications of all new and existing management decisions. Climate change will exacerbate global inequities, and inequity reduces resilience, thereby likely worsening outcomes under all climate change scenarios. Truly inclusive, representative, participatory decision-making processes are needed in all sectors to ensure procedural equity in all policy and management decisions.

Author: Continue reading Climate change poses an existential risk to ocean industries. Here’s how they can respond.

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How Dow seeks to turn plastic waste into a circular resource

Haley Lowry, global sustainability director at Dow, has big plans for plastic.

Representing one of the largest plastics producers in the world, she is working to create new systems, products and technologies — such as advanced recycling and finding new uses for recycled plastics — that are intended to scale the circular life of plastics, creating new revenue streams while lifting people out of poverty. We talked about her efforts at Dow to create paths to reducing plastic pollution. Here are excerpts from our conversation, edited for clarity and length.

Shannon Houde: You’ve spent the last 14 years of your career at Dow. Tell me what has made you stay, and what you’re working on these days.

Haley Lowry: I think of myself as a social innovation intrapreneur, someone who uses the knowledge and experience of the company to help it advance toward a more sustainable future. Dow has provided me with a space where I can thrive in that role and solve critical problems.

Plastic presents one of the biggest challenges — and opportunities — of our generation. Never have we seen an issue rise so quickly to the forefront of the world’s focus, amplified as it has been through social media. It gives me hope that we can solve this, in much the same way that we managed to repair the ozone layer.

The solution to plastic pollution requires collaboration between the private and public sectors in ways that aren’t always convenient or comfortable, but we can do it.

Houde: What is it about plastic waste in the environment that calls for global collaboration? 

Lowry: Too much plastic enters our natural environment. That’s unacceptable. It’s also unacceptable to view this valuable material as waste in the first place. That’s the thinking of a linear economy. As we transform to a circular economy, we’re forced not only to think about waste as a resource but also to change business models, logistics, consumption behaviors, policy and infrastructure.

Moreover, while this is a global issue, it requires localized solutions. Developing countries lack the infrastructure to keep plastic waste out of the environment, while developed countries are scrambling to find markets for their waste after China’s bans. The solutions will be different from one location to the next. 

Finally, no one company, part of the value chain or sector can solve this. Historically the private sector tended to work with one step next to them in the value chain — direct customers and suppliers — and this completely shifts in a circular economy. Collaboration becomes essential.

Houde: Have you seen any examples of this type of collaboration working well? 

Lowry: The Alliance to End Plastic Waste is a great example. It’s a coalition of more than 40 companies including brands, plastic and packaging producers and waste managers. It has committed $1.5 billion toward solving plastic pollution, focusing on scalable solutions for infrastructure, innovation, education and cleanups. While we’re just getting started, the companies involved, including Dow, are finding that there’s a lot we can learn from each other.

Houde: Walk me through this intersection between business and social sectors connecting with plastic waste issues.

Lowry: Let’s consider the example of Recycling for a Change, a program which Dow developed in concert with our partners Boomera (a BCorp) and NGO Fundación Avina in Brazil.

Recycling for a Change uses a training, professional development and strategic support model that enables waste-picker cooperatives to become more sustainable and profitable while providing the highest quality materials to enhance the plastics recycling value chain.

Recycling for a Change supports local entrepreneurship and economically empowers individuals, families and communities. Halfway through the project so far, we’ve already seen a 70 percent improvement in productivity, a 50 percent increase in sales and an increase in workers’ monthly salaries above minimum wage.

Houde: What do these collaborations look like when framed with specific issue efforts such as food waste and plastics in nature?

Lowry: I’ve seen these two issues become one opportunity in our work with the Houston food bank network. We started with a desire to provide more nutritious food to food-insecure people, but access to fresh produce was expensive and hampered by shelf-life constraints and distribution limitations. At the same time, there was so much food waste. A retailer would get a truckload of cucumbers, for example, and 10 percent of it would be spoiled.

So, along with the Montgomery County Food Bank, we co-founded the Produce Rescue Center in April 2017. Everyone in the value chain had something to gain. The retailer didn’t have to pay to send lost food to a landfill and could send it to the center for composting for a lower, tax-deductible fee. The good produce was packaged, extending shelf life by 20 days. And the plastic is fully recyclable.

We’ve rescued 7 million pounds of food from the landfill this year and provided 5.8 million nutritious meals to food-insecure people since we started.

Houde: Is there a role for philanthropy? How have you aligned this to better enable partnerships and collaborations?

Lowry: There’s certainly a role for philanthropy, and at Dow, we’ve launched a Dow Impact Fund that goes to projects that demonstrate a social, environmental and business impact. We’ve had to work on building a culture of intrapreneurship to get submissions from our organizations around the world on critical projects.

All projects must have external partners, especially an NGO in the local region, for maximum implementation. Over three years, we’ve allocated $5 million to 25 projects. We have more progress to make, but this is a step in the right direction to catalyzing philanthropic dollars for greater impact.

Houde: What advice would you give a fellow sustainability practitioner who wants to ramp up the plastics agenda within their company?

Lowry: Don’t give up. This kind of effort often falls into one of two buckets. In one bucket, you have a company working on sustainability but nobody cares about it, so you can shape the effort the way you want it, but with limited resources. In the other bucket, the project is your CEO’s top agenda item, so you get the resources you need but have less latitude in shaping the agenda because you’re juggling a lot of other opinions. Regardless of which bucket you’re in, work with your organization to evolve through these transitions.

Secondly, give your colleagues opportunities to act and participate.

The plastic waste issue is part of a much larger waste management issue, especially in developing countries. Ineffective waste management practices on land lead to waste washing into rivers and eventually into the ocean. Everyone can participate in advancing recycling options, helping to collect waste, or participating in environmental cleanups in your regions.

Helping employees at your companies see that they can make a difference is important, and helping them see the impact of that work will keep them engaged and coming back to help even more.

Above all, keep pushing the boundaries. It can seem like a long, daunting journey, so celebrate every win you get and just keep moving.

Author: Continue reading How Dow seeks to turn plastic waste into a circular resource

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UK Backlash as Amazon Eyes-up $24 Billion Pharmacy Market, Following Controversial Data Deal with British Government

Confidential documents have recently revealed a controversial deal between Amazon (among other private companies) and the UK government, with Amazon granted a free license to commercialize UK National Health Service data, which will help them to sell pharmaceuticals. Alexa, the voice-controlled home assistant can now provide free health advice, based on NHS guidance notes – the data in question – and then suggest pharmaceutical remedies for sale. Amazon could generate $billions in additional revenues in this new paradigm. Their recent health-tech innovation could be a tipping point for the market, with significant political and commercial consequences. 

Generations of medical expertise has been distilled into sophisticated NHS guidance notes, which aggregates into millions of hours of expert work. Licensing this data to the world’s most profitable company for free is highly controversial, given the implications on market value, and Amazon’s dominant position. Amazon can now distribute this NHS medical advice, without having to develop its own medical IP. Parallel to this, Amazon is recording and analyzing personal health data exchanged during Alexa interactions, building a sophisticated medical profile on each user, and indeed, aggregated metadata, which can later be sold to third parties. Importantly, Amazon’s health-tech innovation follows its acquisition of PillPack for $753 million in 2018, now rebranded as “Amazon Pharmacy”.

Amazon is making an aggressive push for a share of the UK’s $24 Billion pharmacy market, threatening the closure of many incumbent pharmacies in the process. While the NHS is a public body, the UK’s pharmacy market is largely private, with around 40% run by independents. Boots is the largest UK pharmacy group, with 18% market share, and is already considering store closures. 

The principle of the UK government granting Amazon a free license to commercialize this data has generated a political and legal backlash that will likely grow, following a formal legal complaint this week to the European Commission. Lawyer Jolyon Maugham QC, a prominent anti-Brexit campaigner and founder of the Good Law Project has launched a legal challenge this week, hoping to cancel the license with Amazon, arguing that the tech giant should at least pay for access to this data. The UK electorate is hyper-sensitive to the principle of privatisation of the health service, and in this context, his legal challenge is likely to attract substantial political support. The prospect of high street pharmacy closures, job losses and an Amazon monopoly position (helped by the government) will aggravate critics of the world’s largest retailer. 

This week’s legal complaint triggers an official inquiry and opens a question over the revocation of the deal. The European Commission has legal power to cancel the license, if found to be in breach of EU State Aid Law, which prevents member states from giving an unfair advantage to private enterprise, through unauthorized subsidy. A State Aid value-limit of €200,000 (£168,600) over three years is set in law, so the argument will likely focus on whether Amazon has received €200,000 of value from the data, or more. The UK is still a member of the EU, and must abide by EU rules. If the data deal is canceled, a new deal could, of course, be proposed by a new government. But future use of the data would be subject to intense public scrutiny.

 We can anticipate job losses in UK pharmacies from Amazon’s new push into medicine, and increasing scrutiny of Amazon’s tax advantages, whatever the consequences of this legal challenge. Amazon UK is currently paying less in corporation tax than many medium-sized companies, while boasting UK sales of $14.5bn (£10.9bn) in 2018. This apparent tax advantage does not seem politically sustainable. At the heart of the Amazon story is tension between innovation and public cost. In this instance, the UK government is seeking to save money on healthcare services through innovation, regardless of the commercial and political side effects.

Source: Forbes – Entrepreneurs
Continue reading UK Backlash as Amazon Eyes-up $24 Billion Pharmacy Market, Following Controversial Data Deal with British Government