Monthly Archives: January 2017

Happiness through success––or success only through happiness?

An interesting question: Will we only be happy when we have achieved success or goals? Or do we work more successfully if we are satisfied from the start? And if the latter is true––how can we implement “happiness first”?

By Jens Kügler

Our last article “A Fairy Tale called ‘Everything Worked out Hard'” concluded with a statement and named examples. Examples that show that discipline and hard work alone are not automatisms of success. If we continue thinking this idea, the so-called success factors such as “a lot of stress, little free time” quite simply turn to status symbols of our fast-moving time.

If these factors are not good for success, then, of course, they don’t help us for the happiness that we hope to achieve through success. On the contrary. If, as usual, after every success we increase our aims, frustration will quickly begin in case of shortcomings.

I recently read about Shawn Anchor in the Huffington Post. He is a Harvard professor and has been dealing for years with the question of what makes people happy and successful. His credo is: Our brain works exactly the opposite way but making us the happier the more successful we are. Shawn Anchor found out that if we are already happy, we increase our professional output and successes. In a positive state, our brain is more productive, according to the US-American professor.

Anchor’s studies have shown that in a previously positive state the productivity of the brain increases by 31 percent compared to the median mean of all subjects. Salesmen even increased their performance by almost 40 percent, as Anchor found out. And physicians work almost 20 percent faster and more precisely.

Anchors’ so-called positive state can be translated with satisfaction in here and now. But as I can see from the further remarks, “here and now” has nothing to do with esotericism or Far Eastern religiosity. And the “positive state” is probably more than a wisdom from the previously known philosophies of “Positive Thinking” by people such as Dale Carnegie or Napoleon Hill. The Huffington Post article concluded with a very simple formula.

A sense of happiness that makes productivity increase possible can be achieved in 21 consecutive days with only two minutes of effort. You just have to write down three things for which you are grateful. After 21 days, the brain begins to first see the world from the positive viewpoint instead of the negative one. This leads to a stronger sense of happiness.

Too bad that I could not read the article in December: It’s content would certainly have become the topic of a good essay article for the new year. Nevertheless, it can still serve as a good pre-eminence for the rest of 2017. Try out? Try out. 21 days …

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A Fairy Tale called “Everything Worked out Hard”

Talent, luck and coincidental chance can be regarded as some of the most important success factors in professional life. But especially the last two are usually absolutely neglected in CV’s. Bus why? Are we not honest enough to ourselves?

By Jens Kügler

Recently, I read the story of an American, who once became an investment banker—more or less unwilling but eventually quite successful because somebody had talked hin into it and gave him some opportunities. Years later, he was able to make something like a sabbatical and followed his true vocation, writing. He became one of the most successful non-fiction authors in the world. The investment banker’s job and his view of the world of work, colleagues and psychology in the industry provided the material for his top-tselling books.

This reminded me of another story which happened in the time around 1960. It’s about a milkshake machine sales representative who visited a particular burger grill in California. This diner had ordered eight instead of the usual one or two milkshake machines. Ray Kroc saw how the McDonald’s brothers organized their store and what business idea they carried out: factory production and frozen storage of the ingredients. Making quick burgers within less than a minute possible. The crowds stood there in queues. Kroc paid little more than two million dollars to the McDonald brothers for their name rights. As, unlike them, Kroc saw the big opportunity. In a nightly flash of inspiration, the poor sales representative had invented the concept of changing the McDonalds’s business idea to the world’s largest franchise and gastronomy company. He became a multi-billionaire.

Many people owe their extraordinary success not only to discipline and hard work. Luck and coincidence are probably the most underestimated and repressed success factors. However, these may have helped the children’s neurologist Eckart von Hirschhausen to become a million book seller and TV entertainer with satirics about health systems that every German laughs about. Without coincidences, the hitherto unknown provincial cook Horst Lichter would surely never have become Germany’s best known television star chef, respectively.

Sure I hear the objections that say: yes, extraordinary talented people succeed much easier. Several generations of Giacomo Puccini’s ancestors were successful professional musicians. Leopold M. of Salzburg is still regarded as one of the best composers of his time. They say he handed over his talent to his son called Wolfgang Amadeus. So far, so good—but also in our little, very personal career and success stories, talent, vocation and often luck and chance play a role. In my case, for example, the coincidence of “discovery” of a talent by my boss helped me from a commercial workplace to the copywriting studio.

Our doctrine says: Only hard work, discipline and excellent further education bring us forward. “I’ve worked hard by myself to achieve all this,” says every boss, every manager. But in reverse, this would mean that any hard work would inevitably lead to success. Secondly, every success should be the result of hard work only. Luck or chance are not accepted. They would depreciate any CV.

I am convinced that no successful life has come true without luck. And since nobody has only bad luck, everyone has a chance. To rely on this alone would be foolish. But it would also be foolish to not try out talents, longings and seemingly random chances until the end of our lives.

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Is it too Expensive or is it Worth the Price?

Discounts can boost sales. But very often, they are absolutely counterproductive. Sometimes the buyers run away from “cheap” products …

By Jens Kügler

Once upon a time there was an agency for telephone marketing. It was my training company. For years, the agency had compiled its offers for one of its key customer strictly according to the unit price list. One fine day, the client informed my boss that the expected new order would be omitted because a competitor had offered the same service about one third cheaper. How did my boss react? He sent another offer, reduced by one third. The response of the customer? “George, that can’t be true. Have we paid your excessive prices for years?”. The customer–until then our most important one –never returned. Why? Not only because he was angry for having paid too much. But also because my boss has devalued our high, “expensive” quality promise with his price reduction.

Well, the story is over 25 years old. But today, more than ever, it’s not only low prices that promote sales. In many areas sales are still pushed by quality. We live in a society of the divided price and consumption policy. On the one hand, we are smart shoppers and discounter buyers and save our hard-earned money together as good as we can—as we believe. In the discounter’s shower gel bottle for 69 Cents there is probably a branded product from any excess production capacity. And my beloved one? She buys what she wants—but as an incentive, she needs a goodie or a discount for her good scent or her wellness weekend.

On the other hand, discount buyers are almost always luxury lovers somewhere, too. Everyone has his favorite brand for certain specific products. For me, it is sportswear, bicycles and racing bike components such as the tried and tested 27-speed shift from Japan. What disappears more and more is mediocrity. For the manufacturers and product suppliers, this means either producing articles with low product ranges and minimal margins, which only make profits over masses. Or they offer smaller quantities of high-quality, mostly highly specialized articles and services at sales prices, which do already pay for the individual item.

In German as well as in English, the word cheap does not only stand for low price but also for inferior quality. And as the Irish poet Oscar Wilde said: “A cynic is a man who knows the price of everything, and the value of nothing.”

Back to the example of my boss. Did he give a higher value to the service and performance of our agency in the eyes of the customer? On the contrary. Did the customer see the seller—my boss—as a competent seller and consultant? Certainly not. Otherwise, my boss would have justified the original price and pointed out the quality difference to the competitor. An all too fast price reduction is unsettling the customers. Just imagine it would have been about buying a car. Every friend of the buyer would have commented something like: “Well, if the seller went down with the price so fast, I would have negotiated much more discount if I were you”.

There are very likely ways to help customers who consider a product to be worth the price. One of these is an upgrade, an extra, an additional service. For selling a car this may be some additional equipment or a comprehensive service package. In the case of the telephone marketing offer, this might have been a service package with things such as a more detailed success documentation, additional purchased customer addresses, mailings or multiple calls. Often, customers will appreciate higher rates only when they see how much human use or manpower they acquire with it. My lade is pleased when they offer her an extra wellness package, be it the extended Thai massage and the noble Prosecco.

Last but not least, customers in the higher price segment do not buy a product but rather the culture, the lifestyle, the vitality of a coherent brand environment. From my Italian racing bike brand I could buy ten times more expensive bikes than mine. But mine gives me the good feeling to be a first class bike rider, too, as I also ride a “B …”! And then there is the example of a British perfume manufacturer. He promotes to offer the “most expensive perfume in the world”. Even if hardly anyone buys this, the other products of the brand sell very well. Because they are from “the best”.

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What makes Founders Fail? Here are Three most Common Reasons

About half of all enterprise foundations in Germany crash within the first five years. But why? Quite simply, many people calculate capital requirements, key figures and performances incorrectly.

A good business idea, a USP feature—that is the groundwork for a successful company. But alone it’s no guarantee for success. And it does neither offer any “roof” nor “protection wall” against homemade crises.

A first major source of error already occurs before the businesses have actually started. It is the lack of corporate finance. Understandably, entrepreneurs do not want to overburden themselves and therefore keep the borrowed capital as low as possible. What many underestimate, however, is the start-up phase in which losses are usual. At no founder’s shop desk, customers already queue up from the opening day on. And the operational break-even is by no means the point at which all investments have been amortized. In summarize, more money than the minimum is needed.

Again and again, financial and business consultants refer to the point of misguided start-up loans. For example, a lack of collateral or the absence of subsidies make loans more expensive. Often their fixed interest rates and maturities are not accompanied by amortization. If, however, the non-repayment periods are extended too long, the repayments will burden the subsequent operating result. In short, if you do not have a precise business plan and secure financial planning by experienced company consultants, you save money at the wrong end from the beginning.

Error source number two is the lack of knowledge of industry-specific key figures such as sales, productivity or coverage. For example, those who position themselves by the so-called regular sales prices, in fact, calculate their sales too high. Eventually, groups or large-scale customers want discounts. And there are seasonal discounts or special rates for storekeepers, too.

Therefore, the average price turnover is much lower. The only way to get safety is a precise calculation of how much annual turnover per square meter or seller is realistic or how much productivity a working hour actually generates. Thus, a comparison with similar companies in a comparable market environment is essential—as well as a local market and demand analysis. But what about the expenses for shop rental, vehicle fleet, business equipment, personnel or personal life? The founders usually offset them against the unrealistic maximum turnover. What seemed to be highly profitable turns out ruinous.

Last but not least, the assessment of one’s own performance does hardly ever agree with the actual possibilities. If, for example, an individual self-employed raises his annual turnover according to the maximum possible 2,500-year working hours, he is enormously miscalculating. If he wants to charge, say, one hundred dollars per hour, he dreams of an annual turnover of a quarter of a million. Well … about one third of his time he will be needing for acquisition and customer negotiations, business initiation and business deals. Added to this has tobe the time required for administrative activities and all the other usual office work.

In fact, he will be able to offer his customers no more than, say, 1,000 annual working hours. And customers will perhaps give him work for 70 percent of these hours if it goes well. This has to be the planning figure, not his imaginational income. The same applies to the calculation of sales area sizes or personnel requirements at retailers, for example. In short, whoever calculates wrongly or too profitable just to get bank loans easier will be facing a dangerous cost trap.

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