Friday, July 10, 2009

The Recession Psyche

In these tough times, understanding the psychology of human nature is paying economic dividends.

Restaurants are restructuring their menus offering specials such as “recession-busting burgers” and “bear market brisket.” There are also those frequent-buyer deals where the seventh or tenth meal is free.

Jewelry stores with sales plummeting are turning to buying gold. They and companies advertising mail-in services are promising quick and easy cash. The ads are enticing especially to those in need. Interestingly, if you go to five stores, there may be a 50 percent difference in the purchase price. This is a reflection of a buyers’ market awareness of desperate sellers.

Psychology is also seen in the limited employer-provided outplacement services for laid-off employees. Employers are hoping in part, that departing employees don’t bad mouth them hurting their reputations, and that the remaining employers’ are comforted by that benefit so their morale isn’t adversely impacted.

These psychological aspects are all at the surface. The recession is also causing deeper psychological problems. For people out of work, it is affecting their perceived self-worth. Many, at times, view themselves as failures, although they aren’t at fault. It is also affecting many of those with jobs, dramatically impacting and changing their spending patterns and investment philosophies. Many are becoming much more risk adverse and want guarantees. The growing appeal of annuities and the move from equities are proof.

There is a particular need for a greater study and understanding of human nature and psychological ramifications of this prolonged recession. How many of our parents and grandparents were identified as having a depression mentality and how did that impact their behavior and thought processes? Will there be generations similarly impacted by this recession?

In that regard, I expect businesses and professionals will be paying increased attention to understanding the psychological implications of this recession and how to capitalize on it. For example, some financial planners will incorporate so-called “financial-planning therapy” into their service package in various ways.

Thursday, July 2, 2009

The Real Technology Learning Curve

I am fascinated watching the newest technologies and how individuals and business experiment with them. There is a perception if you aren’t taking advantage of the latest technology you are totally out of it. The converse is that if you are utilizing the latest technology, you must be with it. Neither is true. Examples are Twitter, which often reads like a stream of consciousness, and those businesses encouraging their employees to experiment with new technology without providing guidance or effective evaluation and monitoring of the progress.

Just because you have mastered how to utilize a particular technology doesn’t mean you are promoting a greater good or using it in the best ways possible. Just think of all the text messaging going on including “talent” shows on television that allow viewers to vote for their favorite performer. People quickly vote and incur a charge, often a dollar a vote. Those in the media aren’t helping in their reporting on technology as often they are often just promoting the latest and greatest. You read and hear constantly on the newest, “improved” version which feeds a consumer-oriented culture.

Both the hype and wastefulness really turns me off. The technology learning curve that fascinates me is when a real problem is solved with technology. One example is remote tracking cell phones that allow you to log on to a Web site “to see the exact location the child is currently at. If the child changes location, you will be able to track and see the movements on the map. If the child is in or driving a car, you will be able to see the travel speed along with the direction of travel.”

Another one is Nationwide Insurance’s new mobile application for iPhones that acts as an accident toolkit. According to Nationwide, it:
· Calls emergency services,
· Helps you collect and exchange accident info,
· Stores your insurance and vehicle info for easy lookup,
· Locates Nationwide agents near you,
· Takes and stores accident photos,
· Converts your iPhone into a handy flashlight,
· Helps connect you with towing services,
· Helps you start the Nationwide claims process,
· Finds Nationwide repair facilities.

Giving a child a tracking cell phone might calm many a parent who is worried when there chiild is late in coming home. Similarly a cell phone application to assist when there is in car accident could be very useful and calming.

The bottomline of the technology learning curve should be figuring out a worthwhile use, not just about mastering a particlur technology.